It is important to realize that changes may occur in this area of law. This information is not intended to be legal advice regarding your particular problem, and it is not intended to replace the work of an attorney.
Security deposit basics
Most residential landlords can require tenants to pay certain fees or deposits. The most common deposit 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. Moreover, your landlord can only charge you for repairs that he or she documents. In Oregon there is no minimum or maximum amount your landlord can charge for the security deposit. Your landlord does not have to pay you the interest gained on your security deposit.
You should carefully inspect and document the condition of the rental unit before moving in or out. Photographs and witnesses can be helpful in settling disputes later on.
Can the landlord increase the amount of my deposit?
During the first year of the tenancy, you 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 are 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 has to 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, 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.
Your landlord may also charge a fee for anticipated cleaning or other anticipated purposes. In order to charge such a fee, your landlord must clearly document what the charge is for. There is no maximum or minimum amount for fees; however, a landlord has a duty to act in good faith in all transactions with tenants by only charging reasonable fees. Although a landlord has no duty to refund cleaning or other such fees, a landlord who charges both a fee and a security deposit must first apply any fee to the related landlord expense before applying the tenant’s security deposit to that expense.
Prepaid rent is another common deposit landlords require. 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.”
You may apply the 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 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. 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.
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.
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.
A landlord may charge a prospective tenant an applicant screening fee. This fee covers the cost of obtaining information on the rental unit applicant. 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 $100 plus the amount of the applicable screening fee charged.
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 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 $100 plus the deposit charged.
With only a few exceptions, a landlord may charge the above-described fees only once per tenancy. The exceptions are:
- late rent fees;
- a fee for dishonored checks; and
- a penalty for a tenant’s tampering with a working smoke detector, if a written rental agreement provides for such a penalty; and
- Your landlord may require payment from you for utilities, 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.
Legal editor Jason Posner, June 2010