The Oregon Legislature passed an historic bill on Tuesday, February 26, 2019 which is the first in the nation to impose mandatory state-wide rent control measures. The bill, Senate Bill 608, was signed into law by Governor Kate Brown on Thursday, February 28, 2019. In addition to the important rent control measures in the Bill, however, Senate Bill 608 also imposes significant limitations on a landlord’s ability to evict tenants. To avoid hefty fines and penalties for violating the new law, landlords and property managers across the state should take a close look at the Bill’s limitations on “no-cause” evictions.
Historically, landlords and tenants in Oregon were both able to terminate month-to-month residential leases simply by giving notice, no matter how long the tenant had been renting the same residence. Landlords did not need any particular reason to evict a tenant, and it was easier to evict a tenant without cause in many cases to avoid potential defenses to the eviction. Under Senate Bill 608, landlords are severely limited in their ability to evict tenants without cause. Senate Bill 608 imposes different rules for evicting tenants for no-cause depending on the length of the lease.
When can a landlord evict a tenant for no-cause? For month-to-month leases, which are fairly common residential leases, a landlord may still evict a tenant without cause, for any reason, at any time during the first year of occupancy. For fixed-term leases, which are also fairly common, the landlord may evict a tenant without cause, for any reason, at the end of the fixed-term lease, but only if the fixed-term lease is for a term of less than one year. If a fixed-term lease expires after one year, the lease automatically becomes a month-to-month lease unless the tenant and landlord enter into a new fixed-term lease. However, a landlord cannot evict a tenant for no-cause just because the lease term has expired when the initial lease term is over one-year long.
When can a landlord evict a tenant if the landlord is prohibited from evicting the tenant for no-cause? A landlord will need cause to evict any tenant who occupies a residence for more than one year, whether the tenant is under a month-to-month or fixed-term lease. If the landlord is prohibited from no-cause evictions, the landlord has two options for evicting tenants, subject to proper written notice of the eviction: (1) For “tenant cause”; or (2) For a “qualifying landlord reason for termination”. Tenant causes are all outlined in the statutes, and a landlord must follow particular procedures for terminating a tenant for cause depending on the cause. Some (but not all) of the causes include the following:
- The tenant fails to pay rent;
- The tenant materially violates the rental agreement;
- The tenant or the tenant’s pet or guest inflicts substantial personal injury to another tenant or neighbor, or upon the leased premises, or threatens to do so;
- The tenant is involved in criminal acts or other acts that are “outrageous in the extreme”; or
- The leased residence is non-judicially foreclosed by a mortgage-holder’s trustee sale.
If the landlord does not have cause to evict the tenant, then the landlord must have a “qualifying landlord reason for termination.” In addition to notice, a landlord who evicts a tenant for a qualifying landlord reason for termination must also pay the tenant an amount equal to one month’s rent. The qualifying landlord reasons are:
- The landlord intends to demolish or convert the residence to non-residential use within a reasonable time;
- The landlord must repair or renovate the residence within a reasonable time and the residence is or will be during the renovations unfit or unsafe for occupancy;
- The landlord intends for an immediate family member to occupy the residence as a primary residence and the landlord does not own a comparable unit in the same building available for occupancy at the same time; or
- The landlord is under contract to sell the property.
Penalties for violating the law are substantial. The landlord is liable to the tenant for an amount equal to three months’ rent in addition to actual damages caused to the tenant as a result of the lease terminating. The tenant may also be able to defend against the landlord’s action for possession of the leased property.
The Bill was passed with an emergency clause, Senate Bill 608 is now in effect. The limitations on no-cause evictions now apply to fixed-term tenancies entered into or renewed after the law was signed, and apply to month-to-month leases existing after the 30th day of the Bill’s passage. If you have questions about your rights as a landlord to evict tenants, or have other questions about this article, please contact Elayna Z. Matthews.
Elayna Matthews is an associate in the Litigation and Creditors’ Rights & Bankruptcy practice groups and the Financial Services Industry Group. The information in this article is not intended to provide legal advice. For a professional consultation, please contact Elayna Matthews at Saalfeld Griggs PC. 503.399.1070. firstname.lastname@example.org © 2019 Saalfeld Griggs PC