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REAL ESTATE RELATED ISSUES ARISING FROM COVID-19 (OREGON SUMMARY)

REAL ESTATE RELATED ISSUES ARISING FROM COVID-19

(UPDATE MAY 26, 2020)

The Oregon Supreme Court Issues an Alternative Writ of Mandamus.  On May 23, 2020, the Oregon Supreme Court issued an Alternative Writ of Mandamus, which provided Baker County Circuit Judge Matthew B. Shirtcliff with a couple alternatives:  Vacate his May 18, 2020 Order Granting Preliminary Injunctive Relief and Denying Motion to Dismiss; or Show Cause (explain) for not doing so, no later than 5:00 p.m. on Tuesday, May 26, 2020.  If the Oregon Supreme Court does not receive notice of compliance with the foregoing alternatives, then the parties are to follow a briefing schedule identified by the Supreme Court.

In response, on May 26, 2020 Judge Shirtcliff provided a Letter electing to stand by his original ruling.  Therefore, Gov. Brown must file a brief by May 28, 2020, and the plaintiffs must provide their briefs by June 2, 2020.

All Oregon counties have applied to re-open (Phase 1) except Multnomah County.   Clackamas County re-opened, and Washington County has applied to re-open with a target date of June 1, 2020.

(UPDATE MAY 19, 2020)

The Oregon Supreme Court stayed (suspended) Baker County (Oregon) Circuit Court Judge’s Order.  Baker County (Oregon) Circuit Judge Matthew Shirtcliff  had ruled May 18, 2020 that Gov. Kate Brown’s executive orders were “null and void.”  Later on May 18, 2020, the Oregon Supreme Court stayed Judge Shirtcliff’s Order – Gov. Brown’s Executive Orders shall remain in place pending further legal action.  The Oregon Supreme Court has scheduled additional briefings but has not scheduled a hearing date.

(UPDATE MAY 18, 2020)

Gov. Brown’s Emergency Orders Ruled Null and Void.  Baker County (Oregon) Circuit Judge Matthew Shirtcliff ruled May 18, 2020 that Gov. Kate Brown’s restrictions on religious gatherings were “null and void” because her emergency order amid the coronavirus pandemic had exceeded its 28-day limit.  Judge Shirtcliff granted the plaintiffs’ motion for a preliminary injunction and blocked enforcement of each of the more than 10 executive orders Gov. Brown has issued since March 8, 2020.  Judge Shirtcliff also denied a request to delay implementation of his ruling.  The State will promptly appeal.

(UPDATE MAY 15, 2020)

On May 1, 2020, Oregon Governor Kate Brown extended the Declaration of Emergency (Executive Order 20-03) for an additional 60 days through July 6, 2020.  (Executive Order 20-24).

On May 14, 2020, Gov. Brown issued Executive Order 20-25, which identified the phased re-opening plan for Oregon, including specific conditions and guidelines.

On May 13, 2020, the applications of 28 of the 33 Oregon Counties that applied for Phase 1 re-opening were approved effective May 15, 2020, including Deschutes County and Jefferson County.  Washington, Clackamas, and Multnomah Counties were the three Oregon Counties that did not apply to reopen.  State guidance on Phase 1 reopening criteria is available at http://coronavirus.oregon.gov/

On May 15, 2020, Oregon Chief Justice Martha L. Walters issued an Order Imposing Level 2 and Level 3 Restrictions on Court Operations relaxing court operating restrictions in counties that have received permission from Governor Brown to begin phased reopening.  Courts in counties not yet approved for reopening will retain current restrictions that have been in place since March.  “Starting June 1 in counties where the Governor has authorized Phase One reopening status, courts also may conduct bench trials (no jury) and other proceedings — including for civil temporary restraining orders and additional family law and child welfare hearings — with social distancing and if sufficient staff are available.  Jury trials not currently permitted, as well as landlord-tenant cases, will remain restricted.

(OREGON SUMMARY) (APRIL 17, 2020)

Oregon Governor Kate Brown appointed on February 28, 2020 the State of Oregon Coronavirus Response Team, and declared on March 8, 2020 a state emergency due to the public health threat imposed by COVID-19.  Gov. Brown has issued 13 Executive Orders since March 8, 2020 related to COVID-19 (through April 24, 2020), many of which have been directed at real estate operations.  Additionally, the federal government and some local jurisdictions have implemented numerous pieces of legislation that also have directly impacted the real estate industry.

