Oregon Real Estate Law

Primary Legal Concerns for Home Buyers and Sellers

Under Oregon law, the seller has a legal duty to disclose all known information.  As  a general rule, a seller is legally required to deliver a property disclosure or disclaimer form.  The buyer then has five or seven business days, depending on the form used, to revoke his offer based on the information provided.  A seller can be held liable for any intentional misinformation or omissions on these forms.

For sellers, the main legal concerns are the buyer's failure to close and the possible existence of some condition the seller doesn't know about that may result in a dispute after the transaction has closed (for example, a leaky oil tank of which the seller was unaware).

Attorneys are often contacted after the agreement has been signed and  communication lines have been severed.  It is important to remember that attorneys are skilled in preventing disputes as well as resolving them, so it's best to contact an attorney before finalizing any agreements.

 Oregon Real Estate Agency

The Oregon Real Estate Agency is the state agency responsible for regulating real estate activity, including licensing of real estate salespersons, brokers, and property managers.

The agency is administered by the Real Estate Commissioner who is appointed by the governor.  The Agency's statutory authority is contained in the following laws and rules:

• Real Estate, Property Management and Escrow, ORS Chapter 696

• Oregon Subdivision and Series Partition Control Statutes, ORS 92.305 to 92.990

• Condominiums, ORS 100.005 to 100.990

• Timeshare estates, Membership Campgrounds, ORS 94.803 to 94.989

• Telemarketing Organization, ORS 696.392, 696.600 to 696.627

• Oregon Administrative Rules, Real Estate Agency Chapter 863, Divisions 1-60

Other pertinent statutes that are not administered by the Agency are:

• Seller's Property Disclosure and Disclaimer Statements, ORS 105.465.490

• Residential Landlord and Tenant, ORS Chapter 90.

The complete text of the laws in Oregon Revised Statutes Chapter 696 (Real Estate and Escrow Activities), and rules in Oregon Adminstrative Rules Chapter 863 are available online.

Visit the Oregon Real Estate Agency FAQs page for information about real estate regulations in Oregon.  This is an good page for consumers to get an overview of Oregon real estate law.

Each year the agency processes and tests more than 5,000 license applicants and monitors regulated activities in over 4,700 escrow and real estate offices. Land developers with offerings to Oregon citizens have thousands of disclosure filings with the agency.

The agency provides educational material and seminars for real estate professionals. The agency also conducts investigations and hearings when complaints are filed against licensees, registrants and real property developers.

Representation

With the advent of buyer's agents, both buyers and sellers have the benefit of exclusive representation.  Real estate agents are required to disclose whom they represent and the terms of the representation by providing an agency disclosure form when a working relationship is initiated.

The primary duty an agent owes his client is to place his client's interests above everyone else's, including her/his own. To the party he does not represent, he must disclose all essential information about the property and treat that party fairly and honestly.  When a licensee represents both parties, limited representation applies.

While real estate agents perform vital functions in the industry, it is not wise or fair to ask them to provide services outside the scope of their profession.  Legal, tax, construction, inspection, title and financing concerns should be directed to professionals in those areas.

Real Estate Agency Disclosure Pamphlet

Agents in Oregon and Washington are required by law to provide an Agency Disclosure Pamphlet to the consumer, disclose whom they represent and the terms of that representation, and have the consumer acknowledge this agency representation. Understanding the different agency roles will assist you in choosing how you want to work with an agent in your real estate transaction.

• Oregon Real Estate Agency Disclosure Pamphlet

• Washington Law of Real Estate Agency

These pamphlets describes agency relationships and the duties and responsibilities of real estate licensees in Oregon. This pamphlet is informational only and neither the pamphlet nor its delivery to you may be construed to be evidence of intent to create an agency relationship.

Fairness

The issue of fairness in real estate law deals primarily with the parties acting in good faith, executing their best efforts, and treating everyone equally.  Under federal and/or Oregon law, a homeowner may not discriminate on the basis of race, color, sex, marital status, familial status, handicap, religion or national origin when negotiating price, terms or other conditions.  Cities and counties may also provide additional protection.

Lease-Options and Land Sale Contracts

Lease-options are a way of purchasing property by paying money (or other consideration) in addition to the rent, which is credited toward future purchase of the property.  Lease-options are, in effect, three separate agreements which are used to document the parties' intent -- lease, option, and purchase agreement.

Timing is essential with all the agreements, but particularly crucial with the option that the renter uses to notify the seller of his desire to buy.  As a rule, if the renter fails to exercise the option by the agreed date, the option money is forfeited, along with any interest in the property except for the right to inhabit under the terms of the lease.

