Tenant Security Deposits under Oregon and Washington Law

Among the more common inquiries we receive from tenants in both Oregon and Washington relate to security deposits that they are required to provide in order to lease residential property.  The legal duties and requirements regarding tenant security deposits can be found in the two states’ respective landlord-tenant acts.  Oregon’s Residential Landlord and Tenant Act (the “Oregon Act”) is found in Chapter 90 of the Oregon Revised Statutes.  Washington’s Residential Landlord-Tenant Act of 1973 (the “Washington Act”) is found in Chapter 59.18 of the Revised Code of Washington.

The following are among the most common questions we receive from tenants:

How much of a deposit can a landlord require?

Neither the Washington Act nor the Oregon Act place a limit on the amount of the security deposit a landlord can require.

What is required of a landlord in order to receive a deposit?

Oregon: The landlord must provide a receipt for any security deposit paid by a tenant.  If there is a written lease agreement between the parties, the agreement must list the security deposit paid by the tenant or required by the landlord.

Washington: If a tenant pays a security deposit in cash, the landlord must provide a receipt; for payments made other than in cash, a landlord is to provide a receipt upon tenant’s request.  The Washington Act also requires:

• A written lease agreement which includes the terms and conditions under which any portion of the deposit may be withheld by landlord upon termination of the lease; and,

• Landlord must provide a written checklist or statement which specifically describes the condition and cleanliness of the premises and furnishings at commencement of the lease, including the walls, floors, countertops, drapes, furniture and appliances. The checklist or statement must be signed and dated by landlord and tenant and tenant must be provided with a copy of the signed checklist or statement.

What must a landlord do with the security deposit it receives?

Oregon: There is no specific requirement under the Oregon Act other than that the landlord must “hold the security deposit for the tenant” who is a party to the lease agreement.  If the landlord sells the premises, it remains responsible to the tenant for any security deposit it previously received.

Washington: The Washington Act requires landlord to place the security deposit in a trust account it maintains with a financial institution or licensed escrow agent located in Washington.  Landlord is to provide tenant with written notice of the name and address of the location of the trust account.

Can the landlord require tenant to increase the security deposit during the lease term?

Oregon: Landlord may not increase the deposit during the first year of a tenancy. After the first year, if landlord does require a new deposit or increases the amount, tenant must be allowed at least three months in which the pay the new or increased deposit.

Washington: There is no corresponding provision, so landlord’s right to require an increase would depend on the terms of the lease agreement.

Under what circumstances can landlord use the security deposit?

Oregon: Landlord can apply the security deposit to: (1) remedy tenant’s defaults in the performance of the lease, including unpaid rent; and, (2) to repair damages to the premises caused by tenant, but not for damages attributable to ordinary wear and tear.

Washington: The Washington Act is somewhat less specific and states that the landlord can use the deposit “for performance of the tenant’s obligations” under the lease agreement.

When must landlord return the security deposit?

This is among the most common questions we receive in regard to security deposits.  The requirements governing the release of security deposits by landlords are strictly enforced by courts.

Oregon: The landlord must provide tenant with a written accounting of, and refund the unused portion of, the security deposit within thirty-one (31) days after the end of the lease. If any portion of the security deposit is withheld by landlord for purposes of repairing damages to the premises or remedying other tenant defaults under the lease, the written accounting must include the basis for the amount withheld.

Washington: Landlord has twenty-one (21) days after termination of the lease to mail to tenant’s last known address any refund due and “a full and specific statement” with respect to amounts withheld.

What if landlord doesn’t comply with these requirements?

Oregon: Landlord can be liable for twice the amount of the security deposit withheld if it fails to provide the written accounting within 31 days or if withholds amounts in bad faith.

Washington: Landlord is liable for the full amount of any deposit if it fails to provide the required statement in the required time.  The landlord is also barred in any legal proceeding brought by the tenant to assert any claim or raise any defense for keeping any of the deposit.  The court has discretion to award a tenant up to two times the amount of the deposit if the landlord intentionally refuses to provide the statement or issue the correct refund.

Both the Washington Act and the Oregon Act provide for an award of attorney fees to the prevailing party in any such dispute.

Where can I find these statutes?

Oregon: The Oregon Act’s requirements regarding security deposits can be found at ORS 90.300.

Washington: See RCW 59.18.260 through 59.18.280.

© 8/23/2017 Charles A. Ford of Hunt & Associates, P.C.  All rights reserved.