2020 has been a year of upheaval for investment owners and tenants alike. With eviction moratoriums set to expire at the end of December, the Oregon Legislature met on December 20th for a one-day special session to consider a comprehensive package of COVID-relief measures. Lawmakers directed much of their attention towards helping tenants struggling to keep up with their rent and providing assistance to the landlords who have absorbed losses since the pandemic began in March.
By day’s end, the legislature had passed HB 4401, which extends the state’s existing eviction moratorium and directs hundreds of millions of dollars towards landlord relief. While the bill is welcomed by many, it adds more complexity to an industry that is still coming to terms with a slew of significant changes to existing landlord-tenant laws. Both groups will need to comes to terms with what these new regulations mean before HB 4401 goes into effect on January 1st, 2021.
Eviction Moratorium Extended
When COVID-19 first landed on our shores back in March, Oregon Governor Kate Brown declared an official state of emergency. This action gave her broad legislative powers to respond to an unprecedented crisis. One of her first acts was to pass a statewide eviction moratorium that prevented landlords from terminating tenant leases for nonpayment. The governor’s declaration also prohibited landlords from charging late fees or reporting nonpayments to a credit reporting bureau.
Governor Brown originally scheduled the moratorium to end in September, with a six-month grace period for tenants to pay off their back rent. However, as the pandemic drug on, she extended the moratorium through December 31st.
HB 4401 moves the emergency and grace periods back until July 1st, 2021. However, unlike previous extensions, tenants must document the financial hardship that’s prevented them from paying rent after the emergency went into effect on March 16th, 2020. The bill requires tenants to submit a document called an HB 4401 Notice and Declaration. Landlords should consult legal counsel to ensure their forms meet all legal requirements. The bill also expressly forbids landlords from:
- Challenging the accuracy of a tenant’s HB 4401 Declaration.
- Requiring additional information from the tenant.
- Requiring more than one declaration per household.
- Refusing to accept a declaration that was translated into other languages by the Oregon Courts.
- Prohibiting how tenants submit their declaration, including photographs, emails, or text messages.
The legislature also attached stiff penalties for landlords who violate the moratorium. These include paying three months’ rent payment, tenants regaining possession of the unit, attorney’s fees, damages, and more.
Landlord Compensation Fund Created
Until now, landlords have quietly shouldered the cost of Oregon’s eviction moratorium by themselves. Fortunately, HB 4401 provides a bit of much-needed support. The bill allocates $150 million in state general funds to seed a brand-new landlord compensation program. Beginning in late January, landlords can submit an online application to receive funds that will cover qualifying tenant’s unpaid rent. The state will score applications based on the number of units owned and the higher percentage of delinquent rents.
These funds won’t come without a cost, however. Landlords that accept compensation funds must agree to several restrictions. These provisions include forgiving 20% of the unpaid rent qualified tenants have accrued between April 1st, 2020, and the application date. Landlords must also agree to repay the program if qualified tenants pay any portion of their forgiven rent or rent payments landlords have received through the program. During the application period, landlords also cannot issue a no-cause termination notice or a termination notice for nonpayment.
The legislature also provided an additional $50 million for traditional tenant-based rent assistance programs. Tenants can access these funds through regional community action agencies and other housing assistance providers that receive Emergency Solution Grants.
Federal Funds are Also Coming
This week, the United States Congress also passed a long-awaited updated economic stimulus package. This bill includes provisions for direct cash payments, expanded unemployment benefits, and $25 billion in rent and utility assistance. Nearly $300 million of those dollars will come to Oregon.
We’re Standing By to Help
Hopefully, these combined efforts will help blunt the sharp toll this pandemic has taken on people across Oregon. People across the country are receiving COVID vaccines. For the first time in months, we can see the light at the end of what has been a very dark tunnel for many of our friends and neighbors.
Until the pandemic is entirely in our rearview mirror, however, Rent Portland Homes by Darla Andrew is standing by to help. If you’re an investment owner who’s wondering how these changes will affect your tenants, you can call or text Darla directly at (503) 515-3170. You can also email us by filling out the contact form on our website.
Our team of property management professionals has the expertise to help you navigate these tricky waters. Along the way, we provide the day-to-day property management services that will reduce your workload and improve your quality-of-life. All while protecting your most valuable investments.