Portland “Relocation Assistance” Ordinance Requires Landlords Pay

Portland City Council Passes Ordinance Requiring Landlords to Pay Tenant’s Moving Costs

On the evening of February 2, 2017, the Portland City Council passed an ordinance that will require landlords to pay for relocation assistance to their tenants. The ordinance will enable tenants to be paid for moving costs when their landlord has either raised the rent by 10% or more or has served a “no cause” termination notice on the tenant.

The Ordinance is in response to the housing state of emergency that was declared by the city in October of 2015 and is intended to assist renters during the continued housing crisis in Portland.

The relocation assistance ordinance is considered to be the strongest renter protection Portland has ever seen with costs to landlords ranging from $2,900 to $4,500, depending on the type of dwelling unit rented.

While tenant advocates claim that the Ordinance is a necessary step in protecting renters, landlord advocates claim the Ordinance may bankrupt landlords who already face property maintenance costs and increasing property taxes.

The new Ordinance amends the “Portland Renter Additional Protections” section of city ordinance 30.01.085, which lists a landlord’s obligation when terminating a tenancy or raising the rent. In addition to requiring a landlord to deliver a written notice of termination to the tenant not less than 90 days before the termination date, the new Ordinance states that a landlord must pay the mandated relocation assistance to the tenant not less than 75 days prior to the termination date.

If a landlord chooses to raise the rent by 10% or more, in addition to providing a 90 day notice prior to the increase taking effect, the landlord must now also be ready to pay the relocation fee. The new Ordinance provides that if within 14 days after receiving the written notice the tenant provides written notice of termination to the landlord, the landlord must then pay the tenant the relocation amount within 14 days.

A landlord’s failure to comply with any of the Ordinance’s requirements could result in liability to the tenant for three months rent, actual damages, the relocation assistance amount, reasonable attorney fees, and costs.

After hearing from dozens of mom and pop landlords, the Portland City Council included at least one late amendment which will exempt landlords only managing one rental unit. Other listed exemptions to the ordinance include: week-to-week tenancies, landlords who temporarily rent out their principal residence during an absence of less than 1 year, or to tenants that occupy the same dwelling unit as the landlord. The final version of the new Ordinance has not yet been released.

Prior to the Portland City Council’s decision, attorneys representing landlords in the Portland area said they would sue if the city passed the Ordinance. During the city council hearing landlords’ complained of not being consulted in the drafting of the Ordinance as well as issues involving the vagueness of the Ordinance.

One issue that may arise is with landlords who intended to only rent a property for a fixed term tenancy and expressed as much in the rental agreement. The new Ordinance means that a landlord will have to pay a relocation fee if they choose to not renew the tenant’s lease on substantially the same terms.

The Ordinance, which was immediately enacted, will remain valid potentially as long as the city’s housing emergency continues. Currently the emergency is scheduled to lapse in October, however in the past it has been extended.

The Oregon Residential Landlord Tenant Act (“ORLTA”) and the Portland City Code (“Code”) is highly technical and landlords are well advised to consult with a real estate attorney knowledgeable about ORLTA and the Code before issuing any termination or rent increase notices.

Read the Ordinance and other relevant documents on the city of Portland’s website.

Unwanted Occupants – a Trap for the Unsuspecting Fiduciary

Dad Died & I Need To Evict or Eject His Adult Child

Personal Representatives, Trustees and Conservators hold positions of tremendous responsibility. Frequently these fiduciaries are faced with challenges caused or exacerbated by relatives, or even acquaintances, of the protected person, decedent, or primary beneficiary. One challenge that frequently arises is when the fiduciary needs to sell a primary residence to generate liquid funds for the Estate or Trust and a family member or acquaintance tenant or other occupant is residing in the residence. Some buyers are willing to purchase a home occupied by a tenant, but such willingness dissipates rapidly when the tenant or occupant is not paying rent.

Under the best circumstances, a month-to-month lease will be in place and the tenant will be paying rent on time. This is the traditional landlord-tenant relationship. In this situation, provided the fiduciary does not want to market the property with the tenant in residence, the fiduciary can issue a 30- or 60-day no-cause termination notice (different notice provisions apply in the city of Portland). If the tenant does not willingly move out prior to the expiration of the notice, it may be necessary for the fiduciary to file a Forcible Entry and Detainer lawsuit (otherwise known as an “FED” or “eviction” lawsuit). These residential evictions are fast-tracked by the court. In Multnomah County, the fiduciary’s first court day in an eviction trial is generally 8 days after the lawsuit is filed (as opposed to several months in a typical civil case). During this first court appearance, provided both the fiduciary and the tenant show up, the judge strongly encourages the parties to come to an agreement and avoid a trial. In this scenario, this may mean that the tenant gets an additional two weeks to move out. If no agreement is reached, then a trial is scheduled.

Under Oregon law, the trial is to take place no later than 15 days after the first court appearance. If the fiduciary prevails at trial, the tenant will need to move out within a few days, or the sheriff will forcibly remove the tenant. Tenant will also owe the Estate or Trust the fiduciary’s reasonable attorney’s fees. These fees can be surprisingly high. A relatively straightforward residential eviction lawsuit, through trial, can cost upwards of $5,000 – although I have personally had two particularly challenging evictions, once as the landlord’s attorney and once as the tenant’s attorney, where the prevailing party attorney fees and costs exceeded $30,000.

