Colorado Security Deposit Law Changes in 2026 (HB25-1249)
On January 1, 2026, House Bill 25-1249 rewrote Colorado’s security deposit statute, C.R.S. § 38-12-103. Because the free legal databases still show the pre-2026 text, most guides and even some legal summaries now describe rules that no longer apply. Here is what actually changed, for landlords and tenants, with each point tied to the statute. Verified against the enacted act August 22, 2026.
What changed, at a glance
| Rule | Before 2026 | Under HB25-1249 (2026) |
|---|---|---|
| Return deadline | “Within one month” | Within 30 days (a lease may extend it, up to 60 days) |
| Triple-damages trigger | “Willful” retention (a deliberate act) | “Wrongful” retention, now defined in the statute |
| Move-out walk-through | No such right | Tenant may require one before move-out |
| Supporting documents | No duty to share | 14 days to provide, on the tenant’s written request |
| Over-keeping | Judged case by case | Keeping 125% or more of actual damages is presumed unreasonable |
| Reasons you can deduct | Loose list (included “abandonment”) | Closed list of four categories |
| Good-faith mistake | Full triple-damages exposure | Excess plus court costs only (safe harbor) |
| Carpet replacement | General standard | No replacement charge for carpet not replaced with new carpet in the last 10 years |
| Deposit cap | Two months’ rent | Unchanged: still two months’ rent |
The change applies by conduct date: it governs any lease termination or surrender on or after January 1, 2026, no matter when the lease was signed.
New duties for a Colorado landlord
- A move-out walk-through inspection (§ 38-12-103(1.5)). Either party may request a walk-through before the lease ends, and a tenant’s request creates a duty on the landlord to provide one, at a mutually convenient time and after the tenant has had a chance to remove furniture. It can be done in person or by a live video walk-through, and it identifies, in writing, damage beyond normal wear and tear that did not predate the tenancy. That written record is exactly the kind of documentation a tenant can later demand under subsection (8), which is why many landlords choose to conduct one. Note that the statute does not say damage left off the walk-through becomes un-chargeable (that consequence was proposed and removed before passage), and this right does not apply to a mobile home in a mobile home park.
- Documentation within 14 days, on request (§ 38-12-103(8)). For a move-out on or after January 1, 2026, if the tenant makes a written request, the landlord must hand over the documentation it has that supports keeping the deposit, including photographs, inspection forms or reports, receipts, invoices, or estimates, within fourteen days. Without a written request the duty is not engaged. There is no separate fine for missing it, and a documentation shortfall on its own is not a listed ground for the penalties below; it is tied to the written statement those rules turn on.
- Email and electronic delivery, measured by sending (§ 38-12-103(1)(a), (10)). The landlord may mail the refund to the tenant’s last-known address or, with the tenant’s consent, send it by a secured electronic transfer of funds, and may send the written statement to an email address it has actual notice of. Compliance is measured by sending, not by the tenant receiving it, so a landlord meets the deadline by sending on time; proof of what was sent and when is what would show compliance if it is later disputed.
- A one-year hold on a returned refund (§ 38-12-103(9)). If a mailed refund comes back undeliverable, the landlord must hold the money for at least one year and pay it to the tenant within fifteen calendar days after the tenant asks for it. (Some summaries say three business days; the statute says fifteen calendar days.)
A harder penalty, and a defined “wrongful”
Before 2026, triple damages required a willful retention, which courts read as a deliberate act. HB25-1249 lowered the trigger to a wrongful retention and then spelled out what that means, so ordinary paperwork failures can now cross the line:
- A withholding is wrongful if the landlord fails to provide the required written statement, together with any documentation the tenant has requested; gives a statement that does not list the exact reasons; misses the deadline to return the balance; or keeps money in bad faith (§ 38-12-103(2.5)). A documentation shortfall on its own is not a listed ground here.
- Keeping 125% or more of the actual damages is presumed to be unreasonably excessive, which is one way a withholding is in bad faith. This is a floor, not a ceiling: a court can find a smaller overcharge unreasonable too (§ 38-12-103(3.5)(b)).
- Forfeiture now follows any failure to comply with the section, not just a late statement: a landlord who does not follow the rules, or who otherwise wrongfully withholds, loses the right to keep any part of the deposit (§ 38-12-103(2)).
- In court the landlord carries the burden of proving that the withholding was not wrongful, that the landlord complied with the section, and the actual amount of damages (§ 38-12-103(3)(b), (3.5)(c)).
The 125 percent line is one of the most consequential additions, and the statute puts it plainly:
An amount retained by a landlord is presumed to unreasonably exceed the amount of actual damages the landlord incurred if the amount retained is one hundred twenty-five percent or greater than the actual damages incurred. C.R.S. § 38-12-103(3.5)(b)
When a withholding is wrongful, the landlord can owe three times the wrongfully withheld amount, plus the tenant’s reasonable attorney fees and court costs (§ 38-12-103(3)(a)). How the tripled figure is measured, on the whole deposit or only the un-accounted portion, is an unsettled question in Colorado, so the tool shows this exposure conservatively rather than as a single hard number.
Two protections for a careful landlord
The 2026 law is not one-sided. Alongside the harder penalty, it added two off-ramps that a compliant, good-faith landlord can rely on:
- A 7-day chance to cure (§ 38-12-103(3)(c)). A tenant can bring the triple-damages case only if the landlord fails to return the deposit within seven days after receiving the tenant’s demand and notice of intent to sue. Return the full deposit, or the withheld portion, inside that window and the treble claim cannot be brought. Our reading of the statute, in line with prior Colorado case law, is that only returning the money cures it; a late accounting does not.
