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Oregon Legislature Extends Eviction Ban Until September 30, 2020, and Adds Six-Month Payment Grace Period

June 30, 2020

Overview

On Friday, June 26, 2020, the Oregon Legislature passed House Bill 4213 (“HB4213”), and the Governor signed HB4213 into law on June 30, 2020. Although slightly different than the Governor’s eviction ban under Executive Order 20-13 (“EO20-13”), HB4213 effectively serves to continue the eviction ban for both commercial and residential tenancies until September 30, 2020, while also granting tenants a six-month grace period for any unpaid balances, with the grace period expiring March 31, 2021. Both commercial and residential tenancies are discussed further below.

Commercial Tenancies

HB4213 establishes an “emergency period,” which is defined to be from April 1, 2020, to September 30, 2020. During the emergency period, similar to EO20-13, landlords may not take prohibited actions against tenants because of nonpayment of rent, late charges, utility charges, or other fees. Prohibited actions by landlords are those taken due to nonpayment and include terminating a lease, assessing late fees, initiating an action to take possession of a premises, or otherwise interfering with the tenant’s possession of a premises. Note that landlords can still take the listed actions for reasons other than nonpayment or for defaults that occurred prior to the emergency period. While these actions are prohibited for reason of nonpayment, rent will still continue to accrue during the emergency period. Unlike EO20-13, which required a tenant to provide notice to its landlord that it was unable to pay rent due to COVID-19, HB4213 does not require a tenant to provide notice to defer payment of rent during the emergency period.

Following the emergency period, landlords must give notice to their tenants of any nonpayment balances accumulated during the emergency period, among other statutory disclosures. This notice also must describe a tenant’s options for paying any accrued balances: (1) make payment by a specified date not earlier than 14 days after the notice (the “payment date”), (2) avail itself of the six-month grace period running until March 31, 2021, or (3) voluntarily enter into an alternative payment plan with the landlord. To avail itself of the six-month grace period, a tenant must then notify its landlord by the payment date specified in the landlord’s notice. After the expiration of the emergency period on September 30, 2020, tenants must make scheduled payments; landlords will have their usual remedies with respect to payments coming due on or after October 1, 2020.

HB4213 also establishes penalties for violations of its provisions. If a tenant fails to timely respond to its landlord’s notice but opts to take advantage of the six-month grace period, then its landlord may seek to recover damages of half of one month’s rent. If a landlord evicts a tenant in violation of HB4213 or otherwise violates HB4213, tenants may seek injunctive relief to regain possession of a property and seek damages of up to three months’ rent, in addition to actual damages suffered.

Residential Tenancies

The provisions discussed above for commercial tenancies generally also apply to residential tenancies, with a few additional provisions applicable only to residential tenancies. These additional provisions include: (1) landlords may not report a residential tenant’s nonpayment to consumer credit reporting agencies, (2) landlords may not deliver any termination notices without cause or file an action under ORS 105.110, and if a tenant’s first year of occupancy would end during the emergency period, the first year of occupancy is extended to end 30 days after the end of the emergency period on September 30, 2020, and (3) the normal statute of limitations of one year for legal action under a rental agreement is tolled until March 31, 2021.

Conclusion

The eviction ban under EO20-13 was set to expire on June 30, 2020, but HB4213 extends the eviction ban until September 30, 2020, for both commercial and residential tenancies. Notably, it creates a new six-month grace period lasting until March 31, 2021, for tenants for payment of accrued rent during the emergency period. Lastly, HB4213 creates new notice requirements that both landlords and tenants should become familiar with, as any violations of these notice requirements creates the potential for additional penalties.

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