Chapter 0028

Chapter 28 Oregon Laws 2010 Special Session

AN ACT

SB 1013

Relating to the rights of tenants in foreclosed property; creating new provisions; amending ORS 86.745, 86.750 and 90.300; and declaring an emergency.

Be It Enacted by the People of the State of Oregon:

SECTION 1. ORS 86.745 is amended to read:

86.745. The notice of sale shall:

(1) List the names of the grantor, trustee and beneficiary in the trust deed, and the mailing address of the trustee.

(2) Describe the property the trust deed covers.

(3) Identify the book and page of the mortgage records that record the trust deed.

(4) State the default for which the foreclosure is made.

(5) State the sum owing on the obligation that the trust deed secures.

(6) State that the property will be sold to satisfy the obligation.

(7) Set forth the date, time and place of the sale.

(8) State that the right exists under ORS 86.753 to have the proceeding dismissed and the trust deed reinstated by paying the entire amount then due, together with costs, trustee’s fees and attorney fees, and by curing any other default complained of in the notice of default, at any time that is not later than five days before the date last set for the sale.

(9) If the property includes one or more dwelling units, as defined in ORS 90.100, include a notice addressed clearly to any person who occupies the property and who is or might be a residential tenant. The notice required under this subsection must:

(a) Include contact information for the Oregon State Bar and a person or organization that provides legal help to individuals at no charge to the individual;

(b) Include information concerning the right the person has to notice under ORS 86.755 (5)(c) and state that the person may have additional rights under federal law;

(d) Be in substantially the following form:

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NOTICE TO TENANTS:

If you are a tenant of this property, foreclosure could affect your rental agreement. A purchaser who buys this property at a foreclosure sale has the right to require you to move out after giving you notice of the requirement.

If you do not have a fixed-term lease, the purchaser may require you to move out after giving you a 30-day notice on or after the date of the sale.

If you have a fixed-term lease, you may be entitled to receive after the date of the sale a 60-day notice of the purchaser’s requirement that you move out.

To be entitled to either a 30-day or 60-day notice, you must give the trustee of the property written evidence of your rental agreement at least 30 days before the date first set for the sale. If you have a fixed-term lease, you must give the trustee a copy of the rental agreement. If you do not have a fixed-term lease and cannot provide a copy of the rental agreement, you may give the trustee other written evidence of the existence of the rental agreement. The date that is 30 days before the date of the sale is ____________. The name of the trustee and the trustee’s mailing address are listed on this notice.

Federal law may grant you additional rights, including a right to a longer notice period. Consult a lawyer for more information about your rights under federal law.

You have the right to apply your security deposit and any rent you prepaid toward your current obligation under your rental agreement. If you want to do so, you must notify your landlord in writing and in advance that you intend to do so.

If you believe you need legal assistance with this matter, you may contact the Oregon State Bar and ask for the lawyer referral service. Contact information for the Oregon State Bar is included with this notice. If you have a low income and meet federal poverty guidelines, you may be eligible for free legal assistance. Contact information for where you can obtain free legal assistance is included with this notice.

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SECTION 2. ORS 86.745, as amended by section 1 of this 2010 Act, is amended to read:

86.745. The notice of sale shall:

(1) List the names of the grantor, trustee and beneficiary in the trust deed, and the mailing address of the trustee.

(2) Describe the property the trust deed covers.

(3) Identify the book and page of the mortgage records that record the trust deed.

(4) State the default for which the foreclosure is made.

(5) State the sum owing on the obligation that the trust deed secures.

(6) State that the property will be sold to satisfy the obligation.

(7) Set forth the date, time and place of the sale.

