It is common knowledge that the landlord / tenant regulations in the City of Portland (in particular), and the entire state of Oregon (in general), have gotten complicated over the last few years.
New rules are continually added, and they differ from city to city and county to county. The state also adds their own versions as new laws are layered on with each new legislative session. These laws are interpreted and litigated by activists, lawyers, and stakeholders from all sides. Simple practices that were commonplace yesterday have transformed into a complex morass of legalese and differing interpretations, oozing with ever-higher risks. To make an informed decision these days, landlords need a professional guide just to navigate through the sludge. It’s one of the reasons why many smaller rental property owners are calling it quits!
Let’s take a simple example: Who is supposed to pay for the garbage? According to the City of Portland website:
“Owners of a residential rental of four or fewer units (single-family, duplex, triplex, fourplex) are required by City Code 29.30.140 to: 1. Pay for garbage, recycling, and compost collection service You must set up and pay for service. Bills must be in your name and sent to you, not the tenants. Your rental property has an assigned garbage and recycling company, and rates and service options are set by the City.”
This law became effective several years ago. One reason Portland enacted the rule was due to the pressure from hauling services who had no leverage to collect overdue or past bills from tenants when they vacate the property. By requiring the bill to be solely in the owner’s name, the debt becomes collateralized. If the owner refuses to pay, the service stops. If the trash piles up, the city can step in with code enforcement and red-tag the property creating hefty fines to the owner, which then can become property liens.
An unexpected result of this action was that the trash hauling companies, a.k.a. the “stakeholders”, (who are not localized to any particular city), realized this practice is profitable beyond Portland city limits. Consequently, they created internal company policies that require their services must only be contracted by property owners, not tenants. The owner is the responsible party for the bill and must recoup the costs from the tenant. This is known as a tenant bill-back.
So, we ask, “Must landlords outside of Portland be required to follow Portland’s ordinance, or can they simply bill back these charges?” Simply put are these garbage company regulations just a bunch of garbage?
ORS 90.315 is the section of the Oregon Residential Landlord Tenant Act that governs statewide responsibilities for utility payments. It says that with certain administrative requirements, landlords can in fact bill back for services like water sewer or garbage. Newer updates to this ordinance have been widely regarded as confusing and poorly written, and they became a hot topic in recent years as numerous lawsuits have shot up – raising a more pertinent question to consider, i.e., “Can utility bill-backs be done simply?”
Courts have now ruled that Landlords can be fined “per violation” if the convoluted regulations within the statute are not properly executed. This is known in legal terms as “stacking” the fines for penalties. Thus, in one example, (Shepard Investment Group, LLC v. Ormandy, 320 Or App 521 (2022)) a single tenant who paid $40 per month regularly throughout their tenancy was entitled to recover $11,010 in damages for the multiple violations! Other cases including several class action suits against landlords have been filed seeking damages in the high six figures and some reaching well over a million dollars, simply for violating an administrative rules.
The Shepard case made it up to the Oregon State of Appeals and it was overturned, thankfully, But it granted the defendant a victory due to the particular case circumstances. As other suits are litigated, it has done little to clarify the poorly written statute or provide a safety net for landlords as who simply want to bill back for services that the tenants use. So, what’s the safest solution?
An old acronym comes to mind: K.I.S.S. (Keep It Simply Simple). Let’s just calculate the charge and add it into the rent and skip all this garbage.