First Come, First Served Rental Housing Spreads to Portland, OR

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First Come, First Served Rental Housing Spreads to Portland, OR

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Portland, Oregon’s massive Fair Access in Renting (FAIR) ordinances have officially gone into effect on March 1st. Passing in June 2019, the FAIR ordinances cover everything from rental application and security deposit procedures to rental listing rules and applicant screening. Buckle up, because you’re not going to believe these intense, uniquely Portlandia laws.

Please note that unless otherwise stated, the majority of this article references PCC 30.01.086 (FAIR Application & Screening) and PCC 30.01.087 (FAIR Security Deposits). This article is not intended to be used as legal advice. Before making any changes, please consult legal counsel.

Vacancies and Advertising Listings

Now when there’s vacancy, Portland property owners have 2 options:

        1. Draw from their waiting list
        2. Advertise the vacancy

Those who advertise their vacancies (like most rental properties do) must now publish a “notice of dwelling unit availability” at least 72 hours before processing applications.

The notice must include:

          • When you’ll begin processing applications
          • A description of the factors you’ll consider when evaluating applicants (your rental criteria)
          • If you’re charging a screening fee
          • Whether the available unit is an Accessible Dwelling Unit

This can seem like a lot of information to put out on your favorite free listing websites, but thankfully the ordinance states that Portland landlords and property managers can paste a url to your notice (it can be on a landing page or somewhere on your website) rather than writing it out on every listing.

First Come, First Served

Once the property owner has advertised the vacancy (skip if using a waitlist), owners and mangers might start seeing rental applications pouring in. This is called the “Open Application Period.” During this time, all Portland landlords and property managers must digitally or manually record both the date and time in which you receive each completed application.

If an application is received before the Open Application Period (aka before it’s officially advertised to the public), owners will need to record the date and time they received it, and mark that it’ll incur an 8-hour penalty. The 8-hour penalty simply means that the early application would be considered, in order of processing, 8 hours after the start of the Open Application Period.

For example (see chart), if you receive Sally’s application for a vacancy at 12pm, and the open application period didn’t start till 1pm, that application would be recorded as 8 hours after the open application period at 9pm.

Remember Seattle, Washington’s “First Come, First Served” ordinance in 2017? This is where recording the date and time on every application comes to play. Now, when Portland rental properties begin processing applications (keep in mind this must match what’s in the advertising notices and be at least 72 hours after the listings were posted), owners and managers must accept, conditionally accept, or deny applicants in chronological order (plus with any 8-hour penalties incorporated). Multiple applications can be processed at the same time, but the rental decisions must be made in order of receipt.

Rental Application Changes: Applicant Identification

When it comes to the rental application, there are new do’s and don’ts relating to acceptable applicant identification in Portland.

You Cannot Require:

      • A social security number (SSN)
      • That the applicant proves their lawful presence in the U.S.
      • Inquire into the applicant’s immigration status

You Must Accept:

      • Evidence of Social Security Number (SSN Card)
      • Valid Permanent Resident Alien Registration Receipt Card
      • Immigrant Visa
      • Individual Taxpayer Identification Number (ITIN)
      • Non-Immigrant Visa
      • Any government-issued identification regardless of expiration date

Financially Responsible Applicants vs. Non-Applicant Tenants

One of the most out-of-left-field provisions of these ordinances deals with the financial responsibility of the applicants. Now, when there are multiple adults applying to reside together in one unit (think roommates), the applicants must choose at least one adult to be the “financially responsible applicant”. All other applicants will be deemed as “non-applicant tenants” and will have no financial responsibility.

This makes applicant screening tricky. While normally, you’d base the rental decision off the financial information from all adult applicants (basing that off your rent-to-income ratio requirements, credit report and scores, and possibly rental payment history) – Portland properties can only screen the elected “financially responsible applicants” for their financial information. The “non-applicant tenants” can only be screened for “factors relating to maintaining the property, and for conduct consistent with the health, safety, or peaceful enjoyment… by other residents” like criminal history and some rental history information.

IMPORTANT: While many properties have already adopted one or the other, be aware that there are 2 choices to legally screen rental applicants! You can adopt the city’s low-barrier criteria or perform individualized assessments using your own written rental criteria.

Rent-to-Income Ratio Limits, Conditional Approval/Guarantor Requirements, Security Deposits and More

Thought we were done? Think again. Portland, Oregon’s FAIR ordinances affect everything under the sun – and you’ll want to take some time to seek legal council if your properties are under its umbrella. On top of advertising, leasing, and applicant screening, there are several additional provisions you’ll need to pay attention to:

        • Applications with a mobility disabled applicant get priority over the first come, first served process if they submit their application during the first 8 hours of the Open Application Period and the unit that they’re applying for is an accessible dwelling unit. Be mindful that there are also provisions relating to disability related modification requests.
        • Some properties have new limits on the max rent-to-income ratios
        • If the landlord or manager extends a conditional approval because the applicant doesn’t meet the income requirements of the property (but passes everything else), the applicant will have 48 hours to respond.
        • Guarantors can be screened, but only to demonstrate their financial capacity. If the guarantor is a friend or family member, you cannot require they have an income greater than 3x the rent.
        • For applications entered into after March 1st, 2020, there are several limits on how much can be requested for the security deposit! Security deposits must also be kept in a separate bank account and there are restrictions relating to that as well, including adding the name and address of the bank the deposits are held in (and whether the account is interest-bearing) on the rental agreement.
        • Rental agreements must include a fixture, appliance, equipment, and personal property addendum with an itemized list, a description, and the depreciated value of each said item. At the start of a lease, properties must provide the tenant a condition report. Condition reports must be updated after any/every repair or replacement is made. You will want to pay attention to this section, as it greatly impacts security deposit withholdings and accounting.

Regardless of if you’re impacted by Portland, Oregon’s FAIR ordinances or not, it’s crucial that you stay up to date on the latest rental housing legislation. With laws like these getting passed, you’ll need to keep your eyes peeled.

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