The following is an overview and reconciliation regarding some of the issues involving lenders, landlords, and tenants in the State of Oregon arising out of the COVID-19 outbreak.  The focus is on foreclosures and eviction proceedings (including tenant issues that may arise during the purchase and sale of real property), and vacation rentals, with periodic updates.  This is not legal advice.  Many circumstances will be determined on a case by case basis, and reasonable minds may disagree regarding the conclusions.  Please consult an attorney as needed for your circumstances.

EVICTIONS:

OVERVIEW OF RECENT ACTIONS INVOLVING RESIDENTIAL PROPERTY:

A.     Oregon Governor’s “Stay Home, Save Lives” Executive Order 20-12:

  • On March 23, 2020, Governor Kate Brown issued Executive Order 20-12, which requires Oregonians to stay at home or at their place of residence to the maximum extent possible. Executive Order 20-12 does not in and of itself preclude evictions, but may have a bearing regarding the appropriate processes to follow.

B.     Oregon Governor’s Executive Order 20-13. (EO 20-13 expanded on Executive Order 20-11):

  • Landlords of residential properties in Oregon “shall not, for any reason of nonpayment as defined in paragraph 1(b) of this Executive Order, terminate any tenant’s rental agreement; take any action, judicial or otherwise, relating to residential evictions . . . including, without limitation, filing, serving, delivering or acting on any notice, order or writ of termination or the equivalent; or otherwise interfere in any way with such tenant’s right to possession of the tenant’s dwelling unit.” [Executive Order 20-13 1(a)]  Oregon law enforcement officers also are precluded from serving, delivering or acting on any notice, order or writ of termination of tenancy or the equivalent of any judicial action … that relates to residential evictions for nonpayment.

C.     Federal CARES Act (the Coronavirus Aid, Relief, and Economic Security Act) (See CARES Act 4022, 4023, and 4024 regarding eviction restrictions):

  • The lessor of a “covered dwelling” may not (1) make, or cause to be made, any filing with the court of jurisdiction to initiate a legal action to recover possession of the covered dwelling from the tenant for nonpayment of rent or other fees or charges; or (2) charge fees, penalties, or other charges to the tenant related to such nonpayment of rent.
  • The lessor of a covered dwelling unit (1) may not require the tenant to vacate the covered dwelling unit before the date that is 30 days after the date on which the lessor provides the tenant with a notice to vacate; and (2) may not issue a notice to vacate under the preceding paragraph (1) until after the expiration of moratorium.
  • A “covered dwelling” is a dwelling that (a) is occupied by a tenant (i) pursuant to a residential lease; or (ii) without a lease or with a lease terminable under State law; and, (b) is on a covered property. A covered property generally is any property that (a) participates in a covered housing program or a rural housing voucher program; or, (b) has a federally backed mortgage loan; or (c) has a federally backed multifamily mortgage loan.
  • Both single family and multi-family properties are covered under the CARES Act.
  • The federal moratorium for evictions is 120 days from March 27, 2020, i.e. through July 25, 2020.

D.     Local Jurisdictions:

  • Some local jurisdictions have implemented their own residential eviction restrictions. These include Multnomah County and Clackamas County and the cities of Beaverton, Portland, Gresham and Hillsboro.   Some of the moratoria include both residential and commercial leases.  Landlords, tenants, and lenders with properties in those jurisdictions (and likely to include others) should review the local regulations.

