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By Dale Strom

Dale Strom is a second generation Manufactured Home Community landlord. He is a Board Member, past President and current Treasurer of MHCO.

This is a multiple part series on a private owner of a Manufactured Home Community willingly attempting to sell that Community to an Association of tenants within that Community. Riverbend MHP is a 39 space community located within the city limits of Clatskanie, OR. In the first part of this series, the motivation of the owner is revealed on why he wanted to work with CASA of Oregon exclusively rather than offering this Community for sale to all interested parties.

There came that time when I knew it is time to get out. This has also occurred several times in my life about situations and commitments that I was in. This is the time that I want to consider getting out of one of my communities. For good. No, I don't want to look at the Federal IRS code 1031 where I can exchange a real estate property for another like kind property. I mean for good!

In the years that MHCO has been involved with the Landlord Tenant Coalition, many aspects of the relationship that Landlords have with Tenants have been discussed. Differences of opinion and understandings have been hashed out. And laws in the Oregon Revised Statutes have been created or at the very least... have been revised.

At the beginning of this decade, a Statewide group going by the name of CASA of Oregon thought that they could start a program where tenants of manufactured home communities could organize, research (with due diligence), negotiate with a seller, close and finally operate a facility. (Would love to see how an organized park owned group will handle a late rent check, dog poop in a common area that can be traced back to the dog and its owner, or God forbid, an abandonment).

State law currently requires a potential seller (which is me in this case) to contact the tenants in the community to state the sellers intentions, and gives those tenants an opportunity to form an Association for the purposes of acquiring that community.

The interesting point of this is I want out. No more looking for other properties. No more looking at Cap Rates. No more P&L's. No more due diligence. No more 1031's. Out, for good! Realize now that when sold, the tax collector will come knocking asking for their cut. The IRS will. But what about the Oregon Department of Revenue?

According to John VanLandingham, an attorney at Lane County Legal Aid and the Oregon Law Center The capital gains breaks are found in the Oregon Revised Statutes following ORS 317.401 (for corporate taxes) and ORS 316.792 (for personal taxes).The specific language

Late Charges or Fees.

Guidelines. Landlords may impose a charge or fee[1] for late rental payments. However, they are subject to an array of limitations that must be observed. Below are the guidelines, all of which should be clearly set forth in the Rental or Lease Agreement:

(a)     They may only be imposed if rent is not received by the fourth day of the weekly or monthly rental period;

(b)     They must be specified as a tenant obligation;

(c)     The type and amount of the late charge must be specified (see Amount discussion below);

(d)     The date on which rent payments are due AND the date or day on which late charges become due.

Type and Amount of Late Charge or Fee. The following limitations apply:

1. Flat Amount. A reasonable flat amount may be charged once per rental period (“reasonable amount” means the customary amount charged by landlords for that rental market) OR;
2. Daily Charge. It may be charged daily, beginning on the fifth (5th) day of the rental period for which rent is delinquent;

(i) This daily charge may accrue every day until the rent (not including the late charge or fee) is paid in full.

                        (ii) However, the daily charge may not exceed:

• Six percent (6.00%) of the “reasonable flat amount” described in paragraph (a) immediately above; OR

• Five percent (5.00%) of the periodic rent, charged once for each succeeding five-day period (or portion thereof) for which the rent payment is delinquent, beginning on the fifth (5th) day of that rental period and accumulating until that rent payment (not including any late charge) is paid in full, through that rental period only.

3. Caveat: The practice of levying a daily charge is fraught with calculation pitfalls. Assessing an incorrect charge can invalidate a notice of default for nonpayment.

For more information see, ORS 90.260.

[1] These terms may be used interchangeably.

Undoubtedly, there is a lot here. And it is all subject to change based upon the whims of the Oregon Legislature. So before taking any legal action against a tenant for nonpayment of rent, charges, utilities, or fees (or a no-cause eviction), qualified legal counsel or someone versed in the current status of these ever-changing laws should be consulted.

To access the complete article - click the attachment above - document includes necessary forms as well as summary.

At the MHCO training on June 24th  I presented a slide that stated landlords were no longer required to include the eviction protection notice with a 10 day nonpayment notice after July 1, 2022.  The rationale was the tenant protections were moot because after June 30 the protections no longer applied. 

Section 9 of SB 891 states that the notice of eviction protection doesn’t sunset until 10/1/22. For this reason, landlords should continue sending the eviction protection notice through September 30, 2022. If you have any further questions about this, you should speak with your attorney.

