On June 26, 2020, in response to the COVID-19 pandemic, the State of Oregon passed House Bill 4213, which restricted a landlord’s ability to enforce certain rights if a tenant failed to pay rent during the “Emergency Period,” defined as April 1, 2020, through September 30, 2020. While the Governor has granted residential tenants additional protections beyond September 30, 2020, no such protections have been given to commercial tenants. Landlords are now free to follow up with commercial tenants regarding rent payments, but there are some important points to note.
In order to both preserve landlord rights to collect any past due rent that accrued during the Emergency Period, and to put tenants on notice that any future payment default will entitle the landlord to all rights set forth in the lease, HB 4213 allows landlords to provide tenants with written notice on or after October 1, 2020, but the notice must contain certain statements.
Along with unpaid balances, landlords should send notices to tenants with the following information:
- The Emergency Period expired September 30, 2020, and the tenant’s nonpayment balance is still due and must be paid.
- The total nonpayment balance (with the usual breakdown of the rent, maintenance charges, etc.).
- The tenant will not owe a late charge for the nonpayment balance and is entitled to a six‑month grace period ending March 31, 2021, to repay the nonpayment balance that accrued during the Emergency Period.
- The tenant must pay the nonpayment balance within a specified date (not sooner than 14 days following delivery of the notice) or notify the landlord that the tenant intends to pay the nonpayment balance by the end of the six-month grace period.
- The tenant’s failure to provide the landlord with notice of its intent to utilize the grace period might result in a penalty equal to 50% of one month’s rent.
- If rent and charges that come due after October 1, 2020, are not timely paid, the landlord may enforce its rights under the lease, including the right to take possession of the premises and terminate the lease.
For landlords who would like help in preparing a written notice to tenants, please reach out to your lawyer, or contact Schwabe’s Real Estate group for assistance.
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