Key Points
Landlords may only withhold tenant security deposits for specific predefined reasons.
The definition of “normal wear and tear” broadens protections for tenants, including some damage and uncleanliness under reasonable use.
Charges for carpet or paint are limited to substantial damage, and no charges are allowed for carpets 10 years or older.
Landlords must provide a pre-move-out inspection if requested by the tenant, following defined conditions.
Overview of HB25-1249: Tenant Security Deposit Protections
Colorado House Bill 25-1249, Tenant Security Deposit Protections, introduces significant changes to the handling, retention, and return of tenant security deposits. While some provisions reinforce existing requirements, others impose new obligations and penalties for noncompliance.
This legislation applies to all landlords, property managers, and housing providers in Colorado, regardless of the number of units owned or managed, and takes effect on January 1, 2026.
Key Provisions of HB25-1249
1. Allowable Deductions
The bill lists the specific allowable reasons for deductions to a tenant’s security deposit, including unpaid rent, utilities, and property damages.
2. Documentation Requirements
Landlords must provide a written statement with the exact reasons for the retention of any portion of the security deposit. Upon tenant request, landlords are required to supply supporting documentation, such as photographs, invoices, or inspection reports, substantiating the charges.
3. New Legal Definition of “Normal Wear and Tear”
HB 25-1249 broadens the definition of “normal wear and tear” to include “Deterioration, damage, or uncleanliness that occurs based upon the use for which a rental unit ... is intended or reasonably and typically used, without negligence, carelessness, accident, or abuse of the premises or private property by the tenant... or their guest.”
Some amount of property damage and even uncleanliness may now fall under “wear and tear” protections if resulting from normal use.
The bill also specifies that “‘Normal wear and tear’ does NOT include uncleanliness that renders a dwelling unit substantially less clean than the dwelling unit was when the lease began.”
Landlords cannot charge for uncleanliness unless the unit is left substantially dirtier than when the lease began. What qualifies as ‘substantial’ could be subjective, making this standard somewhat open to interpretation and a point landlords should document carefully.
4. Carpet and Paint Restrictions
Charges for carpet or paint are limited to substantial damage only.
Normal scuffs, fading, and wear are not chargeable.
If the carpet is 10 years old or older, charges are prohibited regardless of the extent of the damage.
5. Move-Out Inspection
If requested by the tenant, landlords must offer to conduct a pre-move-out inspection under defined conditions. This may be done in person or via video walkthrough and must be scheduled at a reasonable time, allowing the tenant an opportunity to remove furnishings.
6. Deposit Return and Penalties
Security deposits must be returned within 30 days unless the lease specifies a 60-day period. Noncompliance can result in penalties equal to triple the amount wrongfully withheld, plus damages, attorney fees, and costs.
The changes introduced by HB25-1249 require landlords and property managers to update policies, lease agreements, and operational practices before January 1, 2026, to ensure compliance and avoid costly penalties.
This information is provided for general informational purposes only and should not be considered legal advice. For guidance regarding specific situations, please consult a qualified attorney or legal professional.
At Grace Property Management, we believe that when property management is performed with integrity and transparency, both tenants and landlords benefit. Property management is not just our business - it is a relationship between us, our owner-clients, and our tenant-residents.
If these are important to you, we may be a good fit to provide you, your property, and your tenant-resident with our full-service property management services.
Feel free to reach out to us for assistance.
Grace Property Management & Real Estate
Serving real estate investors and residents since 1978.
www.RentGrace.com
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