Investment property owners around Oregon are coming to terms with several new changes to landlord-tenant laws. These include Oregon’s temporary ban on evictions, the nation’s first statewide rent control law, and even changes to security deposit guidelines, among others. One change that could prove particularly expensive for some property owners is the Portland relocation assistance law. According to the Portland Housing Bureau (PHB), Portland renters “may have the right to relocation assistance payments from their landlord if they have to move due to no fault of their own, their rent is increasing significantly, or there is a substantial change to their lease terms.” Under these new rules, landlords face a significant new responsibility that carries severe consequences if violated.
Who is Eligible for Relocation Assistance?
All Portland renters are eligible to receive relocation assistance unless they live with their landlord, rent on a week-to-week basis, or receive a for-cause termination. Investment owners with properties located inside Portland city limits must pay relocation assistance except under very specific circumstances, which the PHB outlines in this brochure. Here’s how the process works.
The Relocation Assistance Process
The PHB outlines five events that trigger a possible relocation assistance payment. They are:
- A no-cause eviction.
- Non-renewal of a lease.
- One of four qualifying landlord reasons which are outlined here.
- Rent increase of 10% or more.
- Substantial changes in lease terms.
Under the first three events, the landlord must give the tenant written notice 90 days before the lease ends. At the same time, the landlord must also provide the tenant with a description of their rights and obligations. Then, 45 days before the end of the lease, the landlord pays relocation assistance.
In the case of a significant rent increase or substantial changes in the lease term, the process is a bit different. After receiving notice of the changes, tenants can either accept the new terms or move out. If the tenant decides to move out due to the rent increase or altered lease, they must notify the landlord within 45 days of receiving the updated terms. At that time, the tenant must also request a relocation assistance payment. Once the landlord receives written notice, they have 31 days to make the payment.
[Update: In response to the COVID-19 pandemic, Portland Mayor Ted Wheeler recently announced that any rent increase through 2021 would also trigger a relocation payment.]
Required Payment Amounts
These payments are intended to help displaced tenants cover moving expenses like rental deposits and other costs. As a result, in most cases, these relocation assistance payments are often more than the costs of a month’s rent. Here’s how the PHB outlines the payments:
- Studio or single-room occupancy: $2,900
- 1 bedroom: $3,300
- 2 bedroom: $4,200
- 3 bedroom: $4,500
This process places additional requirements on both landlords and tenants. For example, if a tenant accepts a relocation assistance payment, they must move out or return the funds. In turn, landlords must notify the PHB within 30 days of making a relocation assistance payment. PHB also requires that all landlord-tenant communication be done in writing, which they define as a letter delivered in person or via first-class mail. Email or text notification does not count.
Failure to Comply
Investment property owners who fail to comply with this law face serious consequences. According to the PHB, these landlords are “liable to tenant for an amount up to 3 times the monthly rent, as well as actual damages, relocation assistance, and reasonable attorney fees and costs.” That could quickly add up to tens of thousands of dollars for landlords who find themselves on the wrong side of this legislation.
What Are the Implications for Property Owners?
Portland landlords should pay careful attention to how this legislation will affect their operations. The law limits the flexibility landlords used to enjoy when deciding when to end leases, but it also imposes a significant additional expense. If landlords want to avoid paying relocation assistance and don’t qualify for an exemption, they can only wait until the tenant decides to move out. Landlords must also now include this additional expense as a regular cost of doing business, in the same way they’d save for repairs and maintenance or a short-term vacancy.
These regulations also underscore the importance of organization and record-keeping in property management. The PHB lays out stringent guidelines for when and how landlords should notify tenants of changes. Self-managing landlords who take an informal approach with tenants or are lax with their record-keeping run a big risk of running afoul with this new law. The only way to defend yourself against potential damages will be through rigorous documentation.
Partner with Professionals
This law is just one example of the hurdles Oregon property owners must clear to rent an investment property successfully. It’s understandable why many potential rental owners might be scared away from the market for fear of unintentionally violating one of these rules. What’s more, increased documentation requirements place an even more substantial burden on part-time self-managers looking for a stable source of additional income. Fortunately, there is a solution.
Professional property managers live in the world of rental management. It’s their business to understand these laws, and then create systems and policies to follow them. When you choose Rent Portland Homes by Darla Andrew, you’ll gain an experienced partner who will look after your interests. From marketing your property to drafting lease agreements to collecting monthly rent, we’ll do it all. Our construction and maintenance division will also make sure your property is well cared for through regular inspections.
More importantly, we’ll ensure dependable renters occupy your property and that you adhere to all applicable laws and regulations. With our help, you’ll sit back and enjoy all the profits without any of the headaches. If you’d like to learn more, you can call or text us at (503) 515-3170 or complete the contact form on our website.