Security Deposits
A security deposit is any deposit of money with the primary function to secure a rental agreement for the residential property. Colorado Revised Statutes § 38-12-102(2) (link to law below).
Return of the Security Deposit
Within one month after the lease ends or the tenant returns the property to the landlord, the landlord must return the security deposit to the tenant or mail the tenant a written statement of the exact reasons why the landlord is keeping part or all of the deposit. A written lease may extend the time for the landlord to return the deposit up to 60 days. It is important for tenants to provide a new address to landlords when they move out because the landlord only has to send the refund and/or written statement to the tenant’s last known address. A landlord may not keep the deposit for normal wear and tear but may keep the security deposit for nonpayment of rent, late fees, abandonment of the property, utility bills, repair work, cleaning and/or other contractual fees, such as attorney fees and court costs. For more information on the return of a security deposit, read Colorado Revised Statutes § 38-12-103(1) (link to law below).
Normal Wear and Tear
Normal wear-and-tear is minor damage to property that occurs due to the use of the property as intended, without negligence, carelessness, accident or abuse by the tenants or their guests. Colorado Revised Statutes § 38-12-102(1) (link to law below). A landlord cannot keep the security deposit to cover normal wear and tear.
Failure to Return the Security Deposit or Provide an Accounting
If the landlord does not send a written statement to the tenant within the time limit, the landlord gives up the right to keep any of the deposit. A landlord may be liable for three times the amount of the deposit he or she keeps plus attorney fees and court costs if the landlord willfully and wrongfully keeps part or all of the deposit. For more information on landlord liability for not returning a security deposit, read Colorado Revised Statutes § 38-12-103 (link to law below).
Lawsuit by the Tenant
For a tenant to sue for three times the amount of the deposit that the landlord has wrongfully kept, the tenant must give a written notice to the landlord of the tenant’s intent to sue at least seven days before filing the lawsuit. A tenant may want to send this letter by certified mail, return receipt requested. At trial, the landlord must prove that keeping the deposit or any portion of it was not wrongful. In evaluating damage to the property, it is very helpful if the landlord and the tenant have pictures of the condition of the property (apartment or house, including yard) from when the tenant moved in and when the tenant moved out.
Links to Laws
Definitions
Colorado Revised Statutes § 38-12-102
Return of Security Deposit
Colorado Revised Statutes § 38-12-103
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