Oregon Security Deposit Laws: No Cap, the 31-Day Return, and Double Penalties

Oregon security deposit law is set almost entirely by one statute — Oregon Revised Statutes section 90.300 — and it works differently from most states. Oregon puts no statewide dollar cap on the deposit, so the discipline comes not from a ceiling but from the return process: a landlord who fails to return the deposit and a specific written accounting within thirty-one days, or who withholds in bad faith, can be liable for twice the amount wrongfully withheld. This guide walks the whole Oregon framework end to end: how much you may collect and why you cannot raise the deposit in the first year, what you can and cannot deduct, the pre-existing-damage rule, the strict carpet-cleaning rule, the thirty-one-day return deadline and written accounting, prepaid last-month’s rent, interest and holding, the Portland limit, and the penalty a court imposes when a landlord keeps a deposit in bad faith.

Whether you own one duplex or a small portfolio, the rules below apply the same way, because Oregon Revised Statutes section 90.300 governs statewide. What varies is the layer a few cities add on top — Portland, for example, limits the deposit in many cases. Where a local rule matters, this guide flags it so you know to check the ordinance for the city where your unit sits. Everything here is general information, not legal advice; confirm the current figures and consult a licensed Oregon attorney before acting on a specific dispute.

Below, a short overview video summarizes the Oregon deposit rules; the sections that follow break down each piece in detail — the no-cap rule and the first-year freeze, deductions versus ordinary wear and tear, the pre-existing-damage and carpet-cleaning rules, the return timeline and written accounting, interest, penalties, the move-out walkthrough, and the small-claims path if a dispute cannot be resolved.

The first thing to understand about Oregon is that there is no statewide dollar cap on a security deposit. Oregon Revised Statutes section 90.300 lets a landlord require a security deposit but sets no maximum, so the amount is largely a market question — unlike states that cap the deposit at one or two months’ rent. Because there is no ceiling, the real discipline in Oregon comes from the return process: the thirty-one-day deadline and the specific written accounting, not from a cap.

That freedom has a hard limit, though. Under Oregon Revised Statutes section 90.300, a landlord may not change the rental agreement to require the tenant to pay a new or increased security deposit during the first year after the tenancy has begun. Whatever deposit you set at signing is the deposit for at least the first twelve months — you cannot demand more mid-year because rent rose or because you decided the original figure was too low. This is one of the most commonly missed rules in Oregon, and demanding a mid-year top-up is a live legal error.

The Portland Local Limit

Local rules can layer a cap on top of the state’s silence. The city of Portland limits security deposits for covered units: where the landlord does not also collect last month’s rent, the security deposit generally may not exceed one month’s rent. Portland’s rules interact with its other landlord obligations and change over time, so if the unit sits inside Portland, treat the deposit amount as a “check the city code” item rather than an open question. Other Oregon cities may adopt their own rules, so confirm the local ordinance wherever the unit is.

Security Deposit vs. Prepaid Last Month’s Rent

Oregon draws a line between a security deposit and prepaid last month’s rent, and the distinction matters. A security deposit secures the landlord against unpaid rent and damage and must be accounted for within thirty-one days of move-out. Prepaid last month’s rent is money earmarked to cover the final month’s rent, credited toward that rent when the tenancy ends — it is not a fund for damage. Label each correctly in the lease. The distinction also drives Portland’s limit, which turns on whether last month’s rent is collected alongside the deposit.

Oregon Revised Statutes section 90.300 limits what a landlord may take from a security deposit. The landlord bears the burden of proving each deduction is legitimate, so anything not clearly permitted is presumed to be the landlord’s cost to absorb.

Permitted Deductions

• Unpaid rent. Rent that remains owed for the final month or any earlier period.
• Unpaid tenant-responsibility charges. Utility or service charges the lease makes the tenant’s responsibility and that remain unpaid at move-out.
• Repair of damage beyond ordinary wear and tear. Broken fixtures, large holes, pet-stained flooring, and similar damage the tenant or their guests caused during the tenancy.
• Carpet cleaning — only under strict conditions. A professional or machine carpet-cleaning charge is allowed only when the specific Oregon conditions below are all met.

