Do you know that when a tenant moves out, if his or her security deposit is mishandled by the landlord the tenant can sue the landlord, recouping their attorney fees and triple the amount of the initial security deposit?
That’s good news for tenants who face mounting financial pressures in Colorado’s hot rental market. Thanks to state law (§ 38-12-102 to 38-12-104), renters are afforded certain protections when it comes to their security deposit. The law views a tenant’s security deposit as not belonging to the landlord. But, rather that the landlord is merely in possession of it until the end of the lease.
Our real estate attorneys have seen many Colorado renters face financial hardship all because a landlord wasn’t aware of, or did not adhere to state law. For renters, it is extremely important to understand the law and know your rights in order to avoid unnecessary security deposit drama when a lease is up.
3 Must-knows about Colorado security deposit laws
1. A landlord cannot mislabel a security deposit. For example, a landlord cannot call the security deposit something else, such as prepaid rent or a fee. They cannot use lease language stating that the sum is “not a security deposit.” Nor can they contractually make the security deposit “non-refundable.”
2. When a landlord keeps some/all of the security deposit. A landlord may be able to keep a tenant’s security deposit, or a portion of the deposit, to cover unpaid rent, utility bills or cleaning bills; to fix any damage in excess of normal wear and tear; and if the property is abandoned by the tenant. If a landlord is deducting some/all of the security deposit, then he or she is obligated by law to give the tenant an itemized statement that specifically lists how much is being deducted and why.
3. How long a landlord has to return a security deposit. In general, a landlord has one month from the termination of tenancy to return a tenant’s security deposit unless otherwise stated in a lease agreement. However, a maximum amount of time a landlord must return the deposit is 60 days.
If a landlord violates any of his or her responsibilities, such as taking some/all of the deposit without sending the tenant an itemized list or fails to return the security deposit within 60 days, then the landlord may forfeit his or her right to keep the amount of money and may be liable for further damages.
As the facts and circumstances vary for each dispute, we encourage you to contact us at 303-688-0944. Our real estate attorneys can advise you regarding the facts pertaining to your case and determine how the laws discussed in this article apply to you.