Committee approves amended security-deposit reforms; sponsors keep working on inspection, timing and safety issues

The House Business Affairs and Labor Committee advanced an amended version of House Bill 12‑49 on Tuesday after hours of testimony from tenants, community groups, small landlords and property managers.

Sponsor Chair Ricks said the revised amendment (L002) narrowed the bill to preserve a strengthened definition of normal wear and tear, allow electronic payment of deposits and keep section 3 of the original proposal that creates an optional walk-through inspection and documentation requirements when a tenant requests it.

"This bill modernizes and strengthens existing tenant protections related to security deposits," the sponsor said, explaining that the goal is to reduce disputes and protect renters who often depend on deposit returns to secure subsequent housing.

The nut graf: The committee adopted L002 — which eliminates some of the more expansive earlier proposals but preserves tenant-facing safeguards — while key implementation questions remain. Witnesses in support argued the changes will increase transparency and reduce wrongful withholdings; those opposed said the proposal still imposed operational, safety and timing burdens on property managers and small landlords.

Supporters included community foundations, housing advocates and civil-rights groups who testified that security-deposit practices often leave tenants unable to move because the withheld money is a large upfront barrier. "For many renters, the security deposit is one of the largest upfront costs of moving into a rental unit," said Naomi Amaha of the Denver Foundation, who urged committee members to back the amended bill and continue stakeholder negotiations.

Opponents included property owners and trade associations that raised practical concerns: mandatory in-person walk-throughs can create safety risks for largely female property managers and remote operators; required documentation and mailing could impose time, printing and postage costs; and a 10-business-day waiting period tied to the inspection process could leave month-to-month landlords unable to re-rent units for that interval.

Property managers and small-scale landlords gave specific examples of repair and replacement costs that can exceed typical deposits. A witness with decades of property-management experience told the committee that rare but substantial damage — from vandalism to wiring or plumbing tampering — can require months to repair and invoices that are not immediately available for an itemized accounting.

The committee adopted amendment L002 by unanimous consent (no objection recorded) after sponsors said they would continue to work with stakeholders on the remaining implementation issues: whether the optional walk-through should be virtual or in-person and how to limit safety and scheduling burdens; the use of certified cashier’s checks versus electronic transfers; the 10-business-day hold language; and the timing for any enactment date to allow providers time to adapt.

Committee members debated whether to route the bill to the Transportation, Housing and Local Government Committee for further work; that motion failed, and a subsequent motion to report the bill favorably to the Committee of the Whole succeeded with an 8‑5 vote.

Sponsor Ricks said she would continue stakeholder conversations and expected further technical amendments at second reading. "We want to make something that's workable for landlords and also for the tenants," she said.