Denver7 Interviews R&H on Apartment Deposit Refund Policy

When a Denver resident put down a $250 deposit for an apartment in Denver, he thought he’d found his next home. The place was beautiful, and everything seemed great until it wasn’t.

When he asked to get his deposit back, things took a turn. The leasing agent told him it would take “60 or so” days to get his deposit refunded from corporate. But when he tried calling the company’s corporate office, no one returned his calls.

Denver7 turned to Robinson & Henry for legal insight and interviewed Managing Partner Don Eby in the story Deposit drama: Corporate apartment managers accused of predatory practices.

According to Eby, who specializes in real estate law, that statement doesn’t hold up under state law.

“In this case, I think the landlord’s a little confused,” said Eby. 

He explained that if no lease was signed, the state statute giving landlords 60 days to return deposits would not apply in this case.

Eby explained that the 60-day window applies only after a lease is in effect and not for deposits taken before a rental agreement is finalized.

“The legal recourse is going to be slow, though,” Eby added. “It’s going to require the tenant to go to the court, pay a filing fee, initiate the court action, have the landlord served, and is likely to take months, even though the tenant is obviously in the right.”

Even when the law favors renters, justice can take time. The process often forces tenants to spend more money and energy fighting for what’s rightfully theirs. Eby explains this is why it’s important to know your rights before signing or paying anything.

Under Colorado law, a landlord typically has up to 60 days to return a security deposit after a tenant moves out, depending on the terms of the lease. But if a lease was never signed, the money isn’t legally a security deposit, it’s considered an application or holding fee, and landlords can’t keep it without cause.

“The right thing to do is give them their money back on an expedited basis,” said Eby.

With Denver’s rental prices climbing, renters are often forced to pay deposits quickly to secure an apartment even before their applications are approved. When those applications are denied, recovering the money can be a challenging process.