(1) A person may create an affordable housing covenant as a condition of giving or receiving a subsidy during ownership or upon conveyance of real property, in the form of a covenant, servitude, easement, condition or restriction in a deed, declaration, land sale contract, trust deed, mortgage, security agreement, assignment, will, trust, rental agreement, lease or other written instrument that is:
(a) Executed by the owner of the real property and the covenant holder; and
(b) Recorded in the deed and mortgage records of the county in which the real property is located.
(2) The affordable housing covenant creates a real property right in an eligible covenant holder to:
(a) Limit the use of real property to occupancy by low or moderate income households in rental or owner-occupied housing;
(b) Restrict the rental rate or sale price of real property to ensure affordability by future low and moderate income households; or
(c) Limit, restrict or condition the use and enjoyment of real property to create or retain rental or owner-occupied affordable housing for occupancy by low or moderate income households.
(3) The affordable housing covenant may be conveyed, assigned, modified or terminated by a written instrument recorded in the deed and mortgage records of the county in which the real property is located. The affordable housing covenant may be:
(a) Conveyed or assigned by a written instrument executed by the conveying or assigning covenant holder and the accepting covenant holder;
(b) Modified by a written instrument executed by the covenant holder and the owner of the real property; or
(c) Terminated by a written instrument executed by the covenant holder and a third party with the right to enforce the covenant.
(4) An affordable housing covenant is not invalid because a holder of the covenant is not an eligible covenant holder. A covenant holder who is not an eligible covenant holder may not modify, terminate or commence an action to enforce the covenant. However, the covenant holder may convey or assign the covenant to an eligible covenant holder who may modify or terminate the covenant or commence an action to enforce the covenant.
(5) An affordable housing covenant is unlimited in duration unless:
(a) The instrument creating the covenant provides otherwise;
(b) The duration of the covenant is modified prior to the expiration of its stated term; or
(c) The covenant is terminated.
(6) Upon termination of an affordable housing covenant for any reason prior to the expiration of its stated term, the covenant holder is entitled to receive the difference between the fair market value of the real property immediately before termination and the fair market value of the real property immediately after termination.
(7) An interest in real property in existence when an affordable housing covenant is created is not impaired by the affordable housing covenant unless the owner of the interest is a party to the affordable housing covenant, subordinates the interest to the affordable housing covenant or otherwise agrees to be bound by the affordable housing covenant.
(8) The instrument creating an affordable housing covenant may grant the eligible covenant holder, or a designee of the eligible covenant holder, a right to enter the real property to ensure compliance with the covenant and, if the right is granted, the instrument shall designate the time and manner in which the eligible covenant holder or designee may enter the real property.
(9) An affordable housing covenant holder may assign a third-party right of enforcement, by a written instrument executed by the covenant holder and recorded in the deed and mortgage records of the county in which the real property is located, to a person that qualifies to be an eligible covenant holder but that is not the holder of that covenant.
(10) An affordable housing covenant is automatically terminated if:
(a) The only holder of the covenant is a corporation, as defined in ORS 65.001, that is dissolved without conveying or assigning the covenant; and
(b) No person is entitled to exercise a third-party right of enforcement pursuant to subsection (9) of this section. [2007 c.691 §3]
Note: See note under 456.270.
Section: Previous 456.235 456.250 456.255 456.260 456.265 456.270 456.275 456.280 456.285 456.290 456.295 456.305 456.310 456.315 456.320 NextLast modified: August 7, 2008