As part of the state’s ongoing response to the coronavirus pandemic, Oregon lawmakers have passed a landlord compensation fund through HB 4401. The bill assists landlords with tenants who have struggled to pay rent as a result of the pandemic. This $150 million package means that qualifying landlords will receive compensation for up to 80% of outstanding rent payments. To receive these funds, landlords must agree to forgive the remaining 20% of the owed rent. It also means that for qualifying tenants, owed rent will be considered fully paid.
Landlord Compensation Fund Application Process
For landlords to receive funds to cover owed rent, landlords must provide tenants with the Declaration of Financial Hardship for Eviction Protection form. Once tenants have completed the form, they are to send it back to their landlord. Tenants and landlords should note that while these funds will cover 80% of unpaid rent, they do not apply to utilities, damage, security deposits, or other fees related to rental costs.
Landlords only need to submit one form to apply for compensation, even if they have more than one tenant who qualifies. It’s up to each tenant to complete the Declaration of Financial Hardship form. However, if they choose not to complete it, they can be subject to eviction once the moratorium expires on July 1st. Additionally, all back rent from April 1st, 2020, to December 31st, 2020, will be due on March 31st, 2021, for tenants who do not submit this form.
Once landlords receive all Declarations of Financial Hardship forms, they can begin the application process. Landlords can submit all required documentation through the Oregon Housing and Community Service (OHCS) online portal. The information you’ll need to gather includes:
- Rent rolls, including all rent amounts collected and owed, from April 1st, 2020, through the application date.
- Tenant names and contact information for current tenants with past-due rent.
- Declaration of Financial Hardship forms.
- IRS form W-9 to verify ownership.
- The number of units owned.
- Percent of rent owed for all rentals since April 1st, 2020.
OCHS may follow up with either landlords or tenants to ensure the accuracy of information provided once landlord compensation applications are submitted.
Initial Application Timeline
The first application process will open in mid-to-late February, once OHCS launches the portal. Tenants and landlords will then have two weeks to submit all required forms. After that, OHCS will take one week to determine who receives the first $50 million landlord compensation installment. Once OHCS finalizes the list, they’ll distribute the funds to over 20 Oregon public housing authorities. OHCS will then give notice to the tenants and landlords who will receive funds so they can plan accordingly. Local housing authorities will distribute landlord compensation funds via check or electronic transfer, along with a 1099 form within 60 days of the initial notice. However, that timeline may vary based on each housing authority.
Application Scoring for the Landlord Compensation Fund
OHCS will not award landlord compensation funds on a first-come, first-serve basis. Instead, OHCS created scoring criteria to prioritize relief based on the number of units owned and the percent of rent owed for all rentals since April 1st, 2020. For example, landlords who own between one and four units will receive 25 points. This number scales down as the number of units owned increases. So, landlords who own more than 501 units receive zero points.
Similarly, landlords whose tenants paid 50% of their rent or less across all units since April 2020 will receive 50 points. This measurement also scales down. Landlords with tenants who have paid 95.1% or more of their rent will receive zero points. OHCS prioritizes those landlords with the highest score when considering funding recipients.
Monthly Application Process
Because the eviction moratorium ends on July 1st, 2021, there will be multiple rounds of application phases and fund distributions. The second round begins just two weeks after OHCS finalizes the first round. All landlords who are owed rent and have received their tenant’s Declaration of Hardship forms are eligible to apply during each round. If you apply a second or third time but haven’t received funds, your application will roll over into the next month. You’ll just need to update the rent roll form you previously submitted. If you’ve already received funds, you can also apply again. You’ll need to submit a new application with an updated rent roll that includes all received landlord compensation funding. The application process will reopen each month until June or until OHCS distributes all available funds.
Rental Property Management Provision
HB 4401 allows rental property management companies to create and submit applications for this funding on landlords’ behalf. Whether filing once or across multiple rounds, the help rental property management companies provide to procure Landlord Compensation Funds is a huge asset. Applying for assistance can be quite complicated for self-managing owners. It requires excellent record-keeping of all paid and unpaid rent, familiarity with OHCS’ portal technology, and continual communication with tenants across many months. The time, effort, and mental energy landlords save by hiring a property management company to manage their rentals and apply for these funds is a great benefit. This assistance is especially valuable for landlords who aren’t technologically savvy or skilled at keeping detailed records.
If you are a self-managing property owner who’d like more information on how a property management company can help you apply for the Landlord Compensation Fund, please reach out to Darla at (503) 515-3170 or fill out our contact page. If you are a current client with questions about the fund or application process, please give us a call at (503) 430-8006. We look forward to partnering with you to navigate this complex time.