Understanding the laws and requirements surrounding security deposits in Denver, CO can be confusing, but there are several important timelines and procedures that must be followed.
Security Deposit Deadlines
Colorado law requires Denver landlords to return a tenant’s deposit within 30 days of the tenant moving out of the property. Whether your tenant moves out on the last date of the lease agreement or you evict your tenants, the 30-day timeframe begins with the vacancy. In specific circumstances, you can take 60 days to return the security deposit, but that must be explicitly stated in the lease. If you do not have this written into your lease, you’ll need to follow the 30-day deadline.
Documenting Property Condition at Move-In
All security deposits are refundable in Colorado. You cannot take a non-refundable deposit from your tenants before they move in. Documenting the condition of your property before the lease begins is critical. You should walk through the home and take a number of high resolution photos. Complete an inspection of the home with your tenant so that everyone can agree on its condition. During this walk-through, you can also show your tenant how things in the home work and where pertinent systems are located.
Documenting Property Condition at Move-Out
Once the tenant moves out, you need to do another walk-through, and you need to take new photographs which you will compare to those you took at the beginning of the lease. This will allow you to see clearly whether you received the property in the same condition that you turned it over. Talk to the utility companies and get the electricity and water turned over to your account. Ask for a final reading of the water bill if it has not been paid up because you can deduct that from the security deposit. Don’t deduct electric or gas balances from the security deposit; your tenant will need to settle those separately.
Deducting from the Security Deposit
If you find tenant damage, you can deduct from the security deposit. Collect written invoices for these repairs and remember that you are not permitted to deduct for normal wear and tear. This can be a difficult area for landlords and you’ll have to be careful deducting for worn carpet or paint. Send the tenant a written accounting statement that shows how much was deducted and why.
If you have any questions about security deposits in Denver, contact Alborz Real Estate.