A land sale contract is a form of seller financing wherein the seller retains legal title until the contract conditions are satisfied.  A land sale contract also provides the seller the right to declare forfeiture (take the property back) if the buyer defaults.  This remedy is generally faster and less expensive than foreclosure.

Oregon DEQ Consumer Corner

The Oregon Department of Environment Quality's (DEQ) Consumer Corner will help you understand the most common household activities DEQ regulates to protect your health and the environment. They'll also let you know how to protect yourself as a consumer.   Topics cover in the Consumer Corner include:

• Mercury Reduction

• Septic Systems

• Asbestos in your home

• Heating Oil Tanks

• Woodstoves

• Vehicle Inspection

 Oregon Law on Underground Oil Storage Tanks

A primary environmental concern for buyers and sellers is the presence of hazardous substances, including petroleum from underground heating oil storage tanks (USTs) and indoor pollutants.  With the large number of USTs in Oregon, steps should be taken to determine whether a tank exists and, if so, whether decommissioning and/or clean up are required.

According to the Department of Environmental Quality (DEQ), there are approximately 210,000 residential underground heating oil storage tanks in the State of Oregon. Oregon DEQ says there are approximately 60,000 underground heating oil tanks still in use and 150,000 that have been abandoned, i.e., not properly decommissioned.  Many of these tanks still contain fuel, and therefore pose potential environmental liability. Statistically 60-70% of underground heating oil tanks on record have leaked some product into the soil.

You will want to view the Oregon DEQ's Heating Oil Tank Bulletin #2 entitled, What You Should Know About Buying or Selling a Home with a Heating Oil Tank dated August 2, 2000. 

The rules and regulations about oil tanks are complicated.  If you purchase a home where an underground storage tank exists (average life of a tank is 25 years) and you were unaware of the tank when you purchased the home, you can undergo considerable financial expense if the tank begins to leak when you are the home owner or should you decide to sell it later.

Lead Paint

Lead is a soft, blue-gray, naturally occurring metal. It has been used for centuries for medicinal, industrial, commercial and household purpose. At the same time, lead that enters the body -- especially when it happens to young children -- can be quite toxic and destructive.

The US Department of Housing and Urban Development (HUD) estimates that 75% of the houses built before 1978 contain some lead-based paint. The director of that agency described lead as the "number one environmental threat to the health of children in the United States." In 1992, the United States Environmental Protection Agency (EPA) and Agency for Toxic Substances and Disease Registry (ATSDR) issued a priority list of 275 hazardous substances. Lead was number one on that list.

Because it does not degrade or break-down, lead stays in the environment and unless it is handled properly, it has the potential to cause an ongoing cycle of health problems.

Oregon Department of Human Services (ODHS) - Environmental Health

ODHS has a wealth of information about lead-based paint including a list of firms certified and licensed to provide professional lead-based paint services in Oregon. You may also request a copy by phoning Health Services' Lead Line at (503) 731-4500 or by visiting their Web site - you can download a copy of the firms. Their Lead Paint Q&A pages are also worthy of reading.

To view a copy of the U.S. Department of Environmental Protection Agency's Lead-Based Paint Pamphlet click here (PDF format).

Mold

The Environmental Protection Agency's (EPA) Web site has pages contains an introduction to molds; basic mold cleanup; ten things you should know about mold; asthma and mold; floods/flooding; health and mold; homes and mold; indoor air regulations and mold; large buildings and mold; schools and mold and indoor air quality; and other mold-related resources and links.   Go to their Mold Resource page for all the information on mold.  The EPA also has numerous publications (PDF format) which you can download.

George Tsongas is a private consulting engineer and a Professor Emeritus of Mechanical Engineering at Portland State University. He is a building scientist with specialization in moisture and mold problems in residences.  Dr. Tsongas has written extensively on mold problems. 

Radon

Oregon Department of Human Services Radon Information  This site will display a table of Portland-area zip codes with the total number of reported tests; highest, lowest, and average radon levels within that sample; and the total number of tests out of that sample that had levels above 4pC/l, the level deemed unsafe by EPA.

EcoTech  EcoTech is a Portland company that provides testing and solutions to environmental concerns effecting homes, buildings and property.  They have a wealth of information about radon as well as other environment problems.  On their Web site, they have a link to a regional map that color-codes risk by zip code.  This is the link:  http://www.ecotechllc.com/assets/risk_map.pdf.