Oregon Security Deposit Laws

Key Takeaways

• Clearly document your security deposit terms in every lease to help set expectations and support compliance with Oregon law.
• Keep detailed records of property condition, payments, and repairs to help justify any lawful security deposit deductions.
• Return security deposits and any required itemized deduction statement within Oregon's 31-day deadline after the tenancy ends.
• Understand the difference between normal wear and tear and tenant-caused damage before making deductions from a security deposit.
• Working with an experienced Eugene property management company can help you stay organized and keep up with Oregon's changing rental laws.

Most landlords in Oregon require tenants to pay a security deposit prior to signing the written rental agreement and moving in to the dwelling unit. And understandably so, security deposit funds helps provide a layer of financial cushion to landlords under certain circumstances during a tenancy.

For example, in the event that a tenant is unable to pay the last month's rent deposit, a tenant breaks the terms of the rental agreement, or they end up causing excessive rental damage to the premises.

Be that as it may, there are rules that landlords must abide by in the state of Oregon when it comes to security deposits. OR Rev Stat § 90.300 is the piece of regulation that primarily regulates the collection and return of security deposits. It is important that landlords are familar with the landlord tenant law, including tenant rights, and security deposit laws.

As an Oregon residential landlord, we at Campus Connection Property Management have outlined the following as the basics of the security deposit laws under the landlord-tenant act that you should know about.

Security Deposits

Oregon doesn’t require landlords to abide by a certain limit when it comes to security deposits. This means that any landlord may request that their tenant pay whatever amount of security deposit they wish so long as it's stated in the rental agreement.

Security deposits are separate from prepaid rent or last month's rent, although landlords may choose to require one or both under the lease. Oregon law does not impose a statewide limit on the amount a landlord may charge for a security deposit. The amount should be clearly stated in the lease agreement and should be reasonable for the property and market.

It should be enough to financially cushion the landlord against costs incurred by certain potential careless actions their Oregon tenant may commit on their premises during the tenancy. Such as, breaking the rental agreement or causing actual damages exceeding ordinary wear and tear to the rental property.

Some states specify how a landlord may keep their tenant’s security deposit during their tenancy. Neither of these requirements, however, applies according to Oregon law. In Oregon, a landlord may store this security deposit any way they would like during the tenancy.

Pet Deposits

Under state law in Oregon, tenants may be asked for an additional pet security deposit if the landlord requires it. The landlord must, however, refrain from levying any charges to tenants with service animals.

That’s because “disability” is a protected class under the federal fair housing laws, and reasonable accommodation should be made for these tenants, including allowing the trained service animal.

The act requires that landlords provide all tenants with equal and fair access to housing regardless of certain classes. Other than disability, other protected classes in Oregon that you should know as a landlord include race, color, nationality, religion, sex, familial status, income source, marital status, sexual orientation, and gender identity.

The government body tasked with administering the state’s civil rights laws is the Oregon Bureau of Labor and Industries Civil Rights Division.

Receipt Requirements

Oregon law does not generally require landlords to provide a separate receipt for collecting a security deposit. However, the lease should clearly identify all deposits, prepaid rent, fees, and other charges, and landlords should maintain accurate payment records for their files.

Allowable Deductions

Returning security deposits isn't always guaranteed. In Oregon, landlords may keep some or all of their tenant’s deposit for the rental property in certain legally acceptable scenarios.

The specific scenarios are as follows:

• For unpaid rent or as prepaid rent.
• Any other breach of the rental agreement that causes financial damage to the landlord.
• Financial losses permitted under the lease and Oregon law, such as certain damages resulting from a tenant's breach of the rental agreement.
• Reasonable cleaning costs necessary to restore the unit to the condition it was in at the beginning of the tenancy, excluding ordinary wear and tear.
• Damage exceeding normal wear and tear.

Speaking of normal wear and tear, what is it exactly? Normal wear and tear refers to damage that occurs due to the normal use of the property by a tenant. Examples of such damage include fading wall paint, loose door handles, gently worn carpets, lightly scratched glass and stained bath fixtures.

Excessive damage, on the other hand, refers to damage to the premises that results from negligence, carelessness, abuse or misuse by a tenant. Examples include broken windows, holes in the wall, broken tiles, pet damage, or missing fixtures.

