Got questions about the security deposit? Navigating the rental market in Portland has always required a bit of local know-how. Still, since the implementation of the Fair Access in Renting (FAIR) Ordinance, the rules of the game have changed significantly. Designed to reduce barriers for renters and increase transparency, the FAIR Ordinance introduced some of the strictest security deposit regulations in the country.
Whether you are a landlord trying to remain compliant or a tenant looking to protect your deposit, here is a comprehensive breakdown of what you need to know.
Fair Ordinance And The Security Deposit
One of the most immediate impacts of the FAIR Ordinance is the limit on how much a landlord can charge upfront. Under the ordinance, the maximum security deposit is strictly regulated based on whether “last month’s rent” is collected:
- If last month’s rent is required: The security deposit cannot exceed half of one month’s rent.
- If last month’s rent is NOT required: The security deposit is capped at one whole month’s rent.
- Conditional Approvals: If a tenant is approved with conditions (e.g., due to credit or rental history), a landlord may charge an additional deposit of up to half a month’s rent, but must allow the tenant to pay it in installments over three months.
2. The Move-In Condition Report
The “he-said, she-said” era of apartment damage is over. Landlords are now required to provide a highly detailed Condition Report and an itemized list of all fixtures, appliances, and equipment.
- Timeline: Landlords must provide this report at move-in. Tenants then have 7 days to review, add their own notes/photos, and return it.
- Photographic Evidence: Landlords must take and share photographs of the unit’s condition at the start of the tenancy.
- The Golden Rule: If an item (like a microwave or specific flooring) is not listed in the original rental agreement or condition report, the landlord cannot deduct money from the security deposit to repair or replace it later.
3. Strict Handling of Funds
Your security deposit can no longer sit in a landlord’s personal savings account. The FAIR Ordinance mandates that:
- Deposits must be held in a segregated, federally insured account.
- The rental agreement must state the name and address of the financial institution.
- Interest Matters: If the account earns interest, that money belongs to the tenant. Landlords may retain 5% of the interest for administrative costs, but the remaining amount must be returned to the tenant upon move-out.
4. New Rules for Withholding Funds
When it comes time to move out, landlords are restricted in how they calculate “damages.”
- Ordinary Wear and Tear: You cannot charge for routine maintenance, “normal” wear, or cleaning unless it is “in excess of ordinary wear and tear.”
- The “Discrete Impacted Area” Rule: For flooring or carpet, landlords can only charge for the specific area damaged. If there is a stain in one corner, you can’t charge to replace the carpet for the entire house.
- Depreciation (The 2022 Update): Originally, FAIR required a complex depreciation schedule. While a 2022 amendment removed the requirement to use a city-mandated schedule, landlords must still be reasonable and cannot charge the “new” price for a 10-year-old appliance.
5. Timelines and Penalties
The clock starts ticking the moment a lease ends.
- 31 Days: Landlords have 31 days to return the security deposit and/or provide a written, itemized accounting of any withholdings.
- Rental History: Within 5 business days of a termination notice, landlords must provide tenants with a written rental history for the previous two years.
The Stakes: Failure to comply with these rules isn’t just a minor oversight. Landlords who violate the FAIR Ordinance may be liable for actual damages, up to $250 per violation, and attorney’s fees.
Summary for Success
- For Tenants: Keep a copy of your signed Condition Report and take your own “timestamped” photos on the day you get your keys.
- For Landlords: Ensure your lease agreements explicitly list every appliance and fixture you want covered by the deposit.
The FAIR Ordinance may seem complex, but it aims to create a more predictable and professional relationship between Portland’s property owners and residents.
Contact 4 Rent Local
Frustrated with the security deposit, or property management? Let our Portland Oregon Property Management ream save you the day-to-day hassle of managing your properties yourself.
Contact us today to learn about the services we can offer you by calling (503) 646-9664 – Talk to a Live Person – Our office answers the phone 9 AM to 5 PM Monday through Friday – or click here to connect with us online.
