Key Takeaways
- Oregon caps annual rent increases — ORS 90.323(1) limits increases to the greater of 7% or the percentage change in the Consumer Price Index (CPI) for the 12-month period preceding notice, plus 1% (as of 2024)
- Penalties are severe for exceeding the cap — ORS 90.323(8) requires landlords to refund the excess rent plus interest and pay the tenant's costs and reasonable attorney fees
- Notice requirements are strict — Rent increases must be given 90 days in advance in writing, or they are invalid under ORS 90.323(2)(b)
- The penalty applies to all excess rent — Even if you exceed the cap by a small amount, you owe back the full overage, not just the difference amount
- Interest accrues on the refund — Excess rent is treated as an unlawful debt subject to prejudgment interest at the rate set by Oregon statute
- This law applies statewide — Unlike some jurisdictions, Oregon's rent control regime applies uniformly to most properties statewide, with limited exceptions
Understanding Oregon's Rent Increase Cap Under ORS 90.323
If you own rental property in Oregon, you operate under one of the nation's most prescriptive rent control statutes. Unlike California, which exempts single-family homes, or Washington, which leaves most rent increases to the market, Oregon imposes a statewide rent cap that applies to nearly all residential tenancies.
The law is straightforward on its face: you cannot raise rent by more than the cap amount without triggering statutory penalties. But the statute contains traps. The calculation is precise. The notice requirement is unforgiving. And the penalty for violation is not a small fine—it is a full refund of excess rent plus attorney fees, which can cost thousands of dollars per violation.
This guide walks you through the exact requirements, the penalty structure, and the compliance steps you need to take before your next rent increase notice.
What Is the Oregon Rent Increase Cap?
The Formula: 7% or CPI Plus 1%, Whichever Is Greater
Oregon Revised Statute 90.323(1) sets the cap as follows:
A landlord may not increase rent in an amount that is greater than seven percent (7%) or the percentage change in the Consumer Price Index for All Urban Consumers (CPI-U) for the 12-month period preceding the date notice of the increase is given, plus one percentage point, whichever is greater.
In plain English: each year, you calculate two numbers and pick the larger one.
| Comparison Method | Calculation | Example (2025) |
|---|---|---|
| Fixed Floor | 7% (applies every year) | 7% allowed increase |
| CPI Formula | CPI-U change for prior 12 months + 1% | If CPI was 2.5%, cap = 3.5% |
| Whichever Is Greater | You apply the higher of the two | 7% (because 7% > 3.5%) |
The CPI Index You Must Use
Oregon law specifically mandates the Consumer Price Index for All Urban Consumers (CPI-U) published by the U.S. Bureau of Labor Statistics. This is the broadest CPI measure. It includes all urban consumers and measures changes over a 12-month period ending in the month before you issue notice of the increase.
The statute does not allow you to use regional CPI, the Portland metropolitan CPI, or any other variation. Using the wrong index invalidates your rent increase notice and exposes you to the penalties outlined in ORS 90.323(8).
For a rent increase notice issued in November 2026, you would look at CPI-U data for the 12-month period ending October 2026.
The Notice Requirement: 90 Days Advance Notice in Writing
Strict Compliance Mandatory
Under ORS 90.323(2)(b), a landlord must provide rent increase notice at least 90 days in advance and the notice must be in writing. Courts have held that this requirement is non-waivable and strictly construed. If you give 89 days' notice, the increase is void.
The 90-day period runs from the date the tenant receives the notice, not the date you mail it. Oregon courts have applied the "reasonable person" standard: when would the tenant reasonably be expected to have received it? For hand-delivered notices, this is the date of delivery. For mailed notices, Oregon courts typically recognize receipt at least 3 business days after mailing, but you should assume 5-7 days for safety.
What Must Be Included in the Notice
Oregon law does not mandate a specific form, but the notice must clearly state:
- The current rent amount
- The new rent amount
- The effective date of the increase
- The percentage increase
- The reason for the increase (optional, but recommended for your defense if challenged)
- Reference to ORS 90.323 and the cap calculation (strongly recommended)
Many landlords include a statement like: "This increase is within the annual limit set by ORS 90.323(1), which permits increases of up to [X]%. Your increase is [Y]%." This contemporaneous documentation of compliance is a defense if a tenant disputes the notice later.