E.     Oregon Supreme Court Preclusions:

  • Oregon Supreme Court — On March 16, 2020, Oregon Chief Justice Martha L. Walters issued an initial Order Restricting Court Hearings and Operations, and on March 27, 2020, Chief Justice Walters issued an Amended Order Imposing Level 3 Restrictions on Court Operations, which provided in part that restrictions on trials and other court proceedings continue until further order. While the courts remain open, most trials and many other hearings have been postponed and will not be scheduled to begin until after June 1, 2020.  “Our goal is to continue to provide essential services while significantly minimizing the number of judges, staff, litigants and case participants, interpreters, and members of the public who come into our courthouses and offices.”  (Amended Order Imposing Level 3 Restrictions on Court Operations, p. 1.)  Most County Courts also have set their own procedures, which are consistent with the Amended Order Imposing Level 3 Restrictions on Court Operations.  This generally means that there are a reduced number of operating courtrooms, limited in-person appearances, some video hearings, and court dockets generally filled with “essential proceedings,” including criminal cases and urgent matters (e.g., stalking, restraining, immediate danger, and dependency hearings).
  • Regarding Forcible Entry and Detainer (FED aka Eviction) Proceedings in particular:
    • FED complaints may be filed and the court shall issue a summons, but (i) all first appearances are automatically postponed without the need for a motion, (ii) no answer will be required at that time, and (iii) no party is required to appear at the date set by the summons in the first appearance.
    • The first appearances will be rescheduled for a date to take place after June 1, 2020.
    • All FED trials scheduled to begin before June 1, 2020 shall be postponed and no trial shall be scheduled to begin before June 1, 2020.
    • A landlord who wishes to have the court enter an order that a defendant pay rent pending trial shall file a motion for such an order.
    • Most hearings will be heard by remote means.
    • Notwithstanding the foregoing provisions, “each Presiding Judge has discretion to order that a particular trial, hearing, or proceeding, or a first appearance in an FED proceeding, begin or take place before June 1, 2020, upon a determination, after consulting with the parties and other affected persons, that it should occur in that time frame, that it can be conducted by remote means or that sufficient social distancing can be maintained if conducted in person, and that the court can order other reasonable precautions to protect the health of the participants, including victims, interpreters, and court staff.”

