Renting a home often comes with costs that extend beyond the monthly payment. Utility expenses like electricity, gas, and water add up, as do other services like an internet connection. Landlords can also choose to charge their tenants additional fees for a variety of services or conveniences. Here in Oregon, the state has established several rules governing how and when landlords can assess a fee. Consequently, self-managed investment owners must be aware of how these rules impact their business operations.
A Fee vs. A Deposit
First off, it’s essential to understand the difference between a fee and a deposit. Fees are non-refundable payments landlords can charge to cover all kinds of expenses. By contrast, landlords hold deposits for the tenant’s rental period as protection against property damage. At the end of the lease term, the landlord must refund the deposit if there is no damage in need of repair. Oregon’s rules governing security deposits were recently amended and placed strict limitations on how landlords handle these payments.
Types of Fees
Some landlords use fees to cover legitimate costs associated with running their properties. Others use fees as a way to provide additional benefits to their tenants. A few common types of fees are:
This fee is nearly universal in the world of rental properties. Typically, this payment covers the cost of running tenant credit and criminal background checks. Most property managers pay a service to perform these checks, so the application fee covers those costs and the property manager’s time. Everyone who applies for a home pays the application fee, which is also typically not refundable if the applicant fails the background check. Rent Portland Homes by Darla Andrew lists our application fee as part of our rental criteria, which we’ve published on our website.
Some landlords charge a move-in fee to cover some of the costs associated with turning over a unit between tenants. These fees also cover one-time services like rekeying a mailbox or supplying a new key fob. In most cases, move-in fees are non-refundable and come in addition to the refundable security deposit.
A pet fee is another common non-refundable charge covering the extra wear and tear that comes with owning pets. Landlords handle pet charges in many ways, including per-pet fees and additional monthly pet rent. Typically, these fees can be found listed in the lease or rental agreement.
Rental units don’t always come with free parking. Multi-family property managers or managers who own units in an urban area often charge tenants a fee for each parking space they use.
Some investment owners offer their tenants access to additional storage space for an extra fee.
Landlords can assess a host of other fees, including additional charges for late rental payments or breaking a lease early. They can also choose to charge fees for conveniences like elevator rentals or laundry services.
Oregon Fee Regulations
Oregon has historically been at the forefront of passing aggressive tenant protection regulations. Examples of these rules include the nation’s first statewide rent control legislation, strict security deposit collection laws, and regulations intended to help underrepresented groups gain access to housing. Oregon has also placed strict rules around how landlords may collect fees from tenants. Here are a few examples:
Oregon law states that landlords are free to charge screening fees for new applicants, with a few attached conditions. First, the law states that landlords “may only require an applicant to pay a single applicant screening charge within any 60-day period, regardless of the number of rental units owned or managed by the landlord for which the applicant has applied to rent.” Second, the cost of a screening fee must reflect the “average actual cost of screening applicants.” That means landlords can’t pad screening fees to make a little extra profit. Landlords only need to refund screening fees if they fill the vacant unit before screening the applicant or do not screen the applicant for any reason.
Oregon has also created rules around the types of miscellaneous fees landlords charge. The list of approved fees includes:
- Late rent payments.
- Dishonored checks:
- Removing or tampering with a working smoke or carbon monoxide alarm.
- Violating a written pet agreement.
- Abandoning a unit during a fixed-term tenancy without cause.
The amount of these allowable fees varies depending on the offense. For example, a dishonored check fee cannot exceed $35.00, tampering with a smoke detector warrants a maximum $250 fee, while pet agreement violations cannot exceed $50 per violation. Landlords can levy additional fines if tenants violate their rental agreements within one year after a written warning notice for the same or similar non-compliance. However, the second fine cannot exceed $50, and the third fine cannot exceed $50 plus five percent of the current rent payment. Landlords also can terminate a residency for continued non-compliance. But they cannot assess a fee and terminate a residency.
Other Allowable Fees
Oregon law also allows landlords to assess fees when tenants do not comply with specific parts of a written lease agreement. These include:
- The late payment of a utility or service charge a tenant owes a landlord.
- Failure to clean up pet waste from areas other than the dwelling unit.
- Failure to clean up garbage from areas other than the dwelling unit.
- Parking violations.
- Improper vehicle use.
- Smoking in a clearly designated non-smoking unit or area of the premises.
- Keeping an unauthorized pet on the premises that is capable of causing damage to persons or property.
Tracking and Assessing Fees is Complicated
The rules governing fees are complicated, making it challenging for self-managed investment owners to stay up-to-date. However, fees play an important role in ensuring tenants follow established rules protecting people and property.
If this all sounds too difficult to manage on your own, consider hiring a professional property manager to help. Companies like Rent Portland Homes by Darla Andrew can handle the administrative details of renting your home, so you don’t have to. A property manager screens prospective tenants, arranges move-in details, collects rent, handles tenant communication, and facilitates maintenance and repair requests. Moreover, they manage all these services for a relatively low monthly rate. Investment owners who partner with property managers typically experience less stress while earning more money.
If you’d like to learn how we can help you, don’t hesitate to reach out. You can call or text Darla directly at 503.515.3170 or by filling out the form on our contact page. Don’t let fear over fees scare you away from successful investment property ownership. Owning a rental property is a breeze with our team by your side.