Security deposit return law in Colorado

In Colorado, a landlord must return the security deposit within 30 days (C.R.S. 38-12-102.5 and 38-12-103 (as amended by HB25-1168, HB25-1249 effective January 1, 2026, and SB26-054)).

Return deadline: 30 days after the tenancy ends
Deposit cap: Two months' rent (conditions below)
Itemized list of deductions: Required
If you get it wrong: A landlord who misses the deadline, gives a statement without exact reasons, fails to return the balance on time, or withholds in bad faith forfeits all rights to withhold any part of the deposit (C.R.S. 38-12-103(2), (2.5)).; C.R.S. 38-12-102.5 and 38-12-103 (as amended by HB25-1168, HB25-1249 effective January 1, 2026, and SB26-054). Verified 2026-09-25.

When the clock starts, and what goes with the money

The landlord must return the full deposit within 30 days after the lease ends or the tenant surrenders the premises, whichever is later, unless the lease sets a longer period, which cannot exceed 60 days.
If the landlord keeps any part, it must send a written statement listing the exact reasons, along with the balance due and any documentation required.
Mailing to the tenant's last-known address, or emailing to an address the landlord knows, counts as delivery (C.R.S. 38-12-103(1)(a)).
Deductions are allowed only for unpaid rent, unpaid utilities, other lawful charges listed in the lease, and necessary repairs for damage beyond normal wear and tear that did not exist before the tenancy (38-12-103(1)(b)).
After giving a statement, the landlord must provide relevant photos, inspection forms or reports, receipts, invoices, or estimates in its possession within 14 days after the tenant asks for them in writing (38-12-103(8)).
Whole-unit carpet replacement or repainting can be charged only for substantial damage beyond wear and tear, and carpet not replaced within the past ten years cannot be treated as irreparably damaged (38-12-103(11)).

How much you can collect

Colorado caps the security deposit at two months' rent (C.R.S. 38-12-102.5 and 38-12-103 (as amended by HB25-1168, HB25-1249 effective January 1, 2026, and SB26-054)). The conditions attached to that cap matter as much as the number:

Since August 7, 2023, a landlord may not require a security deposit greater than two monthly rent payments under the rental agreement (C.R.S. 38-12-102.5(1), added by SB23-184).
Starting January 1, 2027, the cap does not apply when the landlord bought the home from the tenant and the two signed a post-closing occupancy agreement under the purchase contract (38-12-102.5(2), added by SB26-054).
Any lease provision that waives or modifies a tenant protection in this part of the statute is void (38-12-103(7)(a)).

What it costs to get this wrong

A landlord who misses the deadline, gives a statement without exact reasons, fails to return the balance on time, or withholds in bad faith forfeits all rights to withhold any part of the deposit (C.R.S. 38-12-103(2), (2.5)).
Wrongful withholding makes the landlord liable for three times the amount wrongfully withheld, plus reasonable attorney fees and court costs.
The tenant must first give at least seven days' written notice demanding the deposit and stating the intent to sue, and can sue for treble damages only if the landlord does not return the money within those seven days (38-12-103(3)(a), (3)(c)).
Keeping 125% or more of actual damages is presumed to be bad faith, and the landlord bears the burden of proof in court (38-12-103(3)(b), (3.5)).
A landlord who acted in good faith but kept too much owes only the excess and court costs (38-12-103(3.5)(d)).

Holding the deposit

The statute does not require a separate account or interest.
Either party may request a walk-through inspection before move-out, which the landlord must provide at a mutually convenient time after the tenant has had a chance to remove furniture (C.R.S. 38-12-103(1.5)).
The refund may be mailed to the last-known address or, with the tenant's consent, sent by secure electronic transfer.
A refund returned as undeliverable must be held at least one year and paid within 15 calendar days of the tenant's request (38-12-103(9)-(10)).
When a landlord's interest ends by sale or otherwise, whoever holds the deposit must act within 60 days (38-12-103(4)).
A victim-survivor who ends a lease early under 38-12-402 is not liable for damage caused by the responsible party (38-12-103(1)(a)).

Common questions

How long does a Colorado landlord have to return a security deposit?

30 days, under C.R.S. 38-12-102.5 and 38-12-103 (as amended by HB25-1168, HB25-1249 effective January 1, 2026, and SB26-054). The landlord must return the full deposit within 30 days after the lease ends or the tenant surrenders the premises, whichever is later, unless the lease sets a longer period, which cannot exceed 60 days. When the clock starts and what goes back with the money is covered above.

Does Colorado cap the security deposit?

Yes, two months' rent. Since August 7, 2023, a landlord may not require a security deposit greater than two monthly rent payments under the rental agreement (C.R.S. 38-12-102.5(1), added by SB23-184). Starting January 1, 2027, the cap does not apply when the landlord bought the home from the tenant and the two signed a post-closing occupancy agreement under the purchase contract (38-12-102.5(2), added by SB26-054). Any lease provision that waives or modifies a tenant protection in this part of the statute is void (38-12-103(7)(a)).

What happens if a Colorado landlord misses the deadline or withholds wrongly?

A landlord who misses the deadline, gives a statement without exact reasons, fails to return the balance on time, or withholds in bad faith forfeits all rights to withhold any part of the deposit (C.R.S. 38-12-103(2), (2.5)). The full rule is under "What it costs to get this wrong" above.

Does a Colorado security deposit have to be held a particular way?

The statute does not require a separate account or interest. The rest is under "Holding the deposit" above.

The deposit paperwork is the part that gets lost. PropManager keeps the deposit on the lease, the move-out itemization with the tenant's file, and the refund in the ledger, so the record exists before a dispute does.

Sources

C.R.S. 38-12-102.5 and 38-12-103 (as amended by HB25-1168, HB25-1249 effective January 1, 2026, and SB26-054). Source: https://content.leg.colorado.gov/sites/default/files/documents/2025A/bills/2025a_1249_enr.pdf. Verified 2026-09-25.

General information, not legal advice. Check your own lease and any city or county ordinance before you rely on it.

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