The impacts of the COVID-19 pandemic are real and continue to impact all Oregonians, and particularly commercial property managers, real estate agents, property owners, and tenants.
In an effort to prevent a wave of commercial evictions and/or litigation over non-payment of rent in 2020, the Oregon legislature passed House Bill 4213 (“House Bill”). Governor Kate Brown signed it into law on June 30, 2020. The House Bill was effective immediately and picks-up the Governor’s prior executive orders that applied (e.g., EO 20-13 – See CREPI Volume ___ for a discussion on this EO).
The major impact for commercial property managers and owners of the House Bill is that an eviction moratorium was extended to September 30, 2020. From April 1, 2020 to September 30, 2020, the Oregon legislature designated this as an “emergency period.” During the emergency period, commercial property managers and landlord’s cannot issue a non-payment of rent notice, commence a lockout, or take any action that with interfere with the commercial tenant’s possession of the premises. The House Bill also says they cannot threaten these things.
The second major ramification created by the House Bill is a six-month grace period for a commercial tenant to pay any arrearages that arise during the emergency period. Once the emergency period is lifted on September 30, 2020 (assuming there are no further extensions), the commercial tenant must resume paying rent on October 1, 2020 and each month thereafter. If a commercial tenant fails to pay October’s rent – or any month thereafter – the eviction moratorium does not apply.
If the commercial tenants owes rent from the emergency period, they will have the option to pay it back rent over a six-month period. The commercial property manage or landlord is required to send a written notice to the commercial tenant regarding any unpaid sums from the emergency period. The basic terms of the notice is specified in the House Bill. The commercial tenant will then have 14-days to respond if he/she/it wants to take advantage of the House Bill’s repayment plan option. The repayment plan can be negotiated between the parties. However, if the parties cannot reach an agreement, then the House Bill specifies that the tenant will have until March 31, 2021 to pay the arrearage. No interest or late fees can be added to the arrearage.
While the emergency period is in effect, what should you do if you have a non-performing commercial tenant? The House Bill does not prohibit you from communicating with the commercial tenant. You are fine to communicate with them, ask them about their plans, and send monthly ledgers. As always, an open dialogue is always encouraged.
While you wait, you should prepare to send your required notice on October 1, 2020.