Colorado Security Deposit Laws (2025/2026 Updates)
Understand Colorado's new residential security deposit laws, including the 1-month cap, installment payments, return deadlines, and illegal deductions.
Legal Disclaimer
This content is for general informational and educational purposes only. It does not constitute legal advice and should not be relied upon as such. Laws change frequently — always verify current regulations and consult a licensed attorney in your jurisdiction for advice specific to your situation. Landager is a property management platform, not a law firm.Information last verified: May 2026.
Colorado Security Deposit Laws
Governed by the Colorado Revised Statutes, the state's security deposit framework was recently updated by HB 25-1249 ("Tenant Security Deposit Protections"). These provisions took full effect on January 1, 2026, establishing new standards for how landlords process deductions and handle walk-through inspections.
Official Law Citation: The rules and regulations outlined on this page are strictly configured under the official Colorado Revised Statutes (C.R.S. § 38-12-103).
Deposit Limits and Installments (Effective Jan 1, 2026)
Colorado landlords are subject to the following standards regarding move-in costs:
- Maximum Amount: The provided legal sources (HB 25-1249) do not specify a maximum security deposit amount.
- Installment Payments: The current statutes do not provide specific requirements or rights for tenants to pay security deposits in monthly installments.
- Eviction Protections: There are no specific statutory provisions in HB 25-1249 addressing eviction protections related to missed security deposit installment payments.
Holding the Deposit
The provided legal sources do not specify requirements for how landlords must hold security deposits, such as mandates for separate or interest-bearing escrow accounts.
Allowable Deductions
A landlord may not retain a security deposit to cover "normal wear and tear," and Colorado law provides an expanded definition of this term. Key restrictions include:
- Preexisting Damage: A landlord may not retain a security deposit for any damage or defective condition that preexisted the tenancy.
- Carpets and Paint: Deductions for carpet replacement or painting are restricted. A landlord cannot retain funds for these unless there is substantial and irreparable damage exceeding normal wear and tear that did not preexist the tenancy.
- The 10-Year Rule: Carpet may not be deemed substantially and irreparably damaged if it has not been replaced with new carpet within the 10 years preceding the termination of the lease or surrender of the premises.
- Minimum Necessary Amount: If a landlord has actual cause for retention, they may retain only the minimum amount necessary for replacement or repainting in the specifically damaged area.
Walk-Through Rights
Upon a reasonable and practicable request from either the landlord or tenant, a walk-through inspection must be conducted to identify in writing any damage or defective conditions beyond normal wear and tear that did not preexist the tenancy.
- Format: The inspection may be conducted in person or via telecommunication.
- Timing: The inspection must occur at a mutually convenient time before lease termination or premises surrender, and after the tenant has had the opportunity to remove furniture.
Return Deadlines and Required Documentation
If actual cause exists for retaining any portion of a security deposit, the landlord must provide the tenant with a written statement listing the exact reasons for retention and the difference between the sum deposited and the amount retained.
- Documentation Requests: If the tenant makes a written request, the landlord must deliver any relevant documentation in their possession or control (such as receipts or estimates) within 14 days of that request.
- Transfer of Interest: Upon cessation of a landlord's interest in a dwelling unit, the person in possession of the deposit must transfer it to the successor in interest or return it to the tenant within 60 days.
- Returned Payments: If a refund payment is returned to the landlord, the landlord must hold it for at least one year and disburse it to the tenant within 15 calendar days upon request.
Penalties for "Bad Faith" Withholding
A landlord wrongfully withholds a security deposit if they fail to timely provide the written statement and required documentation, provide an inadequate statement, fail to timely return the difference, or retain the deposit in bad faith.
Bad faith retention occurs if the amount retained:
- Unreasonably exceeds actual damages (presumed if the amount is 125% or greater than actual damages).
- Is retained without actual cause.
- Is an amount the landlord knew or should have known exceeded actual damages.
- Is retained for an unlawful, retaliatory, or discriminatory purpose.
In any court action, the landlord bears the burden of proving the amount of actual damages incurred.
Simplify Colorado Compliance
Handling 14-day documentation deadlines and managing walk-through requests manually can lead to legal disputes. Landager streamlines the documentation process, digitizes move-in inspection records, and archives repair receipts, ensuring you are audit-proof under the new Colorado laws.
How Landager Helps
Landager tracks lease terms, required compliance items, and accounting records - making it easy to stay compliant with Colorado regulations.
Frequently Asked Questions
▶What are the Colorado security deposit rules and return deadlines?
Colorado has specific rules governing how much landlords can charge for security deposits, how deposits must be held, and the deadline for returning deposits after a tenant moves out. Landlords must provide an itemized statement of any deductions made from the deposit. Failure to comply with deposit return deadlines can result in penalties and the forfeiture of the landlord's right to claim deductions.
▶What are the Colorado landlord-tenant laws every property owner should know?
Colorado's residential rental market has undergone a dramatic legislative transformation in recent years. Sweeping updates in 2024 and 2025 significantly increased tenant protections, most notably enacting "For-Cause" eviction policies, strict caps on late fees, and brand new limits on security deposits effective in 2026. This guide covers the essential compliance requirements for property owners and landlords.
Read the complete guide▶What is the Colorado eviction process and how long does it take?
The Colorado eviction process requires landlords to provide written notice to tenants before filing a court action. The type and length of notice depends on the reason for eviction — typically shorter for non-payment of rent and longer for lease violations or no-fault terminations. Self-help evictions (changing locks, removing belongings, shutting off utilities) are illegal in Colorado. The full court process varies but typically takes several weeks.
Read the complete guide▶What are the Colorado rent increase laws and caps for landlords?
Colorado has specific rules governing when and how landlords can increase rent. During a fixed-term lease, rent generally cannot be increased unless the lease explicitly allows it. For month-to-month tenancies, landlords must provide proper written notice before an increase takes effect. Check whether Colorado has any local rent control ordinances that may impose additional caps or requirements.
Read the complete guide▶What is the grace period for late rent in Colorado?
Colorado has specific rules regarding grace periods for late rent and the amount that can be charged as a late fee. Late fee provisions must be stated in the lease agreement, and fees must be reasonable. Check Colorado state law and any applicable local ordinances for the exact grace period and late fee limits that apply to your rental property.
Read the complete guide▶What disclosures must Colorado landlords provide to tenants?
Colorado landlords must provide certain disclosures to tenants before or at the time of lease signing. Common required disclosures include lead-based paint hazards (for pre-1978 buildings, a federal requirement), the identity of the landlord or property manager, and any known material defects in the property. Additional state-specific disclosures may include flood risk, mold hazards, and environmental conditions.
Read the complete guide▶What are the Colorado lease requirements for rental properties?
Colorado recognizes both written and oral leases, though written leases are strongly recommended for terms longer than one year. Lease agreements should include the rent amount, payment due date, security deposit terms, maintenance responsibilities, and rules regarding entry, pets, and subletting. Certain lease clauses that waive tenant statutory rights may be void and unenforceable under Colorado law.
Read the complete guide▶What are Colorado landlord maintenance obligations and habitability standards?
Colorado landlords must maintain rental properties in a condition that is fit for habitation and complies with applicable building, housing, and health codes. This includes maintaining structural integrity, plumbing, heating and cooling systems, electrical systems, and pest control. Tenants typically have the right to request repairs in writing, and if repairs are not made within a reasonable time, tenants may have legal remedies available.
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