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Rent Increase and Renovation Eviction in a 2007 Building

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Rent Increase and Renovation Eviction in a 2007 Building

A landlord owns a 14-unit apartment building completed in 2007 in Eugene. In 2024 he wants to raise one tenant's rent from $1,450 to $1,625 (12.1%) effective July 1, and to terminate another tenant's month-to-month tenancy after three years so he can remodel that unit. The building has no subsidized units. The applicable CPI cap for the year is 3.0%. The landlord has given both tenants 30-day notices and believes the building is exempt because it is 'fairly new.'

1. Calculate the maximum allowable rent increase under Oregon's rent-cap law and evaluate the proposed increase.

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Oregon's statewide rent cap is generally 7% plus CPI, with the CPI component capped at 3%. Here that is 7% + 3% = 10% maximum.

Maximum rent: $1,450 × 1.10 = $1,595/month. The proposed $1,625 is $30 per month too high. The landlord cannot lawfully impose the 12.1% increase as noticed.

Also, the building was completed in 2007. By 2024 it is 17 years old, so the 15-year new-construction exemption has expired. The landlord's 'fairly new' assumption is wrong. A 30-day notice is also insufficient for a rent increase; Oregon requires 90 days' written notice for a rent increase.

2. Can the landlord terminate the three-year tenant without cause to remodel? What must he do?

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Not on a bare 30-day no-cause notice. After the first year of tenancy, Oregon's just-cause eviction rules restrict no-cause termination. A major renovation can be a qualifying landlord reason, but the landlord must:

  • Give the required 90-day written notice with the statutory reason stated.
  • Pay any relocation assistance required by ORS 90.429.
  • Be prepared to prove the renovation is genuine and substantial, not a pretext to re-rent at market rent.

A 30-day notice for a three-year tenant based on remodeling is vulnerable to challenge. The landlord should also follow the security-deposit accounting rules and avoid any retaliatory timing after a tenant complaint.

3. What should the property manager recommend to the owner before either notice is served?

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The manager should correct both notices before service:

  1. Recalculate the rent increase to no more than $1,595 and serve a 90-day notice, not 30 days.
  2. For the renovation termination, document the scope of work, confirm that the renovation qualifies, serve a 90-day notice with the statutory reason, and budget relocation assistance.
  3. Confirm the building's age and exemption status in writing; do not rely on 'fairly new.'
  4. Calendar the notice periods so the effective dates are valid, and keep proof of service.

If the owner insists on the 12.1% increase or the 30-day eviction, the manager should decline to serve an unlawful notice and explain the penalty exposure.