A new law signed on July 19 will soon bring changes to the way Oregon landlords screen potential tenants. The bill amends the Oregon Residential Landlord/Tenant Act (ORLTA) to create more extensive guidelines and restrictions for screening fees, criteria, non-discrimination policies, and more. This legislation will go into effect on January 1, 2022, and will require a big adjustment for individual landlords in the Portland metro area. Here are the main changes that SB 291 put into effect and how they will affect Portland’s landlord community.
SB 291’s New Screening Changes
Portland has already seen some significant shifts in tenant screening requirements earlier this year. A slate of new city policies limited a landlord’s ability to reject an applicant based on income, low credit score, a history of eviction, certain criminal convictions, and more. With the SB 291 changes on the horizon, Portland landlords must quickly learn what they’re facing to smooth the transition.
Screening Charges
SB 291 created new guidelines for the fees you charge when screening a tenant. Under the new legislation, each applicant’s screening charge must be no greater than your average actual cost of screening applicants. This can also mean the customary amount tenant screening companies or consumer credit reporting agencies charge for comparable screenings. You can include a reasonable value for the time you spend working on tenant applications as well.
Screening Criteria
The new bill will also bring about some changes to acceptable screening criteria. Firstly, screening criteria must disclose a tenant’s right to appeal a negative determination if the ability to do so exists. It must also include the applicable non-discrimination policy on a federal, state, or local level. Along with the assertion that you as the landlord may not discriminate against an applicant because of the race, religion, sex, sexual orientation, national origin, marital status, familial status, or source of income of the applicant.
Screening Requirements
New limitations will determine what requirements a landlord can consider during the screening process, especially regarding past criminal convictions. Landlords may now only consider an applicant’s previous arrest record if the arrest resulted in a conviction for charges currently legal in Oregon, including if the charges are still pending and the applicant is not participating in a deferral on those charges. For instance, a criminal conviction for marijuana possession would no longer be a viable reason to deny a tenant’s application, as that offense has since been legalized.
Response Timeframes
Landlords must now deliver a written notice citing one or more reasons for denying an application within 14 days of the denial. That statement must include the name and address of the screening or credit reporting agencies that provided the report. Along with any additional evidence the applicant provided which factored into the ultimate decision, and an explanation of why the landlord ultimately decided to reject the application. This statement should also include a notification that the applicant can appeal this decision if that right exists.
Personalized Assessment
Before denying an application, a landlord must offer opportunities for applicants to improve their chances of acceptance. These opportunities include submitting additional evidence to explain factors that might result in a denial. The landlord must also assess the applicant individually, considering the nature, severity, and number of concerning incidents. As well as the time frame since they occurred. In short, this discourages landlords from issuing blanket denials to applicants with red flags without considering the details first.
How Should Landlords Prepare For These Changes?
Most of these new regulations aim to give tenants with negative factors on their rental application a shot at housing. Whether due to bad credit as the result of past identity theft or a nonviolent criminal conviction for a now-legal offense, many Oregonians struggle to find stable housing. In the past, existing screening regulations filtered these tenants out without allowing them to make a case for themselves. With SB 291, the hope is that good tenants can find housing, no matter how they look on paper.
Unfortunately, one side effect of these changes is that landlords may soon face a huge time commitment and a mountain of extra paperwork. For some aspects of SB 291, landlords should only need to create a boilerplate notice to send prospective tenants and inform them of their rights and the application process. For others, landlords will have to spend much longer on each application, ensuring prospective tenants get a personal look. The deadline for written notices also means that landlords cannot delay this additional work. All in all, SB 291 will likely require landlords to spend more time screening applications than they were previously.
So how should landlords prepare? It might behoove you to begin drafting the boilerplate notices which the new legislation will require next year. Besides that, planning to dedicate more time to tenant applications is a smart move for landlords next year.
A Property Manager Saves You Time And Headaches
As legislation around tenant screening requirements tighten, many landlords find that the extra work is taking its toll. While the ideal strategy is to reduce turnover through resident retention and avoid screening tenants as often as possible, vacancies are a fact of the business. Rather than suffering under an increased workload just to find quality tenants for your rental, have you considered signing on with a property management company?
Rent Portland Homes by Darla Andrew specializes in finding the best renters in a short time frame. We handle all the increased paperwork and are always on top of Portland’s shifting property management laws. You’ll never have to worry about inadvertently getting into legal trouble as a result of a new change in Portland’s screening requirements. With the time you’ll save by letting us handle the day-to-day details of running your property, you can focus more on enjoying your rental’s success rather than scrambling to meet a deadline. We’d love to chat about all we can do to make your life easier. Call or text us any time at (503) 515-3170, or fill out the contact form on our website.