The Pre-Existing-Damage Rule

A rule Oregon landlords miss often: you may not deduct for a condition that existed before the tenancy began. A deposit secures against damage the tenant caused, not against the wear or damage that was already there at move-in. This is exactly why the move-in condition record is so important — a signed, dated checklist and photographs establish the baseline, and without it, a landlord who charges for a stain, a scuff, or a broken fixture that was there before the tenant arrived will usually lose the deduction. Document the unit’s condition at move-in and note any pre-existing wear in writing so it can never be charged to the tenant.

Not Deductible — Ordinary Wear and Tear

Ordinary wear and tear is the natural deterioration that happens from living in a unit normally, and the landlord must absorb it. Oregon treats these as non-deductible:

• Faded or lightly scuffed paint, and small nail holes from hanging pictures.
• Carpet worn thin along walkways from ordinary foot traffic, with no stains or pet damage.
• Minor marks, loose grout, or caulk that has aged around tubs and sinks.
• Worn but still-functioning appliances and fixtures that simply reached the end of their useful life.

The deadline Oregon landlords miss most often is the thirty-one-day return rule. Under Oregon Revised Statutes section 90.300, no later than thirty-one days after the tenancy terminates and the tenant delivers possession, the landlord must deliver two things: any portion of the deposit the landlord does not lawfully claim, and a written accounting that states specifically the basis of each claim against the deposit. The clock runs from the day the tenancy ends and the tenant surrenders the unit — keys returned, belongings out — not from the lease date alone.

What the Written Accounting Must Include

The accounting must state the basis of each deduction specifically — a lump-sum figure with no breakdown does not satisfy Oregon Revised Statutes section 90.300 and is treated as if no accounting was given. Name each deduction, give its amount, and tie it to evidence: a dated move-in and move-out photo, a signed condition checklist, and the invoice or estimate behind each repair. A vague accounting is a frequent reason an otherwise reasonable deduction is reversed.

No Forwarding Address? The Clock Still Runs

An Oregon tenant is not required to give a forwarding address, and the absence of one does not pause the thirty-one-day clock. If the tenant leaves no address, mail the deposit and written accounting to the last known address — commonly the rental unit itself — and keep proof of mailing. Do not sit on the funds waiting for an address; the obligation to send the accounting on time still applies.

Oregon has no statewide requirement to pay interest on a security deposit, and no statewide rule that the deposit be held in a separate escrow account. Many Oregon landlords hold deposits in a general account and pay no interest, which is entirely lawful statewide. The money is yours to hold during the tenancy, subject only to the obligation to account for it within thirty-one days.

The caution here is local. A small number of local ordinances around the country impose interest or handling rules, and Oregon’s own local landscape can change, so if the unit sits in a city with its own deposit rules, verify whether any local interest or handling obligation applies. Absent a local rule, treat interest as not required in Oregon — but always confirm the current local law before a return.

Oregon backs the deposit rules with real teeth. Under Oregon Revised Statutes section 90.300, a landlord who in bad faith fails to provide the written accounting or to return the deposit within thirty-one days is liable to the tenant for twice the amount wrongfully withheld. That multiplier is on top of returning whatever was kept without a valid basis.

Bad faith is not merely being wrong about a single deduction. It generally means the landlord acted unreasonably — ignoring the thirty-one-day deadline, inventing charges, giving no accounting or a vague one, or keeping the deposit with no legitimate basis. A landlord who returns the deposit and a clear, specific written accounting on time, with receipts for the charges, is well protected even if one deduction is later disputed. The doubled penalty exists to punish the landlord who treats the deposit as free money, not the one who makes a good-faith judgment call.

Put the rules together and the Oregon move-out becomes a repeatable checklist rather than a judgment call. Follow this sequence and penalty exposure all but disappears.

A thorough move-out record starts at move-in. Use a documented Oregon move-in and move-out checklist and photographs at both ends so you can prove exactly what the tenant caused. When you do withhold, a clean Oregon security deposit itemization form keeps the written accounting organized and defensible.

Most deposit disputes never reach a courtroom, but when they do in Oregon, they usually land in small claims court — a forum designed to be used without a lawyer. As of 2026, an Oregon small claims case may seek up to ten thousand dollars, which comfortably covers a deposit dispute and the doubled penalty in most cases. Verify the current limit, which the Legislature adjusts over time.

