Oregon Legislature Extends Residential Eviction Moratorium, Creates Landlord Compensation Fund

On December 21, 2020, the Oregon Legislature passed HB 4401, further extending the moratorium on residential evictions without cause and for nonpayment of rent from December 31, 2020 to June 30, 2021. The law also extends the deadline for repayment of rents that accrued under residential leases prior to September 30, 2020, from March 31, 2021 to June 30, 2021.

HB 4401 requires landlords to provide tenants with a copy of a “Notice of Eviction Protection.” Tenants receiving the notice must sign and return the notice to the landlord declaring they have experienced specific financial hardship. Tenants that do not return the notice may not take advantage of the extensions provided by HB 4401. However, if the landlord fails to provide the notice, then the tenant may take advantage of the extensions without completing the declaration.

In addition to the moratorium extension, HB 4401 creates a landlord compensation fund to provide distributions to residential landlords for 80 percent of unpaid rent not collected from qualified tenants after April 1, 2020. In order to access these funds, landlords must submit an application and Notices of Eviction Protection from the qualified tenants. Landlords must also agree to forgive the remaining 20 percent of unpaid rent that accrued between April 1, 2020, and the date of the application. The Oregon Housing and Community Services Department is currently developing an online application for landlords to apply for distributions.

HB 4401 also provides that if under any residential lease, the first year of occupancy by the tenant would end between April 1, 2020 and August 31, 2021, then the first year of occupancy shall be deemed to end on August 31, 2021. This is important because SB 608, passed in 2019, provides additional protections to tenants who have occupied their premises for at least one year.

Also, Multnomah County landlords should be aware that the County has passed its own residential tenant eviction moratorium, which expires on July 2, 2021, with back rents deferred an additional six months to January 2022. No notice or declaration of hardship is required to take advantage of the Multnomah County moratorium.

Hours after HB 4401 was passed, a group of landlords filed suit in the District Court of Oregon suing the State of Oregon, Multnomah County, and the City of Portland. The lawsuit argues that the rights of landlords have been significantly impaired by legislative action and executive action throughout 2020 and that such actions qualify as takings and unreasonable seizures of property without just compensation.

On a final note, HB 4401 does not affect commercial tenants. As such, the moratorium on evictions for nonpayment of rent expired on September 30, 2020, and the grace period for unpaid commercial rent that accrued between April 1, 2020 and September 30, 2020 still ends on March 31, 2021.

Given the complexity of the landlord/tenant legal landscape, Tonkon Torp encourages those with questions to reach out to their legal advisers for additional information.