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.


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”

Greg Lutje’s Article “High Times or High Risk?” Featured on WFG News

“In November 1998, Oregon voters approved Ballot Measure 67, which allowed the medical use of marijuana within specified limits. The following year the Oregon Medical Marijuana Program was created to administer the registration program. As a result, there are currently approximately 230 medical marijuana dispensaries approved (by the Oregon Health Authority) for operation in Oregon.”

SYK attorney Greg Lutje’s article “Leasing to Marijuana Growers/Distributors: High Times or High Risk?” was featured on WFG National Title Insurance Company’s site.  He expands upon insurance, mortgage and financial risks, as well as suggested lease provisions. Also, he informs readers that “Oregon lawyers are now allowed, under Oregon’s recently-revised Rules of Professional Conduct, to counsel and assist clients regarding Oregon’s marijuana-related laws and are required to advise clients of applicable federal laws,” while encouraging current and prospective landlords to seek legal counsel to help evaluate risk and determine appropriate lease provisions regarding marijuana business.  The full article can be found on their website.


Elder Financial Abuse and Escrow Agents – Proposed Oregon House Bill 2780 (HB 2780)

Oregon’s recent House Bill 2780, sponsored by Rep. Julie Parrish of West Linn, seeks to diminish the potential for elder financial abuse by brokers with modifications to real estate regulations that govern property sales for older Americans.

At first glance it might seem like the bill complicates sales for homeowners ages 65 and older, but the extra check serves to protect older sellers from unknowingly vending their property for less than its value.

House Bill 2780 simply adds a ‘pause button’ to any transaction with both of the following conditions:

• A seller ages 65 or older
• A sale price more than 20% below the property’s appraised or assessed value

As heinous as it might seem, older property owners are victimized by greedy brokers across the nation. People 65 and older are sometimes targeted because it is more likely that they have reduced cognitive functioning, marked by trouble remembering, difficulty learning new things, concentrating, and making decision that affect their everyday life. The Center for Disease Control reports that the number of Americans ages 65 years and older who suffer from cognitive impairment may surpass 13.2 million by the year 2050. Dishonest financial advisers know these statistics just as well as the healthcare professionals.

Read more about how Salem is working to help seniors with House Bill 2780 on OregonLive.

Investor Defender attorneys at Samuels Yoelin Kantor have focused on protecting investors from financial fraud and abuse for more than 32 years. Securities attorney Darlene Pasieczny states, “ We have experience with unscrupulous brokers convincing owners to sell their homes or to take second mortgages in order to purchase risky financial products for the benefit of the commissioned broker.” If you or a loved one has reason to be concerned with a sale or transfer of funds to purchase alternative or illiquid securities, or swing of more than 10% of reported portfolio value in any account statement, please contact us to understand your potential options for recovery.

Breaking Foreclosure News

Oregon Supreme Court Paves Way for MERS to Foreclose Nonjudicially

The Oregon Supreme Court, in 2 cases (Brandrup v Recontrust, 353 Or___, and Niday v GMAC Mortgage, LLC, 353 Or ___[June 6, 2013]) has ruled that MERS (Mortgage Electronic Registration Systems) is not a Beneficiary of Trust Deeds and therefore cannot, in its own name, foreclose trust deeds by advertisement and Sale. However, the Court has also created a pathway for MERS to proceed with foreclosures by advertisement and sale in the future.

The Court ruled that assignments of the beneficial interest in the trust deed do not have to be recorded, to foreclose by advertisement and sale, if the assignment is by assignment of the Promissory Note that is secured by the trust deed. In addition, though MERS cannot act as a nominee for the lender once the lender has assigned the Note, it may have authority to act for the Lender and its successors, depending on the authority given to MERS in the first instance. Thus, if the documents between MERS, the lender and the lender’s successors give MERS the authority to act as the agent for the lender and its successors, even if that is not recorded in the real estate records, then MERS may proceed to foreclose by advertisement and sale. Depending on the nature of the documentation on the lender’s side of its relationship with MERS, MERS may be able to go back and proceed with foreclosure by advertisement and sale in the many cases which have been in a holding pattern since the Court of Appeals rulings in the cited cases. If the language is not adequate to provide the needed authority to act as an agent, it should be a relatively easy fix for MERS to create an appropriate authorization.