A word of caution, Oregon landlord-tenant law is very tenant friendly and highly technical. Many a wary landlord finds himself running afoul of the law. If the landlord has not dotted all his “i”s and crossed all his “t”s, he or she may find themselves as the losing party and owing thousands of dollars to the lawyer of the tenant they were trying to evict.

As daunting as the FED process above sounds, removing an occupant who never established a tenancy, may be even costlier and more time consuming. Numerous Oregon cases have found that family members were not tenants, due to the specific circumstances under which the family members came to live in the house. In some of these cases, it was necessary to file an ejectment lawsuit. Ejectment lawsuits are heard on the regular civil court docket. This means that it may be several months before the case goes to trial and likely tens of thousands of dollars will be spent in motion practice and preparing for trial.

If you find yourself as a fiduciary (or attorney for a fiduciary) needing to remove a family member or acquaintance from estate or trust property, please consult with me or another experienced landlord attorney before you take any action. Please also contact me if you find yourself in any other real estate disputes or are seeking counsel in advance to avoid finding yourself falling into a trap.

Denise represents clients on real estate disputes, business dissolutions, and trust contests. She also helps hospitality and wine industry clients navigate complex, important issues such as business formation, real estate agreements, trademarks, OLCC rules and other governmental regulations. Please contact Denise directly at denise.gorrell@samuelslaw.com.

So You Want to Sell Your Own Home

For Sale by Owner or FSBO are attractive in a seller’s market. Weekly solicitations from eager Buyers are common. Technology has put selling your home yourself a few clicks away. Websites like Zillow allow you to post a listing. Pinterest and Google can give you pointers on how to stage your home. A brochure may be easily made using a word processor (or get a technologically savvy friend to do it).

There are upsides to FSBO and downsides, just as there are upsides and downsides of using a real estate agent. When homeowners hire a real estate agent to sell their home, the buyer’s and seller’s agent make a combined commission that can run up to 5-6% of your home’s sales price. This entire commission is paid out of the sales proceeds. This means that if your home sells for $300,000, the commission will be upwards of $18,000. Not wanting to pay that commission is one of the primary reasons people choose to sell their homes themselves. FSBO homes can sell quicker than agent-assisted homes. On the other hand, FSBO often sell for lower prices than an agent-assisted sale. This is likely due to the real estate agent’s expertise and in-depth knowledge of the real estate market.

One of the most common concerns with FSBO, is the Seller is responsible for making all the required disclosures and negotiating the documents involved in closing the sale. It is easy to get lost trying to navigate it all and miss something. That mistake could be costly down the road, and may even result in litigation. Reducing the seller’s exposure is the bailiwick of the listing agent. An attorney is essential for those without an agent. An attorney will draft and review documents before the Seller signs them and will make sure the i’s are dotted and t’s are crossed. An attorney will typically charge hourly for his or her time, not as a percentage of the home’s sales price. Attorney fees will also be significantly less than the commission an agent will charge, as the number of hours to represent a seller in a home sale do not exponentially increase as the price of the house increases.

The decision to hire (or not hire) a real estate agent is personal, depending on your own comfort level, confidence in your abilities, and time you’re willing to commit. If you do choose to go the FSBO route, however, you are encouraged to confer with an experienced real estate attorney.

 

Coquine Receives 2016 Restaurant of the Year Award

Congratulations to Coquine! The local neighborhood Café and Restaurant was awarded Portland’s 2016 Restaurant of the Year award by The Oregonian.

Coquine is not quite a year old, but has been drawing local and national attention. The Oregonian article states “Coquine replaces fireworks and unnecessarily bold flavors with subtlety and unerringly precise technique.” Read the full article on The Oregonian’s site for more information on the Restaurant, the Owners, and the Award.

9th Circuit Upholds DOL’s Restrictions on Tip Pooling

On February 23, 2016, the Ninth Circuit Court of Appeals held in Oregon Restaurant and Lodging Association v. Perez (9th Cir., No. 13-35765 [Feb. 23, 2016]) that the U.S. Department of Labor (DOL) has the authority to regulate the tip pooling practices of all employers, not just those who take a tip credit. This is a considerable expansion of their authority.

In 2011, the DOL issued a rule that changed the requirements of tip pooling.  Prior to this rule, the DOL could only regulate the tip-pooling practices of employers who used a tip credit. The DOL did not have authority to impose these requirements on employers who pay their employees at least the federal minimum wage. The 2011 rule changed that. Now, all employers are subject to section 203(m) of the Fair Labor Standards Act (FLSA) regardless of whether the employer uses a tip credit or not.

Two cases were brought separately, one in Oregon and one in Nevada, challenging this rule. The district courts in both of these cases sided with the employers, holding that the new rule was not valid. The Ninth Circuit reversed both cases in a 2-1 decision, saying that the DOL had the authority to establish this rule. One judge issued a scathing opinion in dissent, saying that this ruling was contrary to precedent.

