Tuesday, July 31, 2018

Some finer points of Portland's rent stabilization rules

Portland has had three different iterations of the rent stabilization rules.  The most recent rules are now permanent, and not based on a temporary housing emergency.  Like it or not, effective or not, unintended consequences or not, they are here to stay.

The basics are rent increases of 10% or more per year, or a "no cause" notice to a tenant to vacate, trigger landlord obligations to pay relocation costs to the tenant, should they move.  There are specifics about when the money must be paid, and what tenant obligations are around the money.



Landlords owning only one property are no longer exempt.  Landlords renting out a room in their own residence, or a unit in a multi-unit building in which they reside, are exempt.

Many folks owning one property they are renting out don't think of themselves as landlords, and didn't seek to become landlords.  Often, a life change will have the owner living somewhere else, with the intention of moving back in, or selling in the not so distant future. Think job transfer, or moving in with a partner; temporary job posting abroad, graduate school, sabbatical and so on.  Often, owners like this haven't taken landlord training classes, don't have a go to landlord/tenant attorney, and may or may not have used a property manager.

 In such a cases, a landlord can, at the time a fixed term lease is signed, put in the lease that they will be returning to live in the property, and the tenant is on notice that they'll need to move at that time.  It is required that this be in the original, fixed term lease.  Merely coming back to town and giving tenants notice to vacate as you want to live there, will not provide an exemption from the relocation costs.  In theory, this method also works if you plan to sell, though I've heard differing opinions on this.

 In any case, the relocation assistance fees are as follows:

Studio ...................................................$2,900
One-bedroom....................................... $3,300
Two-bedroom..................................... .$4,200
Three-bedroom (or larger).................. $4,500

These fees must be paid to the tenant 45 days on advance of the move out, or rent increase date.  So,  the required 90 days notice is given, and then 45 days later, the relocation assistance is paid.  This gives the tenant funds with which to place deposits on a new rental.  Since landlords have up to 30 days after a tenant vacates to refund deposit (or provide cost accounting for retained deposits), it can be hard for tenants to pay new deposits without access to funds on deposit with the current landlord.

This is just an overview of the rules, with a focus on the unintentional landlord.  I am not a property manager, nor an attorney.  I have paid attention, taken several classes, and done some reading.  Please consult a property manager or attorney for specific advice about your individual situation.

Late breaking news: the City of Portland is moving toward a registry of rental properties.  Many cities do register rental properties, including Seattle, San Francisco, Eugene and Gresham. I'll write more on this later.

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