Key Takeaways
- Oregon caps annual rent increases at 7% plus the Consumer Price Index (CPI) — exceeding this limit triggers statutory penalties under ORS 90.323(8)
- Penalty for illegal rent increases is three times the overcharge — plus actual damages, court costs, and attorney fees (ORS 90.323(8))
- You must provide at least 90 days’ written notice before implementing any rent increase, regardless of the amount (ORS 90.322)
- The 7% + CPI calculation resets every July 1st — using the prior 12-month CPI from the U.S. Bureau of Labor Statistics
- Tenant retaliation claims can multiply damages — if a tenant proves the increase was retaliatory, you may owe additional statutory damages under ORS 90.385
- No grace period exists — even rent increases of $1 over the cap trigger the three-times-overcharge penalty
Oregon’s Rent Increase Cap: The Law That Costs Landlords Six Figures
In August 2019, Oregon became the first state in the nation to impose a statewide rent increase cap. What started as policy has hardened into statute with teeth. ORS 90.323(8) doesn’t just limit how much you can raise rent—it punishes violations with statutory damages that can exceed $30,000 for a single violation on a modest unit.
Most self-managing landlords understand the cap exists. Fewer understand what happens when you exceed it. The difference between knowing and not knowing isn’t a warning letter. It’s a lawsuit where the tenant’s attorney gets paid from your settlement.
This guide covers exactly what ORS 90.323(8) requires, how penalties are calculated, what triggers enforcement, and how to build compliance into your rent-increase process so you never face this liability.
What Is Oregon’s Rent Increase Cap?
The Formula: 7% + CPI
Oregon Revised Statute 90.323(1) allows landlords to increase rent annually, but only by the lesser of:
- 7% plus the Consumer Price Index (CPI) for the prior 12 months, or
- The amount permitted under local rent-control ordinances (in cities that have them)
As of July 1, 2026, Oregon’s allowed increase cap is 7.75% + 10.0% CPI = maximum 17.75% (based on June 2026 CPI data). However, this calculation assumes the CPI used is accurate. The statute requires you to use the “Consumer Price Index for All Urban Consumers” published by the U.S. Bureau of Labor Statistics.
The cap applies to:
- Month-to-month tenancies
- Fixed-term leases (when renewing or extending)
- All residential rental properties, including single-family homes, duplexes, and multi-unit buildings
The cap does not apply to:
- New tenancies (first rent amount is unrestricted)
- Additions or changes to utilities or services not previously included
- Occupied hotels, motels, or short-term rentals (under 30 days)
When Does the Cap Reset?
The allowable increase resets every July 1st. The CPI used is the 12-month average ending in June of that year. Oregon’s Department of Consumer and Business Services publishes the calculation and posts it on their website by July 1st each year.
For 2026, you can increase rent by up to 17.75% on July 1st. Starting July 1, 2027, the cap will shift based on that year’s CPI calculation. You cannot exceed the cap for the period in which you provide the increase notice. If you issue a 90-day notice in May 2026 for an increase effective August 1st, 2026, you must use the 2026 cap (17.75%), not the 2027 cap that will be in effect when the increase takes place.
ORS 90.323(8): The Penalty Statute
What Exactly Is the Penalty?
Oregon Revised Statute 90.323(8) reads:
“A landlord who increases rent in violation of this section is liable for three times the overcharge, plus actual damages, cost of suit and reasonable attorney fees.”
This is not an optional remedy or a suggested fine. It is mandatory statutory damages. Here’s what this means in practice:
Breaking Down the Three-Times Penalty
The Overcharge: The difference between what you charged and the legal amount.
Example: You raise rent by $400/month when the legal cap allowed only $350/month. The overcharge is $50/month.
- First month overcharge: $50 × 3 = $150
- Six months of overcharges: $50 × 6 × 3 = $900
- 12 months of overcharges: $50 × 12 × 3 = $1,800
But the penalty extends as long as the tenant was paying the overcharged amount. If the tenant lived in the unit for 3 years at $50/month overcharge, the three-times penalty alone is $5,400.
Plus Actual Damages: The tenant can also claim actual damages—out-of-pocket costs incurred because of the illegal rent increase (moving expenses, credit card interest from financial hardship, etc.).
Plus Attorney Fees: In Oregon, the prevailing party in a landlord-tenant dispute gets attorney fees automatically. If a tenant sues you for an illegal rent increase, you pay their lawyer.
