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Phil Querin Q&A: Resident Builds Carport - Sells Home - New Owner Wants to Take Home and Carport

Phil Querin

Answer: This situation is not directly addressed in the Oregon manufactured housing laws. First, some general observations: The manufactured housing side of the landlord-tenant law regards the “space” as the “premises.” For example, a resident in an apartment may not, without landlord permission, intentionally make major structural changes to the interior of the premises. However, most apartments have rules against this, or it is included in the rental agreement. Your space agreement or rules may have similar prohibitions regarding major changes to the space. In this case, however, you permitted the work to commence. It is unclear whether you had reviewed any plans, before the work started. You should have made this a condition of building the carport in the first place. What about permits? It is unclear whether they are required in your jurisdiction, but it is something you should always make sure is complied with. I am unclear what you mean when you say that other such structures are “free standing and permanent.” If they are permanent, in the sense of being permanently affixed to the space, then presumably, you are treating these as structures that would remain if the home were sold and removed. However, your independent conclusion that a structure is “permanent” and therefor stays with the space is really not the complete issue; what does the resident believe? It was his money that presumably paid for the work, and he may have some say in whether he intended it to be a part of the home, and movable if the time came. While your opinion is important, so is that of your resident. For this reason, I suggest that before doing this again, you might consider addressing it in the community rules. Some of the things that should be covered are the following: • Code compliance • Management pre-approval of completed drawings • Time to complete work • Your right to post a notice of non-responsibility for liens if the resident hires a contractor • Method of affixing to the ground • Safety of final structure and perhaps inspector sign-off • Who owns the structure • Can it be removed upon sale and removal of the home (I suggest “yes” so long as the space is returned to its original condition and all holes are safely and completed filled, etc.) • Duty to keep the carport in good and safe condition – remember if it is a part of the space, absent agreement with the resident, it would be your duty, since you own the park. In this particular case, I suggest that if you have not pre-addressed these issues with your resident, he may believe this is his structure to do with as he sees fit. I really can’t disagree, since you permitted the project and from your question, it appears no ground rules were established regarding ownership in the event the home was moved. However, if you permit the carport structure to be removed, you should insist that the space be returned to its original pre-construction condition. That’s about the best you can do with this situation, although establishing rules – or at least agreed-upon terms – before construction commences again, is a good idea.

Manufactured Structures Dealer's License Facts

MHCO

If I am a licensed real estate agent, can I sell manufactured homes?

In some cases, real estate brokers will need an MSD license. If a manufactured structure is sold separate from the sale of the land, this is considered a personal property transaction and requires an MSD license. The sale of a manufactured structure and land in a single transaction is a real estate transaction and requires a real estate license (but not an MSD license).

I sell Park Model structures. Do I need a DFCS dealer's license to sell these structures?

Yes. Except for person-to-person sales, any individual or entity engaged in selling manufactured homes is required to get a license. If you are a park owner and you sell less than 10 manufactured homes in a year, you may apply for a limited license. You can apply for either license online at https://licensesonline.dcbs.oregon.gov/MyLicense Enterprise/

What is the purpose of a limited dealer's license?

The limited license allows a park owner to sell up to ten homes per year within the licensee's park without having to obtain a full dealer license. ORS 446.706

What are the bonding requirements for a manufactured structures dealer?

A bond or letter of credit is required before a license is issued. The bond must be submitted with your application on a Division of Finance and Corporate Securities surety bond form (Form 440-2966) .

How do I apply for a manufactured structures dealer license?

To apply for a regular or a limited license, submit a completed application form to the Division of Finance and Corporate Securities. Alternatively, you can take advantage of the department's online licensing system - License 2000/My License. This system provides licensees a robust set of tools to apply for, renew, update, or check license status via the web. More information can be found online at https://licensesonline.dcbs.oregon.gov/MyLicense Enterprise/.

How do I make changes to my manufactured structures dealer license?

If dealers need to change the street address, mailing address, or the DBA or ABN on their license, a correction to the license must be submitted and a $30 fee applies. Please note, the legal name on the license cannot be changed, only the DBA or ABN.

As a dealership, if I want to open another sales center, do I need another license?

Dealer licenses are good for one location only. If a dealer has, or intends to open, a branch office at a different location under the same business name and license, the dealer must apply for a supplemental license.

Does a dealer need a trip permit to move a new home between dealer inventory lots?

