Security Deposit Demand Letter - Colorado

SECURITY DEPOSIT DEMAND LETTER

STATE OF COLORADO

SENT VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED — ARTICLE NO. [____________________]
AND FIRST-CLASS MAIL

[__/__/____]

[LANDLORD/PROPERTY MANAGER FULL NAME OR ENTITY NAME]
[STREET ADDRESS]
[CITY, STATE ZIP]

Re: FORMAL DEMAND — RETURN OF SECURITY DEPOSIT WITH STATUTORY PENALTIES
Former Tenant(s): [________________________________]
Rental Property: [________________________________]
Lease Term: [__/__/____] through [__/__/____]
Date Possession Surrendered: [__/__/____]
Security Deposit Paid: $[____________________]
Statutory Deadline for Return: [__/__/____]

Dear [________________________________]:

This law firm represents [________________________________] ("Tenant") in connection with your failure to return Tenant's security deposit and/or to provide a legally compliant itemized statement within the time required by Colorado law. This letter constitutes formal demand for the return of the full deposit plus all statutory penalties, attorney fees, and costs to which Tenant is entitled under Colorado's Security Deposit Act, C.R.S. § 38-12-101 et seq., as significantly strengthened by 2021 House Bill 21-1121 (effective January 1, 2022).

Direct all future communications regarding this matter to this office. Do not contact Tenant directly.

I. COLORADO SECURITY DEPOSIT LAW — 2021 AMENDMENTS ARE CRITICAL

A. Governing Statute

Colorado's Security Deposit Act is codified at C.R.S. § 38-12-101 through § 38-12-105. The statute was substantially amended by 2021 HB 21-1121, effective January 1, 2022. The following changes are directly applicable to this matter:

1. Trebled damages — the penalty for wrongful withholding increased from 1x to 3x the amount wrongfully withheld, plus attorney fees and costs. C.R.S. § 38-12-103(3).
2. Receipts and estimates required — for any single deduction exceeding $50, the landlord must provide actual receipts or written estimates. C.R.S. § 38-12-103.5.
3. "Normal wear and tear" expressly defined and non-deductible — C.R.S. § 38-12-102(3) now codifies: "normal wear and tear" means deterioration that occurs based upon the use of the dwelling unit for the purposes for which it is intended, without negligence, carelessness, accident, or misuse. Deductions for normal wear and tear are expressly prohibited.
4. Written itemized statement mandatory — if any portion is withheld, the landlord must provide a written statement specifying each reason and each dollar amount withheld, delivered within the return deadline.

B. Return Deadline

Under C.R.S. § 38-12-103(1):

• Default: Within one calendar month (30 days) after termination of the tenancy and surrender/abandonment of the premises
• Extended: The written lease may specify a period up to sixty (60) days — but only if that extended period is set out in the lease itself
• If the lease does not specify an extended deadline, the 30-day default applies
• The deadline runs from the later of: (1) termination/expiration of the lease, or (2) the date Tenant surrendered actual possession (including returning keys)

Applicable deadline in this matter: [__/__/____] — [___] days have elapsed since Tenant surrendered possession. You are in violation.

C. Itemization Requirements

If any portion of the deposit is withheld, the landlord must send a written statement listing:

• Each specific reason for the deduction
• The specific dollar amount for each deduction
• For any single deduction exceeding $50: an actual receipt or a written estimate from a third-party vendor — C.R.S. § 38-12-103.5

A statement that simply says "cleaning: $300" or "repairs: $500" without supporting receipts or estimates is legally deficient and constitutes a wrongful withholding of those amounts.

D. Move-In Condition Statement

Under C.R.S. § 38-12-103(2), the landlord must provide a written statement of the condition of the premises at move-in. If the landlord failed to provide this statement, the landlord forfeits the right to withhold any portion of the deposit for repairs or cleaning.

E. No-Deduction Rule for Normal Wear and Tear

C.R.S. § 38-12-102(3) expressly prohibits deductions for deterioration resulting from ordinary, intended use. The statute lists examples including: minor wall scuffs, small nail/tack holes, worn carpet in traffic areas, faded window coverings, and fixture wear. These cannot be charged to Tenant under any circumstances.

II. TENANCY AND DEPOSIT FACTS

A. Lease and Payment Information

B. Surrender of Possession

C. Move-Out Condition

Our Client left the premises in the following condition:

☐ Clean and in good repair — Premises left in substantially the same condition as received, reasonable wear and tear excepted, as documented by photographs and/or video.

☐ Professionally cleaned — Tenant hired [________________________________] on [__/__/____]; receipt enclosed.

☐ All personal property removed — No items abandoned.

☐ No damage beyond normal wear and tear — Any changes to the premises are within the definition of C.R.S. § 38-12-102(3) and constitute non-deductible normal wear and tear.

