One question that we routinely get from landlords goes something like this: “How can I terminate my tenants if I want to sell my rental?”

When I first hear it, I wonder “Where have you been for the last few years?” But I do realize how complex newer tenant protection laws have become! So, I roll up my sleeves and start “the chat”…

The answer is simple: “You cannot terminate your tenants in order to sell your rental.”

In 2019 the Oregon Legislature passed SB 608. This law specifically eliminates the option of terminating a tenancy after the tenant’s first year of occupancy for anything other than a For Cause eviction (or by proving there were 3 documented violations during the current lease), and it only allows four landlord-based exclusions for tenant terminations: 1) property demolition, 2) undertaking major repairs, 3) an owner or family member intending to re-occupy, or 4) the sale of the unit.

But here’s how it works: The exclusion for the sale of a property requires that the owner provide written evidence to the tenant (after the property has already been sold) that the purchaser intends to owner-occupy the unit. The tenant then has 90 days, or the lease termination date (whichever is longer) to move out. When serving that notice, the owner must show the tenant the Purchase Contract and pay any applicable relocation fees to the tenant, as required by the state and/or locality.

“So,” the landlords ask, “we cannot evict our tenants in order to get into the property, and fix it up, to help us get ‘top dollar’?”

No.

“And we have to list the property for sale while the tenants still live there?”

Yes.

“Then we can only have it shown to prospective buyers by posting a 24-hour notice of entry?”

Yes.

“But isn’t it common that a tenant occupied listing is harder to sell and that it doesn’t show as well because they don’t really want to move?”

That is historically the case, yes.

“And after all that, we still have to pay them a relocation fee to move out?”

In Portland, yes. In the rest of the state yes, but only if you own 5 or more units.

“Why is the government making it so hard on landlords these days?!”

I have no good answer for that.

The logic behind SB 608 is to keep tenants housed by preventing no-cause terminations and capping the amount of rent increases per year. The eviction moratorium during the pandemic added a host of additional burdens and regulations, and it heightened owner anxieties. Consequently, even while most tenants have continued to pay rent during this time, many landlords have become ever more agitated over the increasing risks of owning rental properties.

Thus, many are considering to just get out of the business, and that’s when they call.

With all this discussion, and after a moment of initial confusion, the frustration normally subsides. Some landlords feel stronger about selling. Many others pause…

It’s long been my assertion that the only time it makes sense to sell a rental property is if you no longer want it or need it.

When that’s the case, the best advice I have is base your goals on the reality of the current market and have a Trusted Advisor, Expert Facilitator and Professional Negotiator on your team.

The Garcia Group Real Estate Service – it’s what we do.