No. New homes identified as dealer inventory may be moved between a dealer's inventory lots provided the dealer has obtained a supplemental dealer license for the lots in question. Please note that a trip permit is required whenever a used home is moved from one site or dealer location to another.

As a dealer, am I subject to taxation on a home I have installed as a spec home?

If you have a supplemental license for the home's location, the home is considered inventory.
See ORS 446.576

How should a dealer handle a spec home that is placed in a manufactured home park?

The statute makes provisions for a dealer to license a park as a dealer site from which the home can be sold. In essence, this means that the initial placement of a spec home on a lot in a park, before it has actually been sold, would be viewed as movement from a dealer lot to a dealer lot.

Can an Escrow Agent complete the sales transaction of a manufactured structure on behalf of my dealership?

Yes, provided the conditions specified in ORS 446.591 are met.

Who should I contact if I have any questions about dealer licensing?

Licensing Staff (503) 378-4140 dcbs.dfcsmail@state.or.us

State to Replace LOIS Manufactured Home Records System On Feb 1, 2017

Escrow/Title Companies and Manufactured Home Dealers:

 

The Oregon Building Codes Division (BCD) is moving toward launching a new online Manufactured Home Ownership Documents System (MHODS) with a projected "go-live" date of Feb. 1, 2017. 

 

MHODS Online

 

The MHODS system will replace the state's current LOIS Manufactured Records System. While the systems have similar features, there are some differences. 

 

  •       To use MHODS, individuals will need to provide a username, password, and contact information to establish an online account. After registration, users can complete applications and upload documents required for an ownership transaction. Note: Each registered user must have a different email address in MHODS, so businesses cannot have multiple individuals associated with the same email address.

 

  •       All transactions in MHODS will require prior county approval. Before getting a trip permit or ownership document, users must submit a county notification and certification document signed by the appropriate county certifying that there are no outstanding taxes or other issues. These forms will be available on BCD's website at www.oregon.gov/bcd in mid January.

 

  •       When submitting documents online to MHODS, all fees must be paid by credit card.??

 

Businesses that have historically used the billing option in LOIS, going forward, will either need to pay online with a credit card or submit documents and fees to BCD or the appropriate county for processing. Note: In early February (because we anticipate that the LOIS system will not be accessible), the division will email invoices for the month of January to users with billing accounts; the invoices will include January transaction fees and any additional outstanding fees due to BCD. 

 

  •      Users who want to pay fees by check can print applications from the BCD website at www.oregon.gov/bcd and submit them via the U.S. mail or in person at a division office in Salem, Pendleton, or Coos Bay, or at a participating county office.

 

  •      BCD will provide online previewing of MHODS and training opportunities in mid to late January. We will send an email in January with more information.

 

 

Public records and reports

 

Everyone will have the ability to search records in MHODS by home identification number, HUD number, serial number, license plate number, owner name, site address, zip code and map tax lot. In addition, users will have the ability to generate data reports.

 

Trip permits

 

Transporters will need to submit a trip permit application and the appropriate county notification form prior to purchasing a permit online. The permit can then be printed from the MHODS system.

 

Additional information

 

A few other items regarding MHODS:

 

  •    Unlike the LOIS system, manufacturers will no longer enter information about new homes in MHODS. New homes will enter the system when dealers and sellers apply to sell and transport the new home. Manufacturers, however, will continue to provide lenders and dealers with a Certificate of Origin for a new home. 

 

  •   There is no option in MHODS for a business to place a hold" on a home (until a lender or dealer is paid

Phil Querin Q&A: Storage Agreement Dispute

Phil Querin

Answer. Their fight is with each other, but the court will decide ownership; who signs the storage agreement is not going to carry the day. So in the interest of moving this forward, let them both sign. But it should be under a written agreement saying that: (a) The home has to be inventoried by a neutral third party; (b) Nothing can be removed by one party without advance written notice to and consent of the other; (c) No action can be taken to sell, remove, or dispose of the home without the permission of the court; (d) Each party preserves their claims, but agrees to accept the decision of the court as final.

 

As for payment of the storage fee, I'd say they should work that out and include it in the writing. They could alternate payments, one pay and the other reimburse half, or any other solution that assures the park getting paid. Then the party who does not get awarded the home would be reimbursed for the storage fees advanced by the party who does.

 

I suppose it's also possible that the court could require the home be sold prior to close of probate, and then the proceeds divided in whatever way it decides.

