Oregon's New 2026 Early Lease Termination Rules Under HB 2134: How Landlords Can Protect Fixed-Term Leases and Avoid Unexpected Vacancies

Christian Bryant
4 days ago
5 min read

Mr Portland Landlord video summary of this article

We're barely two weeks into 2026, and already one of the big changes from the 2025 legislative session is hitting us right where it hurts: the reliability of those fixed-term leases we all count on for steady cash flow. I'm talking about Oregon HB 2134 early lease termination, the new law that gives tenants a fresh way to end a fixed-term lease early—without penalties—if we issue a non-renewal or certain termination notice first.

Empty rental unit symbolizing potential vacancy from Oregon HB 2134 early lease termination by tenant. — Unexpected mid-lease vacancies are a key risk under the new rules—plan ahead to avoid them.

Look, nobody likes surprises, especially when that surprise is a mid-lease vacancy in the middle of Oregon's rainy season, complete with turnover costs and lost rent. But knowledge is power, folks. This change isn't the end of fixed-term leases, but it does mean we need to get smarter about timing, communication, and incentives. Let's break it down together, step by step, so you can protect your investments and keep those units filled.

Quick Summary of the New Early Lease Termination Rule in Oregon

Starting January 1, 2026, HB 2134 adds a new tenant right under Oregon's Residential Landlord and Tenant Act. If you're in a fixed-term tenancy and you (the landlord) deliver a notice terminating the tenancy at the end of the fixed term—think your standard non-renewal notice or a qualifying landlord reason under ORS 90.427—the tenant can now respond with their own written notice to end the lease early. They just need to give at least 30 days' notice, and once they vacate on their specified date, they're off the hook for any further rent or early termination fees.

Important note right up front: This applies only to fixed-term rental agreements entered into on or after January 1, 2026. If your current lease was signed before that date, the old rules still govern—you can generally enforce the full term even if you issue a non-renewal notice. But as we start renewing or signing new leases this year, this will kick in.

What Triggers the Tenant's Right to Early Lease Termination Under HB 2134?

The trigger is specific: It has to be a landlord notice under ORS 90.427(5) that terminates the tenancy on or after the fixed-term expiration date.

That typically means:

A 90-day (or longer) non-renewal notice for a qualifying landlord reason notice, like selling the property, major renovations, or family move-in (with the required longer notices in some cases).

Landlord delivering non-renewal notice to tenant in Oregon rental home, illustrating HB 2134 early lease termination trigger. — Timing your notices carefully can help minimize risks under the new Oregon HB 2134 early lease termination rules.

If you haven't issued one of these notices, the tenant doesn't get this new right. Simple cause terminations or other notices don't trigger it.

Tenant Notice Requirements and Landlord Obligations

The tenant's notice must be in writing, delivered to you, and specify a termination date at least 30 days out. They owe rent only through the date they actually vacate (assuming they return keys and possession properly). After that? No more rent due, and you absolutely cannot enforce any lease clause requiring payment through the original end date or charging an early termination fee if they're using this HB 2134 right.

No Early Termination Fees or Penalties Allowed

That's right—any "lease break" fee or liquidated damages clause in your agreement becomes unenforceable in this scenario. The law explicitly prohibits collecting those if the tenant terminates under this provision.

The Real Impact on Us Landlords

This reduces the guaranteed occupancy we used to rely on with fixed-term leases. Issue a non-renewal notice too far out, and a tenant might decide to jump ship early—leaving you with an unexpected vacancy, cleaning costs, advertising, and lost income. In a market where good tenants are gold, this adds risk to planning renovations, sales, or just deciding not to renew.

Proactive Strategies to Protect Your Fixed-Term Leases

The good news? We can adapt. Here's how I've been advising members to minimize surprises:

Time your non-renewal notices carefully. If possible, wait until closer to the lease end before issuing that notice. Oregon law requires advance notice (often 90 days), but don't send it months earlier than necessary—every extra day gives the tenant more window to counter with their 30-day exit.
Offer renewal incentives early. Reach out 120-150 days before expiration with attractive offers: a small rent discount, upgrade allowance, or even a gift card for renewing. Frame it positively—"We'd love to have you stay another year!"—and get that new fixed-term signed before any talk of non-renewal.
- Sample incentive language you could include in a renewal offer letter: "As a valued tenant, we're pleased to offer you a renewal for another 12 months at the current rent rate (or $50/month reduction) if you sign by [date]. This locks in your rate and avoids any need for end-of-term notices."
Proactive planning checklist: Use incentives and smart timing to retain tenants and protect against early vacancies.
Consider converting strong tenants to month-to-month. Yes, it gives you more flexibility to end with proper notice later, but it also removes the fixed-term "protection" that now comes with this tenant counter-right. Weigh the pros/cons based on the tenant.
Document everything meticulously. Keep records of all communications—disputes over whether you actually issued a triggering notice will be common.
Update your new lease language. For leases signed in 2026 and beyond, include clear acknowledgments of the new law while preserving your other rights (like standard mitigation duties if they break for other reasons).

What Has NOT Changed

If the tenant wants to leave early without your triggering notice, your standard lease-break provisions still apply. You can enforce fees (if reasonable), require them to pay until re-rented, and hold them to mitigation duties. This new rule is narrowly tailored to respond to your end-of-term notice.

Action Steps Checklist for 2026 Lease Management

Here's your practical to-do list:

Review all fixed-term leases expiring in 2026—note signing dates to confirm if HB 2134 applies upon renewal.
Calendar renewal outreach 4-5 months before expiration.
Prepare incentive offers and updated lease templates acknowledging the new law.
Train yourself/staff on precise notice timing and delivery methods.
Consult your attorney for customized notice wording and strategy.
Track market rents—if incentives make sense financially, use them to retain good tenants.

We're in this together, folks. This change tilts things a bit more toward tenant flexibility, but with smart planning, we can keep our portfolios stable and profitable. As always, this isn't legal advice—please consult your own attorney for your specific situations.

Stay dry out there,

Christian Bryant

Portland Area Rental Owners Association

(PAROA) www.paroa.org

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