F.  Particular Residential Property Questions:

  1. How long do the moratoria last? The Oregon eviction  moratorium under Executive Order 20-13 is 90 days – from April 1, 2020 through and including June 30, 2020 – unless extended or terminated earlier by the Governor.  The federal moratorium for evictions with respect to “covered dwellings” lasts for 120 days – from March 27, 2020 through and including July 25, 2020.
  2. Does a residential tenant need to provide proof of nonpayment due to COVID-19? No, under either Executive Order 20-13 or the federal CARES Act.  However, under Executive Order 20-13 (and assuming the property is not “covered property”), the tenant is required to notify the landlord “as soon as reasonably possible” if the tenant is unable to pay the full rent, and also “shall make partial rent payments to the extent the tenant is financially able to do so.”  Under the circumstances, even inquiring about an ability to pay or requesting partial payments may constitute “interference” with a tenant’s right to possession or otherwise violate other state or federal laws.
  3. Must a residential tenant provide any documentation substantiating an inability to pay.    However,  a tenant is required to notify the landlord “as soon as reasonably possible” if the tenant is unable to pay the full rent, and also “shall make partial rent payments to the extent the tenant is financially able to do so.”  Under the circumstances, even inquiring about an ability to pay or requesting partial payments may constitute “interference” with a tenant’s right to possession or otherwise violate other state or federal laws.
  4. Does this apply only to rent?   The term “nonpayment” under Executive Order 20-13 means any nonpayment of rent, late charges, utility charges, or any other service charge or fee as defined in the referenced statutes.  Under the CARES Act, the moratorium applies to nonpayment of rent or other fees or charges, or other fees, penalties or other charges related to such nonpayment of rent.
  5. Is rent waived?   Nothing in Executive Order 20-13 “relieves a residential tenant’s obligation to pay rent, utility charges, or any other service charges or fees, except for late charges or other penalties arising from nonpayment which are specifically waived by and during the moratorium.”  The CARES Act also does not relieve a tenant of the obligations to pay rent.
  6. Can a landlord take action to terminate a tenancy based on circumstances that are “for cause” other than nonpayment?   Examples include material breach of the rental agreement (ORS 90.392) and outrageous conduct by a tenant (ORS 90.396).
  7. May a landlord terminate a tenancy during the moratorium for a “qualifying reason”?   Oregon recently enacted legislation that precludes a landlord from terminating a residential tenancy without cause except for certain “qualifying reasons.”  If there is a qualifying reason, a tenancy generally may be terminated on 90 days’ notice.  These qualifying reasons include the following:  (a)  The landlord intends to demolish the dwelling unit within a reasonable time; (b) The landlord intends to convert the unit to a use other than residential within a reasonable time; (c) The landlord intends to undertake repairs or renovations to the dwelling unit within a reasonable time and (i) The premises are currently unsafe or unfit for occupancy; or (ii) The dwelling unit will be unsafe or unfit for occupancy during the repairs or renovations; (d) The landlord has accepted an offer to sell a dwelling unit separately from any other unit and (i) The buyer is a person who intends in good faith to occupy the unit as the buyer’s primary residence, and (ii) Within 120 days after accepting the purchase offer, the landlord provides the tenant with written notice of termination with a specific termination date and written evidence of the offer to purchase the dwelling unit; (e) The landlord or a member of the landlord’s immediate family intends to occupy the unit as a primary residence, and the landlord does not own a unit in the same building that is available for occupancy at the same time that the tenant receives notice to terminate the tenancy.  Executive Order 20-13 provides that “nonpayment” means any nonpayment of rent, late charges, utility charges, and various other service charges or fees, “or any termination without cause under ORS 90.427.”  The “qualifying reasons” arguably are “without cause” provisions under ORS 90.427 and thus termination during the moratorium based on one of the qualifying reasons may be precluded.  Also, “without cause” is specifically mentioned numerous times in ORS 90.427 and some may argue that the preclusion only applies for those particularly identified “without cause” provisions.  Reasonable minds may disagree given the intent behind Executive Order 20-13.
  8. If I am a buyer of a residential property and I intend to occupy the property as my primary residence, may I send a 90 days’ notice of termination to the tenants?   See above.
  9. If I own a residential property and I or my family intend to occupy the property as my primary residence, may I send a 90 days’ notice of termination to the tenants?   See above.