Eugene Registered Guard Article MHCO's Response How Not to Conduct Consignment/Sale of Resident's Home In a Manufactured Home Community

Editor's Note:  Last month the Eugene "Registered Guard" ran an article on the front page on a manufactured home community - Falconwood Manufactured Home Community.  The article has caught the attention of Oregon Legislators who are demanding more protections for residents.  Many of the protections that may be proposed have already been passed into law (HB 3016 - passed in 2015).   MHCO asked our legal counsel Phil Querin to review the article and advise members how to to CORRECTLY sell a resident's home.  

Here is a link to the orginal Eugene Register Guard Article:

http://registerguard.com/rg/news/local/36552747-75/state-investigates-sa...

Phil's article is attached - simply click the attached file ABOVE.

Phil Querin Q&A: Resident Builds Carport Now Selling/Moving Home - Status of Carport?

Phil Querin

Question:  I have a resident who was given permission to build a permanent carport.  Most all of the carports in my park are free standing and permanent which is my preference. However, he constructed the permanent carport by boring holes in the ground and filling them with concrete and inserting metal mounts to which he fastened 4x4 uprights for the carport.  Building it this way, in my opinion, made it part of the real property.  I was there when construction started but was absent when it was completed. 

 

What now complicates matters is that he recently decided to sell the manufactured home, including the carport.  This would not have been an issue had the buyer is now planned on moving the home.  I believe that since the carport is now permanently affixed to the ground, it cannot be sold as personal property along with the home.  He also attached the carport to the manufactured home which may complicate things, as well.  What are my rights here?

Answer:  This situation is not directly addressed in the Oregon manufactured housing laws. First, some general observations: The manufactured housing side of the landlord-tenant law regards the “space” as the “premises.”  For example, a resident in an apartment may not, without landlord permission, intentionally make major structural changes to the interior of the premises. However, most apartments have rules against this, or it is included in the rental agreement. Your space agreement or rules may have similar prohibitions regarding major changes to the space.

 

In this case, however, you permitted the work to commence.  It is unclear whether you had reviewed any plans, before the work started.  You should have made this a condition of building the carport in the first place.  What about permits?  It is unclear whether they are required in your jurisdiction, but it is something you should always make sure is complied with.  

 

I am unclear what you mean when you say that other such structures are “free standing and permanent.”  If they are permanent, in the sense of being permanently affixed to the space, then presumably, you are treating these as structures that would remain if the home were sold and removed.  However, your independent conclusion that a structure is “permanent” and therefor stays with the space is really not the complete issue; what does the resident believe? It was his money that presumably paid for the work, and he may have some say in whether he intended it to be a part of the home, and movable if the time came.  

 

While your opinion is important, so is that of your resident.  For this reason, I suggest that before doing this again, you might consider addressing it in the community rules.  Some of the things that should be covered are the following:

 

· Code compliance

· Management pre-approval of completed drawings

· Time to complete work

· Your right to post a notice of non-responsibility for liens if the resident hires a contractor

· Method of affixing to the ground

· Safety of final structure and perhaps inspector sign-off

· Who owns the structure

· Can it be removed upon sale and removal of the home (I suggest “yes” so long as the space is returned to its original condition and all holes are safely and completed filled, etc.)

· Duty to keep the carport in good and safe condition – remember if it is a part of the space, absent agreement with the resident, it would be your duty, since you own the park.

In this particular case, I suggest that if you have not pre-addressed these issues with your resident, he may believe this is his structure to do with as he sees fit.  I really can’t disagree, since you permitted the project and from your question, it appears no ground rules were established regarding ownership in the event the home was moved. However, if you permit the carport structure to be removed, you should insist that the space be returned to its original pre-construction condition. That’s about the best you can do with this situation, although establishing rules – or at least agreed-upon terms – before construction commences again, is a good idea.

Phil Querin Q&A: Water Leaks from Manufactured Home

Phil Querin

Answer: By your question, it appears that your community is not sub-metered. If it were, the owners of the home would likely recognize the problem and immediately and fix it.

 

In my experience when water is included as a part of the base rent, most owners really don't care, and don't check. But when the community institutes a sub-metering program, everyone becomes an overnight conservationist. Sub-metering is a win-win for everyone; the landlord saves money in not having to pay for wasted water, and the residents save in (a) controlling their own water bills, and (b) not having to suffer needless rent increases to recapture the cost of wasted water.

