As of the 17th of this month, the Landlord Compensation Fund is open. The Oregon Legislature has provided $150 million dollars in one-time funds for this voluntary program to assist landlords. Sounds great? Well, there are a few strings attached.
Upon approval, the landlord can have 80% of past-due rents covered on the condition that they forgive the other 20%. The program only works for current tenants with rent past due since April 1st, 2020. If you have a tenant that moved out last month and owes you since August, or June, you’re out of luck.
As well as requiring that you forgive 20% of the rent, you are also required to have the tenant sign the Declaration of Financial Hardship for Eviction Protection form. The form is the tenant simply stating that they are unable to pay their obligation under the rental agreement due to financial hardship. Once the form is signed, you can’t evict them until after June 30th.
Break Down of the Landlord Compensation Fund
Pros:
- Both you and the tenant are caught up on the tenancy.
Cons:
- If the tenant decides to stiff you the rent going forward, you can’t do anything about it.
- No evictions until at least June 30th, and possibly longer if they extend again.
- The $150 million won’t cover enough of the past due rent, with that actually owed across the state equaling at least $378 million.
- You’ll be out 20% of past-due rents.
The program will be open for approximately two weeks, and will have at least one more open session in the next few months. If you don’t get approved this time, you are able to apply again. Your application will be graded on how many units you have, with preference given to those with less than forty, how much is owed, and how long it has been outstanding.
Like everything else in property management, deciding to apply for the program is a calculated risk. It relies on many factors. For instance, how likely are your tenant to get caught up on the rent in the future without the help of the program? Are they likely to take advantage of your inability to evict after signing the form? If you did your due diligence when screening, your tenants are proactive and don’t want anything bad on their record, like owing a landlord or management company.
Do you want to take advantage of the Landlord Compensation Fund? Reach out to your property manager and discuss your options.
And, as always, Happy Landlording!