By Daniel Reynolds, Attorney in the Litigation Practice Group
On June 30, 2020, Governor Kate Brown signed HB 4213 into law to extend the eviction moratorium during the COVID-19 pandemic. The bill prohibits certain notices of termination and evictions during an “emergency period” currently set to end on September 30, 2020. The new law also creates a six-month grace period, from September 30, 2020, to March 31, 2021, for tenants to pay any past due rent without being evicted. The eviction moratorium applies to both commercial and residential tenancies. A summary of the new legislation is below.
What specific notices and evictions are prohibited?
The new law prohibits notices of termination and evictions for nonpayment of rent, late charges, utility, or service charges, or other charges that became due between April 1, 2020, and September 30, 2020.
For tenancies in their first year of occupancy, a landlord is also prohibited from delivering a termination notice without cause or filing a related eviction action. This essentially broadens the application of SB 608, enacted last year, to all types of tenancies, whether in their first year or not.
How does the grace period work?
After the emergency period, which currently ends on September 30, 2020, a tenant is entitled to an additional six-month period to repay the rent that was due during the Emergency Period. Tenants must start paying rent timely beginning in October 2020, but they may not be evicted for failure to repay back rent until the end of the grace period.
After the emergency period, the landlord may provide a notice to the tenant that the nonpayment balance is still due and must be paid. The notice must contain certain terms, including: (1) the date the emergency period ended; (2) that the landlord may terminate the tenancy if the tenant does not pay rents and other payments that come due after the emergency period; (3) that the tenant will not owe a late charge; and (4) that the tenant is entitled to the grace period.
A tenant must respond within 14 days of delivery of such notice, and either repay the outstanding balance or give notice that it intends to take advantage of the six-month repayment period. The tenant does not need to give written notice; if the tenant can show actual notice, this is sufficient.
Are there other prohibitions?
Yes, the bill broadly prohibits any action by a landlord that would interfere with a tenant’s possession or use of the rental unit based on the nonpayment balance. In addition, a landlord may not assess a late fee or any other penalty on a tenant’s nonpayment balance that accrues from April 1, 2020, through September 30, 2020.
For residential tenancies, the bill also prohibits reporting a tenant’s nonpayment balance as delinquent to any consumer credit reporting agency.
A landlord can still proceed with notices and evictions for tenant causes other than nonpayment of rent. It is unknown at this time what the courts will require to proceed with an eviction during the emergency period.
Is there any relief for a landlord experiencing difficulty paying its bills?
The Legislature also enacted HB 4204, which imposes limitations on lenders being able to enforce default remedies on obligations secured by mortgages and similar instruments. Click here for information about HB 4204.
Will there be any changes to this law or related legislation?
Governor Brown has signaled that there may be another special legislative session this summer. It is plausible that the “emergency” period is further extended beyond September 30, 2020, or there may be other changes to this legislation. The Legislature is also exploring other relief solutions, including providing aid to tenants or landlords. At Saalfeld Griggs, we continue to monitor developments and will provide updates as they are available.
In addition, HB 4213 may be subject to constitutional challenge as a law impairing contractual obligations. Until such issues are settled by the courts, however, both landlords and tenants should plan to act in accordance with the provisions of HB 4213.
Are there penalties if a landlord violates any of these provisions?
Yes, a tenant may recover from the landlord an amount up to three months’ periodic rent, plus any actual damages, if the landlord violates this legislation. In addition, a tenant may obtain injunctive relief to retain or recover possession of the property and address any other violations. This legislation has also become part of the Oregon Residential Landlord Tenant Act (Oregon Revised Statutes, Chapter 90), which means that the tenant also has the right to recover attorney fees as the prevailing party in any lawsuit to enforce the landlord’s obligations.
Conclusion
As summarized above, this new legislation complicates an already complex statutory scheme. Landlords should exercise care before seeking to collect unpaid rent or evict a tenant at this time. If you have questions about HB 4213 and how it applies to your particular case, contact a member of the Saalfeld Griggs litigation team for guidance.
Daniel Reynolds is an attorney in the Litigation practice group and a member of the Construction Industry Group. The information in this article is not intended to provide legal advice. For professional consultation, please contact Daniel at Saalfeld Griggs PC. 503.399.1070. dreynolds@sglaw.com © 2020 Saalfeld Griggs PC
