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Security Deposit Laws in Colorado


The Colorado landlord-tenant law guides the relationship between landlords and tenants in the state. Enshrined in this law are the basic rules for the security deposits. Security deposits help cushion the landlord against property damage resulting from a tenant’s carelessness or negligence.

If you are a landlord in the state of Colorado, here are the basic security deposit laws you should be aware of.


Colorado Security Deposit Law FAQ:




1.     What happens to the security deposit in the event the ownership of the property changes hands?

To sell your property, you must do two things. One, you can return the security deposit to the tenant minus any deductions. Then you must notify the new owner that you have done so.

Two, you can transfer the security deposit to the new owner minus any deductions. If you take this route, you must notify the renter of the transferred amount and provide them with the name and address of the new owner. You must also provide them with an itemized list of deductions plus their costs if any.

2.     How much can landlords charge as a security deposit in Colorado?

In Colorado, there is no statute limiting the amount a landlord can ask for a security deposit. That being said, the amount should, needless to say, be reasonable. Generally, you can charge anything between a month’s rent and two month’s rent.

Any lower and you risk financial ruin in case of excessive property damage. Any higher and you risk discouraging potential tenants.

You should also check to see if there are any county laws that specify the security deposit amount.

3.     Can landlords ask for a nonrefundable deposit?

No. Under Colorado rental laws, a security deposit is considered the renter’s property.

4.     Do landlords need to give renters a written notice after receiving their security deposit?

No. There is no Colorado statute that requires you to notify tenants that you have received their security deposit. That being said, it’s recommended that you do so. This may help avoid problems in the future regarding the amount of the deposit as well as the date it was received.


5.     How must you store the security deposit in Colorado?

In states like Florida, landlords are required to store the deposit of the tenant in a specific way. For example, in an interest-yielding account or as a surety bond. In Colorado, however, there are no specific requirements compelling landlords to store it in a certain way.

6.     Is a walk-through necessary in Colorado?

A walkthrough inspection isn’t necessary in the state of Colorado. A walkthrough inspection helps the landlord assess the condition of the property prior to a tenant move-out. If there is any damage beyond normal wear and tear, the landlord has a right to deduct a portion or all of the security deposit of the tenant.

7.     What are some of the reasons a landlord can deduct a portion or all of the security deposit of the tenant in Colorado?

There are some occasions where a landlord may be able to keep part or all of the renter’s deposit. They include:

  • If the renter hasn’t paid their utility bills.
  • To cater for cleaning. You may be able to keep a portion of the security deposit of the tenant if the cleaning necessary is excessive.
  • If the renter has caused property damage beyond normal wear and tear.


Examples of wear and tear

Examples of property damage
Dirty draperies or blinds Dirt and filth as a result of inadequate cleaning
Warped windows or doors, due to temperature    or age Appliances broken due to negligence
Appliances no longer working, but not due to misuse Broken or missing window blinds
Bathroom mirror de-silvering Flea extermination, if a pet lived on the premises
Nail holes in walls from picture hangings Missing smoke or carbon monoxide detectors
Sun-faded wallpaper or paint Keys not returned at end of tenancy
General rug wear

Multiple/large holes in the walls

  • If the tenant fails to pay rent. Nonpayment of rent is a serious violation of the lease.
  • If the tenant breaks a lease early. A lease is a contractual agreement that binds both the landlord and the tenant to the terms of the lease. If the renter breaks the lease before the expiry of its term, you have a right to withhold a portion or all of the security deposit depending on the terms of the Colorado rental lease.

8.     When must a landlord send the deposit back to the renter in Colorado?

Generally, landlords are required to return a security deposit of the tenant 30 days after they move out. However, in some cases, there might be a clause in the lease or rental agreement that specifies a longer period. Colorado landlord-tenant law requires that this period shouldn’t exceed two months.

Dangerous conditions involving gas at the rental property may also influence the duration of time the landlord is required to return the security deposit of the tenant. In Colorado, the landlord has three days to fix such a hazard after receiving notice from the renter. Failure to have it fixed, the renter has a right to break the lease.


In this case, the landlord will have three days to hand part or all of the security deposit back to the tenant.

If there are any deductions, you are required to send an itemized list of the deductions alongside the remaining portion of the security deposit to the tenant. The statement must specify the deductions as well as their costs.

If you fail to include the itemized list of deductions, you may face penalties. Specifically, you may forfeit the right to keep any portion of the deposit.

9.   What happens if the landlord wrongfully withholds the security deposit of the tenant?

If you wrongfully withhold a security deposit of the tenant, you may incur some penalties. Under Colorado security deposit laws, the tenant may get up to thrice the security deposit amount plus court costs.


Security deposits are often a source of friction between landlords and tenants. Hopefully, with this information, Colorado landlords will be able to better handle tenants’ deposits. For more information on managing your Colorado rental property don’t hesitate to contact us today!



Posted by: mcguirepm on April 11, 2018
Posted in: Uncategorized