The Legislature, Real Estate, and You

The Legislature, Real Estate, and You

Every two years in the spring, the great lawmakers of our state assemble to partake in the democratic process by which our laws are made and amended. This is a time Oregonians appreciate our process and applaud our representative system. This is also a time, however, for lawyers to experience sleepless nights and anxiety attacks.

As the Legislature convened, they left in their shadow over 50 bills which encroach upon real property law. Although a great number of the bills are rather innocuous, there are a few noteworthy modifications. To recapitulate all of these changes would be rather mind numbing, thus I have filtered out what I believe to be the most significant and pertinent revisions. Following is a summary of those bills.


SB 194 – Landlord and Tenant Law Revisions.

Senate Bill 194 provides that a purchaser or seller, who is in occupancy of a dwelling under a contract of sale, must be given a minimum of 24 hours written notice or a longer notice period set forth in the agreement of sale, before being evicted. However, this does not create the relationship of a landlord and tenant between the seller and purchaser. This bill also excludes an occupancy in connection with a contract of sale from the forcible entry and detainer (FED) provisions. There is also a revision that requires space rent for a manufactured dwelling or floating home be month to month or a fixed term tenancy with a rental agreement for a fixed term having a duration of at least two years.

HB 3686 – Subdivision of Existing Mobile Home Parks.

This act simplifies significantly the process of converting a mobile home park or manufactured dwelling park to a subdivision. Effective upon passage, this act applies to those parks established before its effective date. This conversion process does not increase the number of lots or change the boundary lines or setback requirements. The owner of the park must first offer the individual lot to the tenant for sale who then has 60 days to reject or accept the offer. The owner may then sell the lot, minus the home, to another person other than the tenant 60 days after the termination of the offer.


HB 3912 – Major Amendment to Planned Community Act.

This bill expands the definition of a planned community to include existing and future developments where owners are collectively responsible for maintaining common property or the exterior maintenance of individually owned property. Existing planned communities are subject to this act to the extent that it is not inconsistent with their current documents. If a planned community is not organized as an association, it may organize and become an association subject to this act. All planned communities in the future will be required to form associations as non-profit corporations. This bill also lays out new requirements regarding the Declarations and Bylaws of planned community associations and existing planned communities are encouraged to amend their documents to be in line with this act.

This bill creates three classes of planned communities. Each class has different compliance requirements with the Planned Community Act. Such classifications are based upon the number of lots within a community and the estimated annual assessments.

HB 2206 – Deferral of Oregon Capital Gains Tax.

This act allows residents and non-residents of Oregon to defer the Oregon tax on capital gain until the time the gain or loss is recognized for federal tax purposes. This deferral specifically applies to gain not recognized under IRC Sections 1031 and 1033. Formerly ORS 314.290 allowed Oregon residents doing an exchange to defer capital gains tax on out-of-state purchases until the time the taxpayer was no longer an Oregon resident. Following the Oregon tax court decision Fisher v. Department of Revenue, 2001 WL 238443, it was declared unconstitutional to treat residents and non-residents unequally.

HB 2610 – Release of Trust Deed.

This bill will streamline the process by which title companies may clear satisfied trust deeds by relaxing some of the mailing and notice requirements.

HB 3842 – Seller’s Notice of Construction Claims.

It is now required that a seller of real property provide the purchaser with certain documentation regarding possible construction claims against the real property. If these documents are not given to the purchaser, it constitutes a Class B misdemeanor. If the seller has entered into a contract within the previous two years with anyone hired to provide construction materials, equipment, services, or labor, the seller most provide the purchaser with a list of those persons if the seller has not fully paid on the contract or the person disputes whether full payment was made. The seller must also provide a copy of any notice, claim, pleading, satisfaction or release of construction claim received, within the past two years along with a cautionary notice regarding potential liens which may arise after the sale.

HB 3673 – Recording.

This bill amends recording law and makes it easier to record documents which affect title to real property. Formerly, some counties limited what documents could be recorded in order to keep the record clear of documents that ought not to be. Now those instruments, which are recognized under state or federal law or regulation as affecting interest in or title to real property, and are properly acknowledged, can be recorded.


2001 was a big year in the Legislature for real estate related changes. There were some exciting and some not so stimulating revisions made to Oregon law. If any of the bills I’ve addressed pertain to you or your real property, we would be happy to further explain these changes along with other bills that may affect you or your property. Just give us a call.