Understanding Oregon’s security deposit laws will help landlords avoid making mistakes over charges, deductions, and deadlines. Those who understand these laws manage rentals with more confidence and often prevent disputes before they start.
In this guide, property owners learn everything they need to know about these laws, including the maximum amounts they can collect, how to store deposits, whether they must pay interest, valid reasons to deduct, how to return deposits, how to handle disputes, and more.
Statutes Regulating Oregon Security Deposits
Oregon’s security deposit regulations are located within Oregon’s Revised Statutes Chapter 90, which outlines how landlords collect, hold, account for, and return these funds.
Maximum Security Deposit Amounts Under Oregon Law
Oregon law does not cap the amount a landlord can charge for a security deposit. Landlords can request any amount they consider reasonable, provided the rental agreement clearly outlines the amount.
State law does not create different maximums for specific property types, tenant groups, or contract lengths. Oregon keeps the same rules in place for all rentals, which gives landlords a consistent standard to follow across the state.
Security Deposit Storage Regulations
Oregon law does not require landlords to keep security deposits in a separate account, use a specific bank, or provide a receipt. Property owners may hold these funds in any reasonable manner, as long as they protect the deposit and return it in accordance with the law.
Security Deposit Interest in Oregon
Oregon does not require landlords to place security deposits in interest-bearing accounts. Property owners may use any account they prefer, and won’t ever owe tenants interest on the deposit.
Making Security Deposit Deductions
Security deposit deductions provide landlords with the resources they need to maintain the overall condition of a rental property. Tenants occasionally default on rent or cause damage beyond normal wear and tear, and landlords rely on deposit funds to cover expenses and return the unit to the condition documented at move-in.
When Landlords Can Deduct
Oregon landlords may draw from a tenant’s security deposit for the following reasons:
- Damage that exceeds normal wear and tear and needs repair
- Unpaid rent that remains due after the tenancy ends
- Cleaning costs required to match the unit’s move-in condition
- Replacement of items or fixtures damaged through tenant negligence
- Costs related to undoing unauthorized alterations made during the tenancy
When Landlords Can’t Deduct
Oregon landlords may not draw from a tenant’s security deposit for the following reasons:
- Improvements that upgrade the rental beyond its earlier condition
- Routine cleaning that aligns with standard turnover expectations
- Repairing worn items that reached the end of their useful life
- Expenses tied to general maintenance responsibilities for landlords
- Damage caused by events outside the tenant’s control
Necessary Documentation to Accompany Deductions
Oregon requires landlords to provide tenants with a written accounting that lists each deduction and explains the reason for each charge. Landlords are not required to attach receipts or invoices, but the written statement must clearly describe the basis for every deduction.
What to Do When Deductions are Greater Than the Deposit
Tenants sometimes leave damage or unpaid charges that exceed the deposit amount. In this event, Oregon landlords should bill the former tenant for the remaining balance and request direct payment. Landlords must still provide the required itemized accounting within 31 days, even if the deposit does not cover the full cost.
If the tenant refuses to pay, the landlord may pursue the outstanding amount through Oregon small claims court.
Returning Security Deposits to Tenants
Oregon law sets clear rules for returning the remaining portion of a tenant’s security deposit after all lawful deductions have been made. These requirements help landlords provide accurate accounting and timely communication at the end of each tenancy.
Required Timeline for Return
Oregon requires landlords to return any remaining deposit and provide the itemized accounting within 31 days after the tenancy ends and the tenant delivers possession. The 31-day timeline begins only after the tenant moves out and returns the keys, allowing enough time for landlords to inspect the unit and calculate appropriate deductions.
Method for Return
Oregon does not require a specific payment method to collect a security deposit, so landlords may issue the refund by check or another reasonable form of payment. When issuing a return, landlords must also include a written, itemized list of deductions with the refund, and the statement must clearly explain each charge and show any balance owed to the tenant.
Penalties for Late Return
If a landlord fails to return the security deposit or provide an accounting within 31 days after termination of the tenancy, or wrongfully withholds any portion of the deposit, the tenant may recover the amount wrongfully withheld. If the landlord’s conduct is willful, the tenant may recover up to twice the amount wrongfully withheld. The prevailing party may also be entitled to court costs and reasonable attorney fees under Oregon law.
Security Deposit Disputes
When tenants disagree with how a landlord handles their security deposit, they have the right to raise a dispute. Tenants typically begin by asking for clarification in writing, then follow with a formal demand if they believe the deductions lack justification. Some tenants may also turn to mediation or file a claim in court when communication does not resolve the issue.
As a landlord, prepare for security deposit disputes by using move-in and move-out documentation, staying current with accounting and bookkeeping, and including clear terms in all lease agreements. Thorough documentation, close attention to Oregon requirements, and consistent compliance with all timelines will also help reduce potential disputes.
Using Condition Reports to Document Damage
Oregon landlords who use move-in and move-out condition reports can document the property’s condition at the beginning and end of each tenancy, make comparisons clear, and reduce disagreements.
To generate condition reports, landlords can use property management software to create digital reports with photos and videos directly from a smartphone. Thorough documentation before move-in and after move-out will support each deduction, and make the entire process more cut-and-dry and less open to debate.
Sign up for a free TurboTenant account to streamline property documentation and handle every security deposit with ease.
FAQs: Oregon Security Deposit Law
Can a landlord deduct painting from a security deposit in Oregon?
A landlord may deduct painting costs only when a tenant leaves damage that exceeds normal wear and tear. Landlords may charge only when a tenant leaves heavy markings, stains, or wall damage that requires more than a standard touch-up. Routine repainting between tenants does not qualify.
Are nail holes considered normal wear and tear in Oregon?
Small nail holes typically fall under normal wear and tear in Oregon, so landlords cannot deduct for light picture hanging. Larger holes, wall anchors, or excessive fasteners may qualify as damage, which allows landlords to deduct repair costs when a tenant leaves the walls noticeably altered.
Who has to pay for carpet cleaning in Oregon, the landlord or the tenant?
A landlord may charge for carpet cleaning only when a tenant leaves stains, odors, or damage beyond normal wear and tear. General turnover cleaning does not justify a deduction. Landlords may deduct only when a tenant’s actions create a condition that requires deeper or specialized cleaning.
What happens if a landlord doesn’t return a security deposit within 31 days in Oregon?
If a landlord misses the 31-day deadline to return the deposit, a tenant may attempt to recover the amount wrongfully withheld. When a landlord keeps funds without a valid reason and acts in bad faith, the tenant may also claim up to twice the deposit amount, along with possible court costs.
