The OR Legislature passed two new bills during the summer session aimed at curbing tenant evictions during the Covid-19 crisis, HB 4213 AND HB 4204. The bills were crafted in a way that puts tenants in a better position to weather the coming storm, but may put investors in a position where they don't receive rent and may not have any recourse to collect it once the tenant leaves. Here's some highlights of the bills:
• The new bills are more protective of commercial tenants than borrowers. Under HB 4213,
nonpayment of rent, late charges, utility or services, or certain other charges is excused
during the emergency period regardless of cause. Under HB 4204, however, a borrower or
obligor on debt secured by land must provide proof that nonpayment is related to the
COVID-19 pandemic.
• More specifically under HB 4204, if the subject property is commercial property or
residential property with more than four dwelling units, the borrower must produce
financial statements or other evidence that demonstrates a loss of income related to the
COVID-19 pandemic and must disclose any funds received from the USBA under the
Paycheck Protection Program.
• If a commercial lease expires during the emergency period and the tenant holds over but
does not pay rent, the landlord should still be able to bring an action to evict, because the
action would be based on expiration of the lease and not nonpayment of rent.
• It is possible a landlord could be left high and dry if a lease expires after the emergency
period but before the end of the six-month grace period. If a tenant fails to pay rent during
the emergency period and the lease expires during the grace period, but the landlord must
wait until April 1, 2021, the debt could be uncollectible. After a wait of up to six months,
the tenant may not be around by to pay by the time suit is filed.
More can be read on the attached notes from Thomas A. Ped, Esq.
