• Tuesday, December 14, 2021 5:18 PM | Anonymous

    By: Jason Miller, ORHA Legislative Director
    December 14th, 2021

    Yesterday, December 13th, 2021, Legislature passed in the 2nd special session an extension to the moratorium on evictions for non-payment for tenants who have applied for emergency rental assistance. The housing policy bill, known as Senate Bill 891, was the reason the Governor called the special session.

         In this bill, tenants that apply for rental assistance and provide documentation to their landlord before June 30th, 2022, will have a safe harbor from eviction until September 30th, 2022, or until their application is cancelled or denied. Oregon Housing and Community Services (OHCS) will prioritize those that applied before December 1st, 2021, and cancel applications of tenants that are not responding to their requests. OHCS is required to notify the landlord if a tenant is denied, or an application is cancelled.   

       Additionally, in this bill is the extension of the requirement for a 10-day or 14-day Notice to Pay or Vacate for Non-payment of Rent until Sept 30th, 2022. Landlords must send an updated version of the tenant protection letter with these non-payment notices served after the date that SB 891 is signed into law by the Governor. The updated tenant protection letter will be available on the Oregon Rental Housing Forms Store at https://store.oregonrentalhousing.com/  

       In another bill, Senate Bill 5561 is the budget companion bill to SB 891 which allocates $100 million to OHCS for rental assistance. $5 million was allocated to administrative costs to speed up the processing of rental assistance applications, and $10 million was added to the Landlord Guarantee Fund for landlords to recover lost funds due to canceled, denied or unprocessed rental assistance applications. Another $100 million was allocated for longer term rental assistance programs to be distributed through other local agencies. 

    You can read the full bill here for SB 891:  https://olis.oregonlegislature.gov/liz/2021S2/Downloads/MeasureDocument/SB891/Enrolled  

    You can read the full bill here for SB 5561: https://olis.oregonlegislature.gov/liz/2021S2/Downloads/MeasureDocument/SB5561/Enrolled

  • Sunday, December 12, 2021 3:21 PM | Maria Menguita (Administrator)

    By: Tia Politi, ORHA President
    December 14, 2022

    continued from Part 2 of this article

    Portland screening rules
    In the city of Portland, city regulations restrict many areas of screening. ORHA has created Portland screening forms that are available on the forms store site.

    1. Unit must be advertised for 72 hours prior to accepting applications – called Notice of Unit Availability. Notice must include:
      1. When apps will be accepted (no sooner than 72 hours from date/time of posting of notice)
      2. Whether or not the unit is ADA accessible as a Type A Unit in accordance with the Oregon Structural Building Code and ICC A117.1, providing accessibility for wheelchair users throughout the unit
      3. Amount of screening charge, if any, and description of screening criteria if you will charge for screening applications
    2. If multiple units are advertised HP may publish the following information in either their Notice of Unit Availability or in a combined notice advising where info on each unit may be viewed. Notice must indicate the following:
      1. Number of units available
      2. Range of bedrooms of available units
      3. Range of sizes of available units
      4. Range of rents for available units
      5. When applications will begin to be received
      6. HP’s screening criteria, if assessing a screening charge
      7. Whether or not any of the units meet Type A definition of wheelchair accessible unit
    3. If HP maintains a Wait List:
      1. HP must publish Waitlist opening at least 72-hours prior to accepting names to add to the list, and include all the above info on number of units that can be filled from the list, range of bedrooms, range of unit sizes, range of rents, when the HP will begin accepting applications for the waitlist, and HP’s screening criteria if assessing a screening charge
      2. HP must keep separate Waitlist for Type A units
    4. Two types of Applicants – Financially Responsible and Non-Financially Responsible:
      1. Financially responsible applicants screened for everything including credit & income
      2. Non-financially responsible applicants screened for everything except credit & income. If non-financially responsible tenant is denied, you must still offer the other renters the unit
    5. Two types of Screening – Low Barrier or Landlord Choice/Individual Assessment
      1. Low Barrier Screening – HP agrees not to reject an applicant based on certain aspects of their criminal, credit or rental histories:
        1. Criminal History: An arrest that did not result in conviction, unless pending on the date of application; participation in or completion of, a diversion or a deferral of judgment program; a conviction that has been judicially dismissed, expunged, voided or invalidated; a conviction for a crime that is no longer illegal in Oregon; a conviction or determination through the juvenile justice system; a misdemeanor conviction with a sentencing date older than three years; or a felony conviction with a sentencing date older than seven years
        2. Credit History: A credit score of at least 500; insufficient credit history; past due collections less than $1000; damage balances owed to prior HP’s of less than $500; discharged bankruptcy; Chapter 13 bankruptcy under active repayment; medical, vocational, or educational training debt
        3. Rental History: Eviction history if case was dismissed or won by the applicant; an eviction judgment more than three years old; an eviction judgment less than three years old if the basis for the action was a no-cause notice, or judgment was issued by default and applicant can provide credible evidence that they had already vacated the unit at the time the notice was served; or a judgment that was subsequently set aside or sealed. HP will only deny for rental history reports that indicate rent defaults; three or more material violations of the rental agreement one year prior to application AND that resulted in notices issued to renter; outstanding balance due to prior HP; termination for cause; or insufficient rental history unless applicant in bad faith withholds rental history information
      2. Landlord Choice/Individual Assessment Screening – You may create and apply your own fairly established criteria, but:
        1. If you deny an applicant and any single criterion is more prohibitive than any of the Low Barrier criteria, you must conduct an Individual Assessment, considering factors such as, the nature and severity of the incidents; the number and type of incidents; the time that has elapsed since the incidents occurred; and, the age of the individual at the time the incidents occurred. When conducting an Individual Assessment, you are required to accept and consider all Supplemental Evidence that an applicant provides with their completed application to explain, justify or negate the relevance of the information
      3. Approval, Conditional Approval, or Denial – You must notify each applicant in writing of your determination within two weeks of completing the evaluation
    6. Applications must include:
      1. A space or form to declare or affirm a Mobility Disability or other Disability status
      2. PHB Statement of Applicant Rights & Responsibilities: https://www.portland.gov/sites/default/files/2020-01/notice-30.01.086.c.3.c-application-and-screening-rights-and-responsibilities.pdf
      3. City Notice to Applicants for requesting a Reasonable Accommodation or Modification: https://www.portland.gov/sites/default/files/2020-01/notice-30.01.086.c.3.b-modification-or-accommodation.pdf
      4. Screening criteria and description of the evaluation process if you charge a fee for screening
      5. A statement that applicants may include Supplemental Evidence for consideration, in order to mitigate potentially negative screening results
      6. Not required but “best practice” to include applicant’s right to appeal denial (ORHA Adverse Action and Denial form contains this information)
      7. If applicant requests, HP must provide record of receipt of application whether or not a screening charge is assessed. (Remember, HPs who assess an applicant screening charge are already required to provide a receipt for the fee)
    7. HP tracks receipt of completed applications and offers unit on a first-come, first-served basis, unless:
      1. Unit is ADA accessible as defined in Oregon Structural Building Code and ICC A117.1, and applicant or family member has physical mobility disability, in which case their application is prioritized ahead of other
      2. If someone submits an application prior to the end of the 72-hour period – 8-hour penalty for date/time of receipt
      3. HP may simultaneously screen applications received, but must accept, conditionally accept or deny in the order received
      1. HP may refuse to accept application, only if:
        1. Applicant has verifiable repeated violations of the rental agreement with the same landlord. Most recent violation must have occurred within the past 365 days from the date the application is submitted, and past landlord must provide copies of the violation notices
        2. Application is incomplete
        3. Applicant fails to provide information to confirm identity or income
        4. Applicant has intentionally withheld or misrepresented required information. (Be careful with this, some applicants may have memory or other cognitive disorders.)
        1. Acceptable forms of ID:
          1. SSN
          2. Valid Permanent Resident Alien Registration Receipt Card
          3. Immigrant Visa
          4. ITIN
          5. Non-immigrant Visa
          6. Any government-issued ID regardless of expiration date
          7. Any ID or combination of ID’s that would permit a reasonable verification of identity
          1. Income requirements
            1. Rent vs income calculations must include all cumulative sources of income for all financially responsible applicants, including non-governmental rent assistance
            2. If the monthly Rent amount is below the amount listed for the number of bedrooms in a Dwelling Unit, a Landlord can require an Applicant to demonstrate a monthly gross income of up to but not greater than 2.5 times the amount of the Rent.
            3. If the monthly rent amount is at or above the amount listed for the number of bedrooms in a Dwelling Unit, a Landlord can require an Applicant to demonstrate a monthly gross income of up to but not greater than 2 times the amount of the Rent.
            4. https://www.portland.gov/sites/default/files/2020-01/table-30.01.086.d.2.a-b.pdf
            5. If an applicant fails to meet the income criteria, you may require an additional security deposit as specified in 30.01.087 A, limited to an additional half-months’ rent or a qualified co-signer
              1. If the tenancy is secured by a guarantor, you can require that individual to prove no more than three months’ rent to qualify.
          2. Application Denial
            1. Low Barrier: You must provide written Notice of Denial, with statement of reasons within two weeks
            2. Landlord Choice/Individual Assessment:
            3. You must provide written Notice of Denial, with statement of reasons within two weeks, and must include an explanation of the reasons that any Supplemental Evidence provided did not adequately compensate for the factors leading to the denial
          3. Appeal of Denial of Application. If a denied applicant appeals their denial and is subsequently approved by the applicant providing documentation that contradicts a screening determination, and the unit is still available, you must offer the unit to that applicant. If the unit vacancy is already filled at the time of the successful appeal, the following rules apply:
            1. Appealed approved app is good for three months
            2. If another similar unit becomes available, HP must contact applicant by email, phone or certified mail to offer the unit with a deadline of 48 hours for applicant to respond and declare their intent to rent the unit
            3. If multiple responses from applicants, order of unit offer is based on the appeal submission dates
            4. If no response, unit may be offered to the public by posting Notice of Unit Availability (ad)
            5. If Appealed Approved Applicant misses the 48-hour deadline, but HP has not yet posted Notice of Unit Availability, HP may enter into rental agreement, but is not required to
            6. If Notice of Unit Availability has already been published, Appealed Approved Applicant are subject to the same process as the general public, with the exception of re-screening unless the application is more than three months old.