Oregon Court of Appeals Considers MERS

The Oregon Court of Appeals, on July 18, 2012, in Niday v.GMAC Mortgage, LLC et al, Court of Appeals Case No. A147430, held that MERS, as the nominal holder of the beneficial interest in a Trust Deed but without being the party to whom the debt is owed, may not foreclose the Trust Deed non-judicially, by trustee’s advertisement and sale. The key issue was the Court’s determination that the beneficiary of a Trust Deed is the person to whom the underlying, secured obligation is owed, rather than the party named as the Beneficiary in the Trust Deed. Since the debt was not owed to MERS, in order to be able to foreclose non-judicially, the assignments of the beneficial interest must be recorded, in order to satisfy ORS 86.735. Since MERS is intended to avoid the need for public recording by being a separate, self-contained tracking system, no such assignments are recorded in the public records. As a result, foreclosure cannot be by non-judicial means. However, Trust Deeds where MERS is the nominal beneficiary may still be subject to foreclosure in judicial proceedings, under the decision of the Court of Appeals. That issue was not addressed.

It is reasonable to expect this decision to be appealed and to expect the Oregon Supreme Court to accept the case for review. MERS will likely focus, as it did in the trial Court and at the Court of Appeals, on the designation of MERS as the “Beneficiary” in the Trust Deed, in accordance with the first part of the statutory definition of “Beneficiary” ORS 86.705(1). Plaintiff will rely, as the Court of Appeals did, on the latter portion of the statutory definition of “Beneficiary “ in ORS 86.705 (1) which looks at “… the person for whose benefit a trust deed is given…”.

Stay tuned.

Mandatory Foreclosure Mediation in Oregon

The Oregon Legislature’s hurried enactment of Senate Bill 1552 results in the creation of a mandatory foreclosure mediation system in certain situations. For lenders who have, in the prior year, commenced more than 250 non-judicial foreclosures of residences (i.e., foreclosures by trustee’s advertisement and sale rather than through court proceedings), participation in the mediation process is mandatory, unless the borrower declines or otherwise fails to participate in the process.

Lenders who have not commenced more than 250 non-judicial foreclosures of residential trust deeds in the prior year do not have to participate in the mediation program, provided that they timely file an appropriate affidavit with the Attorney General’s office. Details of the program are being fleshed out and the state is seeking to educate mediators quickly. There are also provisions under which borrowers are required to consult with housing counselors approved by the United State Department of Housing and Urban Development prior to the mediation. There are costs of the mediation which are borne by the borrower and lender. It is not currently clear what the cost for a mediation will be or just how the costs are split.

The required mediation does not apply if the lender elects to proceed with a judicial foreclosure.

It appears that the required mediation will apply even if the borrower and lender have previously entered into a modification agreement, without the assistance of the legislatively mandated mediator, but the agreement is subsequently breached. Thus, if there has been a move by larger lenders, prior to this legislation, to pursue alternatives to completion of foreclosures, this legislation may actually discourage those lenders from continuing such efforts by forcing them into the legislatively mandated process. Of course, to the extent that lenders have refused to submit to mediation processes of any kind, this legislation will impose an obligation to mediate. Since a mediator cannot compel either side to do anything, the only absolute that can be anticipated is that it will cost more for lenders to go through the non-judicial foreclosure process.

The legislation requires that the lender’s representative at the mediation either have full settlement authority or be able to get that during the mediation session, bring the complete payment history for the loan, bring evidence to establish that the beneficiary owns the beneficial interest (this is a response to the MERS situation), and bring other documents. The Attorney General may identify other documents to be brought, as well. In addition, the Attorney General will create and distribute mediation guidelines.

Any lender who is required to mediate under the statute will also have to pay an additional $100 fee for the filing of the notice of default. Those $100 fees will end up with the Attorney General in a fund called the Foreclosure Avoidance Mediation Fund, which is used for paying the expenses of coordinating the mediation program and related expenses.

The legislation includes potential liability for the lender for failure to comply, in the amount of actual damages plus $500 for each failure to comply. The legislation is not simple. The regulations to come from the Attorney General should shed light on a number of issues but may add still more steps to the process.

If you are a lender planning to foreclose a residential loan non-judicially, you must become familiar with this legislation.