Security deposit basics
Deposits are amounts of money that a tenant gives to the landlord with the understanding that the money will be returned at the end of the tenancy, as long as the tenant has paid the landlord all the money the tenant owes, and the tenant has not caused damage to the home.
The most common deposit a landlord may require is a security deposit. Security deposits protect the landlord if the tenant fails to pay the rent or causes damage to the rental premises beyond ordinary wear and tear. Your landlord cannot charge you for normal wear and tear. In Oregon there is no minimum or maximum amount your landlord can charge for the security deposit. A landlord is required to provide a tenant with a receipt for the security deposit. Your landlord does not have to pay you the interest earned on your security deposit.
You should carefully inspect and document the condition of the rental unit before moving in, and again before moving out. Photographs and witnesses can be helpful in settling disputes later on.
Last Month’s Rent Deposit
Many landlords also require tenants to prepay money for their last month of rent. Prepaid rent is any payment required by the landlord for a monthly or weekly rent obligation that is not yet due. It is often referred to as the “last month’s rent.”
If you pay your landlord a last month’s rent deposit, you may apply that prepaid rent to your last month in the unit. If you move out owing rent, however, your landlord may take the rest of what you owe in rent from your prepaid rent. Your landlord must give you the balance of your prepaid rent — and a written explanation of what was kept and why — within 31 days after the termination of the tenancy and the delivery of the rental unit to the landlord. Your landlord may not apply prepaid rent towards anything other than unpaid rent. If your landlord wrongfully keeps part or all of the money, you have up to one year to settle the matter or file a lawsuit for up to twice the amount of the money your landlord kept.
Can the landlord increase the amount of my deposit?
During the first year of the tenancy, your landlord may not require you to pay a new or increased security deposit unless you and the landlord agree to modify the terms of the lease; in that case the additional security deposit must relate to that modification. For example, if you want a pet and your landlord agrees to let you have a pet in the unit, he or she has the right to increase your deposit. Without such a modification to the lease, if your landlord requires you to pay an additional security deposit after you have been in the rental premises for a year or more, you have at least three months to pay the increase.
Getting the security deposit back
Your landlord must return your deposit within 31 days after the termination of the tenancy and the delivery of the rental unit to the landlord. (Note that both conditions must be satisfied before the 31-day clock starts ticking). If your landlord keeps any part of your deposit, he or she must notify you in writing and tell you why. This notice, which is also called an accounting, along with any portion of your deposit that is being refunded, must be personally delivered or mailed within 31 days. If your landlord wrongfully keeps part or all of the money, you have up to one year to settle the matter or file a lawsuit for up to twice the amount of the money your landlord kept.
A “Hold” Deposit
A landlord who has agreed to rent to you may ask for a “hold” deposit under some circumstances. This kind of deposit provides the landlord with some security if you decide not to move in. To charge this deposit, the landlord must give you a written statement describing the conditions for holding or refunding the deposit.
If you move into the unit, the landlord must either apply this deposit to the rent or refund it immediately to you. If you do not move in due to your failure to comply with the written statement, the landlord may keep the money. If the landlord does not make the rental available due to his or her failure to comply with the written statement, the landlord has four days in which to allow you to collect the deposit or to mail it to you. A landlord who does not follow the rules for “hold” deposits is liable to the tenant or applicant for $150 plus the deposit charged.
Fees: You Do Not Get These Back
Unlike deposits, fees are amounts of money paid to a landlord that will not be returned. A landlord may only charge fees if those fees are specifically allowed by Oregon law and if those fees are described in a written rental agreement. If you have only a verbal rental agreement with your landlord, the landlord may not charge you any fees.
A. Abandonment or Early Termination Fee
Your landlord may charge a fee if you abandon your home during a fixed-term lease without cause. The fee may not exceed one and one-half times the monthly rent. This fee shall not apply to certain members of the military called into service or victims of domestic violence or abuse. If you potentially fall into one of the categories and are thinking about abandoning your fixed-term lease, you should consult an attorney.
