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Key Takeaways
Oregon does not set a statewide limit on security deposit amounts, but local ordinances may apply, and state law strictly regulates how deposits are handled.
Landlords must provide a written receipt for any security deposit and follow detailed rules on allowable deductions, including unpaid rent, damage beyond normal wear and tear, and necessary cleaning.
Security deposits must be returned within 31 days after the tenancy ends, along with an itemized statement for any deductions.
Proper documentation at move-in and move-out, including inspections and photos, plays a key role in supporting lawful deductions and protecting your rental business.
Did you know Oregon does not cap how much a landlord can charge for a security deposit at the state level? However, local ordinances can change that.
Security deposits are one of the most important tools landlords have to reduce risk, protect their property, and encourage responsible tenant behavior. When handled correctly, they help prevent disputes and keep rental operations running smoothly.
For a landlord, collecting a security deposit from a tenant offers many benefits. They include:
Coverage for unpaid rent after move-out.
Protection against damage beyond normal wear and tear.
Incentive for tenants to care for the property.
Clear expectations around move-in and move-out responsibilities.
Understanding how Oregon regulates security deposits is not optional. State law is very specific about receipts, deductions, and deadlines.
Missing a step can lead to penalties, including the landlord owing the tenant twice the amount withheld, even when the landlord acted in good faith.
Centurion Real Estate Management put together this article to help Oregon landlords understand the rules, avoid common mistakes, and manage deposits the right way from day one.
Oregon Security Deposit Law Explained
Here is a clear and practical guide to Oregon’s security deposit laws, written specifically for landlords operating in this state.
Fees and Nonrefundable Charges
Oregon law is very restrictive regarding nonrefundable fees. Landlords generally cannot charge "nonrefundable cleaning fees" or "administrative fees" at the start of a tenancy.
Most one-time fees are prohibited unless they are specifically authorized by statute (such as late fees, smoke detector tampering fees, or pet deposits).
If you wish to cover cleaning costs, those must be deducted from a refundable security deposit based on actual cleaning needs after the tenant moves out.
Storing a Tenant’s Deposit in Oregon
While landlords are not required by state law to put deposits into interest-bearing accounts, licensed property managers are required by the Oregon Real Estate Agency to maintain security deposits in a designated Client Trust Account.
Written Notice and Receipts
Unlike many other states, Oregon law requires landlords to provide a tenant with a written receipt for any security deposit paid. This is a mandatory step to ensure transparency and proper recordkeeping for both parties.
Reasons to Withhold a Tenant’s Security Deposit in Oregon
Oregon law allows landlords to keep all or part of a tenant’s security deposit for specific reasons. Common allowable deductions include:
Unpaid rent or late fees owed under the lease.
Damage beyond "normal wear and tear".
Cleaning costs are needed to restore the unit to the level of cleanliness it was at the start of the tenancy.
Repair or replacement of items and fixtures damaged by the tenants.
Expenses incurred to restore the property after any unapproved alterations made during the tenancy
Landlords cannot use the deposit to cover damage or conditions that existed before the tenant moved in. This is why thorough move-in documentation and photo evidence are critical.
A Walk-Through Inspection
Oregon law allows for a walk-through inspection when a tenant moves out. If an inspection is requested, the landlord must provide at least 24 hours’ notice (unless a different period is agreed upon) before the inspection.
This gives the tenant a chance to identify and potentially remedy issues before deductions are finalized.
Security Deposit Refund in Oregon
Once the tenancy terminates and the tenant delivers possession of the unit, Oregon landlords have 31 days to return the security deposit, either in full or partially. If any portion is withheld, the landlord must provide an itemized written statement explaining each deduction.
If the landlord fails to meet this 31-day deadline, the tenant may be entitled to recover twice the amount that was wrongfully withheld, along with any attorney and court costs incurred.
Change in Property Ownership
When a rental property changes ownership, the outgoing landlord must either:
Please return the tenant’s security deposit, less any applicable lawful deductions, and inform the new owner once this has been completed.
Transfer the deposit to the new owner and notify the tenant in writing of the new owner’s name and contact address.
Conclusion
Oregon’s security deposit laws offer landlords flexibility in setting amounts, but they enforce strict procedural requirements regarding receipts, fee prohibitions, and refund timelines.
Complying with these rules, especially the 31-day refund window and the mandatory receipt requirement, helps protect your investment and minimizes the risk of costly legal disputes.
If you have specific questions, it may be wise to partner with a knowledgeable property management company.
Centurion Real Estate Management assists landlords with security deposit handling, inspections, recordkeeping, and overall compliance with Oregon regulations.
To simplify your rental operations and improve tenant relations, contact Centurion Real Estate Management and let experienced professionals manage the details.
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.