 

 

Now to your questions. Clearly, if water is visibly running out of the home, the tenants should be notified and told to fix the problem. They are responsible for their own homes.

 

 

As for the less obvious leaking problems, the only way to find out is to survey the tenants on the issue; e.g. do they hear the toilet leaking, for example.[1]Same question for faucets. Next, what about under the home? Has anyone checked lately? I have heard of management offering to do inspections under the home for free, as a part of instituting a submetering program.

 

 

But can you require residents take these proactive steps, especially hiring someone to inspect under the home. Except for the rules regarding the siting of home on a space, there are likely no regulations that mandate such action on an ongoing basis - at least if there is no present evidence of leaking. If there is evidence, ORS 90.740 can be relied upon to secure compliance, if nothing can be found in the rules or rental agreement:

 

 

90.740 Tenant obligations. A tenant shall:

 

(4)Except as provided by the rental agreement:

(a)Use the rented space and the facility common areas in a reasonable manner considering the purposes for which they were designed and intended;

(e)Install and maintain storm water drains on the roof of the dwelling or home and connect the drains to the drainage system, if any;

(f)Use electrical, water, storm water drainage and sewage disposal systems in a reasonable manner and maintain the connections to those systems;

 

If the rules do not contain such a provision, consider amending them to add language to address the issue. Rule changes can be done in a fairly straightforward manner. See, ORS 90.610. Alternatively, even if submetering is not addressed in your rules, you can unilaterally add it to your rental agreements, as a "Plan B", if you are unsuccessful in implementing the necessary rules.

[1]From the City of Portland website here: "How to check for toilet leaks: Lift of the toilet tank lid. Place 1 dye tablet in the toilet tank. Do not flush. Wait 15 minutes (or more) without flushing. Check the water in the bowl of the tank. If color appears in the bowl, the toilet has a leak."

Landlord Requirements to have licensed plumber or electrician

Question: A landlord recently purchased a manufactured home in his community. He wants to fix the home up and then resell it. Does the landlord have to be a licensed plumber or electrician to do the respective work on the home?

Answer: Yes! It's one thing to be performing repairs on one's own home, and quite another to be doing so on a home intended for re-sale. But keep in mind that in either case, the repairs have to conform to all of the specialty codes - which is a reason enough for using a licensed and bonded contractor in either event. From a liability standpoint, the contractor should be thoroughly vetted through the Construction Contractor's Board. Make sure that the contractor has no complaints or other Board action. If the home is to be sold on an installment contract, make sure a current form of security agreement is used. Make sure the lien is properly filed with the Department of Consumer and Business Services and appears on the title to the purchaser's home until it is paid off. Make sure the Bill of Sale and, if applicable, the retail installment contract, both have extensive AS-IS language, making no express warranties and disclaiming all implied warranties. Make sure the buyer gets their own inspection of the home, inside and out, including all systems such as plumbing, electrical, HVAC, etc. I don't recommend letting the buyer waive the inspection - it could come back and bite the landlord if an unknown defect is later found. The landlord wants the buyer relying on his own expert, not on anything the landlord says. After the sale the landlord does not want any lingering liabilities. The landlord may likely have to be licensed as a dealer under ORS 446.003(8). Review ORS 446.616 for the rules concerning transfer of an interest in a manufactured home. Review ORS 446.611 for the rules regarding perfecting a security interest in the home. See ORS 446.641 regarding notification to the county of a transfer of ownership in the home. The landlord should be careful to record his interest first once it is acquired - and make sure title is clear when he first receives it. Otherwise, he may find himself trying to transfer an interest that the public records show belongs to his predecessor and/or has unreleased liens on it.