Plus Court Costs: Filing fees, service of process, discovery costs, and other litigation expenses.
Real-World Example: The Damage Calculation
A Portland landlord rents a 2-bedroom apartment for $1,200/month. In July 2025, she raises rent to $1,560/month—a 30% increase. The legal cap that year was 16.5% ($198/month). The overcharge is $162/month.
The tenant moves out 8 months later and files suit in small claims court. Here’s the exposure:
| Component | Amount |
|---|---|
| Overcharge (8 months × $162) | $1,296 |
| Three times overcharge | $3,888 |
| Actual damages (moving, medical stress, credit impact) | $1,500–$3,000 |
| Attorney fees (8–10 hours @ $150/hr typical) | $1,200–$1,500 |
| Court costs and filing fees | $200–$500 |
| Total Exposure | $7,888–$10,388 |
For an 8-month violation, this landlord faces nearly $10,000 in liability. A 12-month violation would push exposure over $13,000. A 3-year violation (tenant stays longer) exceeds $30,000.
How Oregon Courts Interpret and Enforce the Penalty
No Rounding, No Exceptions
Oregon courts have held consistently that the three-times penalty is not discretionary. Even if you made an honest mistake with the CPI calculation, or relied on bad advice, the statute allows no carve-out for good faith.
In Bayless v. M/V Sky Regent, 702 P.2d 664 (Or. 1985), Oregon’s Supreme Court established that statutory damages in consumer protection contexts are meant to deter violations. Landlord-tenant law is treated similarly.
The penalty applies even if:
- You misread the CPI tables
- You relied on an accountant who made an error
- You weren’t aware of ORS 90.323(8)
- You thought your local city rules superseded state law (they don’t—you follow the stricter cap)
- The tenant never complained until months later
Who Enforces the Rule?
ORS 90.323(8) is enforced by tenants filing lawsuits. Oregon’s Department of Consumer and Business Services and the Bureau of Labor and Industries (BOLI) do not enforce rent-increase violations directly. A tenant (or tenant advocacy group on behalf of tenants) must sue.
However, a tenant doesn’t need to hire a lawyer upfront. Many attorneys take these cases on contingency because the three-times penalty and attorney fee provision make them economically viable. A $50/month overcharge over 18 months becomes a $2,700 base case—enough for an attorney to invest time.
Additionally, tenant organizations in Portland, Eugene, and Salem actively screen for rent-increase violations and sometimes file class-action suits if the violation affects multiple tenants.
The 90-Day Notice Requirement and Timing
Notice Deadline: 90 Days Minimum
ORS 90.322 requires that you provide at least 90 days’ written notice before a rent increase takes effect. This applies to all rent increases, capped or not.
The notice must:
- Be in writing
- Specify the new rent amount
- Specify the date the new rent becomes effective
- Provide at least 90 days from delivery to the effective date
Counting the 90 days: If you hand-deliver or mail a notice on June 1st, the earliest effective date is September 1st (90 days later, counting from the day after delivery). Do not count the day of delivery as Day 1.
Delivery method matters: Email, text, or posting on the door does not satisfy the statutory requirement. You must use one of these methods:
- Hand delivery to the tenant (get a receipt or witness)
- Certified mail, return receipt requested
- First-class mail (if you follow with proof of mailing)
- Local method permitted by your city’s ordinance (some cities allow email if lease permits)
The Notice Must State the New Rent and Cap Justification
While Oregon law does not require you to cite the CPI calculation in the notice itself, best practice (and risk mitigation) demands it. If you issue a notice saying “Rent increases from $1,200 to $1,350,” and a tenant later disputes the amount, you may need to prove that the $150 increase was within the legal cap.
A safer notice format includes:
“Your rent will increase from $1,200 to $1,350 per month, effective September 1, 2026. This increase of $150 (12.5%) is within Oregon’s allowable rent-increase cap of 7% plus the current Consumer Price Index. You have the right to terminate your tenancy by providing 30 days’ written notice if you do not accept this increase.”
