Colorado security deposit laws cap residential deposits at two months’ rent, require the landlord to return the money within 30 to 60 days after move-out, and let a tenant recover triple the wrongfully withheld amount plus attorney fees if the landlord ignores the rules. A set of reforms that took effect January 1, 2026 added a walk-through inspection right, defined what counts as bad-faith withholding, and voided lease clauses that charge tenants for costs the landlord never actually incurred.
How Much a Landlord Can Charge
Since August 2023, a residential security deposit in Colorado cannot exceed two months’ rent under the lease.1Justia. Colorado Code 38-12-102.5 – Security Deposits – Maximum Amount Anything above that is unenforceable, meaning a tenant can demand the excess back even if they signed a lease agreeing to pay it.
Mobile home park residents have tighter limits. Deposits on single-wide units cannot exceed one month’s rent, and multiwide units are capped at two months’ rent. Mobile home park landlords also have to hold deposits in a separate trust account, not mixed with personal or business funds.2Colorado General Assembly. Colorado Code 38-12-200.1 – Mobile Home Park Act
The two-month cap applies to refundable security deposits. Nonrefundable application fees and pet fees are governed by different rules and are not what this article covers.
When the Deposit Must Come Back
A landlord has one month after the lease ends or the tenant surrenders the unit, whichever is later, to return the deposit along with a written statement of any deductions.3Justia. Colorado Code 38-12-103 – Return of Security Deposit The lease can extend that window, but no lease can push the deadline past 60 days.
Surrender generally means moving out and returning the keys. If a tenant leaves belongings behind or never hands over the keys, the clock may not start, so confirm the move-out date in writing. Also give the landlord a forwarding address. The statute only requires them to send the deposit and the written statement to the last address they have on file.
What the Landlord Can Deduct
Colorado distinguishes normal wear and tear, which the landlord absorbs, from actual damage, which comes out of the deposit. Wear and tear is deterioration from ordinary use without negligence, carelessness, or abuse by the tenant, household members, or guests.4Justia. Colorado Code 38-12-102 – Definitions As of 2026, the definition explicitly covers uncleanliness from ordinary use, but it does not cover a unit left substantially less clean than it was at the start of the lease.5Colorado Division of Real Estate. HB25-1249 Summary
In practice, light carpet wear in traffic areas, small nail holes, and faint scuffs on walls are wear and tear. Large holes in drywall, broken fixtures, burns in flooring, and pet damage to doors or trim are tenant damage the landlord can charge for.
Beyond physical damage, a landlord can deduct for:
- Unpaid rent and contractual late fees still owed at move-out.
- Unpaid utility bills that were the tenant’s responsibility under the lease.
- Financial losses from abandonment if the tenant left before the lease ended.
- Cleaning to restore a unit left substantially dirtier than it was at move-in.
- Attorney fees and court costs if the lease authorizes them.
The 2026 reforms added an important guardrail. Any lease provision that assigns a tenant a fee or charge for repairs, cleaning, or similar costs that were not actually incurred is void.5Colorado Division of Real Estate. HB25-1249 Summary A landlord cannot charge for damage that does not exist, even if the lease says they can.
The Itemized Statement Requirement
If the landlord keeps any portion of the deposit, the law requires a written statement listing the exact reasons for each deduction, sent with the balance.3Justia. Colorado Code 38-12-103 – Return of Security Deposit A one-line entry like “damages — $500” does not satisfy the rule. Each charge has to correspond to a specific repair, cleaning task, or unpaid obligation.
Miss the deadline or skip the written accounting, and the landlord forfeits the right to keep any part of the deposit. The entire amount becomes refundable regardless of whether real damage existed.3Justia. Colorado Code 38-12-103 – Return of Security Deposit This is where landlords most often lose disputes.
The Walk-Through Inspection
Starting January 1, 2026, either the tenant or the landlord can request a walk-through inspection before the lease ends, as long as the tenant has had the chance to remove furniture and belongings first. The walk-through can be in person or over a live video call.5Colorado Division of Real Estate. HB25-1249 Summary
A walk-through gives you a chance to fix problems before they turn into deductions. Request one in writing, and take timestamped photos during the inspection regardless of what the landlord documents. If no formal walk-through happens, photograph the unit anyway on the day you hand over the keys.
Treble Damages and the Seven-Day Notice
A landlord who willfully keeps deposit money in violation of the return and accounting rules can be ordered to pay triple the amount wrongfully withheld, along with reasonable attorney fees and court costs.3Justia. Colorado Code 38-12-103 – Return of Security Deposit On a $3,000 deposit, that is a $9,000 judgment before fees.
Before filing suit, the tenant has to send the landlord written notice at least seven days in advance stating an intent to file legal proceedings.3Justia. Colorado Code 38-12-103 – Return of Security Deposit Skip the notice and you lose the right to treble damages, even if the landlord clearly violated the law. Send it by certified mail or another method that creates proof of delivery.
Most of these cases are small enough to belong in small claims court, which handles claims up to $7,500 excluding interest and costs.6Colorado Judicial Branch. Opening a Case Larger disputes, including those where treble damages push the total above the small claims limit, belong in county court.
What Counts as Bad Faith
The 2026 law gives courts a concrete benchmark. A landlord is presumed to have acted in bad faith if the amount deducted is 125% or more of the actual damages. Bad faith also exists when a landlord withholds money without actual cause, knows the deductions exceed actual costs, or keeps the deposit for a retaliatory or discriminatory reason.5Colorado Division of Real Estate. HB25-1249 Summary
If the Property Changes Hands
When ownership of the rental changes for any reason, the 2026 law gives the outgoing landlord 60 days to do one of two things: transfer your deposit to the new owner and notify you of the new owner’s name and address, or return the deposit directly to you minus any lawful deductions.5Colorado Division of Real Estate. HB25-1249 Summary Once transferred, the new owner takes on all the same obligations. If nobody tells you where your deposit went, raise it in writing right away. Silence from a departing landlord is often the first sign of a deposit about to disappear.
Carve-Outs for Assistance Animals and Military Tenants
Under the federal Fair Housing Act, a landlord cannot charge a pet deposit or pet fee for a service animal or emotional support animal, because those animals are not pets. The landlord can still charge for actual damage the animal causes; the protection runs against upfront fees, not against accountability for harm.
Active-duty servicemembers who terminate a lease under the Servicemembers Civil Relief Act, typically because of a permanent change of station or deployment orders, have 30 days from the termination date to receive the deposit back minus actual damages, along with any unused prepaid rent. A landlord who knowingly seizes or withholds a servicemember’s deposit to collect rent after the lease termination date commits a federal misdemeanor, punishable by a fine, up to a year in prison, or both.7Office of the Law Revision Counsel. 50 USC 3955 – Termination of Residential or Motor Vehicle Leases That criminal exposure makes servicemember deposit disputes one of the few deposit matters that can go beyond a civil judgment.