Overview
Security deposits in Colorado are regulated to protect both landlords and tenants by setting clear rules around their collection, storage, and return. These regulations ensure transparency and minimize disputes at the end of a lease.
Under Colorado Revised Statutes § 38-12-101 to § 38-12-104, landlords are required to follow specific procedures when handling security deposits. Failure to comply may result in penalties, including monetary damages.
This guide covers:
How much landlords can charge
Where deposits must be stored
Rules for returning security deposits
Penalties for non-compliance
Related Statute: C.R.S. § 38-12-101 to § 38-12-104
1. Security Deposit Limits & Storage Requirements
Maximum deposit: Colorado does not impose a statutory limit on the amount a landlord may charge as a security deposit.
Storage requirements: Colorado law does not require landlords to hold security deposits in a separate or interest-bearing account.
Tenant notification: There is no requirement to disclose the location or status of the security deposit account to tenants.
Law Reference: C.R.S. § 38-12-102
2. Security Deposit Returns & Allowable Deductions
Return deadline: Landlords must return the security deposit within 30 days of lease termination unless the lease specifies a longer period, not to exceed 60 days.
Permissible deductions: Landlords may withhold part of the deposit for unpaid rent, damage beyond normal wear and tear, and other lease violations.
What landlords cannot deduct: Landlords may not deduct for normal wear and tear, such as faded paint or minor scuffs.
Itemized statement required: If any portion of the deposit is withheld, the landlord must provide a written, itemized list of damages and associated costs.
Law Reference: C.R.S. § 38-12-103
3. Interest Payments & Documentation Requirements
Interest payments: Colorado does not require landlords to pay interest on security deposits.
Move-in condition report: While not mandatory under state law, landlords are encouraged to document the property condition to support any deductions.
Tenant review period: There is no statutory review period, but tenants may dispute deductions after receiving the itemized statement.
Failure to provide documentation: If the landlord fails to return the deposit or provide an itemized statement within the legal timeframe, they may forfeit the right to withhold any part of it.
Law Reference: C.R.S. § 38-12-103
4. Penalties for Mishandling Security Deposits
Colorado imposes penalties on landlords who violate deposit laws.
Failure to return the deposit within 30–60 days may entitle the tenant to receive treble (three times) the amount wrongfully withheld, plus court costs and attorney fees.
Failure to provide an itemized statement can result in the same penalties if the landlord is found to have acted in bad faith.
Law Reference: C.R.S. § 38-12-103(3)
Key Takeaways
Colorado does not limit the amount that can be charged as a security deposit.
Deposits must be returned within 30 days unless the lease specifies a longer period (up to 60 days).
Only specific deductions are allowed—normal wear and tear cannot be charged.
Landlords must provide an itemized statement if any funds are withheld.
Non-compliance can result in triple damages owed to tenants.
By understanding and following Colorado security deposit laws, landlords can avoid costly legal issues, and tenants can ensure their rights are protected
Disclaimer: This blog post is intended for informational purposes only and does not constitute legal advice. Readers should not act or refrain from acting based on any information included in this post without seeking legal counsel or other professional guidance specific to their situation. The information is provided “as is” without any representations or warranties of any kind, express or implied, including but not limited to the accuracy, completeness, or reliability of the content. Laws and regulations may change and vary by jurisdiction.