  10. What if the tenant is engaging in violent or outrageous conduct? There may be an exception and a proceeding to restrain or evict still may be appropriate.  Each presiding judge has discretion.  This, of course, will be case by case and counsel should be consulted.
  11. What if a tenant fails to pay rent based and the landlord elects to terminate a tenancy based on a “no-cause” lease termination notice or refusal to renew a term lease (e.g., a landlord elects not to renew a month-to-month tenancy of a delinquent tenant)? This is not addressed in the CARES Act or in the Oregon Executive Orders but may frustrate the purposes of the CARES Act and the Oregon Executive Orders.  Arguably the moratorium bars the filing of an eviction under this scenario, but parties should seek legal counsel.
  12. May a landlord increase rent during this moratorium? Neither the Oregon Executive Orders nor the CARES Act address rent changes.  Remember that there already are strict provisions in Oregon regarding rent increases.
  13. What if I’m a residential tenant who is unaffected by COVID-19 and can make the payments. Am I required to do so?  On the one hand, the landlord may not take action against a tenant during the moratorium based on nonpayment.  On the other hand, the tenant is required to notify the landlord “as soon as reasonably possible” if the tenant is unable to pay the full rent, and also “shall make partial rent payments to the extent the tenant is financially able to do so.”  Perhaps most importantly, the obligation to pay rent is not waived and ultimately will be due upon termination of the moratorium.
  14. What if I own a property and am trying to sell it. May the tenant refuse to allow access to the property to potential buyers?  Many residential leases have specific provisions regarding access to show a property to prospective buyers.  Failure to allow access may constitute a breach of the lease (a “for cause” grounds for eviction).  Also, ORS 90.322 provides a lender with a right to access the property for a variety of reasons, including access to prospective or actual purchasers, mortgagees, tenants, workers or contractors.  However, access is not without some limitations, including 24 hours’ notice under most non-emergency circumstances.  In general, a “landlord may not abuse the right of access or use it to harass the tenant” and a “tenant may not unreasonably withhold consent from the landlord to enter.”  At a minimum, a tenant may reasonably expect a landlord to follow all COVID-19 guidelines (social distancing, sanitizers, gloves, face masks).  If the tenant is a susceptible person, additional protections may be required.  Your individual circumstances will dictate what is “reasonable.”
  15. Can’t a tenant claim that the Governor’s “Stay At Home” order precludes the tenant from going outside? The Governor’s “Stay Home, Save Lives” Order (Executive Order 20-12) requires individual to stay at home to the maximum extent possible; however, it is not an absolute prohibition and does not prohibit either real estate or lending business so long as the social distancing requirements may be met.  Of course, accommodations must be made to protect the interests of all parties, including social distancing, reasonable hand and room sanitization, gloves, reasonable time limitations, etc.
  16. Will my credit be affected if I fail to pay rent during the moratorium? While this is not addressed by the Executive Orders, other existing state and federal legislation likely would come into play.  Also, under the CARES Act a creditor or servicer should continue to report a tenant and borrower to the credit rating agencies as current or up-to-date.
  17. What if the tenant is able to pay the rent and simply elects not to do so?  This may be a technical violation but may be difficult to enforce in practice.  The issues are practical and economic as much as legal.  Speak with an attorney.
  18. Once the moratorium ends, how much time does a tenant have to pay the past due rent? The Executive Orders do not address this, and a payment plan is not required.  In theory, a landlord may take action (e.g., 72-hour notices to pay rent or quit) promptly upon termination of the moratorium.  However, some would suggest that this will not be favorably viewed by our judiciary.  Payment plans, common sense, and consideration of both the landlord’s and tenant’s needs should be considered.  Also check the local jurisdictions.  The lessor of a covered dwelling unit under the CARES Act (1) may not require the tenant to vacate the covered dwelling unit before the date that is 30 days after the date on which the lessor provides the tenant with a notice to vacate; and (2) may not issue a notice to vacate under the preceding paragraph (1) until after the expiration of moratorium.
  19. Are there consequences if a landlord or tenant violate the provisions or the Executive Orders?   A knowing violation of Executive Order 20-13 may result in a Class C misdemeanor under ORS 401.990.
  20. What if a landlord has a “for cause” reason for terminating a tenancy during the moratorium? This is not precluded but note that an eviction proceeding may be problematic.  The Oregon Chief Justice has placed limits on FED (eviction) proceedings (generally until after June 1), but motions may be brought to have payment made during the interim period.  (This would not apply for “nonpayment”.)

