Colorado Law
Colorado Security Deposit Law (2026): Deadlines, Deductions and the New HB25-1249 Rules
By Denver Rental Managers · Updated October 16, 2026 · 7 min read
Summary
In Colorado, a landlord must return the security deposit, or a written statement of the reasons for keeping any of it, within 30 days after the lease ends, or up to 60 days if the lease says so. Since HB25-1249 took effect on January 1, 2026, landlords must also hand over photos, invoices and other proof within 14 days of a tenant’s request, cannot charge for carpet that was 10 or more years old, and face treble damages for bad-faith withholding.
Key takeaways
- Default return deadline is 30 days after the tenancy ends; a lease can extend it, but never past 60 days.
- Missing the deadline or the written statement forfeits your right to keep any of the deposit.
- Since January 1, 2026, you must provide supporting documentation within 14 days of a tenant’s request.
- Carpet not replaced in the 10 years before move-out cannot be treated as substantially damaged; repainting faces the same high bar.
- Bad-faith withholding exposes you to three times the amount withheld; tenants must give 7 days’ notice before suing.
- Colorado caps security deposits at two months’ rent under SB23-184.
The deadline: 30 days, or up to 60 if the lease says so
Colorado’s security deposit statute is C.R.S. 38-12-103. HB25-1249, signed June 3, 2025 and effective January 1, 2026, rewrote parts of it. The core deadline is now stated plainly: return the deposit within 30 days after the lease terminates or the tenant surrenders the premises. Your lease may set a longer period, but it can never exceed 60 days.
If you keep any part of the deposit, you must deliver a written statement listing the exact reasons for each deduction within that same window. Miss the deadline, or skip the statement, and you waive the right to keep any of the deposit, even for real damage. This forfeiture rule predates HB25-1249, but it is the mistake that costs owners the most.
What you can and cannot deduct
| Allowed deductions | Not allowed |
|---|---|
| Unpaid rent | Normal wear and tear |
| Unpaid utilities the tenant owed | Damage that existed before the tenancy |
| Other charges lawfully owed under the lease | Carpet not replaced in the prior 10 years (treated as not substantially damaged) |
| Repairs for damage beyond normal wear and tear | Routine repainting or cleaning to “make ready” |
Normal wear and tear means the deterioration that comes from ordinary use: minor scuffs, small nail holes, light traffic patterns in carpet, faded paint. Lease clauses that charge tenants for normal wear and tear or pre-existing damage are now void as against public policy, so a “mandatory carpet cleaning fee” or flat “paint fee” in your lease won’t hold up.
Carpet and paint under HB25-1249
You can withhold for carpet replacement only if there is substantial, irreparable damage beyond normal wear and tear that did not exist before the tenancy. Carpet that hasn’t been replaced in the 10 years before the tenancy ends cannot be treated as substantially and irreparably damaged. Interior repainting is held to the same standard: only substantial, irreparable damage caused during the tenancy qualifies.
The new 14-day documentation rule
If you withhold any part of the deposit, the tenant can ask for your proof. You must then provide all relevant documentation in your possession, including photos, inspection forms or reports, receipts, invoices and estimates, within 14 days of the request. In practice, that means you should assemble the evidence before you send the deduction statement, not after.
Walk-through inspections
Either party may request a move-out inspection identifying damage beyond normal wear and tear, in person or virtually, where reasonably practicable. Agree to it. A joint walk-through with photos settles most disputes before they start.
Penalties for getting it wrong
- Forfeiture: missing the 30- or 60-day deadline or the written statement waives your right to withhold anything.
- Treble damages: bad-faith withholding exposes you to three times the amount wrongfully withheld, plus, per Colorado law-firm summaries, the tenant’s attorney fees and court costs.
- Notice before suit: a tenant must give you 7 days’ written notice of their demand and intent to sue. Use that week to fix a mistake.
- Presumptions: law-firm analyses of HB25-1249 describe a presumption of bad faith in some situations, such as keeping 125% or more of the actual cost of damage. Keep deductions tied to real invoices.
How much can you collect in the first place?
SB23-184 caps a Colorado security deposit at two months’ rent. Pet deposits have their own cap of $300 under HB23-1068 and must be refundable. See our pet deposit and pet rent guide. Under HB25-1090, deposits and fees also need to be described accurately in your advertising and lease; see the junk fee law guide.
A compliant move-out process
- Do a detailed, time-stamped photo and video move-in report, and have the tenant sign it.
- Offer a pre-move-out walk-through so the tenant can fix issues.
- Inspect promptly after the keys come back and photograph everything against the move-in report.
- Get real invoices or written estimates for each repair.
- Send the refund and itemized statement well inside 30 days to the tenant’s forwarding address.
- Keep the documentation file ready to send within 14 days of any request.
Common deduction examples
| Situation at move-out | Deductible? |
|---|---|
| Unpaid final month’s rent | Yes |
| Large pet stains requiring carpet replacement, carpet 4 years old | Likely, with photos and an invoice |
| Same stains, carpet 11 years old | No, under the 10-year rule |
| A few small nail holes and light scuffs | No, normal wear and tear |
| Broken blinds or a door kicked in | Yes, with documentation |
| Routine repainting after a 3-year tenancy | Generally no |
| Unit left with trash and heavy grime well beyond move-in condition | Reasonable cleaning cost, with before-and-after photos |
Where and how to send the refund
Send the refund and statement to the tenant’s last known address or the forwarding address they provided, and keep proof of mailing or electronic delivery. If a deposit check comes back undeliverable, HB25-1249 requires you to hold those funds for at least one year and pay them out within 15 days of a written request.
How Denver Rental Managers handles this
Every home we lease gets a photo-documented move-in inspection, and every deposit is accounted for under C.R.S. 38-12-103, with the itemized statement and invoices stored in the owner and resident portals. That paper trail is the difference between keeping a legitimate deduction and paying treble damages. See what’s included in property management and maintenance and inspections.
This guide is general information, not legal advice. Confirm current rules with the Colorado Division of Real Estate or a Colorado attorney before relying on it for a specific dispute.
Sources
This guide is general information for Colorado landlords, not legal advice. Laws change; confirm current requirements with the Colorado Division of Real Estate or a licensed attorney before acting.
