Colorado Landlord-Tenant Security Deposit

Wrongful Withholding

In Colorado, a landlord may only withhold a security deposit to cover specific costs such as unpaid rent, damage beyond normal wear and tear, or other breaches of the lease. When a landlord fails to return the deposit without proper justification, this can be considered wrongful withholding. Wrongful withholding can also include failing to provide a clear and honest itemization of deductions or providing inflated deductions.

Under Colorado law, tenants who are victims of wrongful withholding may be entitled to up to three times the amount wrongfully withheld, plus potential reimbursement for legal fees.

If you believe your security deposit was retained in bad faith, the attorneys at Flaxman Law Group can help you assess the situation and take action to recover what you’re owed. Securing the rightful compensation can be important to make sure you can move on to a better housing situation, so contact the Denver office of Flaxman Law Group if you did not get your security deposit back or if an excess amount seems to be withheld.

Dispute Resolution

Colorado landlord-tenant security deposit deposits are common, but they can be resolved. Good communication is the first step. In many cases, a written request to the landlord asking for an itemized list of deductions can resolve the matter. However, if that doesn’t work, tenants have several options for resolving disputes:

• Demand Letters. A formal letter from a lawyer often motivates landlords to comply with the law.
• Mediation. Colorado offers mediation services that allow both parties to reach a mutual agreement outside of court.
• Court. Tenants can file a claim to recover the deposit, and working with an attorney can ensure you are represented fairly.

Flaxman Law Group helps clients navigate these steps with a focus on resolution. We aim to resolve deposit disputes efficiently and fairly, avoiding court when possible but prepared to litigate when necessary.

We also work with landlords who are accused of withholding security deposits wrongfully. We recommend that landlords prevent this situation by:

• Keeping careful documentation. Always take clear and detailed photos of the unit before a tenant moves in and after the renter moves out. This helps you show any specific damages. Always keep records of any communication you have with your tenant about repair requests, maintenance, and repairs completed. The more evidence you have, the easier it can be to show that you acted in good faith.
• Getting contractor estimates for any damages. If there is damage that goes beyond wear and tear, get written estimates from more than one contractor. If you are accused of inflating the cost of repairs, you can show that the deductions you have listed are based on professional estimates.
• Contacting an attorney as soon as possible. There is a lot at stake if you’re a landlord accused of wrongful deductions of a security deposit. You could have to pay three times the security deposit amount, plus the tenant’s legal fees, which can be a significant financial loss. Retaining an attorney early in the dispute can defuse the disagreement and can ensure your rights are protected.

Sometimes, the unexpected happens with a security deposit. A tenant may accidentally give you the wrong forwarding address or may not receive their deposit back due to a problem with the mail or online banking. There may be a disagreement, or a renter may not understand how security deposits work.

Colorado landlord-tenant security deposit disputes also often happen because there are challenging situations. Damage to a rental may have occurred due to a service dog or due to domestic violence, and tenants who are living with a disability or are victims of domestic violence have added protections.

Another issue that can arise is that tenants and landlords can disagree about what constitutes wear and tear. Under Colorado law, wear and tear refers to normal damage and fading that can occur due to normal use. Even with this definition, there can be grey zones. A landlord may claim that a tenant damaged and chipped the paint, for example, while a tenant may claim that the paint is scuffed due to normal wear and tear.

At Flaxman Law Group, we work to resolve the most challenging cases. Our goal is to protect your rights and to help you avoid an escalating conflict. We work to preserve the landlord-tenant relationship through negotiations, since maintaining a good relationship ensures you can get a landlord reference (if you’re a tenant) or can preserve your reputation (if you’re a landlord). We are willing to take your case to court, however, if that is what is needed to get you the outcome you deserve.

Pet Deposits

Colorado law allows landlords to require an additional deposit or fee for tenants with pets. Under House Bill 23-1068, landlords can charge no more than $300 per pet as a pet security deposit, regardless of the type of pet or breed. Under the law, landlords are allowed to charge an additional pet rent, which is capped at 1.5% of the rent per month or $35 (whichever is greater).

Pet security deposits are refundable and meant to cover potential damage caused by the pet. If a pet does not cause damage, the landlord must return the pet deposit and the rest of the security deposit within 30 days after the end of the lease and the move-out date (or within 60 days, if the lease specifies that timeline). The additional pet rent of $35 or 1.5% is usually non-refundable and not applied to any specific damage.

It is important to note that landlords cannot charge pet deposits or fees for service animals. This would be a violation of federal and state disability laws.

Pet damage is a common cause of Colorado landlord-tenant security deposit disputes. Tenants sometimes acquire a pet after moving in or acquire an additional pet, and animals can cause significant damage, including urine stains, chew marks, and more. If you find yourself in disagreement with a landlord or tenant over pet damage, contact a landlord-tenant dispute attorney at Flaxman Law Group for a consultation to review what we may be able to do.

Tenant Rights

Colorado tenants have legally protected rights when it comes to their security deposits, including:

• The right to a timely return of their deposit—usually within 30 days, unless the lease allows for up to 60 days.
• The right to receive a written, itemized statement that clearly explains any deductions.
• Protection from retaliation for asserting their legal rights or filing a complaint.
• The right to pursue legal action if their deposit is wrongfully withheld.

When landlords violate these rules, tenants don’t have to accept it. You have legal options. Your first step if a landlord does not give you a list of reasons for withholding part of your security deposit or does not return your deposit at all within the 30- or 60-day period is to write a seven-day demand letter. You must send this letter by first class mail, but you may also want to send it by certified mail, to have a record of your landlord receiving the notice. In the letter, request an itemized list of deductions or your security deposit.

If your landlord does not comply with security deposit rules, you can sue them for three times what they wrongfully withheld, plus your legal fees. Your landlord can still sue you for money owing them or damages to the rental, but they cannot hold your security deposit.

These situations can quickly become contentious. A landlord may also simply ignore you, making it hard to recover your security deposit. If you need help protecting your rights, contact Flaxman Law Group at 970-999-0530 for a consultation.