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Tom Shi
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Tenant Failed to Pay Sewer Fee to City, accumulated $20k in bill that we had to pay

Tom Shi
Posted May 24 2023, 11:56

A thorny problem: 

My relative has been renting out a commercial property to a tenant for some years. The signed lease states that tenant is responsible for all utilities including sewer fee.  Unbeknownist to my relative, the tenant has failed to pay the sewer fee to the city for a number of years, finally accumulating a bill of >$20k including fines.  My relative was finally notified of the situation earlier this year.  Over the last few months, he tried to talk to the tenant about the situation and urged her to pay the bill but was met with stalling and lies (unfortunately nothing in writing, emails or texts, just phone calls).  The city set a deadline to pay the bill or the owner of the property would face special tax assessment, so my relative felt he had no option but to pay the bill himself first.  

My relatives would like to serve the tenant with notice of termination for cause due to breach of the lease (failure to pay utilities). In the termination form, my relative wrote that the tenant has the right cure the violation by paying back the money my relative paid the city.  

I feel a lot of things could go wrong in this situation and have urged my relative to seek proper legal counsel.  He is reluctant due to past experience with the cost of such things.  He was going to just run it through one of those online $50 a pop legal questions website.  I am not sure if that's the greatest idea.  If any of you have recommendation a decent tenant law lawyer for landlords in the Portland OR, please share.  

I also feel that this tenant has exhibited many untrustworthy signs and it's best just to cut ties to protect oneself.  What if the tenant agree to the "cure" by just proposing to pay extra $100 a months for years until the full amount? I doubt my relative can stipulate a lump-sum payment? Then my relative is stuck with this very untrustworthy individual for long term.  My relative prefer to get this tenant out due to this and past behaviors but also has some ambivalence as he feel this particularly property is hard to rent out; this tenant despite some periodic delays, has not been past due in rent all this time. 

My relative also is planning to meet with this tenant today to serve this termination notice. I urged him to hold off until he has a clearer sense of all the legal ramifications.

I am kind at a loss at what's the best course here.   Any advice, past experience with similar issues would be appreciated.  

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Richard F.#1 Tenant Screening Contributor
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Richard F.#1 Tenant Screening Contributor
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Replied May 24 2023, 12:59
Aloha,

As always, what does the Lease Agreement state regarding breach of contract?

I am not familiar with your local laws, so you should absolutely check with a qualified Attorney, but Commercial properties are definitely not under the same laws as Residential. In my experience, you can, with very little notice, chain their doors shut and auction their inventory and trade fixtures.

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Chris Seveney
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Chris Seveney
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Replied May 24 2023, 13:02

@Tom Shi

Well if they refuse to get an attorney and you mention it, it’s one of those things I tel people don’t come complaining to me, I gave you a recommendation and you refused to listen so you are preaching to the wrong choir.

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Bruce Woodruff
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Bruce Woodruff
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Replied May 24 2023, 13:26

So this relative (who doesn't sound very smart) was willing/able to just up and pay a $20,000 bill, but doesn't want to spend a couple thousand on a lawyer?

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Nathan Gesner
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Nathan Gesner
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ModeratorReplied May 25 2023, 05:20
Quote from @Tom Shi:

Your relative is probably throwing away a lot of money in other areas. They may not be cut out to be a Landlord.

They should pay the bill to avoid any problems with the City. Then they send a demand letter to the Tenant demanding payment - in full - within 30 days. If tenant refuses, then they should hire an attorney and pay what it costs to go after the Tenant. 

They are not making good decisions. Do not let them negotiate a payment plan or anything with the Tenant. Either she pays in full or they hire an attorney.

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Melissa Hartvigsen
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Melissa Hartvigsen
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Replied May 26 2023, 13:42

I am shocked that they would be so cheap on attorney fees when faced with a $20,000 bill.  Most attorneys will take a 30 or 60 minute consultation at no cost. 

I have personally used the following landlord tenant attorneys (though they specialize in residential landlord tenant issues which fall under ORS ch 90.  I believe commercial rental rules fall under a different ORS. I am sure they can give you a referral if it isn't something they cover.) 

Mark Passannante of Broer & Passannante
broerandpassannante.com

Warren Allen, their landlord tenant attorney team is up to eight or ten attorneys now:
https://warrenallen.com/landlords-rights/

In the event that you need additional recommendations, I try contacting Portland Area Rental Owners Assocation https://www.portlandarearoa.com/
and asking for a list.

Best regards, 
Melissa

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