          If you own a property in the city of Eugene, you need to be aware that the Renter Protection Committee is working to adopt some of the Portland rules and the city council will be voting on those soon so stay tuned.

          This column offers general suggestions only and is no substitute for professional legal counsel. Please consult an attorney for advice related to your specific situation. Any laws referenced herein are current to the date of publication.

          continue reading Part 2 of this article

        2. Thursday, December 09, 2021 9:51 AM | Maria Menguita (Administrator)

          By: Tia Politi, ORHA President
          December 14, 2022

          continued from Part 1 of this article

          Credit history criteria
          We may require you to submit a copy of your credit report obtained within the past 30 days. Negative credit reports may result in denial of application. Negative reports include, but are not limited to: late payments, collections, judgments, total debt load, and bankruptcy.

          I often hear of landlords requiring a certain credit score to qualify. This is fraught with peril, and I don’t recommend it. Not all credit problems are equivalent in the screening process, so a score is not a good way to evaluate an applicant. What if they have no credit? To me that just shows they don’t like to rack up debt. Why would that be a problem? What if the collection accounts are medical and due to a person’s disability? What if the defaults are due to domestic violence, prior addiction, or mental illness that can be documented? Each of these are ‘protected’ reasons.

          Many landlords overlook medical collections, and student loan collections. Credit cards, mail order, jewelry stores, payday loan collections are a higher risk, and money owed to utility companies, cable or satellite companies, cell phone companies and the courts are a very high risk. Money owing to a prior landlord is usually a non-starter unless the applicant is making payments, but remember, debt incurred during the Protected Period cannot be used to disqualify an applicant.

          An active bankruptcy poses a potential problem for a landlord as they can be named as a creditor until the bankruptcy is closed, so it’s fair to deny an applicant who is in a pending bankruptcy, but what about a past bankruptcy? While you can’t discriminate against someone who has been through bankruptcy, how much you ding an applicant for having gone through one will largely depend on the reason for it, and what has happened since. Bankruptcy to clear the slate of medical bills is very different from bankruptcy to clear the slate of consumer debt because a person was irresponsible with their money and credit. Incurring more bad debt or collections after bankruptcy can also indicate someone who is at a higher risk of default.

          Taking into account the varying reasons for credit problems, your guidelines might look something like this:

          1. No collections or late payments, or no credit accounts at all. Applicant meets criteria.
          2. Minor credit issues – one or two late payments in the past year, up to three minor collections, under $1000 total - $250 increased deposit or qualified co-signer.
          3. Moderate credit issues – some history of late payments, several collections totaling less than $2500, bankruptcy within the past 3 years – $500 increased deposit or qualified co-signer. Require written explanation.
          4. Major credit issues – regular history of late payments, money owing to prior landlord, but making payments, many collection accounts totaling more than $2500, money owing to utility companies, or related to consumer debt, or collections incurred after bankruptcy – $1000 increased deposit, double deposit, or qualified co-signer. Require written explanation and copy of payment agreement with prior landlord. Verify that payments are current.
          5. Open bankruptcy, money owed to prior landlord (not from the Protected Period) with no agreement to pay – automatic denial.

          Prior Rental History
          Favorable rental history of years must be verifiable from unbiased and unrelated sources. No evictions within the past five years. We do not consider evictions which took place five years or more ago, not do we consider evictions which resulted in a dismissal or a general judgment for the applicant. We also do not consider eviction judgments that were rendered during the COVID-19 Protected Period (April 1, 2020 – February 28, 2022). Applicants must provide the information necessary to contact past landlords.

          It’s standard to require at least one year of verifiable rental history. Some companies require a minimum of two years and some as high as three years. Be sure to verify that the person you are speaking with is the owner or manager of the property by looking up the property ownership info on the county’s tax website. Some sites are easy to use, others not so much, so if you are having trouble just call the county assessor’s office and they will tell you who the owner of record is.

          Taking into account your criteria and the information you are able to verify, your rental history guidelines might look something like this:

          1. Full positive reference(s), excellent care of property. Applicant meets criteria.
          2. Minor lack of history/one or two minor issues or late pays during tenancy – additional $500 security deposit or qualified co-signer.
          3. Moderate lack of history/several violations or late pays during tenancy – additional $750 security deposit or qualified co-signer.
          4. Major lack of history/regular violations or repeated late pays during tenancy/money owing to prior landlord, but making payments – additional $1000 security deposit, double deposit, or qualified co-signer. Require written explanation.
          5. Eviction judgment(s) in the past five years (not including the Protected Period), money owing to prior landlord and no payments being made (unless incurred during the Protected Period), uncured violations of the rental agreement, or even multiple cured violations for things like unauthorized occupants, unauthorized animals, noise/parties, smoking in the unit, harassment, assault, running a business in the unit, subletting or running an Air BNB, unsanitary conditions, or major damage resulting from tenant neglect or failure to report maintenance issues – automatic denial.

          Many companies are refusing to provide full rental references anymore and will only verify dates of residency and rent amount. I can tell at least something about the quality of the tenancy by two documents: the tenant ledger and the security deposit accounting. That information could help someone at least partially document their history.

          Criminal history criteria
          Criminal convictions or pending charges which may result in an application denial include but are not limited to: drug-related crimes, person crimes, sex offenses, any crimes involving financial fraud (including identity theft or forgery), or any other crime that would adversely impact the health, safety or right of peaceful enjoyment of the premises of the residents, owner/agent.

          Landlords should evaluate criminal history on a case-by-case basis, considering the nature of the offense(s), the length of time since the offense(s), and the rehabilitative measure taken since. Applicants with criminal history should be required to submit a written explanation of their criminal history, and may offer other supportive documents, resources, or references to attest to their rehabilitation.

          In April 2016, HUD issued a Memo alerting housing providers that they had seen a pattern of disparate impact on members of protected classes in regards to the application of screening standards required to get into housing. The concept of disparate impact states that even seemingly objective criteria can have an adverse impact on people in protected classes.

          “Across the United States, African Americans and Hispanics are arrested, convicted and incarcerated at rates disproportionate to their share of the general population. Consequently, criminal records-based barriers to housing are likely to have a disproportionate impact on minority home seekers. While having a criminal record is not a protected characteristic under the Fair Housing Act, criminal history-based restrictions on housing opportunities violate the Act if, without justification, their burden falls more often on renters or other housing market participants of one race or national origin over another (i.e., discriminatory effects liability). Additionally, intentional discrimination in violation of the Act occurs if a housing provider treats individuals with comparable criminal history differently because of their race, national origin, or other protected characteristic (i.e., disparate treatment liability).”