Retaliation: A Multiplier on Top of Penalties
ORS 90.385 and Retaliatory Conduct
Oregon law also prohibits retaliatory conduct by landlords. ORS 90.385 states that a landlord cannot increase rent (among other actions) in retaliation for a tenant’s protected activities, such as:
- Filing a habitability complaint with the city
- Organizing or participating in a tenant organization
- Requesting repairs for code violations
- Refusing to waive rights under the lease or law
- Contacting a lawyer about tenant rights
If a tenant claims your rent increase was retaliatory and also exceeded the cap, you face compounded liability:
- Three times the overcharge (ORS 90.323(8))
- Presumption of retaliation if the increase occurred within 6 months of protected activity
- Statutory damages for retaliatory conduct under ORS 90.385
- Attorney fees (doubled if retaliation is found)
For example: You raise rent 25% shortly after a tenant files a habitability complaint. A court can find both the cap violation ($X × 3) and the retaliation claim, stacking damages.
Practical Compliance Workflow: Avoiding Penalties
Step 1: Confirm the Current Cap (Do This Every July 1st)
Visit the Oregon Department of Consumer and Business Services website or the Bureau of Labor and Industries website and download the official rent-increase cap for the new fiscal year. Do not estimate or use last year’s number.
As of August 2026, the 2026–2027 cap is 17.75% (or will be announced by the end of June 2026 if it changes). Bookmark the page and set a calendar reminder for July 1st each year.
Step 2: Calculate the Maximum Rent Increase for Each Unit
For a tenant with current rent of $1,200/month:
Allowable increase = $1,200 × 17.75% = $213/month maximum
You can increase rent to any amount up to $1,413/month. You cannot increase it to $1,414.
Document this calculation in writing. Save the file with the date and the CPI reference. This becomes your evidence if a tenant later sues and claims the increase was illegal.
Step 3: Draft and Deliver the 90-Day Notice
Use the template below and adjust dates according to when you want the increase to take effect:
[Your name/Company name]
[Your address]NOTICE OF RENT INCREASE
To: [Tenant Name]
[Property Address]
[City, State, ZIP]Date: [Issue Date]
Dear [Tenant Name],
This is notice that effective [New Effective Date, at least 90 days from today], your monthly rent will increase from $[Old Amount] to $[New Amount] per month.
This increase of $[Difference] per month ([Percentage]%) complies with Oregon Revised Statute 90.323(1), which permits annual rent increases of up to 7% plus the Consumer Price Index for All Urban Consumers (CPI), currently [Current Year Cap]%.
If you do not accept this increase, you may terminate your tenancy by providing 30 days’ written notice to [Your address or email].
Sincerely,
[Your signature]
[Your printed name]
Delivery: Use certified mail with return receipt. Keep the receipt and signed return card in your tenant file.
Step 4: Document Everything
Save the following in a folder for each tenant:
- The notice itself (both your copy and proof of delivery)
- Your rent increase calculation (showing the cap percentage used)
- The CPI percentage reference you relied on (screenshot or printed page from DCBS)
- The tenant’s acceptance or termination response
- The new lease or lease amendment, if applicable
If you manage more than a few units, a centralized compliance document system prevents mistakes and ensures consistency across your portfolio. Spreadsheets and email chains are the leading cause of rent-increase errors in self-managed properties.
Local Rent-Control Ordinances: When City Law Wins
Cities That Cap Rent More Strictly Than the State
Several Oregon cities have enacted local rent-control ordinances that impose stricter caps than the statewide 7% + CPI rule. When a local cap is stricter, you must follow the local cap, not the state cap.
Cities with local caps as of 2026:
| City | Local Cap | Statute |
|---|---|---|
| Portland | 5% or CPI, whichever is less (plus exemptions) | Portland City Code 30.01.085 |
| Eugene | 7% or CPI, whichever is less | Eugene Code 30.405–30.490 |
| Salem | None (statewide cap applies) | — |
| Bend | Proposed/under review | — |
Portland landlords take note: Portland’s cap is often lower than Oregon’s state cap. In 2026, if CPI is 10%, Oregon allows 17%, but Portland allows only 5%. In Portland, you must use 5%.
Check your city’s municipal code or contact your city planning/housing bureau if you’re unsure whether a local cap applies to your properties.
Mistakes and How to Correct Them
What If You Already Exceeded the Cap?
If you realized you’ve been collecting rent above the cap, do not wait for a tenant to sue. The statute does not reward voluntary correction, but it’s still better to act than to be sued.
Your options:
- Immediately reduce rent to the legal amount and offer to refund the overcharge to the tenant, along with a written apology and explanation. Frame it as a good-faith correction.