Timing Considerations for November 2026
If you want to raise rent effective February 1, 2027, your notice must be delivered by November 2, 2026 at the latest. If you miss that window, the earliest effective date becomes May 1, 2027 (90 days from a notice given in February).
The Penalty Structure Under ORS 90.323(8)
What Triggers the Penalty
ORS 90.323(8) states:
If a landlord violates subsection (1) of this section, the tenant may recover the rent paid in excess of the maximum allowable increase, plus interest at the rate provided in ORS 82.010, and the costs and reasonable attorney fees incurred by the tenant in bringing the action.
A violation occurs when:
- You increase rent above the calculated cap percentage
- You fail to provide 90 days' advance written notice
- You use the wrong CPI index or calculation method
- You apply the increase before the 90-day notice period has expired
Calculating the Refund Owed
The penalty is not a fine to the state—it is a direct payment obligation to the tenant. Here's how it works:
Example Scenario:
You own a duplex in Portland. Current rent is $1,500/month. On August 1, 2026, you issue a 90-day notice of a $150 increase to $1,650/month (10% increase). The notice is effective November 1, 2026. However, the maximum allowable increase under ORS 90.323(1) for 2026 is 7% ($105), making the lawful new rent $1,605.
By demanding $1,650, you have collected $45/month in excess rent.
If the tenant files a claim:
- Excess rent owed: $45/month × 12 months (if paid for a full year) = $540
- Interest: $540 × 9% per annum (ORS 82.010 rate) × time period = approximately $48.60 (for one year)
- Tenant's attorney fees: $2,500 to $5,000+ (depending on the attorney and case complexity)
- Tenant's court costs: $200 to $500
- Total liability: $3,000 to $6,000+
Notice how the attorney fees dwarf the actual excess rent owed. This is the real penalty: you pay for the tenant's lawyer to sue you.
Interest Rate on Excess Rent
Oregon Revised Statute 82.010 sets the prejudgment interest rate for unlawful debt at 9% per annum (as of 2026). This rate compounds, meaning the longer you hold the excess rent, the more interest accrues. If a tenant does not sue immediately, the interest grows.
Attorney Fees Are Mandatory, Not Discretionary
The statute says the tenant may recover "the costs and reasonable attorney fees." Courts have interpreted "reasonable" to mean fees that are customary in the jurisdiction for similar work. In urban Oregon counties, this typically ranges from $200 to $400 per hour. A violation that requires 10-15 hours of attorney time to litigate can easily result in $3,000+ in attorney fees.
Importantly: even if you refund the excess rent voluntarily before being sued, a tenant can still recover attorney fees if they incurred them to demand the refund (such as sending a demand letter through counsel).
Common Compliance Errors and How to Avoid Them
Error 1: Using an Outdated or Incorrect CPI Figure
The Problem: You look up CPI and find a recent monthly report, but you apply the wrong 12-month period or use a regional index.
How to Avoid It: Before issuing any rent increase notice, download the official CPI-U data from the U.S. Bureau of Labor Statistics (bls.gov). Specifically, look for the "Consumer Price Index for All Urban Consumers" and the 12-month change ending in the month before you give notice. Write down the exact percentage and cite it in your notice.
Error 2: Miscounting the 90-Day Period
The Problem: You give notice on August 1 and assume the rent can increase on October 1 (60 days later). Or you count calendar days instead of including weekends and holidays correctly.
How to Avoid It: Use a simple method: add 90 days to the date you deliver notice. Use an online date calculator to verify. For safety, assume mailed notices take 5-7 days to reach the tenant. If you mail notice on August 1, assume delivery by August 7, making the 90-day period expire around November 5.
Error 3: Failing to Document the Cap Calculation
The Problem: You issue a notice that states the new rent but does not show the cap calculation. When the tenant disputes it, you cannot prove compliance because the notice itself does not demonstrate you applied the law correctly.
How to Avoid It: Include language such as: "This rent increase is compliant with ORS 90.323(1). The maximum allowable increase for 2026 is 7%. Your new rent of $[X] represents a [Y]% increase, which is within the statutory limit."
Error 4: Issuing Multiple Increases in a Single Year
The Problem: The statute caps increases per year. Oregon courts have interpreted "year" to mean the 12-month period from the prior increase's effective date or, if there was no prior increase, from the initial lease date. You cannot issue two increases that overlap in a calendar year if together they exceed the cap.