          So, how does a landlord walk this fine line regarding the past criminal history of an applicant? It is essential to know the specifics. What was the nature of the crime? Was it a one-time thing or repeated? How long ago did the crime occur? Does this history pose a current danger? Were they in the throes of addiction and now they are clean and sober? Did the offender complete their debt to society and comply with the terms of release and probation? What have they been doing since? A written statement from the individual, along with documentation of any programs or classes they have completed relating to their offense(s) may help to determine whether they are taking responsibility for their previous actions and explain why they are not a risk to the landlord or others. Speaking with parole officers, counselors, and class instructors can provide insight into whether the offender is truly repentant and turning their life in a different direction.

          Another section of the Memo reminds housing providers that research into criminal history shows that if a prior offender has not committed new crimes within the past six or seven years, the risk of new offenses is like that of a person with no criminal history. However, the Memo does continue to allow the denial of applicants with criminal history if that history includes crimes for the manufacture and distribution of illegal drugs (possession is a different story), many violent crimes, and sex offenses.

          I once rented to a family where the dad had a history of methamphetamine use. He was three years clean and sober when he came to us. In his written explanation he accepted full responsibility for his crimes. He provided his certificates of completion for rehab, allowed me to speak to his drug treatment counselor, his parole officer, and his ex-wife. They all vouched for his changed life. His ex-wife told me in no uncertain terms that if he were still using, her children would not be in his house; his current partner said the same thing. He had paid his fines, had a good job, good credit, and three years of positive, verifiable rental history. I made the decision to move forward with a double deposit, and it went well. Within a few years, he got his journeyman’s certification in welding and he and his family were able to buy their own home.

          Another great success story was a young lady whose methamphetamine addition had resulted in the loss of custody of her two children. She completed a one-year inpatient rehab program, graduated from Renters Rehab, and we placed her in a one-bedroom apartment (albeit with a double deposit and a co-signer to mitigate the risk). Within the year she was with us, she successfully paid her rent on time, kept to her lease, and regained custody of her daughters. She needed a bigger place and transitioned out. We were all so happy to be a part of helping her rebuild her life.

          The question often is, how long clean is long enough? Hard to say. I think one year clean is a good start, along with having complied with the conditions of release. Less than that, or hit-and-miss compliance, and I would have misgivings, but I would call or email the Fair Housing Council of Oregon before deciding to see what they think (www.fhco.org).

          In Oregon screening law, you may not consider drug-related convictions based solely on the use or possession of marijuana. When evaluating an applicant, you may not consider the possession of a medical marijuana card or status as a medical marijuana patient when deciding about the suitability of an applicant. Affordable housing providers subject to federal laws prohibiting the use or possession of marijuana (including medical marijuana) by residents on the premises may continue to enforce those rules with their residents.

          So, taking all of this information into account, your criminal history guidelines might look something like this:

          1. No criminal history or one or two minor violations such as traffic, one DUII, parking ticket, wildlife violation – Applicant meets criteria.
          2. Moderate criminal – repeat DUII, major load of parking or traffic violations, criminal trespass, criminal mischief, contempt of court, marijuana with intent to distribute, possession of other drugs - $500 increased deposit, or qualified co-signer along with satisfactory letter of explanation and other supporting information or references to demonstrate rehabilitation.
          3. Major criminal – harassment, assault, theft, ID theft, burglary, unauthorized use of motor vehicle, unauthorized possession of firearm. $1000 increased deposit, double deposit, or qualified co-signer along with satisfactory letter of explanation and other supporting information or references to demonstrate rehabilitation.
          4. Drug manufacturing, arson, patterns or history of violent crimes, sex offenses, and crimes of ID theft or forgery – automatic denial.

          A co-signer is someone, usually a relative or close friend, who agrees to be financially liable for damages or defaults related to the tenancy. Co-signers are most often used with young people setting out on their own who have no history to evaluate but can be used in lieu of a higher deposit if you’re willing.

          If you do decide to accept a co-signer, you need to have criteria for them too. Use Co-Signer Application – ORHA form #52A. It provides a good basis for qualification and allows you to fill in the multiplier regarding the amount of income you will require. If the Co-Signer meets your criteria, you will execute Co-Signer Agreement – ORHA form #52. Sometimes with groups of students renting for the first time we would have some who had co-signers and some who didn’t. We had to establish something fair and reasonable, so we came to the standard that each person needed to provide either a $500 increased security deposit or a qualified co-signer.

          Special Circumstances - Reasonable Accommodation (RA)
          When a person who was once addicted to drugs or alcohol stops using and becomes sober, they are considered to have been disabled during the addiction period and should not be held responsible for their actions while using. The same is true for untreated mental illness that is now under control. It can also apply to victims of domestic violence.

          In cases like this, you may deny an applicant for some poor history or credit, only to have them respond with a reasonable accommodation request and verification to discount that part of their history during the time they were disabled or victimized. Like any reasonable accommodation request you are required to consider it. At a minimum, it can mean overlooking some minor lease violations, but at it’s extreme, you could be required to overlook quite a lot. An applicant may apply with RA paperwork in hand, prepared to make their request at the time of application or bring a request after application denial. In this case, you must consider the request and if you are provided with appropriate verification of the disability or history of domestic violence, you must consider discounting the negative history. The applicant must be under the care of the person verifying the disability-related need, and the verifier must have direct knowledge of the disability or victimization. You can get a good idea of how that process works by looking up the publication, Moving Forward with a Past. It’s a guide for residents with some amount of poor history that takes them through how to apply for a reasonable accommodation and how to write letters of explanation.

          I once denied an applicant who had poor credit, negative rental history, and an eviction on his record that was a couple years old, but a few days later received a reasonable accommodation request and verification from his counselor letting us know that during the three-year span where the credit problems, eviction and poor rental history accumulated, he had been a victim of domestic violence by his intimate partner. According to his counselor, he didn’t know that he had been legally evicted, or that his partner had racked up substantial debt in both their names or that he owed money to a prior landlord. We discounted that part of his history, but still charged him a higher deposit because he didn’t meet our income requirement. The original property he had applied for had been leased to someone else, but we found another comparable unit and moved forward.

          Victims of domestic violence are often not aware of their rights at the time the abuse is happening and sometimes lack the ability to assert any rights they are aware of, so the law takes a compassionate approach that allows victims who become aware of their rights once they are out of the abusive relationship, to ask a prospective landlord to overlook some or all of the poor history.

          Addressing issues of disability through the RA process in screening is walking a fine line. I once had three people apply for a unit who had been clean and sober for one month. That didn’t seem reasonable to me, considering their extensive criminal history with methamphetamine. In another case, a friend of mine managed an apartment complex where a mentally ill resident had twice set his unit on fire while off his meds, but now was back on his meds and receiving treatment. The manager was evicting him for the behavior, but his counselor wanted to use the RA process to stop the eviction. The manager declined and the resident and his counselor chose not to fight it. What would have happened if a complaint had been filed? I don’t know, but in cases like these it’s important to document the reasoning and if you have any questions, contact FHCO. They can provide guidance.

          Inability to verify information
          If, after making a good faith effort, we are unable to verify information on your application, or if you fail to pass any of the screening criteria, the application process will be terminated.

          The law is very clear that if you are unable to verify the information provided by the applicant, that you are not obligated to rent to them. There can, however, be reasons that some part of an applicant’s history is unavailable such as the death of the landlord. Be sure to check on that, though. I did once have an applicant tell me his landlord was dead, only to find out that he was very much alive and was owed more than $5000 by the tenant for the damage done to the home. Google is very helpful in discovering whether someone is still with us.

          Every day a property sits empty, is a day with no rent. It’s reasonable to work an application for a couple of days, and let the applicant know if one or more of their references is not responding, but at some point, you need to move on. Just make sure you can document your efforts to reach the person in case the applicant thinks you just went through the motions to deny them for some other reason.

          All applicants may submit a written explanation with their applications if there are extenuating circumstances which require additional consideration.

          In any case of deficient credit or criminal history it’s important to require a written explanation. I always advise applicants to go belly up, be honest about what happened and why, and tell me why I can trust that whatever happened won’t happen again. It’s a bad sign if the applicant won’t take responsibility, they deflect blame onto others, they demonstrate that they don’t really understand what they did to create or contribute to the problem, or if they can’t articulate the measures they have taken to ensure the behavior won’t be repeated.