Landlord Requirements to have licensed plumber or electtrician

Question: A landlord recently purchased a manufactured home in his community. He wants to fix the home up and then resell it. Does the landlord have to be a licensed plumber or electrician to do the respective work on the home?Answer: Yes! It's one thing to be performing repairs on one's own home, and quite another to be doing so on a home intended for re-sale. But keep in mind that in either case, the repairs have to conform to all of the specialty codes - which is a reason enough for using a licensed and bonded contractor in either event. From a liability standpoint, the contractor should be thoroughly vetted through the Construction Contractor's Board. Make sure that the contractor has no complaints or other Board action. If the home is to be sold on an installment contract, make sure a current form of security agreement is used. Make sure the lien is properly filed with the Department of Consumer and Business Services and appears on the title to the purchaser's home until it is paid off. Make sure the Bill of Sale and, if applicable, the retail installment contract, both have extensive AS-IS language, making no express warranties and disclaiming all implied warranties. Make sure the buyer gets their own inspection of the home, inside and out, including all systems such as plumbing, electrical, HVAC, etc. I don't recommend letting the buyer waive the inspection - it could come back and bite the landlord if an unknown defect is later found. The landlord wants the buyer relying on his own expert, not on anything the landlord says. After the sale the landlord does not want any lingering liabilities.The landlord may likely have to be licensed as a dealer under ORS 446.003(8). Review ORS 446.616 for the rules concerning transfer of an interest in a manufactured home. Review ORS 446.611 for the rules regarding perfecting a security interest in the home. See ORS 446.641 regarding notification to the county of a transfer of ownership in the home. The landlord should be careful to record his interest first once it is acquired - and make sure title is clear when he first receives it. Otherwise, he may find himself trying to transfer an interest that the public records show belongs to his predecessor and/or has unreleased liens on it.

Disrepair, Deterioration & MHCO Form 55

Phil Querin

 

By way of refresher, ORS 90.630 pertains to curable maintenance/appearance violations relating to residents’ spaces.  However, if the violation relates to the physical condition of the home’s exterior, ORS 90.632 applies, to address repair and/or remediation that can take more time to cure, either due to the weather, the amount or complexity of the work, or availability of qualified workers.

 

As a result, SB 277A, which became law on June 14, 2017 (“Effective Date”), will apply: (a) To rental agreements for fixed term tenancies – i.e. leases – entered into or renewed on or after the Effective Date; and, (b) To rental agreements for periodic tenancies – i.e. month-to-month tenancies – in effect on or after the Effective Date.

 

MHCO has significantly changed its current form No. 55 to address the changes in the new law. The major issue going forward is for managers and landlords to be able to recognize when to use Form No. 55 to address disrepair and deterioration conditions, versus Form No. 43C, which is appropriate for violations relating to maintenance and appearance of the space.

 

Tip: Although Form 55 is only for use when there is disrepair or deterioration to the exterior of the home itself, the definition of a manufactured dwelling in ORS 90.100 includes “an accessory building or structure,” and that term includes sheds and carports and “any portable, demountable or permanent structure”. Accordingly, even though the damage or deterioration may relate to accessory buildings or structures – and not to the home itself – they too are subject to the new law.

 

30-day and 60 Repair Periods.  If the disrepair or deterioration to the exterior of the home or related structures creates a risk of imminent and serious harm to dwellings, homes, or persons in the Community (e.g. dangerously unstable steps, decking or handrails), there is a 30-day period to repair.

 

For all other (i.e. non-dangerous) conditions, the minimum period to cure is now 60 days.  As before, the new Form 55 provides a place for landlords and managers to specifically describe the item(s) in need of repair.

 

Trap: If there is imminent risk of harm, and the landlord/manager intends to give the tenant 30 days rather than 60 days, SB 277A requires that they not only describe the item(s) in disrepair, but also describe the potential risk of harm.  There is little question but that the failure to do so would invalidate the notice. The new Form 55 prompts users to describe both the violation and the potential risk of harm.

 

Tip: The new Form 55 contains a prompt at several places to attach additional pages, documents or photos, if doing so would be helpful in identifying the disrepair or deterioration, and the necessary repair. Remember, you cannot expect the tenant to be a mind reader – just because you know the nature of the problem and the appropriate repair, does not mean the tenant is on the same page. If there is any ambiguity in the notice, a court would likely rule in favor of the tenant. Why? Because the landlord/manager filled out the Notice and had the ability at that time to draft it with sufficient clarity.

 

Service of the Notice.  Most landlords and managers are familiar with the various methods of effecting service of notices. However, if in doubt, check the statutes. They are contained at ORS 90.155 (Service or delivery of written notice) and ORS 90.160 (Calculation of notice periods).  You can never be too careful; a notice giving a single day less than legally required, can result in the case being thrown out.

 

Statutory Definitions. The new ORS 90.632 defines “disrepair” and “deterioration”, and for the most part, they are quoted in MHCO’s new Form No. 55:

 

“Disrepair” means being in need of repair because a component is broken, collapsing, creating a safety hazard or generally in need of maintenance.  It also includes the need to correct a failure to conform to applicable building and housing codes at the time: (a) Of installation of the manufactured dwelling or floating home onthe site, or (b) The improvements to the manufactured dwelling or floating home were made following installation on the site.

