If you haven’t already heard, Commissioner Eudaly’s office has been working on a proposal to regulate tenant applications, along with screenings, approvals, denials, and move-in costs related to residential rental units in Portland, Oregon. Earlier this week, the commissioner released the latest draft of the proposal. I have included a copy at the end of this article, if you want to read the complete text. The Portland City Council is hoping to consider this ordinance during a council meeting in mid to late September. It is important to keep in mind that this is a working draft, so it may change before it officially goes before the city council. As you will see, this is a very comprehensive proposal, so it is worth reading the entire document. I have done my best to summarize the most significant parts for you.
The first section deals with the process for submitting applications. Landlords will be required to screen applicants on a first come, first served basis. This has always been a practice that I recommend, but, per this proposal, picking through a group of applications will no longer be an option. For verification, landlords will have to time/date-stamp applications as they are received. They’ll also be required to send a confirmation to prospective tenants within one day. For management companies, which can afford a website and management software, this is a process that can easily be automated. For smaller landlords, this will ultimately be a shift in the way business is done, as many currently have their tenants fill out physical applications. There are, however, new web-based services available for landlords. www.RPMApplication.org, for instance, offers landlords a free online application which they can then customize as necessary. When a prospective tenant submits an application and pays for screening, both the landlord and prospective tenant receive a time/date-stamped confirmation email.
Another big change being considered for the application process is preference being given to any applicants who identify as disabled, with mobility challenges. If a rental unit is at least 60 percent ADA compliant, then preference must be given for the first 24 hours of the open application period.
There are a couple of proposed changes that will affect advertising rental units. The first is that all ads must include complete screening criteria, or at least a weblink to a page with a landlord’s full screening criteria. Many landlords don’t have a typed version of their screening criteria and will have to create one, but it’s a very good practice anyway, in my opinion. Another proposed requirement for landlords that require physical applications is advertising a unit at least one week before accepting applications. If a landlord uses an online application system, then there is no one-week waiting period. This is even more reason for landlords to start using online application sites such as the one I previously mentioned.
One of the city council’s goals is to limit the ability of landlords to determine if a tenant can afford a unit. If this passes as proposed, a landlord won’t be able to require a gross income greater than two times the rent and average utilities. The proposal also establishes specific rules around a tenant’s rights to have a co-signer if his or her income doesn’t meet the gross income requirements.
The next and largest section of the proposal sets restrictions on what a landlord can require for criminal record, credit reporting, and eviction history. I strongly encourage you to read the full text below, as it can get very specific. This proposal lists 11 serious crimes that landlords won’t be able to deny a prospective tenant for if he or she has been out of jail for at least one year or the sentencing was more than three years prior. Prospective tenants will be allowed to have up to three of six negative credit reporting marks, considered to be “minor,” such as low scores, adverse accounts under one thousand dollars, and bankruptcies more than five years old.
There are many parts of this proposal that concern me because they significantly limit a landlord’s ability to determine screening standards to protect their property, maintain the safety of the neighbors, and establish a tenant’s ability to pay rent on time. When I see proposed laws like this, one of my biggest concerns is always the complexity. Given how comprehensive the proposal is, I worry that we may have landlords violating this law simply because they didn’t understand it clearly. With damages being the higher of three times the stated rent or actual damages, this can easily be an honest mistake that sends a small landlord into bankruptcy/foreclosure. Most landlords have one to two units and barely cover their monthly expenses.
Take the time to read the full text below, as there are a lot of details and specifics beyond what I can cover here. The city will have at least one to two opportunities for public comment, if you want to have your opinion or story heard. As of writing this, the times haven’t been confirmed on the schedule, but you can follow the city council agenda schedule at https://www.portlandoregon.gov/auditor/26997.
www.RPMApplication.org (Custom online application & screening)
Office of Commissioner Eudaly
Screening Criteria Policy Concept