          False or inaccurate information
          Falsification or misrepresentation of any part of the application will be grounds for denial.

          This statement speaks for itself but do overlook unintentional errors that the applicant can explain. Some applicants may have a disability that impacts their memory. Sometimes, for example, dates may not match up perfectly based on what the applicant reports and what the reference reports, and may or may not be cause for concern.

          Portland screening rules
          In the city of Portland, city regulations restrict many areas of screening. To read the full outline, click here. ORHA has created Portland screening forms that are available on the forms store site.

          If you own a property in the city of Eugene, you need to be aware that the Renter Protection Committee is working to adopt some of the Portland rules and the city council will be voting on those soon so stay tuned.

          Best practices
          Screen the applicants and screen them fully. Just because someone fills out an application, doesn’t mean they were truthful. Credit reporting laws changed in 2018, and now civil judgments like evictions or small claims money awards are not showing up on credit reports. Best to hire a screening company at least to pull the eviction and civil/criminal history to be sure it’s accurate. If you hit a piece of information that you would likely deny for, don’t stop there, perform the full screening.

          Ask the right questions. What were the dates of tenancy? Rent amount? Did they pay rent on time? Did they take care of the interior and exterior of the property? Were there any complaints related to the tenancy, or did you have to serve them any notices for noncompliance? Did you ask them to move, or did they initiate the move? Did they get any refund? Do they owe money? If so, have they made payment arrangements? Would you re-rent?

          Verify the references. Applicants can set up false references, so take a few minutes to verify that you are speaking to the right person. Property ownership is a matter of public record. Before you call that landlord reference, take a few minutes to look up the owner of record either on the county website in question, or by calling that county’s records department and asking. Same with employment. Don’t just call whatever number you are given and take their word. Call the local or regional office and get copies of pay stubs or tax returns.

          Watch for fraud. I once had a man rent a property, and everything checked out. He provided paystubs and a solid employment reference. He didn’t have rental history as he was new to the US, so we moved forward with a double deposit. A short time later, a friend of his applied for another of our available rentals. He provided similar documentation and we moved forward. The new tenant exhibited some odd behavior that the neighbors reported to the owner, and she started digging further. Turns out the address on the paystubs of both men did not exist. They had created false paystubs and had used virtually the same fake company to verify their employment. We terminated both tenancies without cause and never did find out what they were up to, but they were also on the police department’s radar. The lesson there was to verify everything, even if it looks legit.

          Don’t be pressured. One of the most obvious things an applicant can do that should cause you concern is when they pressure you, say they’re in a hurry, have all the money, can pay six months’ rent in advance, anything to get you to just take their money and give them the property. No matter how tight your financial situation, I can promise you that it will blow up in your face. Don’t take shortcuts, ever, in the screening process.

          Statute of Limitations
          Keep denied apps or apps that for whatever reason did not result in a tenancy for a minimum of two years. Keep tenant apps for at least two years after the termination of tenancy.

          The Takeaway
          Screening will often require some sort of judgment call by the screener in relation to an applicant not quite meeting criterion. Just make sure your decisions are based on an objective measure of risk, not membership in a protected class. Watch out for your internal prejudices and stick to your formula. Jot down notes regarding any negative determinations in case you are investigated for discrimination. Having written guidelines and processes for approval and denial will help you keep your objectivity during the screening process. It will also provide something that could help you justify your decision-making process if you are accused of discrimination.

          This column offers general suggestions only and is no substitute for professional legal counsel. Please consult an attorney for advice related to your specific situation.

        3. Wednesday, December 08, 2021 10:04 AM | Maria Menguita (Administrator)

          By: Tia Politi, ORHA President
          December 14, 2022

          If you have a decent rental property and responsible residents, there’s no easier job in the world than being a housing provider, and proper screening will help you identify those responsible residents. Applicant screening is an invaluable risk assessment tool and a crucial part of your success in rental management. You are handing an asset of great value over to a virtual stranger (in most cases), so it’s essential that you assess the applicant’s ability to stick with the agreement, pay the rent, take care of the asset, and be a good neighbor. That’s all that matters – not the type of job they have or where they rent comes from, not whether they’re married or not, not whether they are from a different culture or religion, and not whether they have children. On paper, the only things that matter are income, rental history, credit history and criminal history. In person, demeanor is also important. An aggressive or bullying demeanor during the screening process is a preview of things to come and may be a reason for denial depending on the circumstances.

          Underlying all aspects of housing is Fair Housing Law. Be careful to apply screening criteria equally to all applicants, without regard to race, color, national origin, religion, sex, familial status, disability, marital status, source of income, sexual orientation, and gender identity, and remember that you can’t discriminate against applicants because they are or have been a victim of domestic violence, sexual assault, or stalking. There may be additional protected classes in your local area. In Eugene, for example, there are also protections for age, type of occupation, ethnicity, and domestic partnership.

          Due to the COVID pandemic, housing providers need to be aware of additional screening restrictions enacted under Senate Bill 282, that while temporary, will impact how we screen through January 2, 2028. Regardless of the reason, housing providers are not allowed to consider eviction judgments rendered or cases pending during the Protected Period (April 1, 2020 – February 28, 2022). Housing providers are also prohibited from denying applicants based on debt owing from a prior tenancy that accrued during the Protected Period. These restrictions apply to any applicant through January 2, 2028.

          While an eviction judgment rendered during the Protected Period cannot be used to screen out applicants, the reasons for the eviction may be relevant, as will any negative rental history arising from the tenancy (unrelated to nonpayment during the Protected Period). So, an eviction action that came about due the applicant’s noncompliance with the rental agreement is relevant, but only as it relates to the behavior of the applicant as communicated to you by the reference. If you are the one providing a rental reference for a prior renter who was evicted or owes debt from the Protected Period, proceed with caution. If asked whether the tenant left owing money, if it relates to debt incurred before or after the Protected Period, it’s okay to say that. If the resident owes money from the Protected Period, they are not considered to be in default until February 28, 2022, and even if they don’t pay in full or make payment arrangements by then, the debt may not be held against them for this five-year period. Challenging, eh?

          In summary, while debt incurred during the Protected Period itself cannot be grounds for denial, the reason for the debt might be. For example, the reference informs you that the applicant left their property in a terrible mess or severely damaged – that’s relevant, but not the money owing. In another example, if the debt is all related to nonpayment of rent during the Protected Period, then it can’t be used as a basis for denial.

          While the provisions of Senate Bill 282 have a sunset date, SB 291 passed last session, making a few permanent changes to screening law, and our screening forms have been changed accordingly. Most of the changes are best practices that professional managers have been compliant with for many years. Beginning January 1, 2022, to assess a screening charge to an applicant, the amount of any applicant screening charge must not be greater than the landlord’s average actual cost of screening applicants or the customary amount charged by tenant screening companies or consumer credit reporting agencies for a comparable level of screening. Actual costs may include the cost of using a tenant screening company or a consumer credit reporting agency, and the reasonable value of any time spent by the landlord or the landlord’s agents in otherwise obtaining information on applicants.

          Additionally, the landlord must include written notice to the applicant of the following:

          1. A right to appeal a negative determination, if any right to appeal exists;
          2. Any nondiscrimination policy as required by federal, state or local law plus any non-discrimination policy of the landlord, including that a landlord may not discriminate against an applicant because of the race, color, religion, sex, sexual orientation, national origin, marital status, familial status or source of income of the applicant;
          3. The amount of rent the landlord will charge and the deposits the landlord will require, subject to change in the rent or deposits by agreement of the landlord and the tenant before entering into a rental agreement; and
          4. Whether the landlord requires tenants to obtain and maintain renter’s liability insurance and, if so, the amount of insurance required.

          A more significant change found within Senate Bill 291 is the requirement of individualized assessments related to denials based on criminal history, which closely mirrors HUD’s guidance when considering an applicant’s criminal history. Housing providers must now seek and allow an opportunity for the applicant to submit supplemental evidence to explain, justify or negate the relevance of potentially negative information that may result in a criminal denial. Further, landlords must also conduct an individualized assessment of the applicant that includes reviewing any supplemental evidence before denying an applicant based upon their criminal-screening results. That individualized assessment must consider factors, including:

          1. The nature and severity of the incidents that would lead to a denial;
          2. The number and type of incidents;
          3. The time that has elapsed since the date the incidents occurred; and
          4. The age of the individual at the time the incidents occurred.

