Governed by the Oregon Revised Statutes (with foundational roots tracing back to 1859), Oregon's security deposit law (ORS 90.300) is detailed and tenant-protective. While there is no cap on the deposit amount, strict rules govern how it must be held, when it must be returned, and what deductions are permissible.

No Statutory Cap on Deposit Amount

Oregon law does not impose a maximum on the amount a landlord can charge for a security deposit. In practice, most landlords charge one to two months' rent.

Security Deposit Holding Requirements

Under ORS 90.300(2)(a), a landlord must hold a security deposit or prepaid rent for the tenant. A tenant’s claim to these funds takes priority over the claims of the landlord's creditors, including a trustee in bankruptcy. However, Oregon law does not explicitly require these funds to be held in a separate trust account, nor does it explicitly prohibit commingling with other funds. Additionally, ORS 90.300 does not explicitly state whether landlords are required to pay interest on security deposits.

The 31-Day Return Rule

After the tenancy ends and the tenant delivers possession, the landlord must return the deposit (minus any lawful deductions) within 31 days. The return must include a written, itemized statement explaining each deduction.

If the landlord fails to return the deposit or provide the itemized statement within 31 days, the tenant can recover up to twice the amount wrongfully withheld, plus reasonable attorney's fees.

Allowable Deductions

A landlord may deduct from the security deposit for:

• Unpaid rent owed at the time of vacating.
• Damage beyond ordinary wear and tear to the premises, fixtures, or appliances.
• Cleaning costs necessary to restore the unit to the condition it was in at move-in (accounting for ordinary wear and tear).

"Ordinary Wear and Tear" in Oregon

Oregon law provides a clear standard: ordinary wear and tear includes deterioration that occurs from the normal use of the premises. Faded paint, minor scuffs, worn carpet in hallways, and small nail holes from pictures are all ordinary wear and tear and cannot be deducted.

Move-In/Move-Out Inspections

While not strictly mandatory, Oregon best practice strongly favors conducting a thorough move-in inspection with the tenant and documenting the condition with photographs. The same should be done at move-out. This documentation is essential when justifying deductions.

Applicant Deposits and Habitability

Under ORS 90.297(4), if a rental agreement is not executed because the applicant rejected it due to the discovery of material habitability defects (as described in ORS 90.320), the landlord must return the "deposit to secure the execution of a rental agreement" (applicant deposit). This provision applies specifically to applicant deposits rather than general security deposits.

Best Practices for Oregon Landlords

1. Consider a Dedicated Account: While not explicitly required by ORS 90.300, holding security deposits in a separate account is a best practice to ensure funds are available and to protect the tenant's priority claim over creditors.
2. Photograph Everything: Take detailed, timestamped photos at move-in and move-out. These are your primary evidence for deductions.
3. Send the Itemized Statement Early: Don't wait until day 31. Aim to mail the statement and refund check by day 21 to account for postal delays.

Back to Oregon Landlord-Tenant Laws OverviewPreview unavailable.

How Landager Helps

Landager simplifies compliance with Oregon's complex landlord-tenant laws. From tracking 31-day security deposit deadlines to enforcing statewide rent control caps and 90-day notice periods, our platform ensures your Oregon portfolio remains legally sound while optimizing your operational efficiency.