- A good-faith safe harbor (§ 38-12-103(3.5)(d)). A landlord who kept the deposit in good faith and complied with every requirement of the section, but is found in court to have reasonably kept a bit more than the actual damages, owes only the excess amount plus court costs, with no triple damages and no attorney fees. It applies only if the landlord otherwise followed all of the section’s rules.
Fewer reasons you can keep the money
The old statute let a landlord retain the deposit under a loose list that included things like “abandonment of the premises” and cleaning the tenant had contracted for. HB25-1249 closed that list. In the statute’s words, “a landlord has actual cause to retain reasonable amounts from the security deposit only for” four things: unpaid rent, unpaid utility charges, other lawful charges the lease specifically lists, and necessary repair of damage that both exceeds normal wear and tear and did not predate the tenancy (§ 38-12-103(1)(b)). A deduction that does not fit one of the four is wrongful, and a lease clause that tries to shift normal-wear or preexisting-condition costs to the tenant is void (§ 38-12-103(7)).
Ownership changes now have a hard 60-day deadline
If the landlord’s interest in the property ends, by sale, assignment, death, or a receiver, whoever holds the deposit must, within sixty days, either transfer it (less any lawful deductions) to the new owner and mail the tenant notice of the transfer and the new owner’s name and address, or return it to the tenant. HB25-1249 replaced the old “within a reasonable time” with this fixed 60-day deadline (§ 38-12-103(4) to (6)).
What did not change
The deposit cap is still two months’ rent. A one-month cap and a right to pay the deposit in installments were in an early draft of HB25-1249 and were stripped before it passed, so the widely repeated claim that Colorado cut deposits to one month in 2026 is wrong (§ 38-12-102.5). See the full breakdown on the Colorado deposit limits page.
A second 2026 act did amend that section, without touching the amount. SB26-054 took effect August 12, 2026 and adds one narrow exception that does not itself begin until January 1, 2027: from that date the two-month cap does not apply where the landlord and tenant have executed a post-closing occupancy agreement under a purchase contract by which the landlord bought the residence from the tenant. That is a seller rent-back rather than an ordinary tenancy, so for a normal rental the cap is two months’ rent both before and after that date.
Where each change is covered in depth
- The 30-day deadline, the written statement, and how the wrongful-withholding and cure rules play out in a letter: Colorado security deposit return letter.
- The expanded normal-wear-and-tear definition, the preexisting-condition bar, and the carpet and paint limits: normal wear and tear vs. damage in Colorado.
- The two-month cap, the one-month myth, and the pet and mobile-home-park limits: Colorado security deposit limits.
Work out your Colorado deposit return under the new law
The free Colorado deposit tool applies the 2026 rules for you: the 30-day deadline, the four lawful deduction categories, the carpet and paint limits, the good-faith and cure protections, and a statute-cited return letter, all in your browser with nothing stored.
Colorado 2026 deposit law changes: common questions
What did Colorado’s 2026 law (HB25-1249) change about security deposits?
A lot. It shortened the return deadline wording from “one month” to “thirty days,” changed the trigger for triple damages from “willful” to “wrongful” and defined that term, added a move-out walk-through right, added a 14-day duty to hand over supporting documentation on request, added a presumption that keeping 125% or more of actual damages is unreasonable, closed the list of allowed deductions to four categories, and added carpet and paint limits. It also added two protections for a careful landlord: a 7-day chance to cure by returning the money, and a good-faith safe harbor. The two-month deposit cap did not change. It took effect January 1, 2026. (C.R.S. § 38-12-103, as amended by HB25-1249)
Does a Colorado landlord have to give a walk-through inspection?
If the tenant asks for one, yes. Either party may request a walk-through before the lease ends, but a tenant’s request creates a duty on the landlord to provide one, at a time convenient to both, before the lease ends or the unit is surrendered, and after the tenant has had a chance to remove furniture. It can be done in person or by a live video walk-through, and it records in writing any damage beyond normal wear and tear that did not predate the tenancy. It does not apply to a mobile home in a mobile home park. (C.R.S. § 38-12-103(1.5))
Can a Colorado tenant demand the receipts and photos behind the deductions?
Yes, in writing. For a move-out on or after January 1, 2026, if the tenant makes a written request, the landlord must give the tenant the documentation it has that supports keeping any part of the deposit, including photographs, inspection forms or reports, receipts, invoices, or estimates, within fourteen days. If no written request is made, this duty is not triggered. (C.R.S. § 38-12-103(8))
Did Colorado cut the security deposit limit to one month in 2026?
No. HB25-1249 rewrote many of the rules but did not change the cap, which is still two months’ rent. A one-month limit was in an early draft of the bill and was removed before it passed, so any site that says the 2026 law cut deposits to one month is repeating a stripped draft. (C.R.S. § 38-12-102.5)
If a landlord made a mistake, can they still avoid triple damages?
There are two off-ramps. First, a tenant can only bring the triple-damages case if the landlord fails to return the deposit within seven days after the tenant’s demand and notice of intent to sue, so returning the full deposit or the withheld portion inside that window forecloses the claim. Our reading of the statute, consistent with prior Colorado case law, is that only returning the money cures it; a late accounting does not. Second, a landlord who kept the deposit in good faith and complied with every requirement of the section, but is found to have reasonably kept a bit more than the actual damages, owes only the excess amount plus court costs, with no triple damages and no attorney fees. (C.R.S. § 38-12-103(3)(c), (3.5)(d))
When did Colorado’s new deposit law take effect?
January 1, 2026. It applies to a lease termination or a surrender of the premises on or after that date, regardless of when the lease was signed. A 2024 lease with a 2026 move-out is fully covered by the new rules. (HB25-1249; C.R.S. § 38-12-103)