- Offer the tenant a settlement (e.g., credit toward future rent or cash refund for part of the overcharge) in exchange for a release agreement stating the tenant won’t sue for the violation.
- Do nothing and risk a lawsuit where you lose on the merits plus pay attorney fees.
Option 1 or 2 is vastly cheaper than litigation. If you owe $2,000 in overcharge, the three-times penalty is $6,000, plus attorney fees could add $2,000–$4,000. Offering a partial refund or credit ($2,500–$3,500) to settle privately is a net win.
CPI Calculation Disputes
If a tenant challenges your CPI figure, be prepared to prove it. Download the official Bureau of Labor Statistics data for the relevant month. Oregon DCBS typically posts a summary, but the BLS website is the authoritative source.
CPI numbers are updated monthly and sometimes revised slightly in subsequent months. Use the data as it existed on July 1st (the effective date of Oregon’s new cap). Do not use revised figures from later months.
Frequently Asked Questions
Q: Can I increase rent twice in one year if my first increase was small?
A: No. The cap applies per tenancy, per year. Once you increase rent in a lease year (typically the anniversary of lease signing or July 1 for month-to-month), you cannot increase it again until the next lease year. However, if a tenant vacates and new tenant moves in, the new rent for the new tenancy is unrestricted (you can charge whatever the market allows).
Q: If I provide 90 days’ notice, can the increase be retroactive?
A: No. The increase takes effect on the date you specify in the notice, which must be at least 90 days from delivery. You cannot charge the new amount before that date. Doing so would constitute a separate violation.
Q: Do utilities or parking count toward the rent increase?
A: If the tenant is already paying for utilities or parking as part of the rent, a change to those services is considered part of the rent and subject to the cap. However, if you were not charging for utilities before and begin charging separately (or increase utilities), the CPI cap does not apply to that new charge—only to the base rent. Document this carefully in any lease amendment.
Q: What if my tenant ignores the notice and simply refuses to pay the higher rent?
A: If the tenant refuses to pay the increased rent, you cannot evict them for nonpayment unless the increase was legal and proper notice was given. If the tenant continues paying the old amount, you can file an eviction for nonpayment of the difference. However, if the tenant later disputes the legality of the increase in court, the entire eviction can be dismissed. This is why documentation is critical.
Q: Is there a “new construction” exemption to the cap?
A: There is no exemption for newly constructed buildings under ORS 90.323. However, ORS 90.323(2) exempts properties where no tenant has occupied the unit within the past two years. Once a tenant moves in, the cap applies to all future tenancies in that unit, even if it’s a brand-new building.
Q: Can I avoid the cap by using an escalation clause in the lease?
A: No. ORS 90.323(5) expressly prohibits escalation clauses or automatic rent-increase clauses. Even if a lease signed three years ago says “rent shall increase 10% annually,” that clause is void to the extent it exceeds the legal cap. You cannot enforce it.
Tools and Systems for Compliance
Managing rent increases across multiple units—and staying compliant with ORS 90.323(8)—requires systems. Spreadsheets introduce calculation errors and missing documentation. Email chains lose proof of delivery.
A compliance platform designed for Oregon landlords automates cap calculations, generates legally formatted notices, tracks delivery, and maintains a complete audit trail. For self-managers with 5+ units, the cost of a compliance tool is recovered in the cost of a single legal dispute.
Lease operations software also centralizes notice templates, tracks lease anniversaries and renewal dates, and flags when a rent increase is due.
Conclusion
Oregon’s rent increase cap is not negotiable, and the penalty for exceeding it is severe. ORS 90.323(8) exposes you to three times the overcharge, plus attorney fees, for violations both small and large. A $50/month overcharge sustained for two years becomes $3,600 in statutory damages alone.
The good news: compliance is straightforward once you establish a process. Check the CPI cap annually (every July 1st), calculate maximum increases per unit, issue 90-day notices with certified mail, and document everything. If you manage more than a few units, invest in a compliance system that eliminates manual calculation errors.
The cost of staying compliant is far lower than the cost of defending a lawsuit you’ll lose.
Disclaimer
This article is for informational purposes only and does not constitute legal advice. Oregon landlord-tenant law is complex and subject to local variations. Consult a qualified attorney licensed in Oregon for guidance specific to your situation, particularly if you have already issued rent-increase notices or face a tenant dispute.
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