☐ Photographic and video documentation — Time-stamped photos/video taken at both move-in and move-out are preserved.

☐ Move-out walkthrough — ☐ Requested by Tenant ☐ Conducted on [__/__/____] ☐ Refused or not offered by Landlord

D. Landlord's Response (or Lack Thereof)

☐ No response whatsoever — The statutory deadline has passed and you have neither returned the deposit nor provided any written statement.

☐ Untimely response — You sent [________________________________] on [__/__/____], which is [____] days after the statutory deadline.

☐ Deficient itemization — You provided an itemized statement on [__/__/____] but it is legally deficient because:
☐ It lacks receipts or written estimates for deductions exceeding $50 as required by C.R.S. § 38-12-103.5
☐ It contains improper deductions for normal wear and tear
☐ It contains deductions for pre-existing conditions documented in move-in materials
☐ Other deficiency: [________________________________]

III. SPECIFIC VIOLATIONS

You have violated the Colorado Security Deposit Act as follows:

☐ Complete Failure to Return Deposit — C.R.S. § 38-12-103(1)
You have failed to return any portion of the $[____________________] deposit within the [30/60]-day statutory deadline. The deadline was [__/__/____]. Today is [__/__/____] — [____] days past the deadline.

☐ Failure to Provide Itemized Written Statement — C.R.S. § 38-12-103(1)
You have retained all or a portion of the deposit without providing a written statement specifying each reason and the corresponding dollar amount for each deduction.

☐ Failure to Provide Receipts/Estimates for Deductions Over $50 — C.R.S. § 38-12-103.5
Your statement contains the following deductions exceeding $50 without supporting receipts or estimates: [________________________________]. Under the 2021 HB 21-1121 amendments, these deductions are unlawful without documentation.

☐ Failure to Provide Move-In Condition Statement — C.R.S. § 38-12-103(2)
You failed to provide a written statement of the premises' condition at move-in. Under Colorado law, this forfeiture prevents you from withholding any amount for repairs or cleaning.

☐ Impermissible Deductions for Normal Wear and Tear — C.R.S. § 38-12-102(3)
You have deducted amounts for the following items that constitute non-deductible normal wear and tear under Colorado's express statutory definition:
☐ Minor scuffs or marks on walls from ordinary use
☐ Small nail or tack holes from hanging pictures
☐ Worn or matted carpet in high-traffic areas
☐ Faded paint, wallpaper, or window coverings
☐ Minor scratches on hardwood floors from normal foot traffic
☐ Worn finish on plumbing fixtures, door hardware, or kitchen fixtures
☐ Minor cleaning in excess of "turnover" level attributable to landlord's delayed rerental
☐ Other: [________________________________]

☐ Deductions for Pre-Existing Conditions
You have deducted amounts for conditions that existed before Tenant took possession, as documented in: ☐ move-in inspection report ☐ move-in photographs ☐ prior tenant records ☐ other: [________________________________].

☐ Deductions Exceeding Actual Cost of Repairs
The amounts deducted for [________________________________] exceed the actual cost of repairs, as evidenced by: [________________________________].

IV. DAMAGES AND PENALTY CALCULATION

A. Amounts Wrongfully Withheld

B. Statutory Treble Damages — C.R.S. § 38-12-103(3)

Under C.R.S. § 38-12-103(3) (as amended by 2021 HB 21-1121), a landlord who wrongfully withholds any portion of a security deposit is liable for:

"…an amount equal to three times the amount wrongfully withheld and reasonable attorney fees and costs."

The tripling is mandatory upon proof of wrongful withholding — it does not require a separate showing of "willfulness."

C. Forfeiture of Right to Deduct — Move-In Statement

☐ Applicable: Because you failed to provide a written move-in condition statement, you forfeit the right to deduct any amount for repairs or cleaning, regardless of the actual condition of the premises. C.R.S. § 38-12-103(2). The entire deposit must be returned.

V. NORMAL WEAR AND TEAR — COLORADO STATUTORY REFERENCE

C.R.S. § 38-12-102(3) (codified by 2021 HB 21-1121) defines normal wear and tear as:

"deterioration that occurs based upon the use of the dwelling unit for the purposes for which it is intended, without negligence, carelessness, accident, or misuse of the premises or contents by the tenant or the tenant's guests."