 We are in the home stretch of the 2017 Oregon Legislative Session. The target adjournment date is June 23rd, the constitutional deadline for adjournment is July 10th. The actual date will fall somewhere between the two - most likely in late June. Significant budget, tax, transportation issues still need to be haggled over as the legislative session draws to a close.

Nearly all legislative proposals MHCO has been tracking (mostly opposed) have died in committee.

Click Here or at the top of this article  "MHCO Legislative Update"  for links to bill drafts and the status of all bills actively tracked by MHCO.

Two significant legislative proposals addressing manufactured home communities are on their way to the Governor's desk for signature. Here is a summary of these two bills:

SB 277A - This is the landlord tenant coalition bill that was negotiated over several months and addresses changes to disrepair and deterioration. The bill provides clear definitions of disrepair and deterioration as well as making it clear that cosmetic or aesthetic concerns are not disrepair or deterioration. The 30 day cure period is extended to 60 days. The bill also clarifies the responsibility of new residents who purchase an existing manufactured home in the community for repairs including cosmetic or aesthetic concerns as long as those concerns are included in the community rules and the community owner gives written notice to a prospective purchaser before he or she becomes a new resident.

HB 2008A - this bill caused a great deal of anxiety for community owners when it was introduced in January. The original bill contained nearly every legislative concept that MHCO has been fighting against for the past 20 years. MHCO negotiated with John VanLandingham (Lane County Law Center) and Representatives Marsh, Fahey and the House Speaker to reach a compromise that removed nearly all of HB 2008 and replaced it with three issues.

The first issue increases the amount homeowners are compensated when a community CLOSES from $5,000 (single wide), $7,000 (double wide), $9,000 (triple wide) to $6,000 (single wide), $8,000 (double wide), $10,000 (triple wide) and tied future increases in compensation to CPI.

The second issue in the compromise addressed resident-owned communities. USDA Rural Development would like to pilot their 502 1% loan program in resident-owned cooperatives, however, they won't if there are restrictions requiring a lien holder to remove an abandoned or foreclosed MH after 12 months. The compromise will give resident-owned cooperatives the flexibility to negotiate storage terms with lien holders that are beneficial to the cooperative. This, in turn, will allow the cooperative to attract lenders who offer extremely affordable loan products to manufactured homeowners in cooperatives who wish to replace older or unsafe homes with new, energy-efficient ones.

The third issue, when a community sells the new community owner will need to report to the state - the number of vacant spaces and homes in the manufactured dwelling park; the final sale price of the community; the date the conveyance became final; and the name, address and telephone number of the new owner.

Finally, the other issue of great concern to all landlords is RENT CONTROL. HB 2004A (the rent control bill) is in the Senate. In March the HB 2004A passed out of the Oregon House and has had a public hearing in the Senate. Final action on the bill (work session) is scheduled for the end of May. There is no indication what the Senate will do, but a number of Democratic Senators have expressed opposition. At this time all eyes are on the Senate - we should have a good idea later next week on what direction the Senate will take on rent control and the elimination of 'no cause' eviction. We will keep you posted on any developments - all should be revealed within the next two weeks.

MHCO Legal Counsel Phil Querin will do a complete analysis and provide practical advice for all MHCO members (managers and community owners) on these new laws later this summer. In addition all necessary changes to MHCO Forms will be made as well.

If you have any questions or concerns please feel free to contact the MHCO office at 503-391-4496.  

Effective July 1, 2021 the process for evicting residents who have not paid rent since July 1, 2021 forward will require a new process and forms.  The necessary forms for the new non payment of rent process are attached above to this article.  These new forms ARE NOT posted under the "Form Section" of MHCO.ORG due to frequent changes mandated by the Legislature.  Do not use any forms that you downloaded prior to July 1, 2021 as those forms are out of date.  Always download forms from MHCO.ORG on the day of use to make sure you are in compliance with a frequently changing regulatory environment.

Notes on the new process and forms:

• The 10-day (formerly 72-hour) notice can only be issued after 7 days of nonpayment – so if the payment date is the first, then you’d have to wait until the 8th to issue - this did not change under HB 4401.  
  • However, as you must realize with all the legislative stuff, rents between 4-1-2020 and 6-30-21 cannot be collected before 3-1-2022.
  • And notices of nonpayment or FEDs rents for 7-2021+ can commence but (a) only with the eviction protection notice and (b) if tenant provides documentation he/she is applying for funds, the landlord or court has to wait another 60 days.  Bottom line is that residents can drag out nonpayments if they want for months is landlord's only recourse is state/federal funds)

MHCO is working on additional tools to help managers and landlords understand the new regulations.  Look for a ‘flow chart’ in early August and we will do an extensive Q&A article as questions become more apparent.

