Author Archives: colinmacdonald

New Ordinance on Security Deposits Takes Effect in Portland on March 1, 2020

By Emily Rena-Dozier

In June 2019, the Portland City Council passed an ordinance, PCC 30.01.087, that added significant elements to a residential landlord’s responsibilities relating to tenant security deposits. The ordinance’s effective date was delayed to provide time for comments regarding administrative rules implementing the ordinance. More recently, a group of landlords filed a complaint in federal court (3:20-cv-00294) and sought an injunction to prevent the rules from taking effect.

The request for a preliminary injunction was denied, and as of March 1, 2020, the ordinance is in full effect for all residential tenancies in the City of Portland that begin after March 1, 2020. Only specified portions of the ordinance apply to rental agreements entered into prior to March 1, 2020.

The following summarizes the major provisions of PCC 30.01.087 and its administrative rules but does not cover every element of the new ordinance. Additional information, including the full text of the ordinance and all administrative rules, is available from the Portland Housing Bureau at https://beta.portland.gov/phb/rental-services/security-deposits.

In addition to the provisions of ORS 90.300, the following requirements now apply for  tenancies for property within the City of Portland entered into on or after March 1, 2020:

  • Limits on amount of security deposit. A landlord may not require a security deposit that is greater than one-half of one month’s rent, if the landlord also requires payment of a last month’s rent deposit. If the landlord does not require payment of a last month’s rent, the landlord may not require a security deposit that is more than one month’s rent. PCC 30.01.087 A.
  • Bank account for security deposits. A landlord must deposit any security deposit collected into a separate bank account. If the account is interest-bearing, the landlord must return any interest collected along with the deposit returned at the end of the tenancy and must also provide an annual accounting to the tenant at least once per year at the tenant’s request. PCC 30.01.087 B.
  • Identification of items and depreciation in rental agreement. A landlord must identify in the rental agreement all fixtures, appliances, equipment, and personal property present in the rental unit at the time the tenancy begins, along with a statement of the condition of those items and their replacement cost, factoring depreciation. PCC 30.01.087 C.1-2.
  • Condition Report required at beginning of tenancy. A landlord must provide the tenant with a Condition Report at the beginning of the tenancy that lists all fixtures, appliances, equipment, and personal property present in the rental unit. The tenant has seven days to complete the Condition Report, noting the condition of all fixtures, appliances, equipment, and personal property present in the rental unit, and return it to the landlord. Unless the landlord disputes the tenant’s Condition Report, that report establishes the baseline for the condition of all the items in the rental unit. PCC 30.01.087 D. 1.
  • Inspection after termination. Within seven days after the tenancy terminates, the landlord must, at the tenant’s request, conduct a walk-through of the unit to document any damage beyond ordinary wear and tear that was not noted on the initial Condition Report. PCC 30.01.087 D. 2.
  • Deposit accounting requirements. No more than 31 days after the tenancy terminates, the landlord must either return the tenant’s security deposit in full or send the tenant an accounting of any deductions from the security deposit. All damage in excess of normal wear and tear must be documented with photos, and the landlord may not charge for any damage that was noted in the Condition Report at the beginning of the tenancy. PCC 30.01.087 D.3.
  • Notice of Rights required. No more than 31 days after the tenancy terminates, the landlord must also provide the tenant with a Notice of Rights relating to their security deposit. PCC 30.01.087 E.
  • Deductions limited to actual cost of repair. A landlord may deduct from the security deposit only what is necessary to reimburse the landlord for actual costs reasonably incurred to repair damage to the premises. A landlord may not use the security deposit to pay for routine maintenance, for damage not caused by the tenant, or for any costs reimbursed by the landlord’s insurance provider. PCC 30.01.087 C.2.
  • Limits on deductions for flooring. A landlord may not deduct from the security deposit to clean or repair flooring material other than as provided in ORS 90.300(7), for carpet cleaning, or to repair discrete areas of the floor — in other words, a landlord may not replace all of the flooring if only a portion of it is damaged. PCC 30.01.087 C.4.
  • Limits on deductions for painting. Similarly, a landlord may not deduct from the security deposit to repaint the unit unless it was painted by the tenant without the landlord’s permission. A landlord may repaint discrete areas of the unit to repair specific damage in excess of ordinary wear and tear but may not charge the tenant for repainting the entire unit. PCC 30.01.087 C.5.
  • Depreciated costs in accounting. Any deductions for damage in excess of normal wear and tear must be based on the depreciated cost of the items, in accordance with the Depreciation Schedule published by the Portland Housing Bureau. Permanent Administrative Rule, PCC 30.01.087.G.
  • Damages for noncompliance. Any noncompliance by a landlord with the provisions of PCC 30.01.087 or its administrative rules creates liability for amounts of up to double the amount of the tenant’s security deposit, reasonable attorney fees, and costs. PCC 30.01.087 G.

