If you own Colorado rental property, it’s imperative that you make yourself aware of the rules and regulations surrounding security deposits. When a tenant vacates your property, properly processing the return of a security deposit can be a complicated process. What are the timelines you must abide by? How much can you deduct for a particular damage item? What are you not legally allowed to deduct? In this blog post, we will answer these questions and more to help ensure a smooth move out for both you and your tenant.
Perhaps the most important rule to remember is that in the state of Colorado, security deposits must be completed and mailed within 30 days of the tenants move out date. If you let this timeline get away from you and reach day 31, you have officially forfeited your rights to retain any part of the security deposit. Even if your tenant destroyed your property, you are legally required to return their deposit. Not only are you now on the hook for the damages, but you are also liable to return three times the amount of the security deposit back to the tenant. If your lease states a 60 day period, you may be able to avoid the 30 day turn around. There are some nuances within Colorado state law worth researching if you are interested in learning more about security deposit timelines.
Another important aspect for rental property owners to educate themselves on is the difference between what the state recognizes as damage versus normal wear and tear. State law defines normal wear and tear as: “Deterioration which occurs based upon the use for which the rental unit is intended, without negligence, carelessness, accident, or abuse of the premises or equipment or chattels by the tenant or members of his household, or their invitees or guests.” Normal wear and tear includes things like nail holes, faded paint, faded and failing caulking, and a reasonable level of dirtiness. This also takes into account the length of tenancy in the rental unit. If you put new carpet into a unit and your tenant stays there for ten years, you are not legally allowed to charge the new carpet to their security deposit. A rule of thumb is to prorate the life expectancy of a given appliance or household item and weigh in the length of tenancy when decided if you can lawfully charge your tenant for a given repair.
Lastly, landlords need to remember that judges in Colorado are “tenant friendly” meaning it behooves you to avoid going to court over a security deposit related matter. You are likely to be disappointed if you find yourself in this situation and should be prepared to have all of the necessary documentation and photos to support your claim.
Educating yourself on your local laws can help to eliminate issues upon a tenant move out. If you have questions about processing a security deposit return, the team at Grace Property Management is here to serve as a resource. We are happy to advise you on the best practices to help you find a fair solution for both yourself and your tenant, as well as keep you in compliance with state laws. Give us a call. 303-255-1990