Common Deposit Mistakes
Here are six common mistakes landlords make when returning a tenant’s security deposit and how to avoid them:
- Meet the Deadline – Colorado law allows 30 days to return deposits (or 60 if stated in the lease). Missing it can result in losing the right to withhold funds and facing penalties.
- Differentiate Wear and Tear from Damage – Landlords can charge for tenant-caused damage but not for normal wear and tear (e.g., minor paint touch-ups).
- Deposits Are Refundable – A deposit cannot be labeled as “non-refundable”; fees must be clearly stated as such.
- Check Unpaid Utility Bills – Final utility bills can be deducted from the deposit if unpaid.
- No Charging for Personal Labor – Only material costs and third-party labor fees can be deducted.
- Consider Life Expectancy – You cannot charge tenants for replacing items that have already exceeded their lifespan. A fair formula should be used for partially depreciated items.
Following these guidelines helps landlords stay compliant and reduce risks when handling security deposits.
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About the Author
Cody Bergan
Principal
Third-generation property management professional leading Bergan & Company with hands-on expertise in the Denver rental market.
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