A fresh Oregon Court of Appeals opinion stands to expose landlords and property managers to a host of new legal claims, including punitive damages.

The ruling in Jackson vs KA-3 Associates, LLC decided that the landlord tenant act does not cover habitability issues in the common areas of apartment complexes. 331 Or App 574, 577 (2024). So, while landlords are now exempt from liability under the landlord tenant act for conduct pertaining to the common areas of their complexes, they face new heightened liabilities for the same conduct under Oregon’s Unlawful Trade Practices Act. ORS 646.605-656.

Before the Jackson opinion, tenants could not bring claims for unlawful trade practices against landlords because common areas were covered under the landlord tenant act. For instance, the landlord tenant act had historically been ruled to have covered common areas of apartment complexes, like common area garbage dumpsters, common area elevators, and any other areas outside a dwelling unit that were under the control of the landlord. See ORS 90.320(1)(f), (g). And Oregon’s Unlawful Trade Practices Act specifically did not apply to these common areas because they were covered by the landlord tenant act. See ORS 646.605(6)(b)(A).

However, after the Jackson opinion, landlords and property managers now face exposure to new legal liabilities for common area conditions under Oregon’s Unlawful Trade Practices Act, including claims not previously available under the landlord tenant act, such as punitive damages, statutory damages, and one-way attorney fees. See ORS 646.638; Ivie v. Mission Rock Residential LLC, No. 3:21-CV-01122-SB, 2022 WL 2612215, at *9 (D. Or. May 27, 2022) (denying a landlord’s motion to dismiss a tenant’s Unlawful Trade Practices Act claims because the claims were not covered by the landlord tenant act).

People familiar with the Jackson case expect the opinion to be modified on reconsideration or on appeal to the Oregon Supreme Court. But as of now, Jackson is good law, and until it is changed, landlords are now subject to claims for unlawful trade practices pertaining to the common areas of their premises.

The opinion of the Court can be read here: Jackson v KA-3 Associates, 331 Or App 574 (2024).

Written by Michael Fuller, Founder, Underdog Law Office