Rent Compensation and Moratorium Extension
By Mark L. Busch, Attorney at Law
In its third special session of the year on December 21, 2020, the Oregon Legislature passed House Bill 4401, which will take effect immediately upon the governor’s signature. The bill allows for partial rent compensation payments made directly to landlords, but it also extends the moratorium on nonpayment and no-cause evictions through June 30, 2021 in most cases (and late fees continue to be waived).
HB 4401 directs the Housing and Community Services Department to compensate residential landlords for 80% of the past-due rent owed by qualified tenants that the landlord has not collected since April 1, 2020. The Department is required to set up an online application process for landlords to request compensation from a $150 million fund, and the Department is granted discretion to establish priorities, restrictions, and limits on compensation. Priority is to be given to landlords with fewer rental units, and to landlords with a higher percentage of unpaid rents.
To qualify, landlords must (a) submit a single application for all of the landlord’s tenants who have not paid rent and who have delivered a declaration to the landlord stating that they have experienced certain financial hardships, (b) include copies of the tenant declarations, (c) provide a description of the unpaid rents, (d) agree to forgive the remaining 20% of the unpaid rents, (e) agree to repay to the Department any rent that a qualified tenant later pays, (f) not request unpaid rents owed by an immediate family member, and (g) agree not to issue no-cause or nonpayment termination notices to the tenants while the application is pending.
HB 4401 also extends the “emergency period” for unpaid rent from April 1, 2020 through December 31, 2020, which means that ALL tenants have a “grace period” until at least March 31, 2021 to repay those amounts to the landlord. However, both the “emergency period” (for not paying rent) and the “grace period” (for repaying rent) are extended through June 30, 2021 if (1) the tenant submits a financial hardship declaration to the landlord, OR (2) the landlord fails to deliver a statutory declaration form and notice to the tenant explaining the process for submitting the declaration to the landlord.
To summarize, landlords are not required to discount unpaid rents by 20% unless they apply for compensation from the state and agree to abide by the rules described above. Tenants who have not paid rent amounts during the period from April 1, 2020 through December 31, 2020 automatically have until March 31, 2021 to repay those amounts to the landlord. Tenants can have the “emergency period” and “grace period” for unpaid rents extended through June 30, 2021 if they submit a financial hardship declaration to the landlord, or if the landlord fails to deliver a statutory declaration form and notice to the tenant. There are also a number of other technical requirements in HB 4401, and you should certainly consult a knowledgeable attorney before taking any eviction or collection actions against a tenant.