Navigating the world of security deposits in Oregon can feel like walking a legal tightrope. Whether you are a landlord wanting to protect your investment or a tenant moving into a new home on the bay, understanding the rules under ORS 90.300 is essential for a smooth transition.
At Oregon Bay Properties, we believe in transparency and education. Here is what you need to know about navigating security deposits in 2026.
1. The Golden Number: 31 Days
The most critical rule in Oregon landlord-tenant law is the timeline for returning a deposit. Under ORS 90.300(13), a landlord has exactly 31 days after the tenancy terminates and the tenant delivers possession (turns in the keys) to:
Return the full security deposit; OR
Provide a written, itemized accounting that explains specifically why any portion of the deposit is being withheld.
Pro Tip: If you are a tenant, make sure to provide your forwarding address in writing. If you don't, the landlord is required to mail the accounting to your last known address (the unit you just vacated).
2. What Can Be Deducted?
A security deposit isn't a "bonus" for the landlord; it’s the tenant's money held in trust. According to ORS 90.300(7), deductions can only be made for:
Unpaid Rent: Any outstanding balances from the tenancy.
Damages Beyond "Normal Wear and Tear": This is the most common area of dispute.
Cleaning: Landlords can deduct for cleaning if the unit is left in a worse condition than it was at the start of the tenancy.
Important Note: Under Oregon law, you cannot deduct for "Normal Wear and Tear." This includes things like minor scuffs on walls, carpet fading from sunlight, or worn-out door hinges. Think of it this way: if it happened naturally over time just by living there, it’s probably wear and tear.
3. New for 2026: Holding Deposits
As of January 1, 2026, HB 3521 introduced stricter rules for holding deposits. Landlords can now only collect a holding deposit after approving an applicant. Furthermore, if the tenant backs out because of "habitability defects" (like a broken heater or unsafe locks), the landlord must refund that deposit within 5 days.
4. The "Twice the Amount" Penalty
Oregon law has "teeth." If a landlord fails to provide the itemized accounting or return the deposit within that 31-day window, ORS 90.300(16) allows the tenant to sue for twice the amount wrongfully withheld.
For landlords, this makes meticulous record-keeping a necessity. For tenants, it provides a clear path to justice if a deposit is ignored.
5. Tips for a Hassle-Free Move-Out
To ensure the deposit process goes smoothly, we recommend:
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The Bottom Line
Security deposits don't have to be a source of stress. By following the guidelines in ORS 90.300, both parties can ensure the financial end of a lease is as professional as the beginning.
Looking for a property management team that knows the law inside and out? Contact Oregon Bay Properties today—we handle the details so you don't have to.
