Oregon bill would make landlords give back rent deposit or pay fee if home found defective
Sen. Deb Patterson, D-Salem, at the Oregon Legislature on Feb. 12, 2024. (Jordan Gale/Oregon Capital Chronicle)
Oregon rental applicants who haven't yet signed a lease could soon get their security deposits back if they find the home they've applied to is defective.
House Bill 3521, now headed to Gov. Tina Kotek's desk, would let Oregon renters get their security deposits back if the home they've applied to has mold, unsafe electrical wiring or other defects making it uninhabitable. The bill already passed the Oregon House in a 33-18 vote in April, and on Thursday it passed the Oregon Senate in a 20-8 vote.
Under the bill, landlords would have five days to return deposits or face a fee equivalent to the deposit they charged. Landlords would not face penalties if natural disasters or emergencies keep them from complying, and they could still choose to return deposits at their place of business rather than through mail.
Rep. Annessa Hartman, D-Gladstone, spearheaded the bill after hearing from renters across Oregon who lost hundreds, sometimes thousands, of dollars to hold deposits for homes they couldn't move into because of mold, broken plumbing or pest infestations.
Renters in Oregon represent 51% of all low-income households, according to Oregon Housing and Community Services. And nearly 37% of Oregonians rent their homes, according to the U.S. Census. That's higher than the national average, and renters are in the majority in cities including Eugene, Corvallis, Monmouth, Beaverton and Seaside.
'Landlords can still enter into whole deposit agreements, collect deposits and keep them when applicants back out without a good reason,' Senate sponsor Deb Patterson, D-Salem, said on the floor. 'That doesn't change. What does change is that applicants will have the right to walk away if the unit is substantially uninhabitable.'
No senator debated against the bill on Thursday. If enacted, the bill would apply to deposits received on or after Jan. 1, 2026.
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