(9) If the property includes one or more dwelling units, as defined in ORS 90.100, include a notice addressed clearly to any person who occupies the property and who is or might be a residential tenant. The notice required under this subsection must:

(a) Include contact information for the Oregon State Bar and a person or organization that provides legal help to individuals at no charge to the individual;

(b) Include information concerning the right the person has to notice under ORS 86.755 (5)(c) and state that the person may have additional rights under federal law;

(d) Be in substantially the following form:

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[NOTICE TO TENANTS:]

[If you are a tenant of this property, foreclosure could affect your rental agreement. A purchaser who buys this property at a foreclosure sale has the right to require you to move out after giving you notice of the requirement.]

[If you do not have a fixed-term lease, the purchaser may require you to move out after giving you a 30-day notice on or after the date of the sale.]

[If you have a fixed-term lease, you may be entitled to receive after the date of the sale a 60-day notice of the purchaser’s requirement that you move out.]

[To be entitled to either a 30-day or 60-day notice, you must give the trustee of the property written evidence of your rental agreement at least 30 days before the date first set for the sale. If you have a fixed-term lease, you must give the trustee a copy of the rental agreement. If you do not have a fixed-term lease and cannot provide a copy of the rental agreement, you may give the trustee other written evidence of the existence of the rental agreement. The date that is 30 days before the date of the sale is ____________. The name of the trustee and the trustee’s mailing address are listed on this notice.]

[Federal law may grant you additional rights, including a right to a longer notice period. Consult a lawyer for more information about your rights under federal law.]

[You have the right to apply your security deposit and any rent you prepaid toward your current obligation under your rental agreement. If you want to do so, you must notify your landlord in writing and in advance that you intend to do so.]

[If you believe you need legal assistance with this matter, you may contact the Oregon State Bar and ask for the lawyer referral service. Contact information for the Oregon State Bar is included with this notice. If you have a low income and meet federal poverty guidelines, you may be eligible for free legal assistance. Contact information for where you can obtain free legal assistance is included with this notice.]

NOTICE TO RESIDENTIAL TENANTS

The property in which you are living is in foreclosure. A foreclosure sale is scheduled for____________. Unless the lender who is foreclosing on this property is paid, the foreclosure will go through and someone new will own this property.

The following information applies to you only if you occupy and rent this property as a residential dwelling under a legitimate rental agreement. The information does not apply to you if you own this property or if you are not a residential tenant.

If the foreclosure goes through, the business or individual who buys this property at the foreclosure sale has the right to require you to move out. The buyer must first give you an eviction notice in writing that specifies the date by which you must move out. The buyer may not give you this notice until after the foreclosure sale happens. If you do not leave before the move-out date, the buyer can have the sheriff remove you from the property after a court hearing. You will receive notice of the court hearing.

FEDERAL LAW REQUIRES

YOU TO BE NOTIFIED

IF YOU ARE OCCUPYING AND RENTING THIS PROPERTY AS A RESIDENTIAL DWELLING UNDER A LEGITIMATE RENTAL AGREEMENT, FEDERAL LAW REQUIRES THE BUYER TO GIVE YOU NOTICE IN WRITING A CERTAIN NUMBER OF DAYS BEFORE THE BUYER CAN REQUIRE YOU TO MOVE OUT. THE FEDERAL LAW THAT REQUIRES THE BUYER TO GIVE YOU THIS NOTICE IS EFFECTIVE UNTIL DECEMBER 31, 2012. Under federal law, the buyer must give you at least 90 days’ notice in writing before requiring you to move out. If you are renting this property under a fixed-term lease (for example, a six-month or one-year lease), you may stay until the end of your lease term. If the buyer wants to move in and use this property as the buyer’s primary residence, the buyer can give you written notice and require you to move out after 90 days, even if you have a fixed-term lease with more than 90 days left.

