SLICING THROUGH THE GORDIAN KNOT OF EVICTIONS IN THE COVID-19 CRISIS
By: Brian Cox, Attorney at Law
April 15, 2020
As the effects of the COVID-19 pandemic continue to unfold in Oregon, residential and commercial landlords seeking to regain possession of their rental properties are currently faced with a myriad of restrictions from several vectors, radically changing their ‘pre-pandemic’ way of doing things.
Rationale: There are two primary reasons driving these actions: limiting the spread of the coronavirus by limiting evictions or otherwise ‘de-housing’ people in order to avoid greater COVID-19 exposure; and, the pragmatic recognition that the current extraordinary health needs leading to the closure of restaurants, schools, and all ‘non-essential’ businesses will cause a wide swath of our population to lose their jobs and businesses in order for everyone to ‘shelter in place’ and care for homebound family members, leaving many Oregonians unable to pay their rent through no fault of their own.
Executive Orders: Under Governor Brown’s current Executive Orders, landlords may not issue termination notices or file, prosecute, or execute ‘economic evictions’ for non-payment of rent, utilities, service charges, late fees, or other charges, without regard to whether the non-payment is the result of the COVID-19 epidemic. The Executive Orders also suspend the imposition of late fees and prohibit law enforcement from serving or enforcing evictions of any kind. Landlords are also prohibited from issuing ‘no-cause’ or ‘landlord-cause’ termination notices or evictions: the former happens during the first year of tenancy or with owner occupied two-unit lots (typically duplexes or ‘mother-in-law’ units); the latter occur when a landlord wants to move in or move a family member into the rental, a buyer wants to live in the rental, the rental needs major renovation work, or the rental is being converted to ‘non-rental’ purposes. Unable to remove their tenants, rental property sellers are unable to deliver possession of the property for an indeterminate amount of time, causing many real estate transactions to fail.
Chief Justice Orders: Under Chief Justice Walters’ current orders, all stages of eviction proceedings are automatically postponed until after May 31st, with the caveat that evictions involving domestic violence, most situations giving rise to a 24-hour termination notice, and similar ‘high need’ eviction cases may proceed by seeking leave of court, following a process to be developed by each court (though trying to set and advance these cases may be difficult and/or follow uncertain timelines). Residential and commercial evictions may still be filed – though evictions for non-payment or ‘no cause’ or ‘landlord-cause’ evictions are prohibited (violation is now a Class “C” Misdemeanor), and such ‘non-compliant’ evictions may be accepted or rejected at filing, depending on local court practice. When an eviction is filed, the first appearance setting and service of summons and complaint will all occur according to statute, only the FED summons and complaint will be accompanied by a multi-language notice advising the parties the first appearance date is automatically postponed to a later date and will be followed by a future court notice informing them of the new hearing date (notice below. Evictions that do proceed or that later proceed are expected to utilize the court’s newly-developed rules for court appearances, including efiling documents and exhibits and remote appearances by parties, witnesses and lawyers where possible.
Federal Action: While federal law does not directly prohibit all evictions, portions of the CARES Act require all landlords with federally-backed mortgages, including those covered by HUD, USDA, FHA, VA, Fannie Mae and Freddie Mac, to forgo evicting their tenants by placing a 60-day moratorium (beginning March 18th), and providing those landlords with various forms of relief, including a 180-day loan forbearance (which can be extended another 180 days at the borrower’s request). The Act allows multifamily housing owners with a federally-backed mortgage to request a forbearance for up to 30 days (which can be extended another 60 days at the borrower’s request), on the condition that they agree not to evict tenants or charge late fees. The Act also institutes a moratorium on filings for evictions for renters in homes covered by a federally-backed mortgage for 120 days of enactment. The Act provides a temporary moratorium on evictions for most residents of federally subsidized apartments, including those supported by HUD, USDA or Treasury (Low Income Housing Tax Credit developments).
Local Ordinance: Multnomah County, Portland, Clackamas County, Gresham and Hillsboro have each imposed their own form of moratorium on evictions, and residential and commercial property owners would be wise to seek current information specific to their jurisdiction before proceeding.
Oregon Legislature: In short, the Oregon legislature has yet to take any action regarding the pandemic.
What is a residential or commercial landlord to do? With access to the courts effectively prohibited, at this point for months, many have asked what they should do considering the constant barrage of bad news. First, opening lines of communications and making payment arrangements and/or accepting partial payments from your tenants is likely a good option, and in some cases, may be the only payment you receive. Next, keep in mind that the COVID-19 state moratorium does not apply to conduct-based notices or evictions. If you have truly troublesome or dangerous tenants, your remedies are still intact – just delayed for now in many situations. Finally, remember that the moratorium creates a payment deferral, not a payment forgiveness. Governor Brown’s executive order was explicitly clear that all amounts owed – except late fees – remain due and owing.
