Colorado narrows 'normal wear and tear' and tightens rules for retaining security deposits

Debbie Mayer summarized major changes to security-deposit law that become effective Jan. 1, 2026. The new law redefines normal wear and tear to include deterioration, damage or uncleanliness only to the extent those conditions deviate from reasonable and typical use for that unit during the tenant's occupancy. The presenters emphasized the tenant-specific standard: routine owner turnover maintenance will not justify withholding a deposit.

Landlords must provide relevant documentation supporting any retention of deposit funds within 14 days of the tenant's request; acceptable documentation includes photos, receipts, invoices or estimates. Mayer described a sequence for deposit return: a written accounting should be sent (the statute allows use of email) and landlords must hold payment that is returned by mail at the last-known address for at least one year and disperse it within 15 days upon tenant request.

The statute restricts what counts as actual cause to keep a deposit (nonpayment of rent or utilities, necessary repairs that exceed normal wear and tear, or other lawful charges listed in the lease). Examples presenters gave: replacing an entire carpet generally cannot be charged to a tenant unless damage was substantial and tenant-specific; routine cleaning or normal smudges are likely normal wear and tear. Mayer said wrongfully withholding a deposit triggers forfeiture of the landlord's right to that deposit and may expose the landlord to damages under the statutory scheme.

Presenters repeatedly cautioned that borderline cases will be decided by courts and encouraged landlords and tenants to keep dated photographs and invoices. In Q&A they said that if damage clearly results from a perpetrator in a gender-based-violence incident, the victim survivor is presumed not liable and the landlord cannot properly retain the deposit for those damages; recovery should be sought from the perpetrator.