Oregon Holding Deposit Rules HB 3521: Six Months In + Portland Screening Integration
- 2 days ago
- 4 min read
Hey Portland-area landlords — six months into the new holding-deposit rules and the Helpline is still lighting up with the same handful of questions. “Can I collect the reservation money when they turn in the application?” “What exactly has to be in that written statement?” “They walked through, found a problem, and now they want their money back — do I have to give it?”
If any of those sound familiar, this is your mid-year reality check. House Bill 3521 amended ORS 90.297 effective for deposits received on or after January 1, 2026. The big shift is simple in concept and surprisingly easy to mess up in practice: you may collect a deposit to secure the execution of a rental agreement only after you have approved the applicant, and only after you have given them a specific written statement. Get the order wrong or skip the paperwork and you open yourself up to having to return the money plus a penalty equal to the greater of the deposit itself or whatever amount the parties agreed to — and the five-business-day clock is short.
The New Sequence Under Oregon Holding Deposit Rules HB 3521
Here’s the only order that works now:
Screen the applicant completely (credit, criminal, rental history, income — whatever your criteria are, applied consistently).
Approve the applicant in writing.
Provide the required written statement that spells out the rent, fees, required deposits, the terms for signing the rental agreement, and the clear conditions under which the deposit will be refunded or retained.
Only then collect the holding deposit.
That’s it. Collecting the money with the application or before approval is off the table. The written statement is not optional window dressing — it is the document that triggers your right to keep the deposit if the applicant walks for non-habitability reasons.
What Must Be in the Written Statement
At minimum the statement needs to cover the rent amount, any fees, the required deposits (including the holding deposit itself), the terms and timeline for actually signing the rental agreement, and the precise conditions for refund or retention. The statute is clear that the deposit is for the purpose of securing the execution of a rental agreement after approval and prior to entering into the rental agreement.
Strongly recommended: pick up the current ORHA Form S7 – Deposit-to-Hold Agreement from the Oregon Rental Housing Association Forms Store. It already contains the post-HB 3521 language (approval-first sequence, written terms, five-business-day refund, material habitability exception under ORS 90.320(1)). Using a standardized, attorney-reviewed form reduces the chance of missing a required disclosure. Grab it here: ORHA Form S7 Deposit-to-Hold Agreement.
When You Must Refund — and the Five-Business-Day Clock
If you fail to execute the rental agreement, or if the applicant rejects because of a material defect relating to the premises’ habitability as described in ORS 90.320(1), you must refund the full deposit within five business days. Delivery can be in person at your office or by standard first-class mail. Miss that window without a legitimate act-of-God excuse and the penalty is the greater of the deposit amount or the amount the parties agreed to in the statement.
Material habitability issues are the serious ones: no working heat in January, major roof leaks causing mold, missing or broken locks that leave the unit unsafe, non-functioning plumbing that creates a health hazard. Cosmetic complaints or “I just don’t like the neighborhood after all” do not trigger the mandatory refund under the habitability exception.
Portland Screening Integration — FAIR and the Minimum Income Table
In the Portland Metro area the state rules sit on top of the city’s FAIR screening ordinance (PCC 30.01.086) and the minimum income requirement table that took effect in May 2026. You still have to process applications in the order received (with limited exceptions), give the required notices, and stay inside the income-to-rent ratios. The holding-deposit sequence does not override those rules — it adds another layer. Screen and approve first, issue the written statement, then collect the deposit. Mixing the timelines is where most of the Helpline calls are coming from.
Common Pitfalls Six Months In
The biggest ones we keep seeing: collecting the deposit with the application “just to hold the unit while we screen,” using an outdated form that still has the old four-day language, failing to document the exact time the written statement was delivered, and treating every walk-through complaint as a habitability defect that requires an automatic refund. Document everything. Timestamp the approval, the statement delivery, and the deposit receipt. Keep copies.
and now a couple shameless plugs
If you want the current landlord forms, the training that keeps you out of these traps, and a community that actually fights for owners at the legislature, join the Portland Area Rental Owners Association (PAROA). Membership gives you the tools and the voice that solo operators simply do not have.
And if you own in the Portland Metro or Central Oregon and you are tired of playing traffic cop with applications, deposits, and move-ins, the team at Northwest Real Estate and Property Management (NWRPM) handles the entire process correctly the first time so you do not have to.
Quick Compliance Checklist
• Screen completely before any deposit talk. • Approve in writing. • Deliver the written statement (use ORHA Form S7). • Collect the deposit only after the statement. • Calendar the five-business-day refund deadline the moment a deal falls through. • Document delivery of every piece of paper or email. • Keep the sequence clean — no shortcuts.
Six months in, the landlords who treat the written statement and the approval-first sequence as non-negotiable are the ones sleeping well. The ones still winging it are the ones calling the Helpline. Choose which group you want to be in. Oregon holding deposit rules HB 3521
Christian Bryant is President of both the Portland Area Rental Owners Association (PAROA) and Northwest Real Estate and Property Management (NWRPM). Join PAROA for the education, landlord forms, networking, and legislative muscle that protect Oregon rental owners. Use NWRPM when you want professional management that already runs the new holding-deposit process correctly every single time.
Sources: ORS 90.297 (as amended by HB 3521), ORS 90.320(1), Portland City Code 30.01.086, ORHA Form S7 (Rev. 1/26), Portland Minimum Income Requirement Table (May 2026).
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