OVERVIEW OF RECENT ACTIONS INVOLVING NONRESIDENTIAL / COMMERCIAL TENANCIES

A.  Governor’s Executive Order 20-13 (expanding on Executive Order 20-11):

  • Landlords of non-residential properties in Oregon “shall not, for any reason of nonpayment as defined in paragraph 1(b) of this Executive Order, terminate any tenant’s rental agreement; take any action, judicial or otherwise, relating to residential evictions . . . including, without limitation, filing, serving, delivering or acting on any notice, order or writ of termination or the equivalent; or otherwise interfere in any way with such tenant’s right to possession of the tenant’s dwelling unit.” [Executive Order 20-13 1(a)]

B.     CARES Act:

  • The CARES Act does not address relief regarding evictions and nonresidential properties.

C.     Particular Nonresidential / Commercial Property Questions:

  1. How long does the state moratorium last? 90 days – from April 1, 2020 through and including June 30, 2020 – unless extended or terminated earlier by the Governor.  The federal CARES Act only includes “covered dwellings,” which generally is limited to single family and certain multifamily properties.   Some local jurisdictions have eviction moratoria for both residential and commercial properties.  (See above.)
  2. Does a commercial tenant need to provide proof of nonpayment due to COVID-19?   Under Executive Order 20-13, the moratorium regarding a commercial tenant shall apply only if the tenant provides the landlord, within 30 calendar days of unpaid rent being due, with documentation or other evidence that nonpayment is caused by, in whole or in part, directly or indirectly, the COVID-19 pandemic.  “Acceptable documentation or other evidence includes, without limitation, proof of loss of income due to any governmental restrictions imposed to mitigate the spread of COVID-19.”
  3. Is a commercial tenant required to continue to pay rent if it is financial able to do so?
  4. Does this apply only to rent?   The term “nonpayment” means any nonpayment of rent, late charges, utility charges, or any other service charge or fee as defined in the referenced statutes.
  5. Is rent waived?   Nothing in Executive Order 20-13 “relieves a nonresidential tenant’s obligation to pay rent, utility charges, or any other service charges or fees, except for late charges or other penalties arising from nonpayment which are specifically waived by and during the moratorium.”
  6. Can a landlord take action to terminate a tenancy based on circumstances that are “for cause” other than nonpayment?
  7. May a landlord increase rent during this moratorium? Neither the Oregon Executive Orders nor the CARES Act address rent changes.  However, the limitations on residential rent increases still apply.
  8. What if I’m a nonresidential tenant who is unaffected by COVID-19 and can make the payments. Am I required to do so?  On the one hand, the landlord may not take action against a tenant during the moratorium based on nonpayment.  On the other hand, the tenant is required to provide the documentation identified above.  Failure of a tenant to provide the proper documentation may allow a landlord to proceed with eviction and other rights under a commercial lease.
  9. What if the landlord disagrees with the reasons for the nonpayment identified in the documentation provided by the tenant? Reasonable minds can and will disagree and there will be attendant risks associated with either incomplete or uncertain documentation, or if a landlord is too aggressive.  Consult with an attorney.
  10. What if I own a property and am trying to sell it? May the tenant refuse to allow access to the property to potential buyers?  Showing the property is not precluded.  However, at a minimum, a tenant may reasonably expect a landlord to follow all COVID-19 guidelines (social distancing, sanitizers, gloves, face masks).  If the tenant is a susceptible person, additional protections may be required.  Your individual circumstances will dictate what is “reasonable” whether a residential or nonresidential tenancy are involved.  Reliance on COVID-19, in and of itself, would not appear to be a sufficient excuse to refuse to allow a property to be shown assuming reasonable precautions are in place.
  11. Will my credit be affected if I fail to pay rent during the moratorium? While this is not addressed by the Executive Orders, other existing state and federal legislation likely would come into play, such as the Fair Debt Collection Practices Act.  Also, under the CARES Act a creditor or servicer should continue to report a tenant and borrower to the credit rating agencies as current or up-to-date.  What if the tenant is able to pay the rent and simply elects not to do so?  This may be a technical violation but may be difficult to enforce in practice.  The issues are practical and economic as much as legal.  Speak with an attorney.
  12. Once the moratorium ends, how much time does a tenant have to pay the past due rent? The Executive Orders and the CARES Act do not address this, and a payment plan is not required.  In theory, a landlord may take action (e.g., 72-hour notices to pay rent or quit or even self-help under appropriate circumstances) promptly upon termination of the moratorium.  However, some would suggest that this will not be favorably viewed by our judiciary.  Payment plans, common sense, and consideration of both the landlord’s and tenant’s needs should be considered.
  13. Are there consequences if a landlord or tenant violate the provisions or the Executive Orders?   A knowing violation may result in a Class C misdemeanor under ORS 401.990.
  14. What if a landlord has a “for cause” reason for terminating a tenancy during the moratorium? This is not precluded but note that an eviction proceeding may be problematic.  The Oregon Chief Justice has placed limits on FED (eviction) proceedings (generally until after June 1), but motions may be brought to have payment made during the interim period.  (This would not apply for “nonpayment” so long as the tenant provides the appropriate document and otherwise follows the mandates of Executive Order 20-13.)

JUDICIAL AND NONJUDICIAL FORECLOSURES

OVERVIEW OF RECENT ACTIONS INVOLVING RESIDENTIAL PROPERTY:

A.     Governor’s Executive Order 20-13 (expanding on Executive Order 20-11):

  • Landlords of residential properties in Oregon “shall not, for any reason of nonpayment as defined in paragraph 1(b) of this Executive Order, terminate any tenant’s rental agreement; take any action, judicial or otherwise, relating to residential evictions . . . including, without limitation, filing, serving, delivering or acting on any notice, order or writ of termination or the equivalent; or otherwise interfere in any way with such tenant’s right to possession of the tenant’s dwelling unit.” [Executive Order 20-13 1(a)]  Oregon law enforcement officers also are precluded from serving, delivering or actin on any notice, order or writ of termination of tenancy or the equivalent of any judicial action … that relates to residential evictions for nonpayment.
  • Executive Order 20-11 and Executive Order 20-13 and the general “Stay Home, Save Lives” Executive Order (Executive Order 20-12) generally do not preclude nonjudicial or judicial foreclosures, residential or nonresidential. But see the federal restrictions regarding foreclosure relief for “federally-backed loans.”  Additionally, court access may  be limited for judicial foreclosure actions.

B.     Federal CARES Act:

  • The CARES Act provides a moratorium on foreclosures for “federally-backed loans.” These are loans (for 1-4 properties) purchased, securities, owned, insured, or guaranteed by Fannie Me or Freddie Mac, or owned, insured, or guaranteed by FHA, VA, or USDA.
  • Except with respect to a vacant or abandoned property, a servicer of a federally-backed mortgage loan may not initiate any judicial or non-judicial foreclosure process, move for a foreclosure judgment or order of sale, or execute a foreclosure-related eviction or foreclosure sale for not less than the 60-day period beginning on March 18, 2020. This is not limited to COVID-19 related issues.
  • Homeowners with “federally-backed loans” affected by COVID-19 may request and obtain a mortgage forbearance for up to 180 days. An additional request also is possible.  (The nature and extent of the forbearance options are beyond the scope of this article.) Oregon Supreme Court Orders:

C.     Oregon Supreme Court Orders:

On March 27, 2020, Oregon Chief Justice Martha L. Walters order that restrictions on trials and other court proceedings continue until further order.  Most trials and many other hearings have been postponed and will not be scheduled to begin until after June 1, 2020.  Some counties have set their own procedures, which are consistent with Justice Walters’ order.  Regarding Forcible Entry and Detainer (FED aka Eviction) Proceedings in particular:

1.  Justice Walters’ order regarding FED proceedings is not limited to residential properties.

2.  FED complaints may be filed and the court shall issue a summons, but all first appearances are automatically postponed without the need for a motion, no answer will be required at that time, and no party is required to appear at the date set by the summons in the first appearance.

3.  The first appearances will be rescheduled for a date to take place after June 1, 2020.

4.  All FED trials scheduled to begin before June 1, 2020 shall be postponed and no trial shall be scheduled to begin before June 1, 2020.

5.  A landlord who wishes to have the court enter an order that a defendant pay rent pending trial shall file a motion for such an order.

6.  Most hearings will be heard by remote means.

7.  Notwithstanding the foregoing provisions, “each Presiding Judge has discretion to order that a particular trial, hearing, or proceeding, or a first appearance in an FED proceeding, begin or take place before June 1, 2020, upon a determination, after consulting with the parties and other affected persons, that it should occur in that time frame, that it can be conducted by remote means or that sufficient social distancing can be maintained if conducted in person, and that the court can order other reasonable precautions to protect the health of the participants, including victims, interpreters, and court staff.”

D.  Particular Questions:

  1. Are nonjudicial foreclosures precluded during the Oregon moratorium? No, except with respect to “federally-backed loans.”  Executive Order 20-11 and Executive Order 20-13 are moratoriums on residential and commercial leases and eviction (FED) proceedings.  The federal CARES Act does provide foreclosure relief from foreclosures involving “federally-backed loans,” which pertain only to 1-4 unit residential properties.
  2. How long does the moratorium last? 90 days – from April 1, 2020 through and including June 30, 2020 – unless extended or terminated earlier by the Governor.  The federal moratorium lasts for 120 days – from March 27, 2020 through and including July 25, 2020.
  3. Does the federal foreclosure moratorium include vacant or abandoned property?
  4. May I send a demand for payment or a notice of default during the 90-day state moratorium or the 60-day federal moratorium? Yes, if the loan does not involve “covered property.”  Neither Executive Order 20-13 nor the federal CARES Act preclude the commencement of nonjudicial foreclosure actions during the respective moratoriums if the properties are not “covered properties.”
  5. May I commence a nonjudicial foreclosure action if the default is “for cause.” Yes, if the loan does not involve “covered property.”  Neither Executive Order 20-13 nor the federal CARES Act preclude the commencement of nonjudicial foreclosure actions during the respective moratoriums if the properties are not “covered properties.”  The preclusion regarding the commencement of nonjudicial or judicial foreclosures involving “covered property” is not limited defaults for nonpayment or COVID-19 related issues.
  6. May I commence a judicial foreclosure action during the moratoriums if the default is “for cause.” Yes, if the loan does not involve “covered property.”  Neither Executive Order 20-13 nor the federal CARES Act preclude the commencement of nonjudicial foreclosure actions during the respective moratoriums if the properties are not “covered properties.”  The preclusion regarding the commencement of nonjudicial or judicial foreclosures involving “covered property” is not limited defaults for nonpayment or COVID-19 related issues.
  7. May I commence a judicial foreclosure action during the moratoriums if the default is for nonpayment. Yes, if the loan does not involve “covered property.”  Neither Executive Order 20-13 nor the federal CARES Act preclude the commencement of judicial foreclosure actions during the respective moratoriums if the properties are not “covered properties.”  The preclusion regarding the commencement of nonjudicial or judicial foreclosures involving “covered property” is not limited defaults for nonpayment or COVID-19 related issues.
  8. Will the courts allow the filing of a judicial foreclosure complaint during the moratoriums? Yes, at least as of the date of this article.  Getting the tenant out after completing of a foreclosure may be another issue.  Also, while the courts may allow the filing of a judicial foreclosure complaint, that won’t relieve a lender from its obligations to refrain from initiating any judicial foreclosure action involving “covered property.”
  9. A nonjudicial foreclosure action is scheduled for announcement during the 90-day state or 120 federal moratoriums. Is the announcement precluded?  No, if it does not involve “covered property.”
  10. A nonjudicial foreclosure action is schedule for announcement during the Governor’s “Stay Home, Stay Alive” Order (Executive Order 20-12). Is the announcement precluded?   Executive Order 20-12 does not  preclude a trustee from announcing or conducting a foreclosure sale.  The federal CARES Act also does not preclude an announcement so long as the foreclosure does not involve “covered property.”  This assumes the trustee or his/her agent is able to conduct the sale in compliance with the social distancing mandates, which should be easily accomplished.
  11. How do I know if a foreclosure involves “covered property” or pertains to a “federally-backed loan”? Some options include the following:
    1. Contact the servicer and directly ask.
    2. Fannie Mae website has a loan lookup mechanism for borrowers: https://www.knowyouroptions.com/loanlookup
    3. Freddie Mac has a loan look site for borrowers:  https://ww3.freddiemac.com/loanlookup/
    4. For unit-based subsidies, low-income housing tax credits, and similar federal programs, one option is the National Housing Preservation Database: https://preservationdatabase.org/
    5. VA loans have identifying features on the loan documents.
    6. FHA-insured loans have FHA case numbers on the loan documents.
    7. Department of Agriculture-insured loans have identifying features on the loan documents.
    8. The CFPB Guide to Coronavirus Mortgage Relief Options also provides a list of federal agencies and entities.

