Security Deposit Law on Rental Inspections

This year, a new law about security deposits and rental inspections in Portland, Oregon, has made landlords, and property managers pause when reviewing their move-out procedures. While it is a relatively new requirement, it will not be surprising if other municipal areas decide to adopt a similar bill as well. This is also a bill that Oregon property managers may expect to see introduced state-wide in the future. Property managers in other states might expect to see similar laws introduced in your area.

The bill requires landlords and property managers to fully provide documentation (including images) of the property’s condition at move-in and any respective damage during tenancy. The bill specifically outlines the need for a condition report.

What is a Condition Report for Rental Properties?

A condition report is a requirement in Portland, Oregon, to ensure landlords and tenants are both equally informed of any potential damage or wear and tear to a rental when the tenant moves in. This documentation ensures that any security deposit deductions at the end of tenancy are not subjective or based on an inaccurate memory of the rental’s condition. Portland, Oregon’s requirement is as follows:

“…Prior to the Commencement Date, the Landlord will make reasonable efforts to schedule a time which is convenient for both the Landlord and the Tenant for a walk through of the unit to complete a report noting the condition of all fixtures, appliances, equipment and personal property listed in the rental agreement and noting damage (the “Condition Report”). Both the Tenant and the Landlord shall sign the Condition Report. The Landlord shall take pictures of the items noted in the Condition Report and share those photographs with the Tenant.” PCC 30.01.087

If the tenant and landlord cannot find a convenient place to meet, the landlord must document the items with photographs and share them with the tenant.

Should You Prepare a Condition Report during Rental Inspections?

While Portland Oregon is one of the few places to legally require a condition report, a comprehensive move-in report is a best practice procedure that every landlord or property manager should add to their tenant turnover process.

Whether you and your tenants coordinate to walk through the property together, or you seek to provide your tenant with a copy of the current damage report, landlords and property managers can greatly benefit from having this information on hand.

Benefits to Conducting a Move-in Inspection with Documentation:

  • Compliance with local regulations and security deposit laws
  • Easy Reference for Move-Out inspections
    • Proof of pre-move-in condition in the instance of litigations from tenant
  • Opportunity to provide concrete expectations for tenants
  • Documentation may also be required if you use a security deposit alternative

Tools You Can Use to Conduct a Move-In Inspection Report:

While a move-in inspection report should include video or photographic documentation, managers don’t necessarily need a specific tool or top-of-the-line camera to prepare a condition report or a move-in report.

Use Your Mobile Phone’s Camera:

A modern mobile device will likely have the photography capabilities you need to adequately document any potential damage or wear and tear. However, remember that blurry, grainy, dark, or pixilated photographs could work against you in a litigation situation since the damage or the previous state of the property will be difficult to assess. If you go this route, be sure that the area is well-lit, and review your photos or video before moving on to the next area of the property.

Use a Professional Inspection Tool:

An inspection tool can assist you by making the process more seamless. Whether you pair your smartphone with an inspection mobile app or you utilize a 360 camera to ensure you capture every angle on your property, you will likely be impressed with the time you save. If you utilize a property management software, like Rentec Direct, be on the lookout for integrations between your software and an inspection tool. This can allow you easy access to the report at move-out and can ensure you create a comprehensive comparison when reviewing the property for potential damage after tenancy. Property management software companies design their programs to help with compliance of security deposit laws and other legal requirements for owning and managing rental properties.

Note: If you are a Rentec Direct property management software client, you can benefit from an integration with Zinspector to help you with this process.

Learn more: Mobile Inspection App for Rentec Direct Landlords & Property Managers

Regardless of where your rental properties are located, photographic evidence of damage is best practice. Here are some tips you can take to reduce damage at your rental property and ensure that you will be protected should you face any litigation claiming that your security deposit deductions were unreasonable.

Tips to Prevent Damage at Your Rental:

Documentation may be key, but so is prevention and education. No landlord wants to deal with damage to their rental property, and no tenant wants to say goodbye to their security deposit. While some damage is inevitable, there are some tips landlords and property managers can take to mitigate the risk of damage to the rental property. These tips will help your tenants receive a secuirty deposit refund and help you comply with security deposit laws.

Use Tenant Screening Best Practices:

Screening is crucial. Property managers who screen tenants well are far more likely to end up with a great long-term tenant. Remember that not all tenant screening reports are the same. Be sure yours is comprehensive and you understand its limitations. Additionally, make sure you have legal written screening criteria to ensure you are following federal fair housing requirements.

Learn More: Are All Tenant Screening Reports Created Equal?

Educate Your Tenants:

Many renters have never owned a home and do not have an understanding of basic home maintenance or its importance. Landlords and managers may find it beneficial to educate their tenants–particularly new or young renters. Many renters do not understand the why behind changing their HVAC filter, how to prevent mildew build-up in bathrooms, or recognize the importance of reporting small leaks quickly.

This information can be key to ensuring less wear or damage due to negligence at your property and a better relationship with your tenants. Providing your tenants with a verbal walkthrough of the lease as well as a cheat sheet that highlights important lease information can be a good way to ensure that education.

Learn more: New Tenant Success Tips

Perform Regular Inspections:

Regular inspections serve to allow landlords and management to assess any potential issues before they progress. It can also be an excellent way to connect with your tenants. Inspection time is a great time to ask if your tenants have any complaints or concerns, as well as remind them of any key lease requirements that they may need to follow more closely moving forward. Seasonal inspections are also the perfect time to tackle any seasonal maintenance issues to keep your property in its best condition long-term.

Learn more: Important Inspections for Your Rental Property