STATE LAW NOTIFICATION REQUIREMENTS

IF THE FEDERAL LAW DOES NOT APPLY, STATE LAW STILL REQUIRES THE BUYER TO GIVE YOU NOTICE IN WRITING BEFORE REQUIRING YOU TO MOVE OUT IF YOU ARE OCCUPYING AND RENTING THE PROPERTY AS A TENANT IN GOOD FAITH. EVEN IF THE FEDERAL LAW REQUIREMENT IS NO LONGER EFFECTIVE AFTER DECEMBER 31, 2012, THE REQUIREMENT UNDER STATE LAW STILL APPLIES TO YOUR SITUATION. Under state law, if you have a fixed-term lease (for example, a six-month or one-year lease), the buyer must give you at least 60 days’ notice in writing before requiring you to move out. If the buyer wants to move in and use this property as the buyer’s primary residence, the buyer can give you written notice and require you to move out after 30 days, even if you have a fixed-term lease with more than 30 days left.

If you are renting under a month-to-month or week-to-week rental agreement, the buyer must give you at least 30 days’ notice in writing before requiring you to move out.

IMPORTANT: For the buyer to be required to give you notice under state law, you must prove to the business or individual who is handling the foreclosure sale that you are occupying and renting this property as a residential dwelling under a legitimate rental agreement. The name and address of the business or individual who is handling the foreclosure sale is shown on this notice under the heading “TRUSTEE.” You must mail or deliver your proof not later than ____________ (30 days before the date first set for the foreclosure sale). Your proof must be in writing and should be a copy of your rental agreement or lease. If you do not have a written rental agreement or lease, you can provide other proof, such as receipts for rent you paid.

ABOUT YOUR SECURITY DEPOSIT

Under state law, you may apply your security deposit and any rent you paid in advance against the current rent you owe your landlord. To do this, you must notify your landlord in writing that you want to subtract the amount of your security deposit or prepaid rent from your rent payment. You may do this only for the rent you owe your current landlord. If you do this, you must do so before the foreclosure sale. The business or individual who buys this property at the foreclosure sale is not responsible to you for any deposit or prepaid rent you paid to your landlord.

ABOUT YOUR TENANCY

AFTER THE FORECLOSURE SALE

The business or individual who buys this property at the foreclosure sale may be willing to allow you to stay as a tenant instead of requiring you to move out. You should contact the buyer to discuss that possibility if you would like to stay. Under state law, if the buyer accepts rent from you, signs a new residential rental agreement with you or does not notify you in writing within 30 days after the date of the foreclosure sale that you must move out, the buyer becomes your new landlord and must maintain the property. Otherwise, the buyer is not your landlord and is not responsible for maintaining the property on your behalf and you must move out by the date the buyer specifies in a notice to you.

YOU SHOULD CONTINUE TO PAY RENT TO YOUR LANDLORD UNTIL THE PROPERTY IS SOLD TO ANOTHER BUSINESS OR INDIVIDUAL OR UNTIL A COURT OR A LENDER TELLS YOU OTHERWISE. IF YOU DO NOT PAY RENT, YOU CAN BE EVICTED. AS EXPLAINED ABOVE, YOU MAY BE ABLE TO APPLY A DEPOSIT YOU MADE OR PREPAID RENT YOU PAID AGAINST YOUR CURRENT RENT OBLIGATION. BE SURE TO KEEP PROOF OF ANY PAYMENTS YOU MAKE AND OF ANY NOTICE YOU GIVE OR RECEIVE CONCERNING THE APPLICATION OF YOUR DEPOSIT OR YOUR PREPAID RENT.

IT IS UNLAWFUL FOR ANY PERSON TO TRY TO FORCE YOU TO LEAVE YOUR HOME WITHOUT FIRST GOING TO COURT TO EVICT YOU. FOR MORE INFORMATION ABOUT YOUR RIGHTS, YOU MAY WISH TO CONSULT A LAWYER. If you believe you need legal assistance, contact the Oregon State Bar and ask for the lawyer referral service. Contact information for the Oregon State Bar is included with this notice. If you do not have enough money to pay a lawyer and are otherwise eligible, you may be able to receive legal assistance for free. Information about whom to contact for free legal assistance is included with this notice.