B. Late Fee
When your rent payment is late, your landlord may charge a late fee. Your rental agreement must describe how the late charge is calculated, the date on which the rent payment is due, and the date on which a late fee becomes due. Your landlord must wait at least four days after rent is due to charge you a late fee. Nonpayment of a late charge alone is not grounds for eviction for nonpayment of rent. (An exception is that in mobile home facilities, repeated late payments can be grounds for eviction.) Nonpayment of a late charge may be grounds for a 30 day for-cause eviction.
There are limits on how big a late fee can be. A late fee cannot exceed:
A reasonable flat amount, charged once per rental period; “reasonable flat amount” means the typical late fee charged by landlords for the particular rental market of your home;
A reasonable amount charged on a per-day basis beginning on the 5th day of the rental period. This per-day charge cannot exceed 6 percent of the “reasonable flat amount” described above; or
Five percent of your periodic rent, charged once for each five-day period beginning on the fifth day of the rental period.
Your landlord is not allowed to apply part of a rent payment to a previous late fee in order to charge you even more late fees.
Your landlord may impose interest charges on unpaid late fees. The interest must be simple interest that isn’t higher than the rate allowed for court judgments. If your landlord improperly charges late fees or interest, he or she may be liable to you for violations of the landlord-tenant statutes and state debt collection laws.
C. Screening Fee
A landlord may charge a prospective tenant an applicant screening fee. This fee covers the cost of obtaining information on the rental unit applicant. Screening fees typically cover the cost of checking references and obtaining a credit report. The landlord must tell an applicant in writing what the screening investigation will involve, the landlord’s screening criteria, how much the screening will cost, and the applicant’s right to dispute the accuracy of any information provided to the landlord by a screening company or credit reporting agency. The fee cannot be more than the average actual cost of screening applicants, and the landlord must give you a receipt for the fee.
If the landlord denies the application entirely or partly based on information from a screening agency or credit reporting agency, the landlord must tell you at the time of the denial that the information from the screening agency or credit reporting agency is the reason. Unless already given to you, the landlord must then give you the name and address of the screening agency. You have the right to dispute any inaccurate information.
If no units are available, a landlord may not charge a screening fee unless you agree otherwise in writing. If the landlord charges you a screening fee and then doesn’t screen you, he or she has to return the application fee within a reasonable time. In addition, if the landlord does not screen you and doesn’t return the fee to you within a reasonable time — or if the landlord fails to abide by the landlord-tenant laws governing the screening process and does not accept you as a tenant within a reasonable time — you may have a claim against the landlord for $150 plus twice the amount of the applicable screening fee charged
D. Other Fees
Except for the late rent fees, a landlord may charge the fees described above – fees for early termination and the screening fee — only once per tenancy. Like late rent fees, a landlord may charge the following fees more than once per tenancy, so long as they are in writing as part of the rental agreement:
a fee for dishonored checks;
a penalty for a tenant’s tampering with a working smoke detector or carbon monoxide alarm;
a fee no greater than $50 for the violation of a written pet policy or other written rule relating to the premises;
a fee for the violation of a rule or policy covering the nonpayment of utility service charges; the failure to remove pet or service animal waste; the failure to remove garbage; parking violations and the improper use of vehicles; smoking in a nonsmoking area; or keeping an unauthorized pet. A landlord may not charge a fee for the first time such a violation occurs; the landlord must instead provide a written notice describing the violation and advising that a second violation can mean a fine of up to $50 (except for unauthorized pets, where the fine can be up to $250). For third or later violations, the fine can be up to $50 plus 5 percent of the monthly rent. A landlord may not fine a tenant and terminate a tenancy for the same violation.
payment for utilities, public service charges, television cable service and other services if you signed a rental agreement that makes you responsible for the costs. This kind of payment is called a service charge. Your landlord can add a small, additional charge for some limited services such as cable television and direct satellite service.
If your home is within a homeowners’ association and your written rental agreement describes an association assessment imposed for expenses related to moving in or out of a unit, your landlord may charge that assessment to you.
In certain tenancies, your landlord may be allowed to require you to purchase renter's liability insurance with up to $100,000 in coverage, but your landlord may not require you to purchase such insurance from a particular company.
With only a very few exceptions, the landlord may not charge any other fees to the tenant. This prohibition includes cleaning fees, for instance; the practice of charging tenants a cleaning fee is no longer permitted.
Legal editor: Troy Pickard, January 2016