May 5, 2015
by Colin Mackenzie
RCO Legal, P.S.
USFN Member (Arkansas, Oregon, Washington)
After the sunset of the PTFA on December 31, 2014, Oregon’s notice requirements for tenants after the foreclosure of an occupied property reverted to the pre-PTFA notice requirements. Because Oregon’s previous, and now current, rules only applied to trustee sales, the method of foreclosure now determines the notice requirements for tenants.
Oregon Revised Statutes (ORS) 86.782(6)(C) outlines the notice requirements that apply if property purchased at a trustee sale includes a dwelling unit subject to the Oregon Residential Landlord-Tenant Act (ORS chapter 90), and the individual that occupies the property is a bona fide tenant. If the bona fide tenancy is month-to-month or week-to-week, or the purchaser intends to occupy the property as a primary residence, the tenant must be provided a 30-day notice to vacate. If the bona fide tenancy is a fixed term tenancy, the tenant must be provided a 60-day notice to vacate.
ORS 86.782(h) defines a “bona fide tenancy” in essentially the same terms as the PTFA, meaning that: (1) the tenancy was an arms-length transaction that occurred before the date of the foreclosure sale; (2) the tenant is not the mortgagor or the child, spouse, or parent of the mortgagor; and (3) the rent paid was not substantially less than the fair market rent for the property.
Additionally, a separate written notice of the change in ownership must be provided to all occupants within 30 days after the date of sale, and before or concurrently with service of a written termination notice. The contents of the notice of change in ownership are outlined in ORS 86.782(5)(b) and (d), and include information about the tenants’ rights to notice prior to an eviction action, as well as information about where to obtain legal and other assistance. If the notice of the change in ownership is not sent within 30 days after sale, the new owner is automatically deemed to be the tenant’s new landlord, and is saddled with the duties and obligations that follow. It is recommended that the notice of change in ownership be sent as soon as possible following a trustee sale.
Judicial foreclosures in Oregon operate under a different set of statutes than nonjudicial trustee sales. Neither ORS chapter 88 (foreclosure of mortgages) nor ORS chapter 18 (which contains the procedures for sheriff’s execution sales) provides any additional protections to tenants after a sheriff’s execution sale. Since the PTFA sunset, the same rules apply to both tenants and former owners following an execution sale; neither are provided any additional protection, and both may be evicted using Oregon’s eviction procedures any time from the date of sale, forward.
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