The End of the Grace Period, and How Landlords Should Approach it

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The end of the grace period and how landlords should deal with unpaid rent is something they should discuss with their attorneys.

It’s now February, a month many have waited for since last year. February 28, 2022 is officially the last day of the grace period as it is defined in the COVID laws passed last year. Until that date, any debts from the Emergency Period—defined from April 1, 2020 until June 30, 2021—are protected, leaving landlords unable to recover this balance until that time. That frustration has escalated for many landlords, as rent-assistance organizations no longer seem concerned about those balances when tenants apply for rent assistance.

As of March 1, and assuming no additional legislative changes, the Emergency Period Balance becomes due and owing once again. How landlords deal with these balances is something to discuss with their attorneys, as missteps (and current laws) can still provide some obstacles.

One approach, assuming those with a balance are still current tenants, is to serve a Notice of Termination for Cause with respect to the unpaid balance. While this notice cannot turn into any form judgment that could be utilized to garnish or collect those monies it can prompt the tenant to pay the amount owing or vacate.  Even though some of these debts are very old at this point, waiver under ORS 90.412 is not a concern, as there is an express carve-out in the current renter-protection laws on that issue.

The important thing to keep in mind with respect to the above approach is that tenants are still allowed to apply for rent assistance pursuant to SB 891, unless they have already done so under that law. Assuming a tenant follows the proper procedure, SB 891 would cause a stay to remain in place while the tenants’ application for rent assistance is “pending.” It is unclear how rent-assistance organizations will handle these issues. Further, given the factual differences of every notice and balance ledger, it is difficult to predict how those issues will play out. Ultimately, readers of this column will remember that anything received from a tenant should be scrutinized with your attorney to evaluate whether or not it qualifies as “documentation” that could affect your rights.

Alternatively, another option for landlords is to simply exercise their civil remedies with respect to a small claims case or lawsuit. Once the law’s protections expire, the Emergency Period Balance becomes a debt that can be pursued civilly. This goes for both current tenants and former tenants who have moved out. While landlords are allowed to withhold security deposits for unpaid debts and damages under the current COVID laws, those deposits rarely (if ever) cover the entirety of the rent arrears left behind.

Many landlords continue to carry large balances from tenants. Those same landlords were not afforded the protections, grace periods, or other benefits afforded to other individuals affected by COVID. That was unfortunate, and further eroded the relationships between landlords and their tenants that current laws seem to continually exacerbate. Landlords will have additional rights and options at their disposal in the coming months, and unless rent-assistance agencies begin writing checks for these unpaid balances, landlords should prepare to assert them.

Source: Rental Housing Journal