          Another significant change is that you must now provide a written statement of denial within 14 days of the denial regardless of whether you assess a screening charge. That’s a big change for folks like me who do not charge for screening.

          Some of the biggest problems landlords create for themselves usually result from shortcutting the screening process. Some basic rules: only accept completed applications; require that all lines on the application be filled in, even if it’s just an N/A because there is no information; when multiple parties are applying together, establish a policy that the applications will not be considered complete until the last one has been received; and perhaps the most important basic rule, do not pre-screen. Housing providers often get into trouble trying to weed out unqualified applicants. Provide an application to all who inquire, even if at first contact it appears that they may not qualify. Use our new combined four-page Application to Rent - ORHA form S1, now available on the forms store. The packet now consists of our Application Screening Guidelines (it’s important to let applicants know your screening criteria), as well as a separate Release of Information to make it easier to send the request without compromising applicants’ privacy.

          When talking with applicants, absolutely don’t ask illegal questions such as their line of work, whether they have children, or about their religion, marital status, or ethnicity. What can begin as a friendly attempt to get to know a potential renter can head right to a discrimination complaint on a dime. Plan your communications: if someone asks a leading question, just say something like, “I do not discriminate based on any protected class. Would you like an application?” To help you avoid discrimination claims, note on the application the date and time received, and screen applications in the order received. This is now a requirement in Portland, and the city of Eugene will likely be following suit very soon, but not the state, yet. It’s just a best practice that can help you stay out of trouble. Check each application thoroughly to make sure each question has been answered yes or no. If an applicant answers a question regarding criminal history in the negative and within one year the landlord discovers they lied about that, the tenant may be evicted on a 24-hour Notice for Harm. That won’t happen to you though because you will check their history, right?

          It’s understandable that we would like a clear path to approval or denial, but most of life is not black and white, and in screening there’s a lot of gray. Establishing reasonable criteria, evaluating an applicant’s suitability, and having clearly defined processes for approval and denial will help you stay on track. You must also know the law in Oregon.

          Required Disclosures:
          You must disclose the following, in writing, to any applicant before taking any payments:

          1. Terms of tenancy – Periodic (month-to-month, week-to-week) or fixed-term?
          2. Rent amount – Subject to change prior to entering into a rental agreement.
          3. Required Deposits – Which can be increased for an applicant’s failure to meet criteria.
          4. Due date for rent.
          5. Renter's insurance requirement – You may require tenants to obtain renter’s insurance if their combined household income is above 50% of the HUD median for that area. Visit www.hud.gov to determine what the income threshold is for the county where the unit is located. The requirement must be disclosed in writing during the application process, and you must also summarize the instances when it would not be legal to require it. You may require tenants to name you as an Interested Party (not an Additional Insured) on the policy for the purposes of notification of the resident’s failure to maintain the policy, reduction in coverage, or removal of your status as an interested party, and may also require that residents maintain a minimum of $100,000 in liability coverage as part of that policy. Requiring renter’s insurance when it would be illegal to do so may incur a penalty of the tenant’s actual damages or $250, whichever is greater.
          6. Fees to be charged at the beginning, end or during the tenancy. This includes late fees, NSF fees, noncompliance fees and statutory fees such as smoke/CO alarm tampering fees.
          7. Legal action – You must disclose if the property has entered foreclosure due to default under a trust deed, mortgage or contract of sale, or notice of trustee's sale under trust deed, including any pending suit to foreclose a mortgage, trust deed or vendor's lien under a contract of sale or any pending declaration of forfeiture or suit for specific performance of a contract of sale, or any pending proceeding to foreclose a tax lien – Use Foreclosure/Default Addendum - ORHA form #58. The penalty for non-disclosure: If the resident moves because of foreclosure actions that you failed to disclose, the penalty is twice the actual damages or twice the monthly rent, whichever is greater, in addition to all prepaid rent. Should the property enter legal action as described above at any time during the tenancy, the residents may, with written notice, request that any security deposits or prepaid rents be applied to their current rent or payment obligations. If the property is retrieved from legal action, you must provide proof of such to the residents and may require repayment of those funds but must give them up to three months to pay.
          8. Utility or services for which tenant pays that benefit another - If, as part of renting a unit, the tenant will be absorbing the cost of something that benefits the landlord or another tenant, such as common area lighting or yard care, it must be disclosed in writing at or before the commencement of tenancy. If you will be charging a utility fee to your residents, proceed with caution. Housing providers must disclose and do many specific things, such as the method of apportionment (square footage or number of bedrooms) and provide copies of bills upon request. There’s a lot more to charging utility fees, read and re-read ORS 90.315 Failure to disclose utilities or services that benefit another or improperly assessing utility fees incurs a landlord penalty of one month's rent or twice the amount wrongfully charged, whichever is greater. This penalty has been assessed by the courts for every month during which the housing provider was out of compliance, going back one full year, yikes!

          Prohibited considerations in screening

          1. Dismissed evictions.
          2. Eviction judgments more than five years old (remember now, this includes any eviction judgment rendered during the Protected Period).
          3. Arrests that did not result in a conviction, unless there are pending criminal charges for which the applicant would be denied, if convicted.

          Should you charge a screening fee and if so, how much?
          For my business before these changes, I chose to not charge a screening fee, but I only have four units, so it’s not very impactful on my budget to absorb that cost. I’m also very busy and there are a lot of things you must remember to do if you accept a fee, and if you mess up, the penalty is double refund of the fee, plus $150. Now that the screening requirements have changed in a way that removes the ‘advantage’ of not collecting a screening charge, we may want to reconsider this approach. If you want to pass on the costs of screening to the applicants, you must provide the following information to each applicant:

          1. Written screening criteria – use your own or use our Application Screening Guidelines contained in our Application to Rent packet – ORHA form S1.
          2. You must have an available unit or one that will be available soon and disclose how many units of that type you have are available or will be available.
          3. The number of applications in line ahead of theirs.
          4. The procedures once approved must be disclosed, outlining the steps the applicants must take if they are approved.

          Additionally, you must provide a receipt for the fee - use Application Screening Charge Receipt - ORHA form #42, and you must perform the screening or must return the fee. The charge to the applicant must represent the actual costs of the time and expense for conducting the review and cannot exceed the amount customary to the local area. Most screening services charge between $40-$50. Now that evictions and civil judgments won’t be showing up on credit reports due to a credit reporting law change, it can be a good idea to use a good screening company.

          If you charge a fee and deny an applicant or want to conditionally approve an applicant who doesn’t quite meet your criteria with a higher deposit or co-signer, you must disclose the reasons in writing separately to each applicant and give them the opportunity to challenge the denial or adverse action. Use Application Denial and Adverse Action Letter – ORHA form #43.

          Remember, credit reports are not always correct. I’ve had people show up as registered sex offenders only to find out it wasn’t them, but someone with the same name. They provided evidence that it was an error, and we were able to reopen their application, and in many cases, enter into a rental agreement. If a denied applicant successfully proves that the reason for denial was incorrect, and you reopen it, they don’t get to jump the line. Their application will go to the end of the line or if you have another available unit that meets their needs, you can place their application in line there. An applicant can also challenge an adverse action by providing evidence that the alleged deficiency is not correct in some fashion.

          What are your screening criteria, and how do you apply them during the screening process?
          Do you require household income of two times the monthly rent or three? Do you allow applicants to combine income for the purposes of meeting income criteria or must they qualify individually? What about debt-to-income ratio? How many years of verifiable rental history do you require? One year? Two? Three? What about someone who has none? How will you evaluate an applicant’s creditworthiness? What types of credit problems would disqualify an applicant? What about bankruptcy? What types of criminal convictions would disqualify an applicant?

          There’s a lot to screening and many aspects of the process that need to be done just right to avoid claims of discrimination. To keep yourself on track, you should develop your own risk assessment tool. I suggest that you write up and use a document to help guide you through the decision-making process and regardless of whether you assess a screening charge, provide the tenants with Application Screening Guidelines – ORHA form #45. The language below in italics is taken directly from that form.

          Income/Resources Criteria
          Household income shall be at least ______ times the rent (excluding utilities). Income must be verifiable through pay stubs or employer contact; award letters for Social Security, alimony, child support, welfare, utility or housing assistance; current tax records; or bank statements.