How to Avoid It: Track the anniversary date of each tenant's lease. Never issue a new rent increase notice until 12 months after the last one became effective.
Exemptions and Limitations
What Properties Are Exempt?
Oregon's rent control law, codified in ORS Chapter 90, applies broadly. However, limited exemptions exist:
- Properties constructed after January 1, 2020 are exempt from the rent increase cap for 10 years from substantial completion (ORS 90.323(4)(b)). After 10 years, the cap applies.
- Owner-occupied buildings with four or fewer units where the owner also occupies a unit are exempt (ORS 90.322(1)(g)).
- Properties operated by certain non-profits or government housing authorities may have different rules.
If you own a single-family home you do not occupy, or a duplex where you do not live, the rent cap almost certainly applies to you. Do not assume an exemption applies without consulting a local attorney.
Practical Compliance Checklist for Oregon Landlords
Before you issue your next rent increase notice, follow this step-by-step process:
- Verify the property is not exempt — Check construction date, unit count, and your occupancy status
- Determine the effective date you want — Write it down (e.g., February 1, 2027)
- Work backward 90 days — Use a calendar or online calculator to find the notice deadline (e.g., November 2, 2026)
- Look up the current CPI-U figure — Visit bls.gov and find the 12-month change for the month before your notice date
- Calculate the cap — Determine whether 7% or CPI + 1% is greater
- Calculate the new rent amount — Current rent × (1 + cap percentage) = new rent
- Draft the notice — Include current rent, new rent, effective date, percentage increase, and citation to ORS 90.323
- Deliver the notice in writing — By hand delivery (get a signed receipt) or certified mail (get delivery confirmation). Do not email or text unless you also provide written confirmation.
- Document delivery date — Save the receipt, certified mail tracking, or signed acknowledgment
- Do not collect the new rent until 90 days have passed since delivery — Verify the actual effective date in writing before the tenant's next payment is due
Interaction With Lease Terms and Move-Out
Can You Use Lease Language to Waive the Cap?
No. ORS 90.323(7) states that any agreement or waiver that violates the rent increase cap is void. A lease cannot contract around the statutory limit. If your lease says "rent increases up to 10% annually," the 10% clause is unenforceable, and you are capped at the statutory limit regardless.
What If a Tenant Moves Out Before the Increase Takes Effect?
Once a tenant vacates, the rent cap does not apply to the next tenant. ORS 90.323 applies to increases for the same tenant. A new tenant can be quoted any rent the market will bear (with exceptions for just-cause eviction restrictions, which are separate rules).
However, if you issue a rent increase notice to a current tenant and they move out before the effective date, you cannot collect the increased rent from them. You can charge the new tenant a new market rate.
Recent Oregon Case Law and Enforcement Trends
Enforcement by Tenants' Rights Organizations
Oregon's statewide rent control law has created a private right of action for tenants. Tenants' unions and legal aid organizations routinely send demand letters on behalf of tenants seeking refunds of excess rent. Some cases have been filed as class actions when landlords have systematically overstepped the cap across multiple units.
In 2024-2026, there has been increased enforcement activity in Portland, Eugene, and Salem, where tenant advocacy is strongest. If you receive a demand letter from a tenant's attorney, treat it seriously—the statute's attorney fee provision makes these claims economically viable to pursue.
Burden of Proof
If a tenant sues, the burden is on the landlord to prove compliance with the cap. You must produce the CPI figure you used, the calculation method, the notice you issued, and proof of delivery. Have all of this documented before you issue the notice, not after a dispute arises.
Using Compliance Software and Tools
Manually calculating rent increases and tracking notice deadlines is error-prone, especially if you manage multiple units with staggered lease anniversaries. A compliance-aware property management system stores the CPI table, calculates the cap automatically, and flags when a notice deadline is approaching.
LeaseBase's compliance engine includes Oregon rent increase cap calculations and notice generation. It tracks 90-day windows and stores proof of delivery, so if a tenant disputes the increase, you have contemporaneous documentation of compliance. Systems like this reduce the risk of a $3,000+ lawsuit over a $500 excess rent error.
Similarly, rent payment tracking ensures you know exactly what you collected from each tenant each month, making it simple to calculate excess rent if you need to issue a refund or defend against a claim.
