Saturday, August 13, 2022

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Becoming a Landlord? A Few Items to Consider

As local housing prices continue to fall, many people will be looking to buy distressed properties as investments.  Buying low is just one part of the equation.  landlord1
Another is managing the asset.  If you are thinking about becoming a residential landlord, an ounce of planning may prevent a house full of cure.    What type of risks do you face as a landlord?  I think there are three main categories.

Legal and Regulatory Compliance 

You should become generally familiar with the laws and regulations applicable to the residential landlord-tenant relationship.  Landlords can do much to determine the relationships they will have with their tenants by the terms contained in a written rental agreement.  However, a tenant has certain rights under the law.  Oregon’s Residential Landlord Tenant Act (the “Act”) outlines certain rights and obligations of the parties that may not be overridden by contract (i.e., the rental agreement), in addition to default rules that may be overridden by contract.   For example, the Act includes notice requirements for (i) terminating month-to-month tenancies without cause, (ii) terminating a tenancy for certain outrageous conduct (e.g., substantial property damage, injury to another tenant, selling or manufacturing an illegal substance), (ii) terminating a tenancy for non-payment of rent and the tenant’s right to cure, (iii) terminating a tenancy for violation of a “no pet” policy and the tenant’s right to cure, (iv) declaring a default of other material terms of the rental agreement and the tenant’s right to cure (v) dealing with repeat violations after having given the required notice, and (vi) dealing with a tenant’s deposit upon termination.  

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