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.

Trust Account Requirement

Unlike many states, Oregon requires landlords to hold security deposits in a separate trust account (though not necessarily an interest-bearing one). The deposit must not be commingled with the landlord's personal or operating funds. However, landlords are not required to pay interest on the deposit.

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.

HB 3251 (Effective Jan 2026)

A new change modifies ORS 90.300 to require landlords to return a security deposit if a tenant does not proceed with the rental agreement due to habitability defects discovered under ORS 90.320.

Best Practices for Oregon Landlords

1. Open a Dedicated Trust Account: Set up a separate bank account specifically for security deposits. This is a legal requirement, not just a best practice.
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.

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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.