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ORHA Update: Increasing Security Deposits

04/25/2023 4:41 PM | Anonymous

By Tia Politi, Oregon Rental Housing Association President

We’re in the last couple of months of the session and politics is at a fever pitch. Recently HB 2001 was signed by the Governor, at the end of March, substantially changing the time frame for eviction for nonpayment of rent. Read the article by Eugene attorney Brian Cox for a full run-down of the changes, and check out the legislative update elsewhere in this newsletter for the latest news coming out of Salem. Thank you for helping by submitting testimony to your elected representatives. It really does make a difference!

Because it will now take much longer to evict a tenant for nonpayment, I want you all to think about changing a couple of things. First, I think it is wise to start requiring a minimum base deposit of two months’ rent because that’s how long it could take to evict for nonpayment. As restrictions get tighter, I also recommend tighter screening standards. No more second chances.

I also want to draw your attention to a little-known landlord option: increasing the security deposit. What? You can do that? Yes, you can!

ORS 90.300(5)(a) Except as otherwise provided in this subsection, 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. Subject to subsection (4) of this section, the landlord may require an additional deposit if the landlord and tenant agree to modify the terms and conditions of the rental agreement to permit a pet or for other cause and the additional deposit relates to the modification. This paragraph does not prevent a landlord from collecting a security deposit that an initial rental agreement provided for but that remained unpaid at the time the tenancy began.
(b) If a landlord requires a new or increased security deposit after the first year of the tenancy, the landlord shall allow the tenant at least three months to pay the new or increased deposit.

We have a newer form, Notice of Security Deposit Increase – ORHA form #O14, that can help you accomplish this. Like the law says, you must provide a minimum of 90 days to pay the increased amount and you can always give more time if you wish. I recommend that landlords consider this option if you have renters who chronically pay late. This is also a good tool to cover damage caused by the tenant that doesn’t make sense to repair now. Just increase the deposit to cover the damage so you have enough at the end to cover the costs.

Having said that, it’s always important to remember that everything we do under landlord-tenant law must be reasonable and we must act in good faith. When you’re looking at doing something like increasing the security deposit, you should always imagine yourself standing in front of a judge explaining your decision-making process. What is the basis for the increase? Is the additional amount you are requesting reasonable based on the factors at hand? If you feel that you can justify the increase, then do it.

The good news about HB 2001 for landlords and tenants alike is that the state is creating a rent assistance fund that will be administered through Oregon Housing and Community Services. As someone who’s in eviction court a lot, there are people for whom this is going to make a huge difference. Assistance may be able to bridge the gap between losing a job and getting a new one, overcoming an illness, or repairing a broken vehicle. Remember that you must cooperate with an assisting agency, or your tenant will have a defense to eviction. If the tenant’s application is successful, you should be reimbursed for all costs incurred to that point and maybe some forward rent as well.

12725 SW Millikan Way #300, Beaverton, OR 97005
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