What are the legal consequences of failing to return a security deposit?

The correct answer highlights the legal implications of not returning a tenant's security deposit, which can lead to a potential lawsuit or penalties imposed by the court. Under Oregon law, landlords are required to return the security deposit within a certain timeframe after the tenant vacates the property. If a landlord fails to do so, the tenant may file a lawsuit for the return of the deposit. The court may order the landlord to return the full amount due, along with possible additional damages, which can serve as a deterrent against unjust retention of the deposit.

This legal framework serves to protect tenants and ensure that they receive their rightful funds, emphasizing the importance of adherence to rental laws. Furthermore, failing to return a security deposit does not merely result in warning or discussion but can escalate to formal legal action, making clear that landlords have significant obligations under the law.

In contrast, the idea of losing a rental license, receiving a warning, or relying on tenant agreement do not accurately reflect the statutory obligations or the seriousness of a landlord’s responsibilities regarding security deposits. Such options downplay the legal framework in place to protect tenant rights. Overall, the consequences are designed to ensure that landlords comply with the terms of the lease and state regulations.