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SECTION 3. ORS 86.750 is amended to read:

86.750. (1)(a) Except as provided in paragraph (b) of this subsection, the notice prescribed in ORS 86.745 [shall] must be served upon an occupant of the property described in the trust deed in the manner in which a summons is served pursuant to ORCP 7 D(2) and 7 D(3) at least 120 days before the day the trustee conducts the sale.

(b)(A) If service cannot be effected on an occupant as provided in paragraph (a) of this subsection on the first attempt, the person [attempting] that attempts to effect service shall post a copy of the notice in a conspicuous place on the property on the date of the first attempt. The person [attempting] that attempts to effect service shall make a second attempt to effect service on a day that is at least two days after the first attempt.

(B) If service cannot be effected on an occupant as provided in paragraph (a) of this subsection on the second attempt, the person [attempting] that attempts to effect service shall post a copy of the notice in a conspicuous place on the property on the date of the second attempt. The person [attempting] that attempts to effect service shall make a third attempt to effect service on a day that is at least two days after the second attempt.

(C) If service cannot be effected on an occupant as provided in paragraph (a) of this subsection on the third attempt, the person [attempting] that attempts to effect service shall send a copy of the notice, bearing the word “occupant” as the addressee, to the property address by first class mail with postage prepaid.

(c) Service on an occupant is [deemed] effected on the earlier of the date that notice is served as provided in paragraph (a) of this subsection or the first date on which notice is posted as described in paragraph (b)(A) of this subsection.

(2)(a) Except as provided in paragraph (b) of this subsection, a copy of the notice of sale [shall] must be published in a newspaper of general circulation in each of the counties in which the property is situated once a week for four successive weeks. The last publication [shall] must be made more than 20 days prior to the date the trustee conducts the sale.

(b) The copy of the notice of sale required to be published under paragraph (a) of this subsection does not need to include the notice to tenants required under ORS 86.745 (9).

(3) On or before the date the trustee conducts the sale, the trustee shall file for recording in the official record of the county or counties in which the property described in the deed is situated the following affidavits with respect to the notice of sale:

(a) An affidavit of mailing, if any;

(b) An affidavit of service, if any;

(d) An affidavit of publication.

(4) On or before the date the trustee conducts the sale, the trustee shall file for recording in the official record of the county or counties in which the property described in the deed is situated an affidavit of mailing with respect to the notice to the grantor required under ORS 86.737.

(5) On or before the date the trustee conducts the sale, the trustee shall file for recording in the official record of the county or counties in which the property is located an affidavit from the beneficiary or the beneficiary’s agent that states how the beneficiary or the beneficiary’s agent has complied with the provisions of section 3 (1) and (2), chapter 864, Oregon Laws 2009.

SECTION 4. ORS 86.750, as amended by section 6, chapter 864, Oregon Laws 2009, is amended to read:

(b) The copy of the notice of sale required to be published under paragraph (a) of this subsection does not need to include the notice to tenants required under ORS 86.745 (9).

(a) An affidavit of mailing, if any;

(b) An affidavit of service, if any;

(d) An affidavit of publication.

SECTION 5. ORS 90.300 is amended to read:

90.300. (1) As used in this section, “security deposit” includes any last month’s rent deposit.

(2)(a) Except as otherwise provided in this section, a landlord may require [the payment of] a tenant to pay a security deposit. The landlord shall provide [a] the tenant with a receipt for any security deposit [paid by] the tenant pays. The landlord shall hold a security deposit or prepaid rent [shall be held by the landlord] for the tenant who is a party to the rental agreement. [The claim of a tenant] A tenant’s claim to the security deposit or prepaid rent [shall be] is prior to the claim of [any] a creditor of the landlord, including a trustee in bankruptcy.

(b) Except as provided in ORS 86.755 (8), the holder of the landlord’s interest in the premises at the time [of termination of] the tenancy terminates is responsible to the tenant for any security deposit or prepaid rent and is bound by this section.

