House Bill 25-1249 Preamended

LLS NO. 25-0192.01 Richard Sweetman x4333
First Regular Session
Seventy-fifth General Assembly
State of Colorado

House Sponsorship

Ricks,

Senate Sponsorship

(None),

House Committees

Business Affairs & Labor

Senate Committees

No committees scheduled.

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removed from existing law
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added to existing law
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A Bill for an Act

Bill Summary

(Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://leg.colorado.gov.)

The bill amends and makes additions to existing law concerning security deposits that tenants submit to landlords and the conditions under which a landlord may retain all or part of a security deposit.

For the purposes of security deposits, the bill expands the definition of "normal wear and tear" and narrows the definition of "tenant".

Under current law, a landlord may not require a tenant to submit a security deposit in an amount that exceeds the amount of 2 monthly rent payments. The bill changes this maximum to one monthly rent payment.

The bill requires a landlord to permit a tenant to pay a security deposit in multiple installments of substantially equal amounts with installments due no more frequently than once a month over a period of at least 6 months. If a tenant fails to pay an installment, the landlord may seek compensation through a civil action. But a landlord may not terminate the tenancy or initiate an eviction action, and a court may not enter a judgment for possession, based on a tenant's failure to pay an installment.

A landlord that wrongfully demands and retains a security deposit in an excessive amount must return the excess amount to the tenant within 7 days after receiving a written demand from the tenant. A landlord that fails to timely return the excess money is liable for 3 times the excess amount.

A landlord that refuses to allow a tenant to pay a security deposit in installments violates the "Rental Application Fairness Act", and the tenant harmed by the violation may recover damages as provided in existing law.

Under current law, a landlord may not retain a security deposit to cover normal wear and tear and, if actual cause exists for retaining any portion of a security deposit, the landlord must provide the tenant:

The bill states that a landlord may not retain a security deposit to cover any damage or defective condition that preexisted the tenancy and that when the landlord delivers the written statement, the landlord must also deliver any relevant documentation in the landlord's possession or control.

The bill requires a landlord, upon a tenant's request, to provide the tenant a walk-through inspection of the dwelling unit to identify in writing any damage or defective conditions that are beyond normal wear and tear and that did not preexist the tenancy. If a walk-through inspection of the dwelling unit occurs, the landlord may not retain any amount from the security deposit for damage or defective conditions that are not documented during the walk-through inspection.

A landlord wrongfully withholds a security deposit or any portion of it if the landlord:

A landlord retains a security deposit or any portion of it in bad faith if the amount retained:

A landlord retains an unreasonable amount if the amount retained is 125% or greater than the actual damages.

In any court action brought by a tenant under the provisions of the bill, the landlord bears the burden of proving the amount of actual damages the landlord incurred.

Under current law, upon cessation of a landlord's interest in a dwelling unit, the person in possession of a tenant's security deposit must either transfer the security deposit to the landlord's successor in interest or return the security deposit to the tenant within a reasonable time. The bill states that this must be done within 60 days after cessation of the landlord's interest in the dwelling unit.

If a landlord's payment refunding a tenant's security deposit or any portion of it is returned to the landlord, the landlord must hold the payment for at least one year after receiving it and must disburse the payment to the tenant within 3 business days upon the tenant's request.

A landlord does not have actual cause to retain any amount from a security deposit for the replacement of carpet or painting unless there is substantial and irreparable damage that exceeds normal wear and tear and did not preexist the tenancy. If a landlord has actual cause, the landlord may retain only the minimum amount necessary to replace the carpet or to repaint in the area that is damaged. A landlord may not deem carpet substantially and irreparably damaged if it has not been replaced with new carpet within the 5 years preceding the termination of the lease or surrender of the premises.