Starting March 8, small business owners in Oregon with 100 or fewer employees and who are behind on their rent can apply for a grant from Business Oregon, the state’s economic development agency. Grants are available for up to $100,000 per tenant, with no single landlord able to receive more than $3 million. The program is the commercial companion to the residential landlord compensation fund created in December 2020.
Approved by the Oregon Legislature’s Emergency Board in January, the grant fund will pay out $100 million in grants in two rounds of $50 million each. Applications for the first round will be accepted until March 22, and grants will be awarded by lottery. The second round of funding will open for applications in late April. Any applicant for the first round that does not receive funding will be automatically entered in the second round lottery.
The application requires cooperation between tenants and their landlords. The landlord submits the application, but the application requires information from the tenant to certify eligibility, and ultimately both the landlord and tenant must sign the grant agreement. Grants are available only to private, for-profit businesses headquartered in Oregon and actively registered with the Oregon Secretary of State. The tenant must be open for business or commit to opening for business when applicable COVID restrictions are lifted. The 100-employee limit applies per lease location, not to the employer as a whole, so some relatively large businesses with employees dispersed across multiple locations will still be eligible.
For their tenants to be eligible, landlords must not be past due on any taxes, must waive interest and penalties, and must agree not to evict the tenant for six months or enforce eviction rights for any rent default between March 1, 2020 and February 28, 2021.
The grant may only be used for past-due rent, not prospective rent, and the total past due rent must be less than the $100,000 maximum available grant. Upon completion of a successful grant application, Business Oregon will pay the grant amount directly to the landlord.
Under House Bill 4213 which was signed into law last June, landlords have been prohibited from evicting commercial tenants for non-payment of rent that accrued prior to October 1, 2020. With that prohibition expiring April 1, the state is hopeful that these grants will enable commercial tenants to finally cure those rent defaults and avoid eviction. But it is highly unlikely that $100 million will come close to meeting the demand, so we should still expect commercial eviction activity around the state to increase starting April 1.
