How to End a Lease Early by Mutual Agreement in Oregon: A Tenant’s Guide

In Oregon, breaking a lease can be expensive, but state law provides two powerful financial shields for tenants: strict limits on "lease break fees" and the Landlord’s Duty to Mitigate Damages (ORS 90.125).

If you leave early, your landlord generally cannot charge you for the remaining months of rent if they can find a new tenant. Furthermore, Oregon law (ORS 90.302) often limits the "early termination fee" a landlord can charge to 1.5 times the monthly rent if written into the lease.

However, relying on these statutory limits can still lead to disputes. The safest way to leave is through a Mutual Termination Agreement.

Unlike some states with official government forms, Oregon does not have a single mandatory form for this. It is a private contract between you and your landlord. This guide explains how to draft this agreement, how to leverage Oregon’s rent cap and eviction restrictions, and the specific rights for victims of domestic violence.

How a Mutual Agreement Works in Oregon

A mutual agreement is a voluntary contract where the landlord and tenant agree to end the tenancy on a specific date, releasing the tenant from future liability.

• No "Official" State Form: While some landlord associations (like Multifamily NW or Oregon Rental Housing Association) have their own forms, there is no state-mandated government form. You generally must use a private written agreement signed by both parties.

• Voluntary: A landlord cannot force you to sign this. If they want to evict you, they must follow strict "for cause" rules or (in the first year) "no cause" notice procedures.

• Overrides the Lease: A valid mutual agreement replaces the expiration date of your original lease. It legally stops your obligation to pay rent after the agreed move-out date.

When Should You Use It?

1. Breaking a Fixed-Term Lease

If you need to move out before your lease ends, simply leaving can be risky.

• The "Fee" vs. "Actual Damages": Check your lease. If it has a "lease break fee" clause, the landlord can charge up to 1.5x monthly rent. If it doesn't, they can charge "actual damages" (lost rent until re-rented).

• The Strategy: If you want certainty, offer a Mutual Termination Agreement. "I need to leave early. I know you have a duty to mitigate damages, but to save us both time, I offer to pay a set fee of [Amount] if we sign a mutual release today."

2. "Cash for Keys" (Sale or Renovation)

Oregon has a statewide Rent Cap (set at 10% for 2025) and strict "Good Cause" eviction laws after the first year of tenancy. Landlords often cannot just kick you out to sell the building or renovate without giving 90 days' notice and paying relocation assistance (in Portland, this is even stricter).

• The Negotiation: If your landlord wants you out quickly to sell, you have significant leverage. You can negotiate "Cash for Keys." The landlord pays you (e.g., relocation costs + extra cash) to sign a mutual agreement and leave voluntarily, bypassing the 90-day notice requirement.

How to Draft the Agreement

Since there is no standard government form, you must draft a clear document.

Required Elements:

1. Title: "Mutual Termination of Rental Agreement."

2. Parties: Full names of Landlord and Tenant.

3. Property: The complete address of the rental unit.

4. Termination Date: The exact date you will surrender the keys.

5. Release of Liability: A critical clause stating: "The Landlord releases the Tenant from all future rent obligations and lease break fees under the Lease after the Termination Date."

6. Security Deposit: Explicitly state that the security deposit will be returned within 31 days as per ORS 90.300.

7. Signatures: Both parties must sign and date the document.

The Risks for Tenants

1. The 31-Day Security Deposit Rule

Oregon law requires landlords to return your security deposit (or a written accounting of deductions) within 31 days of the tenancy ending.

• The Trap: If you don't have a written mutual agreement, the landlord could argue the lease didn't "end" when you moved out, but rather when they found a new tenant. This could delay your refund. A mutual agreement fixes the "end date" legally.

2. Portland Relocation Assistance

If you live in Portland, you may be entitled to Mandatory Relocation Assistance (ranging from $2,900 to $4,500) if your landlord issues a no-cause notice or raises rent by 10% or more.

• Warning: If you voluntarily sign a "Mutual Termination Agreement," you generally waive your right to this mandatory payment. Only sign if the "Cash for Keys" offer is better than the statutory relocation amount you would get otherwise.

Special Rights: Domestic Violence & Military

Domestic Violence:

Under ORS 90.453, victims of domestic violence, sexual assault, or stalking can terminate their lease early by providing 14 days' written notice and verification (e.g., police report or protective order). You do not need a mutual agreement; it is your right.

Military Service:

Under the federal SCRA and state laws, active duty members receiving deployment or PCS orders can terminate a lease. You must provide a copy of the orders and written notice. The lease ends 30 days after the next rent payment is due.

Frequently Asked Questions (FAQ)

1. Is there an official Oregon form to end a lease?

No. While landlord associations sell forms (like Form T9), there is no free government form. You must draft a private written agreement.

2. Does the landlord have to find a new tenant if I move out?

Yes. ORS 90.125 requires the landlord to make reasonable efforts to rent the unit (mitigate damages). If they don't try, they cannot charge you for the lost rent.

3. What is the maximum fee for breaking a lease?

If your lease has a "lease break fee" clause, it is capped at 1.5 times the monthly rent. If the lease does not have this clause, the landlord can charge "actual damages" (lost rent + advertising costs).

4. When do I get my deposit back?

The landlord has 31 days after you move out and return possession to mail your deposit or an accounting of deductions.

5. How much notice do I need to give if I am month-to-month?

You generally must give 30 days' written notice to terminate a month-to-month tenancy (unless you are in Portland/Milwaukie or have lived there less than a year, where rules can vary for landlords, but tenants typically give 30 days).

References:

• Oregon Residential Landlord and Tenant Act (ORS 90.125 - Mitigation)

• ORS 90.300 (Security Deposits)

• ORS 90.453 (Domestic Violence)

• Oregon State Bar: New Rules for Landlords

• Oregon.gov: Annual Maximum Rent Increase 2025

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