Investing in rental properties can be a lucrative business venture, but if you don’t follow state laws regarding real estate, tenant policy, and rental management, you can end up in legal trouble. Below are some of the most important information that landlords in Oregon should know before signing a lease with a tenant.
Required Disclosures
It’s important for landlords to keep their tenants informed regarding important aspects of their rental property. Some common state-required disclosures are lead-based paint hazards or landlord/owner identification notices. In Oregon, there are numerous unique policies that the state expects landlords to know and execute.
For example, landlords must provide their tenants with a receipt acknowledging that they received the security deposit in full. Also, if utility services benefit the landlord or the other tenants in the unit, the landlord must disclose that in the lease along with any utility charges for common areas that are separate from the tenant’s individual unit utility charges.
You are also required to provide carbon monoxide and smoke alarms/detectors to all tenants along with instructions for testing them. And if you require renter’s liability insurance, you’ll need to notify tenants of that, too.
Oregon landlord tenant laws forbid charging rental application fees unless they disclose the following:
- The amount
- The screening criteria
- The applicant screening process
- The applicant’s right to dispute the screening report
- The right to appeal a negative result
- Nondiscrimination policies that may exist
- The amount of rent and deposits
- Whether the landlord requires the tenant to have renters’ insurance
Lastly, the tenant has a right to know whether the landlord’s units have any pending legal actions including outstanding notices of a default under a trust deed or mortgage, a pending suit to foreclose on a mortgage, or other actions of that nature. If the tenant is not informed of these actions and chooses to move, they can recover twice the actual damages or of their monthly rent, whichever is greater, and additionally can recover any prepaid rent.
These are some of Oregon’s required disclosures, but this list is incomplete. Be sure to research Oregon’s state laws thoroughly to ensure you’re disclosing everything you are required to.
Evictions
Dealing with evictions is an unfortunate but necessary aspect of being a landlord.
Eviction laws in Oregon specify that when rent is five days late, the landlord can issue a 144-hour pay-or-quit notice. If rent is at least eight days past due, the landlord can then send a 72-hour pay-or-quit notice. These notices must include the original due date and amount of the rent.
If the tenant violates another term in your lease agreement, you must provide them 30 days to either cure the violation or vacate. This notice must disclose the violation and when the lease will terminate. If the violation is able to be cured, you must allow 14 of the 30 days for them to do so.
If a tenant threatens someone on the premises or otherwise endangers someone or the property, you may issue an unconditional 24-hour notice to leave the property. A tenant also can receive this notice if they have provided false information on their rental application or committed an act that is “outrageous in the extreme”, such as illegal drug use or manufacturing.
Security Deposits
There are no limits on security deposit amounts in the state of Oregon, and landlords are not required to pay interest on tenants’ deposits. They must return the deposit within 31 days after the lease’s termination and can withhold funds for unpaid rent, lease breaches, and damages that go beyond normal wear and tear. However, Oregon security deposit laws necessitate that any deductions must be itemized and given to the tenant when they receive their deposit.
Rent and Other Fees
Application fees in Oregan can be equal to the actual cost that the landlord takes on when conducting tenant screening. They may charge a reasonable late fee which can be a flat amount that is charged once per rental period, a day-rate that is less than 6% of the flat fee, or 5% of monthly rent which is charged once for each following five-day period until the tenant pays what they owe.
Oregon also has a mandatory grace period of four days, meaning you must wait at least four days after rent is due before charging late fees.
Landlords cannot increase rent by more than 7% each year plus inflation, though the maximum annual rent increase is published by the Oregon Office of Economic Analysis each year.
Conclusion
Oregon has extensive rental laws, and it’s your job as a landlord to familiarize yourself with them and any changes that may occur. The information above is a great place to start, but you must continue to do your own research to be as knowledgeable as you should be when starting to rent out your properties.