          Many property management companies will allow applicants to combine income if they have shared housing for a year or more to avoid discriminating against applicants based on marital status. It’s standard to require gross household income be three times the monthly rent or higher, but with rents increasing faster than wages, some like myself are only requiring 2-1/2 times the monthly rent. But what if you have a person with a very high income, but also a high debt-to-income (DTI) ratio? To calculate that ratio, simply take the total debt figure and divide it by the total income. For instance, if the debt costs $2,000 per month and the monthly income equals $6,000, the DTI is $2,000 ÷ $6,000, or 33 percent. In the world of mortgage lending, most lenders want to see no more than 30% debt-to-income ratio. Anything above that constitutes a higher risk in the world of lending, which I think can be extrapolated to our business as well.

          Taking into consideration the amount of rent vs the amount of debt and income and your internal guidelines might look something like this:

          1. Meets criteria or has only a minor lack of income, $100 or less short, good DTI. Applicant meets criteria.
          2. Some lack of income – 2-1/2 times rent/income ratio, good DTI - $500 increased deposit or qualified co-signer.
          3. Moderate lack of income – 2 times rent/income ratio or marginal DTI - $1000 increased deposit, double deposit, or qualified co-signer.
          4. Major lack of income/poor DTI – less than 2 times rent/income ratio, high DTI, some income not claimed or documented – additional $1500 security deposit or qualified co-signer.
          5. No provable income - automatic denial.

          continued to Part 2 of this article

        4. Tuesday, December 07, 2021 12:53 PM | Maria Menguita (Administrator)

          By: Tia Politi, ORHA President
          January 1st, 2022

          Hope everyone had a Happy Holiday season!

          Our legislative team has been hard at work fighting for your rights. Our new Legislative Director, Jason Miller, really stepped in it when he was voted into this position. He came on just as COVID was in full swing and along with Lobbyist Shawn Miller has been drinking from the fire hose so to speak. For those of us on the Legislative and Rapid Response committees, his commitment has been outstanding. Shawn has also been working for us harder than ever, meeting with legislators and negotiating the best outcomes within the framework of a triple Democrat majority in Salem. They are on the front lines and need your support, both in terms of donations to the ORH Key PAC and in terms of your time. If you want to see what happens behind the scenes, get involved in this committee. There are opportunities to participate in work groups and hearings beyond just sending in messages to your legislators (which we very much appreciate). Contact Jason if you would like to join in or volunteer – orhalegislative@gmail.com

          We are heading into one of the most exciting races for Governor this year and we will continue to advocate for candidates who support our efforts to provide housing to citizens of our great state, with the minimum level of restriction and interference. Fortunately, with COVID at the front of legislators’ concerns, we had few permanent changes in landlord-tenant law in the 2021 long session. Read my article "Tenant Screening – Senate Bill 282, Senate Bill 291, and Best Practices in Screening" for a full run down on how the changes impact our business, and how to use proper (and legal) applicant screening to keep your business profitable.

          Due to these changes, we have revamped our forms, and unfortunately, have had to discontinue offering our Application to Rent for free on the Forms Store site. We are always working to help our base of private housing providers stay out of trouble and with the changes to screening law, we felt that an application by itself would not be enough to keep folks compliant with the new laws. Thank you to Technology Chair Cloud Miller, who took our Application and combined it with our updated Application Screening Guidelines form and created a new Information Release form to create a 4-page packet that ensures our members stay in line with the updates to screening law. The new packets are available now.

          And of course, thank you to all of you who continue to do your part to support us and our members throughout the state. Let’s keep it that way - stay involved, let your voices be heard, and let’s hope this New Year is happier than the last two have been!

        5. Saturday, October 30, 2021 12:41 PM | Maria Menguita (Administrator)

          By: Tia Politi, ORHA President
          October 28th, 2021

          We will be holding our November Board Meeting virtually on November 20, 2021 (9:00 a.m. – 3:30 p.m.), and Committee meetings the day before. The agenda will go out soon so save the date(s). If you don’t know what it means to be a delegate for your local chapter, it means that you agree to attend regular board meetings (six per year – January, March, May, July, September, November) and represent the views of your membership. Please know that if you become a delegate, we will make you work! All delegates are required to belong to at least one committee, but many of us belong to or chair multiple committees. What are the options? Check out the list below.

          Since COVID changed the way we do a lot of things, we are now able to allow virtual attendance at our in-person board and committee meeting – thank you Technology Committee. Many committee meetings are held the Friday before the Board meetings, and at other times as well. All ORHA members are invited to participate in our committee meetings without being a delegate, we welcome your suggestions and ideas, but know that if you think something wonderful needs to happen, we may be put you in charge of it.

          Nothing great happens without a great team, so thank your delegates and committee chairs, they are moving us forward!

          ORHA Committees – just in case you’re wondering what we do…

          • By-Laws Committee – Ben Seamans, Chair – Evaluates and updates bylaws as needed. We are currently close to the end of finalizing the biggest changes to our bylaws in many years, but we strive for continual improvement.
          • Education/Mentoring Committee – Violet Wilson, Chair – Develops classes and presenters to provide education to members in a variety of topics. This committee also provides special support to smaller chapters through the Mentoring Program, assisting them with developing and growing their membership by offering lower rates for educational webinars and by assisting with the nuts and bolts of such tasks as bylaws, officers, tax filings, etc.
          • Finance Committee – Jill Maricich, Chair – Oversees all aspects of ORHA finances.
          • Forms Committee – Tia Politi, Chair – Creates and updates forms, produces the Forms Manual and Law Book. (New Forms Manual coming soon!)
          • Legislative Committee – Jason Miller, Chair – Works with the Legislative Director and Lobbyist to craft strategy and responses to legislation that impacts housing providers.

          o Rapid Response Committee – This is a subcommittee of Legislative comprised of a smaller number of members who agree to drop almost anything to respond to our Legislative Director and Lobbyist when they need a rapid response.

          • Long-Range Planning Committee – Rick Newton, Chair – Takes the long view of our mission and the steps that must be implemented to achieve that mission and our specific goals.
          • Membership/Dues Committee – Jason Miller, Chair – Works to increase membership. Evaluates and recommends suggestions for improvement and dues increases to meet budgetary goals.
          • Newsletter Committee – Maria Menguita, Chair – Produces the ORHA Newsletter, including content, design and editing.
          • Survey Committee – Alex Wilkens, Chair – Prepares and sends surveys to members for data collection. Knowing the mind-set of our membership helps us more effectively advocate for and serve our network around the state.
          • Technology Committee – Cloud Miller, Chair – Implements technology solutions and upgrades for the work we do. From the Forms Store to the technology platforms we use, this committee is our own Geek Squad!
          • Website/Social Media Committee – Maria Menguita, Chair – Oversees our social media platforms, sourcing and reviewing content for our website, Facebook page and Twitter. Responds to queries from the public.

          We have two other groups affiliated with ORHA: The ORH Key-PAC and ORHA Education, Inc.

          ORH Key-PAC – The PAC solicits, collects, and distributes campaign contributions to legislators in Oregon, opening doors and ears to our message, “Housing providers are not the problem, but the solution to Oregon’s housing woes.”

          ORHA Education, Inc. – This distinct non-profit was created after the disastrous rollout of “education” after the passage of the Housing Choice Act of 2014. After attending some of these sessions, many of us in ORHA knew we could do better and under the guidance of Past President Michael Steffan, created a non-profit dedicated to seeking grant moneys to provide fact-based, impartial education to both housing providers and residents. We did a successful rollout of free classes across the state after the passage of SB 608 and now we are working to obtain grants to roll out Tenant Training to all high schoolers in the state of Oregon.

          Stable Housing = Stable Lives = Stable Communities

        6. Saturday, October 30, 2021 11:30 AM | Maria Menguita (Administrator)

          By Tia Politi, ORHA President
          October 28th, 2021

          Does your household have a budget, or at least a reasonable idea of what your expenses are relative to your income and needs? Do you have a savings account? An emergency fund? Hope so, but if not, you can comfort yourself with the knowledge that, if misery loves company, you’re not alone. Most people don’t have those things. They tend to spend more than they make, carry loads of credit card debt, and live paycheck to paycheck. But if you’re a rental owner, haphazard financial planning will impact your ability to succeed. You must plan and set aside money for regular maintenance and periodic replacement of larger components of your housing units. Your property will require it, and your success depends on it.