The two previous articles by Phil Querin on the new process as a result of SB282 and SB278 which are posted under "Community Updates" are probably worth reviewing now that you have the forms in hand.

This has been a long trying process – MHCO appreciates the efforts of all those involved to draft forms that are useful and accurate.  We are especially appreciative of Phil Querin's knowledge and expertise.  More information will be forthcoming in the weeks ahead.  Thank you for your patience.

Answer. ORS 90.531 - 90.543 consists of a series of statutes that permit landlords to convert utility charges from base rent to a program passing them on directly to residents. ORS 90.533 expressly permits garbage collection costs to be converted to a pass-through program. In summary, it provides as follows:

1. Unilateral Amendment. You must first unilaterally amend your rental or lease agreements to remove the cost of garbage collection from your base rent and have it billed to residents by your garbage provider. You do not need tenant consent to make this amendment.

1. 180-Day Notice. You must give not less than 180 days' written notice to each resident, before converting to a garbage pass-through billing program.

1. Reduction of Rent. You are required to reduce your base rent at the time of the first billing under the new program. The rent reduction may not be less than an amount reasonably comparable to the amount of the rent previously allocated to the garbage services averaged over at least the preceding twelve (12) months. Landlords may not convert to this program sooner than one year after giving notice of a rent increase, unless the rent increase is an automatic increase provided for in a fixed term rental agreement (i.e. a lease) entered into one year or more before the conversion.

1. Twelve Months' Garbage Billing Records. Before you may first bill the residents under the new program, you must provide them with written documentation from the garbage provider showing your cost for the service during at least the twelve (12) preceding months.

1. Prohibition on Subsequent Rent Raises. During the six months following your conversion to a garbage pass-through billing program, you may not raise the rent to recover any costs of conversion to the program.

1. Common Areas. At the same time you convert to the pass-through program, you may also unilaterally convert the billing for common areas to a pro rata method that divides the cost based on the number of occupied spaces in the facility. don't forget to address this in the unilateral amendment!

Answer: HB 2639 will become effective on July 1, 2014. It applies to all housing, whether or not it is manufactured housing inside of a community. The current law provides that a landlord may not refuse to sell, lease or rent any real property to a prospective lessee or tenant based upon the following factors: - Race; - Color; - Religion; - Sex; - Sexual orientation; - National origin; - Marital status; - Familial status (i.e. children under 18 years of age); and - Source of income. Under HB 2639 "source of income" now includes federal rent subsidy payments under Section 8 and any other local, state or federal housing assistance. [However, it does not include income derived from a specific occupation or income derived in an illegal manner.] Your concern is misplaced, but you still must be careful. HB 2639 clarifies that the prohibition against discrimination does not prevent you from refusing to rent or lease real property to a prospective renter/lessee based upon their inability to pay rent. If you have a 33% rule, and consistently apply it, you should be fine. However, what you must do is to include in your 33% calculation, any moneys the applicant is receiving from other state, local, or federal assistance, including Section 8 subsidies (collectively "Government Assistance"). You may not deny an applicant solely because they are receiving Government Assistance, and you must include it in your calculations. Conclusion. It is my opinion that HB 2639 means that going forward, you should include all Government Assistance, as well as other income, when calculating your applicants' ability to pay the space rent. In other words, just because they receive Government Assistance does not mean that you may deny them occupancy. Lastly, even if they qualify under your 33% rule, after including their Government Assistance, if there are other legitimate grounds for denial, such as prior rental history or criminal record, you are still legally entitled to reject them. Please understand that this is not legal advice, and you should verify my interpretation with you own attorney.

Answer: Under the Fair Housing Act ("the Act") housing providers including landlords, are required to make reasonable accommodations to the rented facilities and common areas, if requested by a handicapped tenant or their legal occupant ('the requestor").

Landlords are entitled to obtain reasonable information from the requestor in order to assist in determining whether the requested accommodation is reasonably necessary because of the disability. If a person(s) disability is obvious, or otherwise known to the landlord, and if the need for the requested accommodation is readily apparent or known, then the landlord may not seek any additional information about the requestor's disability or the disability-related need for the accommodation. This law also applies to the use of assistance animals.

