Oregon security deposit laws for landlords: the receipt, the first year freeze and the 31 day accounting
Oregon's deposit statute, ORS 90.300, requires a receipt for every deposit, bars a new or higher deposit in the first year of a tenancy, and gives you 31 days after the tenancy ends and the tenant hands over possession to give a written accounting and return what is left. A landlord who misses the 31 days, or keeps money in bad faith, can owe the tenant twice the amount. The section sets no dollar cap on the deposit.
What must I do when I take a deposit in Oregon?
ORS 90.300(1) says "security deposit" includes any last month's rent deposit. Under (2)(a) you may require a deposit, you must give the tenant a receipt for it, and you hold the deposit or prepaid rent for the tenant who is party to the agreement. The tenant's claim comes ahead of a creditor's, including a trustee in bankruptcy. A written rental agreement must list any deposit paid or required (3), and the deposit cannot be claimed for a purpose you did not require it for (6).
You cannot charge a pet security deposit for a service animal or a companion animal that a tenant with a disability needs as a reasonable accommodation (4). You also cannot make a tenant pay or forfeit a deposit for not keeping a month to month tenancy for a minimum number of months (8).
Can I raise the deposit later?
Subsection (5)(a): you cannot change the agreement to require a new or higher deposit during the first year of the tenancy. The exceptions are an extra deposit that relates to an agreed change, such as permitting a pet, and collecting a deposit the original agreement already called for but that was unpaid when the tenancy began. After the first year, any new or increased deposit must give the tenant at least three months to pay (5)(b).
What can I claim and what does labor cost?
You may claim only the amount reasonably necessary to remedy the tenant's defaults in performing the rental agreement, including unpaid rent, and to repair damage the tenant caused, not including ordinary wear and tear (7)(a). You need not do the repair before you claim its cost. Labor must be charged at a reasonable hourly rate, and that includes your own time (7)(b).
Carpet gets special treatment (7)(c). You may recover machine carpet cleaning, beyond a common vacuum, only if the cleaning was done with a machine designed for carpets, the carpet was cleaned or replaced after the last tenancy and before this tenant took possession, and the written agreement says you may deduct the cost whether or not the tenant cleans before leaving. You may also claim loss of use of the unit while the tenant's cleaning or repairs are done, if they are done promptly.
Example a made-up tenant leaves a $1,800 deposit. A door needs 3 hours of work at a made-up $40 an hour, $120, plus $35 of parts. The landlord claims $155 and returns $1,645 with the accounting. No charge is made for faded paint that is ordinary wear.
How do the 31 days work?
To claim any part of a deposit or prepaid rent, you give the tenant a written accounting that states specifically the basis for each claim within 31 days after the tenancy terminates and the tenant delivers possession (12), with a separate accounting for the security deposit and for prepaid rent. You return the unclaimed balance by the same 31 days (13). Delivery is personal, by first-class mail or, where the notice rules allow, by email (14). If both sides sign an addendum after the tenancy begins and the tenant is in residence, you may return the money electronically to the tenant's designated bank account.
Unused prepaid rent is refunded the same way as a deposit, and you may claim from it only the amount reasonably necessary to pay the tenant's unpaid rent (11). A last month's rent deposit must be applied to the final month once either side gives a termination notice (other than for nonpayment), or by agreement, or at the end of a term lease (9).
What is the penalty?
If you miss the 31 day return, or in bad faith fail to return any part of the deposit or prepaid rent due, the tenant may recover the money due in an amount equal to twice the amount withheld without a written accounting, or withheld in bad faith (16). A deposit in your hands cannot be garnished (17). The holder of the landlord's interest when the tenancy ends is responsible for the deposit (2)(b), with a carve-out for certain foreclosure sales.
Example a made-up landlord withholds $500 of a $1,800 deposit and sends no accounting by day 31. If the $500 was withheld without a written accounting, the tenant can recover twice that, $1,000, rather than the $500 that should have come back.
How DoorKeeping handles it
In DoorKeeping a tenant's deposit and any prepaid rent are separate lines in the property's own books, which suits Oregon's separate accountings. E-signed leases and the signed receipts you give are kept in the property's documents. Deposits stay in your own bank account: DoorKeeping never holds your money and sends a payment only when you approve it. It gives no legal advice.
Sources
Questions
- How many days does an Oregon landlord have to return a deposit?
- 31 days after the tenancy terminates and the tenant delivers possession, with a written accounting stating specifically the basis of any claim.
- Can an Oregon landlord raise a deposit during the first year?
- No, with narrow exceptions such as an agreed change to allow a pet. After the first year the tenant gets at least three months to pay an increase.
- Is there a cap on an Oregon security deposit?
- ORS 90.300 sets no dollar cap. Check your lease and any local rules.
- What is the penalty for wrongly withholding an Oregon deposit?
- Twice the amount withheld without a written accounting or in bad faith (ORS 90.300(16)).