Oregon Rent Control Senate Bill 608 [How Does This Affect Landlords?]

Oregon Rent Control Senate Bill 608 Facts

FAQs are meant to answer general, broad questions about the changes to Oregon Rent Control Senate Bill 608 (“SB 608”) and its impact on Eugene. Many of the answers below will have additional details or exceptions. Landlords should consult with an attorney before taking any action as it relates to End of Tenancy/Non-Renewal Notices and/or increasing rent. We are committed to the local community and multifamily property owners in Eugene, and we are here to provide the expertise and service you need.

When did Oregon Rent Control Senate Bill 608 go into effect?

Senate Bill 608The Senate Bill 608 went into effect on February 28, 2019. Senate Bill 608 has an “emergency clause” and became effective immediately when signed by Governor Brown.

The law capped rent increases, but can cities and counties set higher rent caps and go around Senate Bill 608?

Senate Bill 608 dictates there are no exceptions for cities and counties, and therefore the rent increase cap would apply to the entire state equally. Further, any local ordinances that conflict with the statewide cap on rent increases would likely be preempted by the legislature’s acts. We advise seeking legal counsel to determine where estate and local laws may conflict and the potential impact of such a situation.

Source: Oregon Association of Realtors

Could multifamily property owners in Eugene face more strict rent control measures in the future?

California just voted to limit an annual rent increases to no more than 5 percent higher than the cost of inflation. Could this happen in Eugene, Oregon? Maybe. The most recent statewide rent control states that landlords cannot raise rents higher than 7 percent above the cost of inflation, but there is nothing in the law that states that lawmakers cannot change it down the road. Landlords rushed to raise rents in Eugene, Oregon, before the new law took effect, many of them raising rents $400–$500 in order to catch up to the market. It will be several months before we see what impact Senate Bill 608 has on rents and whether it created any vacancy in Eugene multifamily properties.

What is annual rent increase cap under Oregon Rent Control Senate Bill 608?

Rents can be increased by no more than 7% + consumer price index West (CPI-W) in a 12-month period. The current law regarding rent increases that prohibits rent increases in first year of month-to-month tenancy and the requirement that landlords give 90-day notice of rent increases stays in place.

How does my building being more than 15 years old affect rent increases?

Senate Bill 608 says that buildings more than 15 years old are limited to annual rent increases to 7 percent plus CPI West.

Are there any exceptions to rent increase cap?

  • The building’s certificate of occupancy was issued less than 15 years ago: A landlord may increase the rent above 7% +CPI in a 12-month period.
  • The landlord may reset rent on a new tenancy without limitation, if the previous tenant vacated the unit voluntarily or their tenancy was otherwise terminated in compliance with other applicable law. The bill caps increases if the previous tenant did not leave voluntarily due to a no-cause eviction or their fixed term lease was canceled not allowed to roll over to 7% + CPI above the previous rent.
  • Landlords participating in subsidized housing programs as part of a federal, state, or local program or subsidy that provided rent to the tenant are exempt.

Where can I find the (CPI) – Consumer Price Index?

(CPI) is published by the Bureau of Labor Statistics of the United States Department of Labor in September of the prior calendar year. See: https://www.oregon.gov/das/OEA/Pages/Rent-stabilization.aspx

What restrictions are placed on no-cause evictions?

Week-to Week Tenancy

No-cause evictions can still be issued with 30 days’ notice during the first year of tenancy or with a 10 day notice.

Month-to-Month Tenancy

For the first 12 months of occupancy, a no-cause eviction can be issued with a 30-day notice. The bill prohibits no-cause evictions after 12 months of occupancy.

Fixed-Term Tenancy

For the first 12 months of occupancy, a no-cause eviction can be issued with a a 90-day notice. After the first 12 months of occupancy, the fixed-term lease will automatically roll over to month-to-month unless the landlord has a tenant or landlord-based reason to terminate.

How does the bill cover for-cause eviction?

Landlords can continue to evict for a tenant-based cause such as violation of the rental agreement. When evicting month-to-month renters after the first year of tenancy landlords must cite a cause, such as failure to pay rent or other lease violation. The bill also adds landlord-based for-cause reasons to evict a tenant.

What are the four carve outs that allow the landlord to issue a for-cause eviction of a tenant?

A landlord can use one of these four landlord-based reasons, in addition they must provide the tenant with 90-day notice and relocation expenses in the amount of 1 month’s rent:

  • If they intend to demolish a unit or convert it to a nonresidential use
  • If the unit cannot be occupied during necessary repairs or renovations
  • If the landlord or a member of their immediate family plans to live in the
    unit and no other similar unit is available
  • If the landlord has received an offer from someone who intends to buy the unit
    and use it as a primary residence.

Are there any other exceptions to for-cause eviction?

Small landlords (4 or fewer units) do not have to pay relocation expenses.

I have a vacant unit due to a no-cause eviction, can I raise the rent?

After the landlord issues an allowable no-cause eviction, they cannot raise the rent more than 7 percent plus CPI West prior to renting the unit to a new tenant.

What about wrongful eviction claims?

A tenant must make any a claim of being wrongfully evicted within one year.  A landlord found at fault must pay three months’ rent plus damages.

My transaction was in process before the bill passed, when it closes can the new owner evict the tenants?

Depends. Generally, you may only evict for a tenant cause or a “qualifying reason for termination” under of the enumerated circumstances that the law provides.

Once you become an owner of qualifying rental property, you become a “landlord” whose conduct is governed by the bill and you should review both the current law and existing tenant contracts of the property you’re purchasing.

However, the law does allow for specific circumstances under which a landlord, including a new landlord, could evict a tenant landlord-based reasons including significant renovations, demolitions, safety, or owner-occupancy.

Source: Oregon Association of Realtors

Summary on Senate Bill 608:

Senate Bill 608 is a slippery slope for landlords as we as tenants. As landlords and investors we all know that the local market dictates rental rates we can charge tenants. Basic economics tells us it is the law of supply and demand. What really is going on is the state is trying to free up housing from the rental market and getting it into the hands of the end consumer. We are already seeing ramifications of Senate Bill 608. From here on out we will continue to see  shortage of housing for the rent sector. How will all this play out? Only time will tell.

What Are We Doing To Deal With Senate Bill 608?

At Flip Sharkz we are aggressively seeking properties to acquire. If you are a tired landlord who is just had enough of the laws and feel like you are ready to cash out then give us a call at 541-780-2424. We pay top dollar for move in ready rentals and we can handle just about any property type you have, from SFR to Multi to apartments. We would be pleased to work with you to find a solution to the needs you have.

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