MORTGAGE FORBEARANCE

The Oregon Executive Orders do not address mortgage forbearance.  However, the CARES Act provides that borrowers with “federally-backed mortgage loans” affected by COVID-19 may  request and obtain forbearance from mortgage payments for up to 180 days.  They also then may request and obtain additional forbearance for up to another 180 days.   During a period of forbearance, no fees, penalties, or interest shall accrue on the borrower’s account beyond the amounts scheduled or calculated as if the borrower made all contractual payments on time and in full under the terms of the mortgage contract. The covered period appears to be during the emergency or until December 31, 2020, whichever is earlier.  On April 6, the federal Consumer Financial Protection Bureau produced a CFPB Guide to Coronavirus Mortgage Relief Options.

SHORT TERM RENTAL BANS

Numerous cities and counties have issued bans or restrictions regarding short term rentals.  Here is a pending list:

  1. Deschutes County:
    • On April 1, 2020, the Deschutes County Commissioners issued an Order Regarding Short Term Rentals (Deschutes County).
    • The Order, in part, prohibits stays of less than 30 days in vacation rentals, short-term rentals, inns and bed and breakfasts, and will remain in effect until May 15.
    • The Order does not apply to stays that do not otherwise qualify as short term rentals, such as occupancy of second homes by owners/family.
    • Deschutes County areas that are covered include all unincorporated areas of Deschutes County, including Sunriver, Black Butte, Eagle Crest, Pronghorn, and Tetherow. It does not include the cities of Bend, La Pine, Redmond, and Sisters.
    • See Deschutes County for further details. (Deschutes County Short Term Rental Restrictions)
  1. Bend: On April 15, 2020, the city of Bend voted down a proposed resolution that would have banned rentals within city limits.
  2. Lincoln County: On March 23, the Commissioners of Lincoln County implemented a ban on all short term rentals, defined as rentals of a duration of less than 30 days, in vacation rental dwellings or show term dwellings and homestay lodgings until the declared emergency ends on April 30 or this prohibition is otherwise  ended or modified by the Commissioners, whichever occurs first.  (Lincoln County Restrictions)
  3. Coastal Towns: Many coastal towns have similar resolutions that ban or limit either short term rentals or hospital or other lodging stays by nonresidents, including Cannon Beach, Seaside, Astoria, and Tillamook.

BUYER AND SELLER GUIDES

Buyers and sellers are facing unique challenges.  The Oregon Association of Realtors has prepared advisory guides for both potential Buyers and Sellers effective April 14, 2020.

 

Disclaimer: this column does not constitute the giving of legal advice, and your reading this column does not create an attorney/client relationship. You are encouraged to consult a lawyer or accountant should you have questions about how this information may be applicable to your particular situation.

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