What are the requirements under the rule?

Any tip pool that includes employees who would not customarily receive tips is invalid. In a restaurant, servers and bartenders are customarily tipped, while the kitchen staff is not. A valid tip pool in a restaurant could not include kitchen staff. Therefore the employer cannot require the servers and bartenders share their tips with the kitchen staff. However, a tip pool comprised of only customarily tipped employees may still be valid.

When will this become effective?

A federal appellate court ruling is not effective until the court issues a mandate. The minimum timeline for a mandate is 21 days from when the court issues its opinion, so at the earliest this ruling will be effective on March 14, 2016. However, the deadline may be extended if the plaintiffs petition for a rehearing or if they petition the U.S. Supreme Court for a writ of certiorari.

According to the website for one of the plaintiffs, the National Restaurant Association, they are still considering their legal options. There is a good chance that at least one of the plaintiffs will either petition the Ninth Circuit for a rehearing or petition the Supreme Court of the United States. In the meantime, restaurants in states covered by the Ninth Circuit should be preparing to make changes to their tip pools on short notice. States covered by the Ninth Circuit are Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, and Washington.

If you have questions about complying with these DOL regulations or the impact of this recent case, be sure to contact an attorney who is well versed in hospitality law.

Attorney Denise Gorrell has a unique background in hospitality law. She spent over a decade in the Seattle hospitality sector, which included time with wine retailer Esquin and the award winning restaurant Wild Ginger. Her experience gives her a deep understanding of the challenges faced by food and beverage entrepreneurs. She helps hospitality industry clients navigate complex, important issues such as business formation, real estate agreements, trademarks, OLCC rules and other governmental regulations.

Coquine and Rucker – 2016 James Beard Awards Semifinalists

Congratulations to Coquine and Gabriel Rucker, chef of Le Pigeon and Little Bird.

Coquine is a semifinalist a James Beard Award as Best New Restaurant in the United States. The Portland French inspired restaurant opened in July of this past year in the Mount Tabor neighborhood. We at SYK are fans of Portland Monthly’s “2015 Cookie of the Year”, Coquine’s take on a chocolate chip cookie.

Chef and author Gabriel Rucker is up for the James Beard Outstanding Chef Award this year. In 2011, he received the James Beard Award for Rising Star Chef of the Year, and in 2013, took the prize as Best Chef: Northwest. Last year Rucker, the founding chef owner of Le Pigeon and Little Bird Bistro, stepped back into the kitchen when the executive chef of Little Bird left the Portland hot spot.

We wish both owner and chefs the best of luck in their nominations, and look forward to another tasty year ahead for them (and our taste buds)!

Portland Residential Landlords Beware – Notice Timelines Increased

Portland City Council has declared the city to be in a housing emergency. Rental rates have increased by 15% in 2015, and vacancy is hovering at about 3%.

The Council has announced measures to combat these issues. On October 14, 2015, the Council unanimously voted to pass an ordinance requiring residential landlords give 90 days’ notice for rent increases greater than 5% and for no-cause evictions. This is an increase from the 30 or 60 days’ notice that were previously required. If a residential landlords fails to give enough notice, he could owe the tenant “up to three months rent as well as actual damages, reasonable attorney fees and costs.” Some on the City Council, including Commissioners Dan Salzman and Nick Fish, wish they could do more to protect tenants, but state residential landlord-tenant laws prevent cities from enacting more stringent provisions, like rent control. Commissioner Salzman has promised to review and evaluate the policy in a year to see if it accomplished its goals.

The ordinance goes into effect next month. This may cause some residential landlords to rush to send out notices this month in advance of the ordinance’s effective date. The Oregon Residential Landlord Tenant Act (“ORLTA”) is highly technical and landlords are well advised to consult with a real estate attorney knowledgeable about ORLTA before issuing any termination or rent increase notices.

For more information, see the following Oregonian articles:

“Portland OKs 90-day notice for rent increases, no-cause evictions”

“Portland approves housing emergency plan, what comes next is unclear”

Oregon Decides that Attorneys, Dentists, Optometrists, Legislators, and Chiropractors Will Be Mandatory Elder Abuse Reporters as of January 1, 2015

In House Bill 2205 (HB 2205), the Oregon Legislature expanded the list of those professions whose members are required to report suspected elder abuse. Governor Kitzhaber signed HB 2205 into law on June 11, 2013. Under ORS 124.050, an elderly person is defined as anyone 65 years of age or older and abuse includes, but is not limited to, neglect, physical injury and financial exploitation.    

Attorneys will be required to take mandatory abuse reporting continuing legal education classes (CLEs), that will cover elder abuse. Presently, attorneys are mandatory child abuse reporters and are required to take CLEs covering that mandatory reporting obligation. An attorney is not, however, required to breach a client confidence in order to meet this reporting requirement, nor is an attorney required to report if disclosure of this information will be detrimental to his or her client.

The expanded mandatory reporting obligations take effect on January 1, 2015. The bill can be found at the following link: http://www.leg.state.or.us/13reg/measpdf/hb2200.dir/hb2205.en.pdf