In this writer’s opinion – Neither tenants nor property owners should have to stand alone bearing the social or economic burden of the COVID-19 Pandemic. Perhaps the ‘best’ economically- and socially-rational way for the federal and state governments to preserve housing stability for families impacted by the COVID-19 crisis and struggling to cover housing expenses is by creating emergency rental assistance programs through a drastic short-term expansion of the Rental Assistance Vouchers program or similar programs. This should be the first and highest priority with regard to the allocation of funds provided to Oregon through the Federal CARES Act – immediately infusing cash for rent payments into the hands of renters and landlords. The eviction moratorium can also be better tailored to safeguard owners’ ability to effectively affect repairs and manage their communities, while allowing more types of housing providers access to mortgage forbearance, ensuring fairness and flexibility in its terms, and by providing financial assistance for property-level financial obligations such as property taxes, utilities or insurance payments and by extending credit to multifamily mortgage servicers, small landlords and multifamily businesses using the Small Business Administration’s Paycheck Protection Program.
We are in this together, and together we are stronger.
This information is current as of April 15th, 2020. Time and answers are changing rapidly, and all readers are encouraged to seek the most current and reliable information available.
* * *Court notice accompanying FED Summons * * *
NOTICE TO LANDLORDS FILING FED (EVICTION) CASES
On April 1, 2020, Governor Kate Brown issued Executive Order 20-13 which, among other things, prohibits the filing of certain eviction cases. The Executive Order was effective immediately and remains in effect for 90 days unless extended or terminated earlier by the Governor.
- A violation of Executive Order 20-13 could subject you to criminal penalties including a Class C Misdemeanor punishable by a fine of up to $1,250.00 and up to 30 days in jail.
- If you file your complaint, your filing fee will not be refunded, even if it is subject to the Executive Order.
- You should review the full Executive Order to determine if it applies to the complaint you are filing. Available at: https://www.oregon.gov/gov/admin/pages/eo_20-13.aspx.
- If you have questions, you may want to contact an attorney.
The following are excerpts from Governor Brown’s Executive Order 20-13:
“1. Residential Tenancies.
a. During this moratorium, landlords of residential properties in Oregon shall not, for reason of nonpayment as defined in paragraph 1(b) of this Executive Order, terminate any tenant’s rental agreement; take any action, judicial or otherwise, relating to residential evictions pursuant to or arising under ORS 105.105 through 105.168, including, without limitation, filing, serving, delivering or acting on any notice, order or writ of termination or the equivalent; or otherwise interfere in any way with such tenant’s right to possession of the tenant’s dwelling unit.
b. The term “nonpayment” as used in paragraph 1 of this Executive Order means any nonpayment of rent, late charges, utility charges, or any other service charge or fee, as described in ORS 90.392(2)(a) or (c), 90.394, or 90.630(1)(d) or (10), or any termination without cause under ORS 90.427. All other terms used in paragraph 1 of this Executive Order shall have the same meanings as set forth in ORS chapters 90 or 105.
c. Nothing in paragraph 1 of this Executive Order relieves a residential tenant’s obligation to pay rent, utility charges, or any other service charges or fees, except for late charges or other penalties arising from nonpayment which are specifically waived by and during this moratorium. Additionally, paragraph 1 of this Executive Order does not apply to the termination of residential rental agreements for causes other than nonpayment.
d. * * *
2. Non-Residential Tenancies.
a. During this moratorium, landlords of non-residential properties in Oregon shall not, for reason of nonpayment as defined in paragraph 2(b) of this Executive Order, terminate any tenant’s lease; take any action, judicial or otherwise, relating to non-residential evictions pursuant to or arising under ORS 105.105 through 105.168, including, without limitation, filing, serving, delivering or acting on any notice, order or writ of termination or the equivalent; or otherwise interfere with such tenant’s right to possession of the leased premises.
b. The term “nonpayment” as used in paragraph 2 of this Executive Order means nonpayment of rent, late charges, utility charges, or any other service charge or fee, as described in the lease or in ORS 91.090, 91.210 or 91.220. All other terms used in paragraph 2 of this Executive Order shall have the same meanings as set forth in ORS chapters 91 or 105.
c. Paragraph 2 of this Executive Order shall apply if a tenant provides the landlord, within 30 calendar days of unpaid rent being due, with documentation or other evidence that nonpayment is caused by, in whole or in part, directly or indirectly, the COVID-19 pandemic. Acceptable documentation or other evidence includes, without limitation, proof of loss of income due to any governmental restrictions imposed to mitigate the spread of COVID-19.
d. * * *
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