          When my husband and I bought our first rental property, I learned that the lender would only consider 65% of the rent as income for calculating our debt-to-income ratio because they were factoring in the costs of maintenance, overhead, vacancy loss, insurance and taxes. They expected that on average, we would have to spend 35 cents of every dollar we received to cover those things. And that’s a pretty good estimate for an average property over time.

          When you’re performing a needs assessment for any property, you need to factor in the age of the property along with the age of the components like HVAC systems, roof, siding, windows, paint, light fixtures, faucets, and the list goes on. Many times when I managed property in the private sector, owners would tell me they couldn’t afford this or that repair or replacement, and either their property would continue to degrade from deferred maintenance or the repair was required and they would have to take on debt to pay the bill. Neither of these options is viable for the long term investor. If you can’t afford to maintain your property, you might want to consider that you made a bad investment and divest yourself.

          The benefits of solid financial planning include a well-maintained property with happy residents who stay for a long time, no financial surprises that stress you out and over-spend your economic resources, and a property that is ready to sell at any time with few or no upgrades needed.

          Penny-Wise, Pound Foolish: How to spend more by trying to spend less
          A lot of rental owners get a shock when they see the hourly costs of hiring a licensed contractor and instead find an unlicensed handyman for much less. But tempting fate is a poor choice. What are the risks? There is always the joyful possibility of blackmail by the resident who threatens to turn you in to building officials for violating the law; lawsuits by residents or neighbors, and agency fines for improper handling of hazardous materials like lead-based paint or asbestos; or substandard work that results in damage to your property – and maybe liability for damage to someone else’s property.

          I took over management of a historic home in downtown Eugene, and when the owner and I went to look at it, we were surprised to note that the historic property next door was in the midst of exterior painting. It was clear that the painters were amateurs without the proper training or licensing, because they had pressure washed the exterior of the home, spewing paint chips that contained lead far and wide, including on my client’s property. Once the EPA got involved, not only did the job come to a screeching halt, but the owner was fined thousands of dollars by the agency, he had to spend thousands more to abate the lead chips and dust that had spread to neighboring properties as well as his own, and he had to hire a lead-based paint certified painter anyway to finish the job. It was a stupid choice that cost him far more than hiring a certified painter would have charged to do the job right the first time.

          Another way working on the cheap can cost you is when you choose to have residents perform repairs. An acquaintance of mine had some older homes that needed work and no money, she said, to hire pros to do the job so she repeatedly worked out deals with residents – you fix up the place and you get to stay for free until the work is done. Every time she did this, that I’m aware of, she ended up in court, because once the work was done, the residents didn’t want to start paying rent, and when she tired of their threats to report her to the city and sued them in eviction court for non-payment, they had numerous defenses.

          She would eventually get her property back, but only after losing months of rent, and paying substantial costs for travel to defend her suits. In almost every case, the coups de grace would come when the residents turned her in to the city for the unpermitted work they had done, costing her double the initial permit fees, and requiring that she tear out and redo much of the work the residents had done. Not only did she not save money, she caused herself an incredible amount of stress.

          I’m sure there are notable examples of residents performing excellent work and happy rental owners all around, but like going into business with family it carries inordinate risk of damage to the relationship, creating undercurrents of tension in what otherwise would be a pleasant business exchange. The resident feels underpaid, the housing provider feels cheated by poor quality, whatever. It doesn’t usually turn out well.

          Using cheap materials is almost always a poor choice – housing providers end up paying more while thinking they’re paying less, both in the short and long term. Quality products and materials will reward a long-term investor in a number of ways. The first are happier residents, but even if looking at self-interest alone, better materials mean longer lifespan, fewer repairs, higher rents and a higher value if or when you refinance or sell. In my experience, a quality home attracts quality residents, and quality residents are a blessing unto their housing providers.

          Another way you can lose money is by insisting on doing all the work yourself. One man I know prides himself on doing everything on his own with used or free materials whenever possible, never hiring out the work. As an intelligent man in so many areas, I can’t understand why he didn’t see that although he saved a great deal of money on the upgrades themselves, he wasn’t factoring in the cost of the lost rent he could have gotten had he hired out at least some of the work. One project that could have been done in three to six months, ended up taking almost two years at more than $1200 per month in lost rent. He worked himself to exhaustion and cost himself money overall, not a wise choice. He also ended up with a home that was terribly mismatched with different cabinets, doors, carpeting, etc., effectively setting himself up for either short-term tenancies or marginal residents, and most certainly lower rent.

          Watch the pennies and the dollars will take care of themselves: It’s good to be frugal
          While it’s important to know when to go ahead and spend for repairs, keeping a tight rein on your budget is equally important. There are very creative ways to save money, whether you are a do-it-yourself type or not, and getting the maximum lifespan out of all of your components will reward you over the long term. Good roof care can limp a marginal roof along for years. My husband and I bought a small rental near our home that we thought would need a new roof within no more than five years, but with detailed cleaning and moss treatment, and occasional shingle repairs, we got 12 years out of that roof, seven more than anyone would have thought. It gave us more time to save for a replacement.

          The same is true of fences. At a cost of (ouch!) $48 or more per linear foot for cedar fencing right now, new fences can be quite costly, but with some extra love and support, that old wooden fence can limp along for years. With rotted posts, you can sink a buddy post right behind the old one, and bind them together with earthquake straps. Rotted stringers or broken fence boards can also be replaced, helping you get the maximum life possible. When replacement time comes, chain link is actually much cheaper ($23-$30 a linear foot) and will last much longer.

          Damaged sections of siding can be replaced using strategically placed Z-flashing and touch-up paint. Cabinets can be stripped and restored, decks can be limped along with replacement of rotting boards and regular application of preservative, bathtubs can be resurfaced at one-third the cost of new, and a spring rod with a nice curtain costs way less than new closet doors, and they don’t keep falling off the tracks. Flooring remnants can save you hundreds of dollars if you’re willing to have more limited choices. Old Formica countertops can be made like new with creative new paint coatings that look like granite. Some thrift stores sell recycled paint that is 25 percent of the price of new.

          Overstock sections at home improvement stores are a great place to find replacement items at bargain prices, as are places like the Habitat for Humanity Restore. I once got several large quality beveled mirrors there for $35 each that had been pulled out of the Hilton Hotel when they were remodeling, and made my rental units look extra fancy. When I needed a new double-sink bath vanity for a rental, I found a cool antique sideboard at a second-hand store that I refinished, drilled holes for the sinks and plumbing, and tiled the top, all for about $500, including installation and plumbing. It did require more time on my part than purchasing a ready-made set, so sometimes the question is, what do you have more of: time or money? At that point in my life I had more time than money so it made sense; now I might have to make a different choice.

          Preventative maintenance: A stitch in time saves nine
          When you’re looking to manage your budget, preventative maintenance is crucial. Caulking is one of the cheapest preventative maintenance tools, but one of the most expensive when ignored. Spend a few dollars to keep things sealed up or you could be spending hundreds or thousands to repair water damage.

          Keeping your roofs and gutters clean and downspouts clear will dramatically extend their lifespan as will replacing damaged shingles right away. Rot spreads very quickly in the rainy Pacific Northwest, so don’t put off dealing with it or you’ll be faced with a much bigger project. Watch for rot in your subfloors, especially the bathrooms and you can stop a problem in its tracks. Seeping leaks at the toilet flange can be almost unnoticeable until they are a big problem so look for discolored vinyl around your toilet, it can be an indication that there’s a problem developing. Once rot gets under the tub, you’re in for a lot of trouble, so install splash guards and keep up on your inspections. Act at the first sign of softness in your walls or flooring, and make sure your tub surrounds are solid. I once found some rot starting by the tub in a unit I managed. Since the vinyl was floating, the contractor was able to carefully peel it back, fix the rot spot and lay in back down, saving a lot of time and money, but if we had waited much longer, it would have gone under the tub and been a significantly more costly repair.

          The lifespan of degraded concrete walkways can be extended dramatically with good patching, and many lifted sections of concrete can be ground down, providing the maximum life possible. Sealing tile or granite on a regular basis keeps the stone looking good, and keeps water from seeping through your older grout, and a gallon of sealant only costs less than $25.

