In early March, Portland City Council expanded and made permanent an ordinance requiring landlords pay moving expenses to their tenants in some instances. Tenants served with a no cause eviction (including refusal to renew a lease), denied renewal of their lease on similar terms, or where rent is increased 10% or more in a year, are entitled to a payment of between $2900 and $4500, called “relocation assistance.” The size of the payment depends on the number of bedrooms in the rental.
This has caused concern for area landlords, especially those who own only one rental unit. Keep in mind the ordinance does not apply to evictions “for cause” including, among other things, failing to pay rent, or breaching the terms of the rental agreement. In addition, the City has included 12 exemptions that may allow landlords to terminate a tenancy without paying the tenant a relocation fee. In order to be exempt, a landlord must apply for and receive an exemption from the Portland Housing Bureau.
Exemptions include the following circumstances:
- A landlord who rents out a room in their house, an ADU on the property of their primary residence, or the other half of a duplex they live in;
- A landlord who rents out their primary residence for 3 years or less, or for the duration of active duty military service;
- A landlord who terminates the tenancy in order for an immediate family member to move in, or because the rental unit becomes uninhabitable;
- A landlord who tells a tenant before moving in, that they intend to sell or no longer use the property as a rental after the end of the lease period.
There are also a few other exemptions for properties that fall under very specific state of federal programs, or when the landlord intends on demolishing the rental unit.
So, what can you do? Landlords or potential landlords can mitigate the risk of paying relocation assistance with some advance planning. When purchasing a property that already has tenants, consider whether the rent is at or near market rates and covers the carrying costs of the property. Next, when renting a property, setting a competitive rental price is key, as rent increases must stay under 10% per year. Finally, think ahead- do you intend on selling a property or moving back into it in the next few years? If so, it may make sense to inform the tenant up front of your intention to sell the property at the end of their lease.
The penalties for ignoring or violating the ordinance are steep: landlords can be liable to the tenant for three times the monthly rent, actual damages, Relocation Assistance, attorney fees and costs. That’s why it is important to consult with an attorney when considering your options.
More information can be found at: https://www.portlandoregon.gov/phb/74544
DISCLAIMER: The information in this article is not a substitute for legal advice and you should consult an attorney for legal advice specific to your situation. This article should not be construed as legal advice and neither the author of this article, nor RE/MAX, shall be liable for any damage resulting from any error, inaccuracy or omission.
Author: Alisa Hardy
Alisa is an attorney in Portland, specializing in construction and small business transactions