Oregon Security Deposit Returns & Deductions

Oregon Security Deposit Returns & Deductions

Last Updated: February 4, 2023 by Ashley Porter

Quick Facts Answer
Acceptable Deductions
  • Unpaid rent, utilities, and late fees
  • Costs of damage
  • Damages due to breach of lease
  • Carpet cleaning costs
Return Deadline 31 Days
Itemized Deductions Required
Penalty for Late Return 2x Amount due + court costs + attorneys’ fees

For laws on security deposit collections and holdings in Oregon, click here.

Security Deposit Deductions in Oregon

In Oregon, the following things can be deducted from security deposits:

  • Unpaid rent, utilities, and late fees
  • Costs of damage excluding normal wear and tear
  • Monetary damage as a result of a breach of the lease
  • Costs of carpet cleaning
note

Landlords in Oregon can make deductions for damage whether or not they repair the damage.

Most states, such as Oregon, do not have a legal limit on how much a landlord can charge for damages except that the charges must be reasonable.

If the cost of the damages exceeds the amount of the security deposit, landlords are entitled to seek additional damages from the former tenant.

What is Considered Normal Wear & Tear vs Damage in Oregon?

Normal wear and tear is damage that is expected when a rental unit is used in a normal way, such as gently worn carpets and faded walls. Damage is the destruction caused by abusive or negligent use of a rental unit, like ripped carpets and heavily stained walls.

“Normal wear and tear” is deterioration that occurs naturally as a result of the tenant using the property as it was designed to be used.

Examples include:

  • Gently worn carpets
  • Lightly scratched glass
  • Faded paint and flooring
  • Lightly dirtied grout
  • Loose door handles
  • Stained bath fixtures

“Damage” means destruction to the rental unit that occurs because of abuse or negligence by a tenant during the course of the tenancy.

Examples include:

  • Heavily stained, burned, or torn carpets
  • Broken tiles or windows
  • Holes in the wall
  • Missing fixtures

Can the Landlord Charge for Replacing the Carpet in Oregon?

Yes, landlords can charge for replacing the carpet if it is damaged beyond normal wear and tear.

Some wear and tear on a rental unit’s carpet is expected after normal day-to-day use of the property. For example, carpets typically become discolored, indented, or gently worn, when used in a normal way. However, non-typical, abusive use of carpet results in rips, visible stains, or burns. Landlords have the right to charge the tenant for the replacement of the carpet in areas where serious damage has occurred.

Can the Landlord Charge for Nail Holes in Oregon?

Yes, landlords can charge a tenant for nail holes if they damage the walls in a way that is not a result of ordinary enjoyment of the rental unit.

Tenants have the right to use the walls within their unit in a reasonable way. This includes inserting small nails or thumbtacks to hang posters or pictures. However, large holes from drilling, multiple nail holes, large nail holes, and holes made for hanging heavier things may be considered damage and thus, chargeable to the tenant.

Can the Landlord Charge a Cleaning Fee in Oregon?

Landlords in Oregon can charge a cleaning fee if the tenant causes damage that requires cleaning (e.g. walls stained from smoke). Landlords can also charge for carpet cleaning requiring more than a common vacuum cleaner.

However, in order to recover costs for carpet cleaning, landlords must:

  • Use a machine specifically designed to clean carpets
  • Only charge a fee if the carpet was cleaned or replaced after the previous tenancy
  • Include the charge in the lease agreement as a condition regardless of whether or not the tenant cleans the carpet
  • Conduct the cleaning in a timely manner if it is done while the tenant occupies the rental unit

Can the Landlord Charge for Painting in Oregon?

Yes, in Oregon, landlords can charge for painting, except for normal wear and tear. For example, if the tenant:

  • Causes damage beyond normal wear and tear
  • Repaints the wall but is not permitted to do so under the lease agreement
  • Repaints the wall in an unprofessional way

Normal wear includes minor scrapes from daily use, fading due to sunlight, or minor cracks in the original paint. Landlords can charge for repainting if the damage is not the result of normal use. This includes stains, large or deep scratches, and water damage.

Can a Security Deposit Be Used for Last Month’s Rent in Oregon?

Oregon law does not forbid the security deposit from being used for any outstanding rent.

Landlords can include a provision in the lease agreement that the security deposit cannot be used for the last month’s rent until the tenant vacates the rental unit.

Security Deposit Returns in Oregon

Landlords must return a security deposit by first-class mail or hand-delivery to the tenant’s last known address no later than 31 days after the lease term ends and the tenant vacates the rental unit. If deductions are made,an itemized list of deductions must be included.

When returning a security deposit in Portland, landlords must:

  • Provide a completed Rental History Form
  • Provide written notice of the tenant’s security deposit rights (or a printed copy of Portland City Code § 30.01.087 with contact information for the nearest Legal Aid Services of Oregon or the Oregon State Bar)
  • Conduct a final inspection
  • Create a final condition report detailing any damage beyond normal wear and tear with pictures

See Portland Landlord-Tenant Law for more information.

How Long Do Landlords Have to Return Security Deposits in Oregon?

Oregon landlords have 31 days  after the lease term ends and the tenant vacates the rental unit to return any remaining portion of a security deposit.

However, the landlord must return the security deposit within 14 days after a notice of termination if a government agency deems the rental unit unsafe due to conditions that may affect the health or safety of the tenant. The tenant can choose the method of delivery. If they fail to do so, the landlord must return the deposit by first-class mail.

Do Landlords Owe Interest on Security Deposits in Oregon?

Oregon state law does not require landlords to provide interest on held security deposits.

note

In Portland, if a security deposit is held in an interest-bearing account, it must be paid to the tenant unless it is applied toward damages. However, landlords can keep up to 5% of the interest for administrative expenses.

How Do Landlords Give Notice / What Information Do They Have to Provide in Oregon?

If deductions are to be made from the security deposit, an itemized statement of deductions must be sent by first-class mail or hand-delivery to the tenant’s last known address. The statement of deductions must provide separate accounting for the security deposit and prepaid rent (which can only be used for unpaid rent).

note

Security deposits and/or written statements of deductions cannot be sent by certified or registered mail.

Security Deposit Disputes in Oregon

If landlords do not return the security deposit or provide a written statement of deductions, if any, within the required time period, tenants can file for damages in court up to twice the amount wrongfully withheld  plus court costs and reasonable attorneys’ fees.

note

In Portland, the maximum penalty is $250 per violation plus actual damages, court costs, and reasonable attorneys’ fees.

Tenants can also take legal action against a landlord for:

  • Failure to list the security deposit in the lease agreement
  • Unreasonable deductions

How Can Tenants File a Dispute for a Security Deposit in Oregon?

If a landlord fails to perform their obligations regarding a security deposit, the tenant can file a dispute in the small claims division of Circuit Court or Justice Court if the amount of damages is less than $10,000. If the amount is greater, the tenant must file a civil case in the Circuit or Justice Court.

A small claims case regarding the return of a security deposit must be filed within 1 year.

Cases are filed in the county where the rental property is located or where the defendant lives. Representation by an attorney is not permitted unless approved by the judge. Filing fees vary depending on the court.

Our website provides more information about the process of filing a dispute in Small Claims Court.

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