For tenancies for property within the City of Portland that were entered into before March 1, 2020, the following requirements apply (see Administrative Rules for PCC 30.01.087 C.4):

  • Deductions limited to actual cost of repair. A landlord may deduct from the security deposit only what is necessary to reimburse the landlord for actual costs reasonably incurred to repair damage to the premises. A landlord may not use the security deposit to pay for routine maintenance, for damage not caused by the tenant, or for any costs reimbursed by the landlord’s insurance provider. PCC 30.01.087 C.2.
  • Limits on deductions for flooring. A landlord may not deduct from the security deposit to clean or repair flooring material other than as provided in ORS 90.300(7), for carpet cleaning, or to repair discrete areas of the floor — in other words, a landlord may not replace all of the flooring if only a portion of it is damaged. PCC 30.01.087 C.4.
  • Limits on deductions for painting. Similarly, a landlord may not deduct from the security deposit to repaint the unit unless it was painted by the tenant without the landlord’s permission. A landlord may repaint discrete areas of the unit to repair specific damage in excess of ordinary wear and tear but may not charge the tenant for repainting the entire unit. PCC 30.01.087 C.5.
  • Notice of Rights required. No more than 31 days after the tenancy terminates, the landlord must also provide the tenant with a Notice of Rights relating to their security deposit. PCC 30.01.087 E.
  • Damages for noncompliance. Any noncompliance by a landlord with the provisions of PCC 30.01.087 or its administrative rules creates liability for amounts of up to double to the amount of the tenant’s security deposit, reasonable attorney fees, and costs. PCC 30.01.087 G.

The new ordinance can appear complicated for both tenants and landlords. The Portland Housing Bureau is providing free trainings for tenants and landlords on the new security deposit provisions. Visit https://beta.portland.gov/phb/rental-services/portland-landlord-tenant-law-training for more details!

Federal Trade Commission and Other Consumer Protection Agencies Warn of Coronavirus Scams

By Colin D. A. MacDonald

The rapid spread of the novel coronavirus has been a source of fear and confusion for Oregonians and consumers across the country. The Federal Trade Commission, along with several other federal and state agencies, is warning consumers to be on the lookout for scams that take advantage of the current crisis – and warning businesses that the nation’s consumer protection laws still apply.

The FTC has launched a special website, www.ftc.gov/coronavirus, with regular advice and updates. The agency advises consumers to be wary of claims of cures and vaccinations currently circulating. Some key warnings include:

  • Consumers should continue regular techniques of avoiding scams, like researching charities before donating and not clicking links from unknown sources.
  • Scammers are using illegal robocalls to pitch everything from scam coronavirus treatments to work-at-home schemes. If you receive a robocall from an unknown source: hang up, do not press any numbers, and do not say anything. Even if the recording says that this will place consumers on a do-not-call list or speak to a live operator, it may lead to more calls.
  • Although the government may send out checks to assist struggling Americans, that has not happened yet. If it does, the government will never require you to pay money upfront to get your check; and it will never call you to ask for your Social Security number, bank account number, or credit card number.
  • Scammers may pose as the Centers for Disease Control or other public health agencies in an effort to get consumers’ personal information. If you get a call from someone claiming to be from the government, you can always ask to call them back using their agency’s public phone number or email them at an email address ending in “.gov.”
  • As more Americans work from home, it is more important than ever to prioritize cybersecurity. Protecting both home and work computers and networks will help prevent data breaches and even identity theft.

In addition to the FTC’s consumer education efforts, the agency along with the Food and Drug Administration sent warning letters to seven companies who made claims that their products treat, cure, or protect against the coronavirus. The warning letters remind businesses that “it is unlawful under the FTC Act, 15 U.S.C. 41 et seq., to advertise that a product can prevent, treat, or cure human disease unless [the advertiser] possess[es] competent and reliable scientific evidence.”

The FTC is not alone in warning the public about scammers taking advantage of the current crisis. The Oregon Department of Justice similarly alerted consumers about coronavirus scams in the state. The federal Securities and Exchange Commission also warned investors about coronavirus-related investment scams. The World Health Organization cautioned the public about scammers pretending to be the WHO as a means of stealing money or sensitive information.

Consumers who suspect they are being scammed can report their scam to the FTC online at www.ftccomplaintassistant.gov or by phone at 877-FTC-HELP (1-877-382-4357). Even though FTC staff are taking precautions to protect themselves and the public against the coronavirus, they continue their work to protect America’s consumers.

 

Colin D. A. MacDonald is a Seattle-based consumer protection attorney for the Federal Trade Commission. The views expressed in this article are his own and do not necessarily reflect those of the Commission or of any individual Commissioner.