(3) A landlord may not charge a tenant a pet security deposit for keeping a service animal or companion animal that a tenant with a disability requires as a reasonable accommodation under fair housing laws.

(4)(a) Except as otherwise provided in this subsection, a landlord may not change the rental agreement to require the tenant to pay [payment of] a new or increased security deposit during the first year after the tenancy has begun. Subject to subsection (3) of this section, the landlord may require an additional deposit [may be required] if the landlord and tenant agree to modify the terms and conditions of the rental agreement to permit a pet or for other cause and the additional deposit relates to [that] the modification. This paragraph does not prevent a landlord from collecting [the collection of] a security deposit that [was provided for under] an initial rental agreement provided for but that remained unpaid at the time the tenancy began.

(b) If a landlord requires a new or increased security deposit after the first year of the tenancy, the landlord shall allow the tenant at least three months to pay [that] the new or increased deposit.

(5) The landlord may claim all or part of the security deposit only if the landlord required the security deposit [was made] for any or all of the purposes [provided by] specified in subsection (6) of this section.

(6)(a) The landlord may claim from the security deposit only the amount reasonably necessary:

(A) To remedy the tenant’s defaults in the performance of the rental agreement including, but not limited to, unpaid rent; and

(B) To repair damages to the premises caused by the tenant, not including ordinary wear and tear.

(b) A landlord is not required to repair damage caused by the tenant in order for the landlord to claim against the deposit for the cost to make the repair. Any labor costs the landlord assesses [assessed] under this subsection for cleaning or repairs must be based on a reasonable hourly rate. The landlord may charge a reasonable hourly rate for the landlord’s own performance of cleaning or repair work [by the landlord].

(A) Carpet cleaning, other than the use of a common vacuum cleaner, if:

(i) The cleaning is performed by use of a machine specifically designed for cleaning or shampooing carpets;

(ii) The carpet was cleaned immediately [prior to] before the tenant [taking] took possession; and

(iii) The written rental agreement provides that the landlord may deduct the cost of carpet cleaning regardless of whether the tenant cleans the carpet before [delivery of] the tenant delivers possession as described in ORS 90.147.

(B) Loss of use of the dwelling unit during the performance of necessary cleaning or repairs, if the cleaning or repairs are performed in a timely manner.

(7) A landlord may not require [that] a tenant to pay or to forfeit a security deposit or prepaid rent [be required or forfeited] to the landlord [upon] for the tenant’s failure [of the tenant] to maintain a tenancy for a minimum number of months in a month-to-month tenancy.

(8) The landlord must apply any last month’s rent deposit [must be applied] to the rent due for the last month of the tenancy:

(a) [Upon] When either the landlord or the tenant [giving] gives to the other a notice of termination, pursuant to this chapter, other than a notice of termination under ORS 90.394;

(b) [Upon agreement by] When the landlord and tenant agree to terminate the tenancy; or

(c) [Upon termination pursuant to] When the tenancy terminates in accordance with the provisions of a written rental agreement for a term tenancy.

(9) A landlord shall account for and refund as provided in subsections (11) to (13) of this section any portion of a last month’s rent deposit [not applied] the landlord does not apply as provided under subsection (8) of this section [shall be accounted for and refunded as provided under subsections (11) to (13) of this section]. Unless the tenant and landlord agree otherwise, the tenant may not require the landlord to apply a last month’s rent deposit [shall not be applied] to rent due for any period other than the last month of the tenancy. A last month’s rent deposit [shall not operate to] does not limit the amount of rent charged unless a written rental agreement provides otherwise.

(10) [Upon termination of the tenancy] When the tenancy terminates, a landlord shall account for and refund to the tenant, in the same manner this section requires for security deposits, the unused balance of any prepaid rent the landlord has not previously refunded to the tenant [as required by] under ORS 90.380 and 105.120 (5)(b) or any other provision of this chapter[, in the same manner as required for security deposits by this section]. The landlord may claim from the remaining prepaid rent only the amount reasonably necessary to pay the tenant’s unpaid rent.