Walkthrough Inspections

Oregon law does not require landlords to conduct a move-in or move-out inspection. However, many landlords choose to document the property's condition with photographs and written inspection reports to help avoid disputes.

Returning Deposits

As an Oregon landlord, you must refund your tenant’s security deposit, with written accounting of any deductions, within 31 days after moving out. Every landlord must return the portion of the deposit to the tenant either in person or via first-class mail in a timely manner.

Landlords generally mail the deposit to the tenant's last known or forwarding address if one has been provided.

Every landlord must also remember to accompany the security deposit with a written accounting of any deductions they’ve made. The written statement must include the reasons for the money deduction and the approximate cost of repairs.

A court may award twice the amount wrongfully withheld if a landlord intentionally fails to comply with Oregon's security deposit law.

Sale of Property

When a rental property is sold, the current owner generally must either transfer the tenant's security deposit (less any lawful deductions) to the new owner and notify the tenant, or return the deposit directly to the tenant if the tenancy has ended, consistent with Oregon law.

Bottom Line

Our experts at Campus Connection Property Management have decades of experience when it comes to managing investment properties in the Eugene/Springfield area. If you're a landlord looking for a property management company in Eugene, Oregon, get in touch to learn more!

Frequently Asked Questions About Oregon Security Deposit Laws

Can A Landlord Charge Both A Security Deposit And Last Month's Rent?

Yes, Oregon landlords may require both a security deposit and prepaid rent, including last month's rent, if those charges are clearly outlined in the lease agreement. Because these payments serve different purposes under Oregon law, it's important to identify each one separately in your lease and accounting records.

Clear documentation can help reduce misunderstandings and make it easier to manage refunds, deductions, and financial records throughout the tenancy.

What Documentation Should Landlords Keep For Security Deposits?

Good recordkeeping is one of the best ways to support proper security deposit administration. Landlords should retain signed lease agreements, move-in condition reports, dated photographs or videos, invoices for repairs or cleaning, payment records, and copies of any itemized deduction statements provided after move-out.

Organized documentation can help support lawful deductions if questions arise and may simplify accounting for rental property owners managing one or multiple investment properties.

Are Move-In Photos And Inspections Worth Doing If They Aren't Required?

Although Oregon law does not require landlords to perform move-in or move-out inspections, documenting the property's condition is generally considered a best practice.

Photos, videos, and written inspection reports can establish a clear record of the property's condition before occupancy and provide helpful documentation if damage beyond ordinary wear and tear is discovered later. Consistent documentation practices may also streamline maintenance planning and property turnover between tenants.

What Happens If A Landlord Misses Oregon's Security Deposit Deadline?

Oregon law generally requires landlords to return any remaining security deposit and provide an itemized accounting of lawful deductions within 31 days after the tenancy ends and possession is returned.

Missing this deadline can expose a landlord to legal disputes, and courts may impose penalties in certain circumstances if deposits are wrongfully withheld. Rental property owners should have a consistent process for documenting move-outs and preparing deposit accounting promptly.

How Can Property Management Help With Security Deposit Compliance?

Professional property management can help owners establish consistent procedures for collecting deposits, documenting property condition, maintaining records, coordinating repairs, and preparing itemized deductions when appropriate.

Campus Connection Property Management serves rental property owners throughout the Eugene and Springfield area, helping manage day-to-day operations while supporting compliance with Oregon's landlord-tenant requirements. While every situation is unique, standardized processes can help reduce administrative burdens and improve recordkeeping.

Should Eugene Landlords Review Their Security Deposit Policies Regularly?

Yes. Even though Oregon's security deposit laws do not change every year, rental housing regulations and industry best practices can evolve. Reviewing lease language, deposit procedures, documentation practices, and move-out processes periodically can help landlords remain consistent and reduce the risk of compliance issues.

Property owners with multiple rentals or growing portfolios may also benefit from periodic reviews with a qualified property management professional or Oregon real estate attorney.

Disclaimer: Please note that the information provided in this blog is intended for general guidance and should not be considered as a replacement for professional legal advice. It is important to be aware that laws pertaining to property management may change, rendering this information outdated by the time you read it.