Security Deposits in Colorado: A Guide for Owners and Residents

• Key Legal Guidelines in Colorado

  Maximum Security Deposit

  • Under CRS 38-12-102.5, a resident security deposit cannot be more than two months’ rent for most residential tenancies.

  Ownership of Funds

  • Security deposits legally belong to the resident. They are not income for the owner, the landlord, or the management company.

  Trust Accounting

  • Colorado law requires security deposits to be held in a properly designated security deposit trust account, following Colorado real estate regulations. Individual property owners who are NOT licensed in Colorado are NOT required to follow this rule.
  • Under Superior Property Management’s internal policy, owners may not hold resident security deposits. Superior Property Management holds all resident security deposit funds.

  Deposit Amount Disclosure Requirements

  • Clearly stated in all online advertising.
  • Clearly stated before an applicant applies.
  • Listed on Page 1 of our Residential Lease Agreement.

• The Security Deposit Process and Timeline

  • At move-in, the deposit is placed in our trust account, and we complete a move-in inspection with photos.
  • Before move-out, either party may request a walk-through.
  • After move-out, we complete a move-out inspection and compare it to the move-in report.
  • Within 30 days (or up to 60 days if the lease says so), we return the deposit or send an itemized statement with any remaining balance.

• Normal Wear and Tear

  • Deterioration, damage, or uncleanliness from ordinary use, without negligence, carelessness, accident, or abuse.
  • It does not include leaving the home substantially less clean than it was at move-in.

• What Cannot Be Charged to a Security Deposit

  • Normal wear and tear.
  • Damage or conditions that existed before the tenancy.
  • Automatic or flat cleaning fees.
  • Full carpet replacement or full repainting, unless there is substantial damage throughout the home.

• What May Be Charged To A Resident’s Security Deposit

  • Unpaid rent and utilities.
  • Other lawful charges listed in the lease.
  • Repairs for damage beyond normal wear and tear.
  • Cleaning, only if the home is left substantially less clean than at move-in.

• Documentation Standards

  • Move-in and move-out inspection reports with photos.
  • Receipts, invoices, or estimates for every deduction.
  • Documentation provided within 14 days of a resident’s request.

• Disputes

  • Residents may dispute any deduction in writing, and we will review the documentation with them.
  • Before filing a lawsuit, a resident must give the landlord at least 7 days’ written notice.

• Our Philosophy

  • The deposit is the resident’s money. We return it on time, charge only actual, documented costs, and explain every deduction.

Frequently Asked Questions

• What is the maximum resident security deposit allowed in Colorado?

  Two months’ rent for most residential tenancies.

• When must a security deposit be returned?

  Within 30 days after move-out, or up to 60 days if the lease allows.

• What must be provided if money is withheld from a security deposit?

  A written, itemized statement of each deduction. If the resident requests them, supporting photos, receipts, or invoices must be provided within 14 days.

• What qualifies as normal wear and tear?

  Deterioration from ordinary use, such as light scuffs, small nail holes, faded paint, or carpet worn in walkways.

• Can a landlord charge for repainting the entire unit?

  Only if there is substantial damage to the walls or ceilings throughout the home. Otherwise, only the damaged area can be charged.

• Can a landlord charge to replace all carpet?

  Only if the carpet is substantially and irreparably damaged. A landlord cannot charge for replacing carpet that has not been replaced in 10 or more years.

• Can cleaning charges be deducted?

  Only if the home is left substantially less clean than at move-in, and only for the actual cost.

• What is considered wrongful withholding of a security deposit?

  Missing the return deadline, keeping money without actual cause, or withholding in bad faith, such as keeping 125% or more of the actual damages.

• What are the consequences of wrongful withholding?

  The landlord loses the right to keep any portion of the deposit. In bad-faith cases, the landlord may owe three times the amount wrongfully withheld, plus attorney fees and court costs.

• Is a pre-move-out walkthrough required?

  Yes, if the owner or resident requests one and it is reasonably practicable. It can be done in person or by video.

• Who holds the security deposit?

  Superior Property Management holds all resident security deposits in a designated trust account.

• When the resident moves out, who returns the security deposit?

  Superior Property Management returns the deposit, or any remaining balance after documented deductions, to the resident(s) named on the lease.