A "reasonable accommodation" is a reasonable change, exception or adjustment to a rule, policy practice or service that will enable a handicapped person to have an equal opportunity to use and enjoy the rented facilities and common areas. There must be an identifiable relationship between the requested accommodation and the person's disability. Landlords are not required to make requested accommodations if doing so would impose an undue financial or administrative burden upon them or fundamentally alter the nature of the landlord's operations. With respect to a person, a "handicap" means: (a) one with a physical or mental impairment which substantially limits one or more major life activities; (b) one with a record of such impairment; or (c) one who is regarded as having such an impairment. [Juvenile offenders, sex offenders, persons who illegally use controlled substances and those with a disability whose tenancy would constitute a direct threat to others, or result in substantial physical damage to the property of others, are generally not protected under the Act.]

If a landlord refuses a requested accommodation, the requestor is encouraged to have a discussion with the landlord concerning an alternative accommodation. This is a summary only and not intended to constitute legal advice. For more information, landlords, tenants and legal occupants of tenants are encouraged to consult with their attorney or a Fair Housing expert if they have any questions regarding their rights and responsibilities.

My first reaction is that what the resident is requesting is not appropriate for several reasons [and not simply because other residents do not have computers and cannot access Facebook]. Here is a sampling:

• He is asking for information that goes to business/management issues that may not be appropriate for sharing with residents, either because it is not available, it is subject to change, it may not be known, etc. Even if it is appropriate for discussion at the general meetings, I can see this forum moving in the direction of demanding more and more information than management is willing to share. The test for content is, I suppose, whether it would be a topic of discussion at open meetings.
• There should be one time and place for these meetings, and if you are not going to give up open meetings at scheduled times, then the Facebook approach is not only duplicative, but risks creating two lines of communication, one at the public meetings and the other over the Internet. You should limit the meetings to the open forum.
• Anonymity is a dangerous format for questions, since he could simply begin making up his own questions, turning the Facebook forum into an opportunity for his own private inquisition.
• I don't think I would like to see my residents' questions spread across the Internet, for business reasons. Resident meetings are not open to the public, as far as I know. Why would you do so with an Internet forum?
• Clearly, what he wants is not what the other residents want - his request for the accommodation ignores their wishes and your needs as a manager. In other words, it is administratively impossible.
• I'm sure with time I could come up with a host of other objections.

You should, of course, take this request seriously. While you want to briefly explain why you are unwilling to participate in this process, you don't want this to get into a lengthy dialogue on the matter. For example, what if you gave three reasons for declining his request? Then he files a Fair Housing claim, and you then give five reasons? It appears that you just made up two new ones. Accordingly, anything you say should be couched in "Here are some - but not necessarily all - of the reasons I cannot grant your request. The shorter the better. No need to get into a lengthy letter writing campaign.

You should definitely make a counter-proposal for the kind of accommodation you can grant - e.g. have someone take minutes of the open meetings (not recordings). He and everyone else can have the minutes for review. If anyone wants to raise a question or comment about the minutes, they may do so at the following meeting. He can select a proxy - i.e. another resident - to relay his questions and concerns at the meetings he does not want to attend.

Lastly, it appears that the rest of the residents want you present - his demand seems to want to subordinate everyone's needs to his. That is not the concept behind a "reasonable accommodation." It comes from the landlord to the requestor - not from the residents. Granting him what he wants/needs by taking minutes and allowing the proxy, reaches a far better balance for everyone involved. The residents have open meetings and he has access through the minutes and his proxy.

Answer: Here is _ 805(b) of the Fair Debt Collection Practices Act regarding communication in connection with debt collection. The following activity is prohibited: "Communication with third parties. Subject to limited exceptions, without the prior consent of the consumer given directly to the debt collector, or the express permission of a court of competent jurisdiction, or as reasonably necessary to effectuate a post-judgment judicial remedy, a debt collector may not communicate, in connection with the collection of any debt, with any person other than a consumer, his attorney, a consumer reporting agency if otherwise permitted by law, the creditor, the attorney of the creditor, or the attorney of the debt collector." The Take-Away: This law, when coupled with the general expectation of privacy that residents have, it is my opinion that a landlord should never be in the position of voluntarily disseminating personal contact information to potential creditors, or any other people for that matter - unless the tenant consents in advance. If the debt collector issues a subpoena, that's another story. But until they do, landlords should avoid voluntarily complying with requests for personal information on residents. This applies regardless of whether the third party is a debt collector.