In most circumstances, when a tenant wants to rent a home they are required to pay a security deposit. Security deposits protect the owner's interest if the tenant damages the rental unit beyond normal wear and tear.
Not charging a security deposit can lead to devastating consequences. Just ask any landlord who's replaced a wood floor for a resident with a high-energy dog.
Planning to charge a security deposit? It's important to understand Colorado security deposit law. Security deposit laws differ between states, counties, and cities.
So, what are the rules a landlord must follow when asking for security deposits in Colorado? Keep reading to learn everything you need to know about Colorado security deposit law.
Are There Colorado Security Deposit Limits?
As a landlord, you will be glad to know that Colorado does not set a specific limit on the amount you can charge for a security deposit on a rental. It is common for landlords to ask for an amount equal to one month of rent.
Keep in mind that city, county, and federal laws regarding tenant and landlord rights may differ from state law. Make sure you check all of them to avoid any infractions.
Are Landlords Required To Provide Receipts for Security Deposits in Colorado?
Colorado security deposit law does not require a landlord to provide a tenant with a receipt for a security deposit. However, keeping track of your tenant's security deposits is highly recommended.
Where Should Colorado Landlords Save Security Deposits?
A landlord can save a security deposit in any manner they choose. Colorado security deposit law does not specify where a landlord must keep security deposits.
You can decide whether you store your security deposits with a bank, in a personal account, or buried in the backyard.
What's the Deadline To Return a Security Deposit?
Colorado security deposit laws require a landlord to return a security deposit to a tenant within one month of the tenant vacating the rental property.
The only time this can change is if the landlord and the tenant have agreed upon a longer period of time. That period of time must be stated in the lease. The period of time cannot extend longer than 60 days from move-out.
When Can A Landlord Keep a Security Deposit?
First of all, the law does not allow for non-refundable security deposits in Colorado. The security deposit is the tenant's property. The landlord simply holds onto that property for their security.
Under no circumstances can a landlord force a tenant to pay a non-refundable security deposit. However, there are circumstances under which a landlord can keep a security deposit.
In the event a tenant's behavior is in violation of the terms of their lease, the landlord is entitled to keep some or all of the tenant's security deposit. Here are some of the circumstances that apply:
- The tenant damages the rental unit in excess of normal wear and tear
- The tenant fails to pay their rent
- The tenant fails to pay for their utilities
- The tenant fails to pay for repairs
- The tenant fails to pay for cleaning
It's a good idea to include these kinds of terms in the tenant's lease. The more clear you are about expectations and consequences, the less likely it is for a tenant to dispute your reasons for keeping their deposit.
Colorado Security Deposit Law in Brief
To summarize, Colorado security deposit law does not set a limit for what a landlord can charge as a security deposit. Landlords are not required to provide security deposit receipts or save security deposits in a specific way.
Colorado landlords must return security deposits unless the tenant has violated their lease in some manner. Then the landlord can use the deposit to cover the costs of the violation.
For more information about property management solutions, check out our owner/investor services at Laureate Limited or call us today at 303-578-3733.
