When landlords finalize the interior of a rental, there is often a moment of hesitation before buying furnishings. Is it wise to get a matching pair of lamps if one breaks? Is this sofa robust enough for a rental?
There is always that underlying worry that you'll face damage or tenant problems. But there is a solution, and that's the security deposit. Here are five things you need to know about security deposits in Portland, Oregon.
1. Maximum Deposit Limits
In some parts of the US, the amount you can demand for a security deposit is limited. However, in Oregon, no law specifically mandates security deposit caps.
Nevertheless, an advisory limit is a deposit of 1.5 times the monthly rent. Following these guidelines is worth it, as they'll help ensure you are a fair and responsible landlord in the eyes of the law.
That could help you avoid potential legal disputes with problem tenants later on.
2. Nonrefundable Fees
As a landlord, you must differentiate between security deposits you return to the tenant and nonrefundable fees. Likewise, always clarify this for your tenant to avoid any confusion.
Nonrefundable fees cover separate costs associated with property rentals, such as wear and tear from accepting pets. Sometimes, landlords also include a fee for cleaning.
That's why you should keep these figures separate from a security deposit.
3. Interest Payments
When you receive a tenant's deposit, it stays in a bank account that could earn interest over the lease period; in some states, landlords are required to return that interest payment to the tenant alongside the security deposit when the lease ends.
However, that's not stipulated in Oregon law.
For Portland landlords, this means you won't have the added worry of calculating interest owed. Nevertheless, it is wise to keep that security payment in a bank account different from your personal one.
4. There Are Rules About Withholding Deposits
If you reach the end of a lease with a tenant, you can withhold some of the security deposit. However, you can only withhold money for specific reasons.
For example, you can't withhold money for wear and tear but can withhold funds for property damage. You can also withhold the deposit if the tenant owes you rent.
Always set this out in your rental agreements and ensure it reflects Oregon laws on tenant rights.
5. Deadlines for Deposit Refunds
Once a tenant leaves your property, the clock starts ticking, and you have a finite time to return the money with or without deductions. In Portland, that's 31 days.
That allows you time to inspect the property and itemize any deductions you wish to make.
If you fail to meet this deadline, the tenant can claim their entire security deposit without any deductions, even if there is a potential unearthed issue like property damage.
Security Deposits: Understanding the Law
Security deposits are an essential tool for any landlord. They are there to protect your income and your property. However, it's crucial to stay up to date with the local laws in Oregon.
At PropM, Inc., we take pride in delivering a premium service comprised of an experienced team and an exceptional work ethic. So we can ensure you get the most from your Portland investment property. You can discover more about our services here.