What to Do If You Made a Mistake
You Realize You Exceeded the Cap
If you discover you raised rent above the statutory limit, the safest course is to:
- Calculate the overage — How much excess rent have you collected per month since the increase took effect?
- Issue a written notice to the tenant — Explain the error and state that rent will return to the capped amount, effective immediately or as of the next pay period
- Refund the excess rent promptly — Do not wait for the tenant to sue. A swift refund minimizes accrued interest and may forestall attorney fee claims if the tenant has not yet hired counsel
- Keep all documentation — Save copies of the notice, the refund, and the corrected rent amount going forward
Even if you refund the excess, you may still owe attorney fees if the tenant incurred them to demand the refund. However, courts are more likely to deny or reduce attorney fees if you corrected the error voluntarily and promptly.
A Tenant Disputes the Increase Before Paying
If a tenant claims the increase is too high and withholds rent, do not immediately evict. Respond in writing with your cap calculation, the CPI figure you used, and the notice you gave. Offer to sit down and review the math together.
If you made an error, correct it. If the tenant is mistaken, a written explanation with supporting documents often resolves the dispute without litigation. If the tenant is correct, refund the excess and correct the rent prospectively.
FAQ: Oregon Rent Increase Cap Penalties
Q: Can I increase rent if it has been five years since the last increase?
A: No. The cap applies to each rent increase, regardless of how long it has been since the last one. Even if you have not raised rent in five years, the next increase is still limited to the statutory cap (7% or CPI + 1%, whichever is greater). You cannot "make up" previous years' foregone increases by exceeding the cap in a later year.
Q: Does the rent increase cap apply if the tenant signs a lease renewal agreeing to the higher amount?
A: No. ORS 90.323(7) voids any agreement that attempts to waive or contract around the rent cap, including lease renewals. If a tenant signs a lease renewal at a 10% increase, the increase is still capped at the statutory limit. The tenant can challenge it and recover the overage plus attorney fees.
Q: What if I accidentally collected excess rent for six months before the tenant complained?
A: You owe a refund of all excess rent collected, plus interest at 9% per annum for the time period the excess was held, plus the tenant's attorney fees and court costs. The longer the overage persists, the more interest accrues and the stronger the tenant's case for attorney fees (because the issue becomes more serious).
Q: Can I avoid the penalty by immediately refunding the excess when a tenant disputes the increase?
A: A prompt refund significantly limits your exposure, but you may still owe attorney fees if the tenant hired an attorney to demand the refund. If you refund voluntarily before any legal action is threatened, you have a stronger argument that attorney fees are unreasonable or should not be awarded.
Q: Does the 7% minimum mean I can always raise rent by 7%, even if CPI is negative?
A: Yes. The statute sets 7% as the floor. Even if the CPI-U declines (deflation), you can increase rent up to 7%. Conversely, if CPI + 1% exceeds 7%, you can increase rent by the higher amount. The cap is always the greater of the two.
Q: What if I do not know the tenant's current rent amount and overestimate?
A: Ignorance is not a defense. You must maintain accurate records of what each tenant pays. If you miscalculate and demand more than the cap allows, you have still violated ORS 90.323(1) and are liable for the penalty. Use a lease management system or spreadsheet to track current rent for every unit.
Steps Moving Forward
If you manage rental properties in Oregon, compliance with the rent increase cap is non-negotiable. The statute provides no safe harbor for good faith mistakes. The penalty—full refund of excess rent, 9% interest, and the tenant's attorney fees—can exceed the financial benefit of the excess rent by a factor of five or more.
This month (November 2026) is a critical time to review your rent increase practices for 2027. If you plan to raise rent next year, now is the moment to research the CPI figure, calculate the cap, and document your compliance plan. Do not issue notices in a rush or without written calculations.
Consider integrating your rent increase notices into a centralized portfolio management system where you can track rent amounts, notice dates, and effective dates across all your units. This creates an audit trail that proves compliance and protects you if a tenant disputes an increase.
Disclaimer
This article is for informational purposes only and does not constitute legal advice. Consult a qualified attorney licensed in Oregon for guidance specific to your situation, particularly if you have received a dispute from a tenant or demand letter from an attorney. Rent control laws are complex and fact-specific. An attorney can review your specific lease, rent history, and notice documentation to provide tailored advice on your compliance posture.