“Deterioration” includes, without limitation, such things as a collapsing or failing staircase or railing, one or more holes in a wall or roof, an inadequately supported window air conditioning unit, falling gutters, siding or skirting, or paint that is peeling or faded so as to threaten the useful life or integrity of the siding. Deterioration does not include aesthetic or cosmetic concerns.

Trap:  Note that the definition of “deterioration” refers to “…paint that is peeling or faded so as to threaten the useful life or integrity of the siding.” (Underscore added.)  Before requiring a tenant to paint their entire home, it might be prudent to confer with a qualified painter who, if necessary, would be prepared to testify that the poor condition of the paint would likely threaten the useful life or integrity of the siding (at least as to the affected  area). This could avoid arguments in the future about whether the entire home or structure actually needed to be repainted.  In any event, management should be careful when issuing Form 55 to make sure that: (a) It is not issued for minor repairs bordering on the cosmetic, and (b) Required repairs are not overly burdensome or broad. For example, if one side of the home is exposed to the weather and in need of repainting, there may be little reason to insist that the resident repaint the entire home.

Necessary Repairs.  As before, SB 277A requires that management specifically describe what repairs are required to correct the disrepair or deterioration. In the new Form 55 we have included instructions both to the Cause section of form, and also to the Necessary Repairs section. And don’t forget to attach additional pages, documents or photos, if it might be helpful; the more illustrative examples of what is wrong with the home and what repairs are necessary, the less room there is to argue about it later.

Right to Extension of Time.  There are three circumstances in which a resident may request an extension of the 60-day compliance deadline. Note however, as discussed above, there is no right to any extension if the adverse condition would pose a risk of serious harm.

                                                                                              

  • Additional 60 days. If the necessary repairs involve exterior painting, roof repair, concrete pouring or similar work, and the weather prevents that work during a substantial portion of the existing 60-day periodto cure;
  • Additional 60 days.  If the nature or extent of the correction work is such that it cannot reasonably be completed within the 60-day cure period due to the type and complexity of the work and the availability of necessary repair persons;
  • Additional 180 Days (Six Months). If the disrepair or deterioration existed for more than the preceding 12months with the landlord’s or manager’s knowledge, or rent had been accepted over that time.

 

Tip: The law requires the tenant to make a written request for an extension of time if it is sought in a reasonable amount of time prior to the last day of the 60-day compliance period. There are two issues, however: (a) How long an extension is the tenant asking for – 30 days, 40, 50, or 60? (b) Obtaining an extension also extends the deadline for compliance.  An oral extension does not nail down the additional time in writing and may not identify the new deadline. Accordingly, landlords and managers should insist on a written request from their tenants and should consider putting in writing: (a) The amount of time granted; and, (b) The new deadline. That way there can be no confusion about the length of the extension and the outside date that compliance must be completed.

 

Issue: Does SB277A contemplate that following the request for a 60-day extension, management may agree to less? Possibly, since new law provides that the need for the extra time must be due to certain conditions that prevent that work from occurring during a substantialportion of the existing 60-day period. If confronted with this situation, management should consult with legal counsel.

Notice of Correction. If the tenant performs the necessary repairs before the end of the compliance date, or extended compliance date, they have the right to give the landlord/manager a written notice that the issues have been corrected. There is no fixed time for management’s response as to whether the repairs have been satisfactorily andtimely performed; it is sufficient if it is within a reasonable time following the tenant’s written notice. However, if a tenant gives this notice to management at least 14 days prior to the end of the completion deadline, or extended deadline, their failure to promptly respond is a defense to a landlord’s termination of tenancy.

Sale of Home; Prospective Purchasers. Prior to enactment of SB 277A, Oregon law permitted a tenant to sell their home while the disrepair/deterioration notice was outstanding, permitting the landlord/manager to give a copy of it to the new perspective purchaser, and providing that the sale would not automatically extend the compliance period. Essentially, the new tenant stepped into the shoes of their seller, and became subject to the same notice and time periods.

 

The practical result of this protocol was that as between the tenant and the prospective purchaser, they could negotiate any price reductions for the necessary work, and the new rental agreement would contain a provision requiring that it be completed within the time prescribed in the original notice, or a permitted extension.  That is no longer the case under the new law.

