Oregon's New Rent Control Law signed today by Oregon Governor.
I wanted to see thoughts and comments by fellow real estate investors. I'm an Oregon investor (though a newbie with 2 properties: 1 single family home and 1 duplex) and wondered how this will impact landlords/investors in Oregon. It looks like this will impact what kind of properties I can afford to buy and that inheriting tenants will cost quite bit if their rent isn't at current market rates.
From the news:
Eviction rules overhauled
Landlords will be limited to when they can issue eviction notices after the first year of tenancy.
The legislation largely does away with no-cause evictions, except during the first year of tenancy. In that first year, landlords have to give 30 days' written notice for eviction.
After the first year, landlords can end month-to-month rental agreements with 90 days' notice for a "qualifying landlord reason," which includes:
- Planning to demolish the unit or convert it to non-residential use in "a reasonable time." (SB 608 doesn't define how long is "reasonable.")
- Planning to repair or renovate the unit, again in "a reasonable time." In this case, the property has to be unfit or unsafe for someone to live there.
- The landlord or their immediate family — such as children, grandchildren or spouse — planning to live in the unit, when the landlord doesn't own a similar unit in the same building they could move into.
- The landlord has agreed to sell the unit to someone who plans "in good faith" to live there. They also have to provide evidence of the planned sale, along with notice, no more than 120 days from the day they strike a deal with a buyer.
If a landlord ends the rental agreement, they have to outline the "qualifying reason" in the termination notice and give "supporting facts." The landlord also has to pay the renter an amount equaling one month's rent when they deliver the termination notice — again, should they have a qualifying reason.
Landlords who manage four or fewer units are exempt from the requirement to pay a month's rent.
There are still instances where landlords can evict month-to-month renters without cause after a year — namely if the landlord's main residence is located on the same property as the tenant's and the property has two units or fewer.
In that case, they can serve a no-cause eviction with 60 days' notice. They can give 30 days' notice if a sale similar to the earlier described is in the works.
Tenants can still be evicted for cause; if, for example, they fail to pay rent or deliberately damage the unit.
Rent increases limited
Landlords can only raise rents once a year for tenants, and when they do, rent increases are capped at 7 percent plus the yearly change in the consumer price index.
The 7-percent plus CPI cap gives property managers wide latitude in raising rents each year, according to a Statesman Journal analysis.
For instance, only once in the past decade have average rents for a 2-bedroom, 1-bath apartment built before 1990 in the Salem-Keizer area surpassed the cap adopted under SB 608, housing data shows.
Properties built in the past 15 years are exempt from the 7 percent plus CPI limit, as are properties where landlords give reduced rents because of government subsidies or programs.
The rules say landlords also have to adhere to the 7 percent plus CPI cap if they evict a resident without cause with 30 days' notice or serve an eviction notice within the first year of occupancy.
Basically, landlords aren't allowed to evict tenants without cause and 30 days' notice just so they can raise rents past the limit.
Landlords with four or fewer units still have to abide by the rent caps, according to Danny Moran, a spokesman for House Speaker Tina Kotek, D-Portland.
The bill isn't just geared toward apartments; single-family rental homes are also affected.
"If someone owned and was renting out a single-family home that they did not live in or live on the property of, they would have to abide by the rent regulation and the for-cause eviction pieces," Moran said.
However, if a landlord lived on the same property with no more than two units, such as a single-family home or accessory dwelling unit, "the owner could still use a no-cause eviction, but they are still subject to the cap on rent," he said.
