Why do security deposit amounts vary for rentals in Denver?

Full question:

I am looking for a rental unit in Downtown, Denver. I am not familiar with tenancy laws in Colorado. I have met a few landlords in the vicinity but I am confused about the security deposit amounts they quote. All of them charge about the same amount as rent ($900) but their demand for the security amounts vary from $900 to $1800. Why is it so? Even if I do take up a rental unit, what does the law say regarding repayment of the deposit by the landlord?

• Category: Landlord Tenant
• Subcategory: Residential Lease
• Date: 04/07/2025
• State: Colorado

Answer:

In Colorado, there is no legal limit on the amount a landlord can charge for a security deposit. This is why you see varying amounts, even if the rent is the same. Landlords can set their own security deposit amounts based on their policies or market conditions.

Regarding the return of your security deposit, Colorado law (C.R.S. 38-12-103) states that a landlord must return the full deposit within one month after the lease ends or the tenant surrenders the property, unless the lease specifies a longer period, not exceeding sixty days. Landlords cannot keep the deposit for normal wear and tear.

If a landlord withholds any part of the deposit, they must provide a written statement detailing the reasons for the retention and return any remaining amount. If they fail to do so within the required time, they lose the right to withhold any part of the deposit.

Additionally, if a landlord wrongfully retains a security deposit, they may be liable for three times the amount wrongfully withheld, plus attorney fees and court costs. However, tenants must notify the landlord at least seven days before filing a legal action.

Finally, if the landlord sells the property or otherwise transfers their interest, they must transfer the security deposit to the new owner and inform the tenant of the change.