 

SB 277A now provides that at the time of giving a prospective purchaser the application and other park documents, the landlord/manager must also give them the following:

 

  • Copies of any outstanding notices of repair or deterioration issued under ORS 90.632;
  • A list of any disrepair or deterioration of the home;
  • A list of any failures to maintain the Space or to comply with any other provisions of the Rental/LeaseAgreement, including aesthetic or cosmetic improvements; and
  • A statement that the landlord/manager may require a prospective purchaser to complete the repairs,maintenance and improvements described in the notices and lists provided.

 

Tip: Note that the new law combines not only ORS 90.632 notices relating to damage and deterioration of the home or structures, but also a list of failures to maintain the space and other defaults, including aesthetic or cosmetic improvements. This may or may not include 30-day curable notices under ORS 90.630 for failure to maintain the space. But in both cases (i.e. defaults relating to structures, and those relating to the space), the new tenant appears to get the six-month period to comply.

 

This represents and interesting shift in Oregon law, and possibly for the better. Many parks historically gave “resale compliance notices” to tenants who were placing their homes up for sale. However, until now, there was some question whether a landlord could “require” as a condition of resale, that the existing tenant make certain repairs – absent having first sent a 30-day notice.[1]Now, under the new version of ORS 90.632, it appears landlords may make that list, and let the tenant/seller know that unless the work is completed before sale, it will be given to the tenant’s purchaser upon application for tenancy.

 

So, if the landlord/manager accepts a prospective purchaser as a new tenant, and notwithstanding any prior landlord waivers of the same issue(s), the new tenant will be required to complete the repairs, maintenance and improvements described in the notices and lists.

Under Section (10) of the revised statute, if the new tenant fails to complete the repairs described in the notices within six months from commencement of the tenancy, the landlord “may terminate the tenancy by giving the new tenant the notice required under ORS 90.630 or ORS 90.632.”  This appears to say that a new tenant who fails to complete the items addressed in the notices and lists within the first six months, will thereafter be subject to issuance of a curable 30-day or 60-day notice to complete the required repairs. Accordingly, this is how the new MHCO Form 55 will read.

 

What if the landlord had already given the seller a written notice under one of these two statutes, but the compliance period had not yet run at the time of sale? The new statute does not carry over the unused time to the new tenant/purchaser, since under the new law, they will have received essentially the same information upon application, and will now have six months to complete.

 

Tip: Nonetheless, it is still a good idea to give a detailed 90.632 notice to a tenant before sale. That way, the very same repair issues will be in front of the landlord, existing tenant and prospective purchaser at the same time. It will now become a matter of negotiation between tenant/seller and tenant/buyer as to who will perform the repairs, and when.

 

Repeat Violations. If one or more of the items that caused issuance of a 30-day or 60-day notice under ORS 90.630 or 90.632 recurs within 12 months after the date of issuance of that notice, the tenancy may be terminatedupon at least 30 days’ written notice specifying the violation(s) and the date of termination of tenancy. In such case, correction of the disrepair or deterioration will not prevent a termination of the tenancy.

 

Miscellaneous. As under the prior law, a copy of the disrepair and deterioration notice may be given by thelandlord/manager to any lienholder of the tenant’s home.

 

And during the period of time provided for the tenant to make the necessary repairs, they are still required to payrent up to the termination date appearing in the notice, or, if applicable, any permitted extension period.

 

Trap: If the rent tendered by the tenant covers days that extend beyond the deadline for compliance, or any permitted extension thereof, it should be returned to them within ten (10) daysafter receipt, pursuant to ORS 90.412(3). This will avoid a waiver of termination of the tenancy described in the notice, should the tenant fail to timely perform the required work.

 

Conclusion.  Members will see that due to the added complexities of ORS 90.632 (e.g. risk of harm vs. non-risk of harm violations, added detail for explanations, prospective tenant disclosures with application, etc.) the new Form 55 is longer than before. However, despite the added length, we believe it remains user-friendly. 

 

[1] This is because ORS 90.510(5)(i) provides that the rental or lease agreement for new tenants must disclose “(a)ny conditions the landlord applies in approving a purchaser of a manufactured dwelling or floating home as a tenant in the event the tenant elects to sell the home. Those conditions must be in conformance with state and federal law and may include, but are not limited to, conditions as to pets, number of occupants and screening or admission criteria;