Colorado security deposit laws cap deposits at one month’s rent for leases signed on or after January 1, 2026, give landlords one month after the lease ends to return the deposit or deliver an itemized statement of deductions, and allow a tenant to recover triple the wrongfully withheld amount plus attorney fees. The rules sit mostly in CRS 38-12-103 and 38-12-104, with major changes added by HB 25-1249.
How Much a Landlord Can Charge
For leases entered on or after January 1, 2026, the maximum security deposit is one month’s rent. HB 25-1249, signed in June 2025, lowered the previous two-month cap set by SB 23-184.1Colorado General Assembly. HB25-1249 Tenant Security Deposit Protections If your rent is $1,800, the deposit cannot exceed $1,800.
A pet deposit is separate and capped at $300, and it must be refundable.2Colorado General Assembly. HB23-1068 Pet Animal Ownership in Housing It sits on top of the regular deposit but follows the same return and itemization rules.
Labels do not control. A “move-in fee” or “nonrefundable fee” collected to guarantee a tenant’s lease obligations is treated as a security deposit in Colorado, and the caps and return rules apply regardless of what the landlord calls it.
What a Landlord Can Deduct
Colorado allows deductions only for unpaid rent, unpaid utility charges, abandonment of the unit, repair costs for damage beyond normal wear and tear, and cleaning the tenant agreed to in the lease.3Justia. Colorado Code 38-12-103 – Return of Security Deposit General cleaning is not a valid deduction unless the lease specifically requires the tenant to pay for it.
Normal wear and tear is never deductible. Faded paint, minor scuffs on hardwood, and carpet that shows its age after years of use fall in this category. Holes in drywall, broken fixtures, and pet stains do not.
Carpet and Paint
HB 25-1249 tightens the two most common dispute areas. Carpet replacement cannot be deducted unless the carpet has substantial, irreparable damage beyond normal wear and tear that did not exist before move-in. And if the carpet was not replaced with new carpet within the ten years before the lease ended, the landlord cannot claim it was substantially damaged at all.1Colorado General Assembly. HB25-1249 Tenant Security Deposit Protections The same substantial-damage standard applies to paint.
Even when a carpet or paint deduction is valid, the landlord can keep only the minimum amount needed to address the damaged area, not the cost of redoing the whole unit.
Preexisting Damage
Under HB 25-1249, a landlord cannot deduct for any damage or defect that existed before the tenancy began. If a tenant requests it in writing, the landlord must provide any relevant documentation in the landlord’s possession within fourteen days.1Colorado General Assembly. HB25-1249 Tenant Security Deposit Protections
The Deadline for Returning Your Deposit
A landlord has one month after the lease ends or the tenant surrenders the unit (whichever comes last) to return the full deposit or deliver a written statement explaining the deductions and refunding any remaining balance.3Justia. Colorado Code 38-12-103 – Return of Security Deposit The lease can extend this period, but never past 60 days.
A faster deadline applies when a tenant vacates because of an uninhabitable condition. Under CRS 38-12-104, if a landlord fails to make necessary repairs within 72 hours of written notice and the hazard remains, the tenant may vacate and declare the lease void. The landlord then has 72 hours after the tenant vacates to deliver the refund.
The landlord satisfies the mailing requirement by sending the statement and refund to the tenant’s last known address. If you move out, give your landlord a forwarding address in writing. Without one, the refund may go to the rental unit and never reach you.
The Itemized Statement
When a landlord keeps any part of the deposit, the written statement must list the exact reasons for each deduction and arrive with the refund of whatever is left.3Justia. Colorado Code 38-12-103 – Return of Security Deposit Vague entries like “damage” or “cleaning” do not satisfy the law. The statement needs to spell out what was damaged, what was cleaned, and how much each item cost.
Missing the deadline is costly. If no written statement is delivered within the required time, the landlord forfeits all rights to retain any portion of the deposit, even for deductions that would otherwise have been valid.3Justia. Colorado Code 38-12-103 – Return of Security Deposit A statement mailed a week late can wipe out a legitimate damage claim entirely.
If the Landlord Wrongfully Withholds
A landlord who willfully withholds a security deposit in violation of Colorado law is liable for three times the wrongfully withheld amount, plus reasonable attorney fees and court costs.3Justia. Colorado Code 38-12-103 – Return of Security Deposit A $1,500 improper withholding can turn into $4,500 plus legal fees.
The Bad-Faith Presumption
HB 25-1249 adds a presumption of bad faith when the amount withheld is 125% or more of the actual damages. Bad faith also covers retaining funds without actual cause, keeping an amount the landlord knew exceeded real damages, or withholding for a retaliatory or discriminatory purpose. In court, the landlord carries the burden of proving the withholding was justified.1Colorado General Assembly. HB25-1249 Tenant Security Deposit Protections
The Seven-Day Demand Letter
Before filing a lawsuit for treble damages, you must give the landlord written notice at least seven days before filing.3Justia. Colorado Code 38-12-103 – Return of Security Deposit The letter should identify the amount owed and state that you intend to pursue legal action, including treble damages, if the funds are not returned. Skipping this step can undermine a treble damages claim, so send the letter first and keep proof.
Where to File
Most deposit disputes fit in Colorado small claims court, which handles claims up to $7,500.4Colorado Judicial Branch. Opening a Case No lawyer is required. If your treble damages claim exceeds $7,500, you would need to file in county court.
Walk-Through Inspections
Starting in 2026, either the landlord or the tenant can request a walk-through inspection before the lease ends. When the request is reasonable and practicable, both parties must participate. The inspection can be in person or by video call, and it must happen after the tenant has had a chance to remove furniture and before the lease ends or the unit is surrendered.1Colorado General Assembly. HB25-1249 Tenant Security Deposit Protections
The point is to identify any damage beyond normal wear and tear in writing, with both parties present. Tenants who skip it lose a strong chance to contest deductions before they happen. Request it in writing and keep a copy.
When the Rental Property Is Sold
If the landlord sells, dies, or otherwise stops owning the property, CRS 38-12-103(4) gives two options. The landlord can transfer the deposit (minus any lawful deductions) to the new owner and notify the tenant in writing of the new owner’s name and address, or return the deposit directly to the tenant.3Justia. Colorado Code 38-12-103 – Return of Security Deposit HB 25-1249 requires this to happen within 60 days of the landlord’s interest ending.1Colorado General Assembly. HB25-1249 Tenant Security Deposit Protections After the transfer, the new owner takes on the same obligations. Get written confirmation of who holds your deposit.
Assistance Animals Are Not Pets
The $300 pet deposit cap does not reach service animals or emotional support animals. Under the federal Fair Housing Act, landlords must waive pet fees, pet deposits, and breed or size restrictions as a reasonable accommodation for a tenant with a disability-related need for an assistance animal. Charging a pet deposit for one violates federal law. The landlord can still deduct from the regular security deposit for actual damage the animal causes, like any other damage beyond normal wear and tear.
Military Service Members
Service members who terminate a lease under the Servicemembers Civil Relief Act get additional federal protection. Advance rent paid beyond the termination date must be refunded within 30 days. A landlord who knowingly seizes or holds the security deposit or personal property of a service member (or dependent) who has lawfully terminated a lease commits a federal misdemeanor, punishable by a fine, up to one year in prison, or both.5Office of the Law Revision Counsel. 50 USC 3955 – Termination of Residential or Motor Vehicle Leases Colorado’s standard return rules still apply alongside the federal rules.