Security deposits in Colorado are regulated by Colorado Revised Statutes § 38-12-101 to § 38-12-104. Certain municipalities may have local laws that supplement state regulations. To ensure full compliance, verify the requirements applicable in your area.

Maximum Security Deposit

Security deposits are limited to two months’ rent. Landlords/property managers may collect an additional refundable deposit of up to $300 for pets.

Holding & Interest Requirements

Holding Requirements: Colorado state law does not currently specify where landlords/property managers must hold security deposits.

‍Interest on Deposits: Colorado state law does not currently require landlords/property managers to pay tenants interest on security deposits.

Information Provided to Tenant: There is currently no specific requirement for landlords/property managers to provide tenants with information about where the security deposit is held

Deposit Refunds

Timeline: Security deposits must be returned to the tenant within 30 days of the tenant vacating the property unless: (1) the lease specifies a longer period, which can be up to 60 days, or (2) the tenant is forced to vacate the property due to a hazardous condition that the landlord/property manager fails to repair, in which case the security deposit or portion thereof must be returned within 72 hours of vacancy.

Permissible Deductions: Landlords/property managers may deduct the following from a security deposit:

• Unpaid rent or utilities
• Damages beyond normal wear and tear
• Cleaning fees contracted for by the tenant
• Damages due to the tenant’s abandonment of the property

Documentation of Deductions: If landlords/property managers retain any portion of the security deposit, they must provide an itemized list of deductions and the exact reason for each deduction. 

‍Penalties for Violations: Failure to return the security deposit or provide a written statement of deductions as required may result in the landlord/property manager being liable for up to three times the portion of the security deposit that is wrongfully withheld, plus attorney’s fees and court costs if the tenant wins in a lawsuit.

Sale of the Rental Property

Upon sale of the property, the landlord/property manager must, within a reasonable time:

• Transfer the security deposit, or any remainder after lawful deductions, to the new owner and notify the tenant by mail of such transfer and of the new owner's name and address; or
• Return the security deposit, or any remainder after lawful deductions, to the tenant.