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How does Oregon’s new rent control law affect landlords?

During the 2019 state legislative session, Oregon became the first state in the nation to impose a state-wide law that restricted rent. Here’s how the proposal affects landlords.

 

Rent Control

Perhaps the most attention-grabbing portion of Senate Bill 608 is the limitations that it puts on landlords to raise rent. Under the new rule, landlords can only raise rent once a year. That increase can also be no higher than 7% “plus the average amount of inflation for the past 12 months, as published in the prior September.”

However, this control only applies for buildings that are 15 years or older. This means that developers and owners of newer buildings will not have to observe this rent control.

No-cause evictions

No-cause evictions are evictions that happen without reason. The new law places restrictions on landlords from ending a tenancy without cause. However, there are exceptions to this rule:

  1. You may still evict a tenant without cause if they have resided in the unit for less than a year. In these cases, you must give a 30-day, no-cause notice.
  2. You may evict a tenant without cause if you live on the property, and the property only has two units. In these cases, you must give a 60-day, no-cause notice.

Terminating tenancy after one year

After one year, you can terminate a tenancy if a tenant violated a lease three times in the past 12 months. You will, however, have to give a written warning to the tenant after each violation. Each warning must explain the violation and your right to terminate the tenancy at the end of the lease if there are three or more violations within 12 months.

You may also terminate a lease for one of four “landlord-based” reasons:

  1. Intention to demolish the unit or use it for something other than a residence
  2. Intention to make repairs/renovations that would render the property unsafe for residence
  3. Plans for the landlord and/or immediate family members to move in
  4. Sold the unit to another individual who plans to move in

With each of these reasons, you must give a 90-day notice, and you may have to pay for relocation assistance. If you have ownership interest in fewer than five units, you do not have to pay for relocation.

This bill comes as part of a state-wide initiative to provide affordable housing and combat homelessness. Some critics say that the bill could scare away potential investors and developers. Regardless of the speculation, the law has been passed and will impact landlords for the foreseeable future.

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