(11) In order to claim all or part of any prepaid rent or security deposit, within 31 days after the [termination of the] tenancy terminates and [delivery of] the tenant delivers possession the landlord shall give to the tenant a written accounting that states specifically the basis or bases of the claim. The landlord shall give a separate accounting for security deposits and for prepaid rent.

(12) The landlord shall return to the tenant the security deposit or prepaid rent or the portion [thereof] of the security deposit or prepaid rent that the landlord does not [claimed] claim in the manner provided by subsections (10) and (11) of this section [shall be returned to the tenant] not later than 31 days after [the termination of] the tenancy terminates and [delivery of] the tenant delivers possession to the landlord.

(13) The landlord shall give the written accounting [as] required [by] under subsection (11) of this section or shall return the security deposit or prepaid rent as required by subsection (12) of this section by personal delivery or by first class mail.

(14) If a security deposit or prepaid rent secures a tenancy for a space for a [tenant owned and occupied] manufactured dwelling or floating home the tenant owns and occupies, whether or not in a facility, and the dwelling or home is abandoned as described in ORS 90.425 (2) or 90.675 (2), the 31-day period described in subsections (11) and (12) of this section commences on the earliest of:

(a) Waiver of the abandoned property process under ORS 90.425 (26) or 90.675 (22);

(b) Removal of the manufactured dwelling or floating home from the rented space;

(c) Destruction or other disposition of the manufactured dwelling or floating home under ORS 90.425 (10)(b) or 90.675 (10)(b); or

(d) Sale of the manufactured dwelling or floating home pursuant to ORS 90.425 (10)(a) or 90.675 (10)(a).

(15) If the landlord fails to comply with subsection (12) of this section or if the landlord in bad faith fails to return all or any portion of any prepaid rent or security deposit due to the tenant under this chapter or the rental agreement, the tenant may recover the money due in an amount equal to twice the amount:

(a) Withheld without a written accounting under subsection (11) of this section; or

(b) Withheld in bad faith.

(16)(a) A security deposit or prepaid rent in the possession of the landlord is not garnishable property, as provided in ORS 18.618.

(b) If a landlord delivers a security deposit or prepaid rent [is delivered] to a garnishor in violation of ORS 18.618 (1)(b), the landlord that delivered the security deposit or prepaid rent to the garnishor shall allow the tenant at least 30 days after a copy of the garnishee response required by ORS 18.680 is delivered to the tenant under ORS 18.690 to restore the security deposit or prepaid rent. If the tenant fails to restore a security deposit or prepaid rent under the provisions of this paragraph before the tenancy terminates, and the landlord retains no security deposit or prepaid rent from the tenant after the garnishment, the landlord is not required to refund or account for the security deposit or prepaid rent under subsection (10) of this section.

(17) This section does not preclude the landlord or tenant from recovering other damages under this chapter.

SECTION 6. (1) The amendments to ORS 86.745 by section 1 of this 2010 Act apply to notices given under ORS 86.740 on or after the effective date of this 2010 Act.

(2) The amendments to ORS 90.300 by section 5 of this 2010 Act apply to tenancies that are terminated on or after the effective date of this 2010 Act.

SECTION 7. (1) The amendments to ORS 86.745 by section 2 of this 2010 Act become operative June 30, 2010.

(2) Before the operative date specified in subsection (1) of this section, a trustee may meet the trustee’s obligations under ORS 86.745 by using either the form for the notice to tenants described in ORS 86.745 (9), as amended by section 1 of this 2010 Act, or the form for the notice to residential tenants described in ORS 86.745 (9), as amended by section 2 of this 2010 Act.

SECTION 8. This 2010 Act being necessary for the immediate preservation of the public peace, health and safety, an emergency is declared to exist, and this 2010 Act takes effect on its passage.

Approved by the Governor March 4, 2010

Filed in the office of Secretary of State March 4, 2010

Effective date March 4, 2010

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