Tenant Tip Tuesday: Understanding the “Small Landlord” loophole on the Portland Relocation Ordinance

As many of you know, tomorrow marks the Portland City Council hearing to extend the city’s Relocation Ordinance. While it is expected to be voted into extension unanimously, there is a push to end an important loophole in the ordinance. Known as the “Small Landlord” exemption, it’s important people understand what it means and how it affects the effectiveness of the local law.

What is a “Small Landlord”?

The Portland Relocation Ordinance defines a Small Landlord as a person that owns 1 rental unit in Portland. The idea behind this is that property-owners who have small margins of profit should be exempt of paying the cost of relocations to their tenants regardless of cost to the renter.

The problem

There are several things wrong with the premise – the idea that property-owners of 1 unit be exempt of responsibility to the people of our city – but the most pressing concern is that many large property-owners and management companies have found a loophole. Landlords have been registering their individual properties under limited liability companies, or LLCs, to avoid accountability and traceability. If John Smith owns 50 properties by each one is listed as Smith John LLC, Greedy Landlord LLC, Money Maker LLC, etc., then residents trying to figure-out if they qualify for relocation fees are stuck with the almost impossible task of figuring out who owns the LLC their building or home is listed under. While they are still liable even when they are signed up as LLCs, it is a LOT of work to find out who owns individual LLCs for the renter.
Landlords aren’t required to out themselves as owners of LLCs, and it’s nearly impossible to find out which LLCs are affiliated or owned by the same person. Without this information being public, the task is blurred by hunting down who gets the mail for this LLC or that other one and trying to connect those addresses to individuals.

The Solution

We need to close the LLC loophole in the Portland Relocation Ordinance. Adding to that, all property-owners, including ones who only own a handful of properties, should know the cost of doing business in Portland includes relocation fees. It’s a hot market, rents are constantly on the rise, and landlords have the upper hand in almost every case against the people who seek housing. It is inappropriate to assume to they are unable or unwilling to be accountable for no-cause evictions. Their renters are not afforded any benefit in renting from them, and pay the same costs of rent and deposits as residents in mass-owned properties.
You can call the Portland City Council and demand the closing of the LLC loophole or attend the hearing and testify tomorrow, October 4, at 9:30 a.m. Portland Mayor Ted Wheeler has stated at this time he intends on the ordinance becoming permanent in 6 months.