The pattern is consistent: Oregon deposit cases are won on paper. The landlord who documents condition at both ends, avoids charging for pre-existing wear, states each deduction specifically, attaches receipts, and mails on time rarely loses — and the tenant who keeps their own photos and a copy of the written accounting is equally well positioned to recover a wrongful withholding.

Beyond a routine move-out, a handful of situations trip up Oregon landlords because the deposit rules interact with other events. Three come up often.

When the Property Is Sold

If a landlord sells the rental, the deposit obligation does not simply vanish. Oregon law provides for the deposit to be handled on transfer — the seller either transfers the remaining deposit (after any lawful deductions) to the new owner, the successor in interest, or accounts for it to the tenant, and the tenant should be told who now holds the deposit. This matters to buyers too: a landlord buying an occupied Oregon property should confirm in escrow that deposits are transferred and documented, because the obligation to return the deposit follows the tenancy. Verify the current transfer requirements before closing.

Roommates and a Single Deposit

Where several tenants share a lease and a single deposit, Oregon treats the deposit as one sum tied to the tenancy, not as separate shares. When one roommate leaves and another stays, the landlord’s thirty-one-day obligation is generally triggered only when the tenancy as a whole ends and the unit is surrendered — not each time one roommate moves out mid-lease. Sorting out each roommate’s share of a refund is usually a private matter among the tenants. Landlords should return the single deposit to the tenants collectively unless the lease or a written agreement directs otherwise, and avoid getting drawn into splitting it.

The First-Year Freeze and a Rent Increase

Because Oregon forbids a new or increased deposit in the first year, a landlord cannot use a permitted rent increase as a reason to demand more deposit mid-year. Even after year one, a lawful deposit increase gives the tenant at least three months to pay — it is never a lump-sum demand. Landlords weighing a rent increase should review the separate rules that govern it — see our guide to Oregon rent increase laws — and should not treat a permitted rent bump as a license to top up a sitting tenant’s deposit. Set the deposit correctly at signing and leave it there.

Every rule above ultimately turns on proof. Oregon places the burden on the landlord to justify each deduction, which means the landlord who cannot document a charge loses it — regardless of whether the damage was real. Build the evidence file across the whole tenancy, not at the end.

At Move-In

• A written condition checklist, room by room, signed and dated by the tenant.
• Timestamped photos or video of every wall, floor, fixture, and appliance, stored where the date cannot be doubted.
• A written note of any pre-existing wear, so it is never later charged to the tenant — the direct answer to Oregon’s pre-existing-damage rule.
• Proof the carpet was professionally cleaned or replaced before move-in, if you intend to rely on the carpet-cleaning charge.

During the Tenancy

• A dated log of every maintenance request and the landlord’s response, which also rebuts a habitability defense — see Oregon habitability laws.
• Records of any lawful entry to inspect or repair, made with proper notice under Oregon entry rules — see Oregon landlord entry laws.

At Move-Out

• A second set of timestamped photos taken at surrender, to compare against move-in.
• Invoices, receipts, or a documented cost for every charge, tied to a specific line in the written accounting.
• Proof that the written accounting and refund were mailed within thirty-one days.

The cheapest deposit dispute is the one that never happens. A few disciplined habits protect an Oregon landlord across an entire portfolio.

• Document move-in exhaustively. A signed checklist and dated photos of every room create the baseline that decides every future deduction — and defeat any charge for pre-existing wear.
• Set the deposit at signing, and never raise it in year one. Oregon forbids a mid-year increase in the first year, and Portland caps the amount in many cases.
• Label deposit and prepaid rent separately. They are governed differently, and Portland’s limit turns on whether you collect last month’s rent too.
• Only charge for carpet cleaning if all three Oregon conditions are met. Machine-cleaned, cleaned before move-in, and a lease clause — or do not charge.
• Calendar the thirty-one-day deadline at surrender and mail the specific written accounting with proof, well before it expires.
• Screen carefully before you ever hand over keys. The tenants most likely to leave a unit in disputed condition are often the ones a thorough screening would have flagged.

That last point is where most disputes are actually won — before the lease is ever signed. A prior eviction, a pattern of damage, or unstable finances rarely appears out of nowhere; it usually leaves a trail an applicant’s history reveals. Screening for it is the single highest-leverage habit an Oregon landlord can build.

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