          Lipstick on a pig: When is it smart to do the bare minimum on the cheap?
          There are times when a focus on cost alone is the intelligent choice. I once managed for an owner who knew his triplex was a dump, but he rightly discerned that the value of the property was not in the old decrepit building, but in the land, so he did the bare minimum to keep the premises habitable, knowing down the road that the building would be razed and re-developed. That wasn’t a terrible strategy for him, but was quite a burden on the management company as we were constantly scrambling to patch things together, and the low rents reflected the low quality of the units. When I drive by, the building is still limping along, but he will likely make a great profit when he sells or develops the land into a different use, and he won’t have spent a fortune on upgrades.

          When my dad needed to sell his 70’s era single-wide trailer in a 55-and-older park, some strategic effort and a few thousand well-placed dollars made it sell quickly and for a decent price. I had some brownish paint left from another rental project and painted the interiors of all of the metal windows, hiding the discolored metal frames. We had some inexpensive vinyl installed in the kitchen and entry, fixed the dry rot in the subfloor, cleaned the carpets, painted the kitchen and bathroom cabinets with leftover paint, installed used knobs from another project, painted the mirror frames and glued on decorative trim inside the frame to hide the ugly gap, cleaned the unit very well, had the heat pump serviced and the ducts cleaned, pressure washed the exterior siding and concrete, and spruced up the yard. It worked and didn’t break the budget. Without that effort, it might not have sold at all, so it was a good return on a nominal investment.

          The vacancy factor: Planning for lost rent
          While most of us seek long-term tenancies, over time residents come and go. Aside from low-priced pig sties rented to marginal-at-best residents, a mid-priced family home in a good school district usually results in the longest-term tenancies. College rentals turn every year or two, and high-end homes are often just stopping places along the way to a home purchase. Whatever your market niche, remember that vacancy loss is another factor to consider when planning your budget.

          Too many rental owners forget this part and when one month’s rent is lost prepping for a new resident, they remember they still have to pay the mortgage and start freaking out. The wise housing provider has a savings account for such things. Lost rent can also hit hard when the resident loses a job and doesn’t pay. Then, not only is there lost rent to consider, but the costs of eviction, and don’t forget the turn itself. In any household budget, there needs to be an emergency fund of three to six months’ living expenses, and the same is true of rental properties…better start saving.

          Maintenance reserves: Knowing how much to set aside
          When you’re planning for replacement of larger items, there are various sources of information. I have compiled lists from HUD and a random insurance company that you can access here, titled DEPRECIATION SCHEDULE FOR HOUSING COMPONENTS and HUD DEPRECIATION SCHEDULE. Armed with the knowledge of how long something should be expected to last and the likely age of that component, you should be able to identify pending projects, and get estimates for the cost so you know what’s coming. You can then plan ahead and increase your maintenance reserves to cover the expense.

          The takeaway: Planning for repairs is essential to your success
          You need a budget. And an emergency fund. Don’t go to ridiculous extremes to try to save money – it won’t work. Preventative maintenance is best. Be intelligently frugal. Know when it’s okay to put lipstick on a pig. Understand your market and your product so you know what to expect. Make a plan and save for it.

          This column offers general suggestions only and is no substitute for professional legal counsel. Please consult an attorney for advice related to your specific situation.

        7. Saturday, October 30, 2021 11:17 AM | Maria Menguita (Administrator)

          The ORH Key-PAC is your legislative advocacy organization, but we can’t do it without you! Never have we faced such opposition and lopsided efforts to restrict the rights of property owners in Oregon. With a triple Democrat majority in the state and new redistricting maps creating even more unfair voting blocs, now more than ever we must act.

          What is a PAC and what do they do? Political Action Committee (PAC) — PAC is a popular term for a political committee organized for the purpose of raising and spending money to elect candidates who support their interests. Most PACs represent business, labor, or ideological interests. PACs can give $5,000 to a candidate committee per election (primary, general, or special). They can also give up to $15,000 annually to any national party committee, and $5,000 annually to any other PAC. PACs may receive up to $5,000 from any one individual, PAC, or party committee per calendar year.

          So, it’s all about money? Yep! Campaign contributions open doors to our message, “Housing providers are the solution, not the problem to our housing crisis.” With strategic donations, we develop relationships that inform and educate our lawmakers on the struggles and concerns of housing providers, encouraging them to see our point of view when they are involved in legislative changes to the rental housing industry.

          What political parties does the PAC donate to? Donations are disbursed to candidates in all political parties based on the recommendations of our Lobbyist Shawn Miller and Legislative Director Jason Miller. The recommendations for donations are based on a candidate’s history in supporting fair and reasonable housing policies and their willingness to listen to our concerns.

          Can I get a tax credit for my donation? Yes, you can! Individuals can donate up to $50 and each couple filing jointly can donate up to $100 annually and receive a dollar-for-dollar tax credit up to those amounts. And, of course, you can always donate more. 

          Please visit, oregonrentalhousingpac.org to donate online, or mail a check or money order to:

          Oregon Rental Housing Key PAC
          89286 Cranberry Lane
          Bandon, Oregon 97411

        8. Saturday, October 30, 2021 10:56 AM | Maria Menguita (Administrator)

          By: Jason Miller, ORHA Legislative Director
          October 27, 2021

          Thousands of Housing Providers across Oregon received notification from Residents that they applied for rental assistance. Once a Housing Provider receives that notification, they are required to give Residents a sixty (60) day stay from eviction. While some Housing Providers have received assistance checks many are left wondering what is going on. To make things worse, for most of them, we are past or approaching the end of the sixty (60) day stay from eviction. 

          Housing Providers do not necessarily want to evict a tenant if they know their Resident qualifies and rental assistance is coming. But with no communication from Oregon Housing and Community Services (OHCS) or the local Community Action Agencies Housing Providers are making the heartbreaking decision to file for eviction. How many of those eviction filings could be avoided if the Housing Provider received a simple email or phone call saying your Resident qualifies and the rent is on the way? I suspect a large percentage of Housing Providers would hold off a little longer if they knew the assistance was coming. Remember, the alternative is to evict the tenant in hopes the unit can be rented to someone able to pay. The Housing Provider will incur costs of turning over the rental property to make it ready to rent and lose any chance at being made whole on past-due rent. However, to some this sounds more attractive than being left in the dark wondering when, or if, assistance will come.

          While some believe the answer is to increase the sixty (60) day stay on eviction to ninety (90) or one hundred and twenty (120) days, my message has been to increase communication with Housing Providers and involve them in the process. Housing Providers do not want to go through the process of eviction if it is preventable and would rather receive rental assistance than a loss in income. My belief is most Housing Providers would naturally, without any requirement, wait another 30 or 60 days if they knew and had a guarantee that rental assistance was coming.

          This message has been relayed to OHCS and Legislators in hopes they will improve their communication process to avoid unnecessary evictions. We have received promises of improvement but for some it may be too late and until the promises are fulfilled Housing Providers will still need to make that gut-wrenching decision to evict their Resident or continue to not receive any payment, uncertain if assistance will ever come.

        9. Saturday, October 30, 2021 10:45 AM | Maria Menguita (Administrator)

          By: Violet Wilson, ORHA Education Committee Chair
          October 27, 2021

          The committee has been working on long-range planning goals, including:

          1. Increasing the available ORHA classes for use by member associations and other organizations.
          2. Direct sales of completed presentations to non-members.
          3. Adding to our list of qualified speakers
          4. Continuing to reach out to our smaller locals who need more support.

          A number of classes on the new Landlord Guarantee Program (LGP), which provide funds to housing providers who waited out the sixty day “safe harbor” period but did not get funds from the tenants or rent programs, have been presented. The power point on the LGP was also sent out to local associations for their use.

          The new Law and Rule Required course (LARRC) with the new discrimination requirements will be completed by January and LARRC classes will be offered after that time.

          Continuing Education Certificates processing for ORHA classes has been centralized and will be completed and sent out by a single individual. This should speed up the timelines for receipt of the certificates by attendees.

          The committee is always looking for new ideas on what to teach. Please contact Violet at vwilson503@comcast.net.

        © 2015-2023 Oregon Rental Housing Association - All Rights Reserved
        PO Box 20862, Keizer, OR 97307
        Contact ORHA (click here)
        ORHA Support Team: support@oregonrentalhousing.com
        ORHA Office: office@oregonrentalhousing.com

        The Oregon Rental Housing Association (ORHA) is a non-profit educational landlord association -- ORHA Board Members, Mentors, Staff, and/or other related ORHA affiliates do not give legal advice. Please be advised that any information provided  is no substitute for professional legal counsel and any advice or guidance given does not constitute legal advice.  Please consult an attorney for legal advice related to your specific situation.

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