The following items cannot lawfully be deducted under this express statutory definition:

☐ Minor wall scuffs, smudges, or marks from normal furniture placement or routine use
☐ Small nail holes, tack holes, or picture-hanging holes (reasonable number)
☐ Worn, matted, or discolored carpet in primary traffic areas after a tenancy of [____] year(s)
☐ Faded or sun-damaged drapes, blinds, or window coverings
☐ Worn finish on appliances, door handles, cabinet hardware, or plumbing fixtures
☐ Minor scratches or dullness on hardwood floors from normal foot traffic
☐ Light grout discoloration in bathrooms or kitchens from regular cleaning
☐ Loose or worn door hinges, latches, or locks from normal use
☐ Minor settling cracks in walls or ceilings
☐ Standard cleaning costs properly attributable to the landlord's pre-listed turnover duties

VI. EVIDENCE PRESERVED

Our Client has preserved the following evidence in support of this claim:

☐ Original signed lease agreement
☐ Certified mail receipt or proof of deposit payment
☐ Move-in condition statement / checklist (if provided by Landlord)
☐ Move-in photographs (time-stamped) taken [__/__/____]
☐ Move-out photographs (time-stamped) taken [__/__/____]
☐ Move-out video walkthrough
☐ Move-out inspection report / landlord sign-off (if conducted)
☐ Written notice to vacate with proof of delivery
☐ Written forwarding address notification with proof of delivery
☐ Professional cleaning invoice from [________________________________]
☐ Receipts for any Tenant repairs during tenancy
☐ All correspondence with Landlord regarding deposit
☐ Landlord's itemized statement (if any), dated [__/__/____]
☐ Witness statement(s) from: [________________________________]
☐ Utility final bills confirming service through move-out date
☐ Other: [________________________________]

VII. DEMAND FOR PAYMENT

We demand that you pay to our Client the following amounts within fourteen (14) days of the date of this letter:

Payment must be made by certified check or money order, payable to [________________________________], and delivered to:

[________________________________]
[________________________________]
[________________________________], Colorado [________]
Reference: [________________________________] Security Deposit

VIII. CONSEQUENCES OF NON-COMPLIANCE

If you fail to comply with this demand within fourteen (14) days, we are prepared to:

1. File suit in Colorado County Court or Small Claims Court. County Court has jurisdiction over claims under $25,000 (C.R.S. § 13-6-405). Small Claims Court handles claims up to $7,500 (C.R.S. § 13-6-403). We will seek treble damages, attorney fees, and costs.

2. Seek mandatory treble damages. Under the 2021 amendments, C.R.S. § 38-12-103(3) provides for 3x the wrongfully withheld amount as a matter of right upon proof of wrongful withholding — no additional showing of malice is required.

3. Seek attorney fees and costs. C.R.S. § 38-12-103(3) mandates an award of reasonable attorney fees to a prevailing tenant.

4. Report to regulatory authorities:
   - Colorado Attorney General — Consumer Protection Section, 1300 Broadway, Denver, CO 80203; [email protected]
   - Colorado Division of Housing — Colorado Department of Local Affairs
   - Office of the Denver City Auditor (if property is within Denver and subject to Denver's rental licensing requirements)
   - Local code enforcement (if habitability violations exist)

5. Pursue judgment enforcement by all lawful means, including wage garnishment, bank levy, and judgment lien on real property. C.R.S. § 13-52-101 et seq.

IX. RESPONSE REQUESTED

Respond to this demand in writing within fourteen (14) days. Your response must include:

1. The amount you acknowledge is owed to our Client
2. Copies of all receipts and written estimates (over $50) supporting any claimed deductions, in compliance with C.R.S. § 38-12-103.5
3. Payment in full or a written good-faith settlement offer

Failure to respond will result in filing suit without further notice.

X. RESERVATION OF RIGHTS

This letter is sent without prejudice to all rights and remedies available to our Client under applicable law, all of which are expressly reserved. No statement herein, and no subsequent negotiation, shall constitute a waiver of any claim, defense, or right.

Respectfully submitted,

[________________________________]

By: _______________________________________________
[________________________________]
Colorado Bar No. [________]
[________________________________]
[________________________________], Colorado [________]
Tel: [________________________________]
Email: [________________________________]

Attorneys for [________________________________]

ENCLOSURES:
☐ Copy of signed lease agreement
☐ Security deposit receipt or proof of payment
☐ Move-in condition statement (if provided by Landlord)
☐ Move-in / move-out photographs (flash drive or printed)
☐ Written notice to vacate with delivery confirmation
☐ Forwarding address notification with delivery confirmation
☐ Professional cleaning receipt(s)
☐ Landlord's itemized statement (if any)
☐ Authorization to represent Tenant

cc: [________________________________] (Tenant)
[________________________________] (Property Management Company, if applicable)
[________________________________] (Property Owner, if different from addressee)
Client File

COLORADO SECURITY DEPOSIT QUICK REFERENCE (POST-2021 HB 21-1121)

COLORADO PRACTICE NOTES FOR ATTORNEYS

☐ 2021 HB 21-1121 Transforms Landlord Exposure: Before January 1, 2022, the penalty was 1x the wrongfully withheld amount plus attorney fees. After the amendment, it is 3x. Confirm the lease commencement and the date of the wrongful withholding to determine which version applies (the 2022+ version applies to all tenancies where the withholding occurred on or after January 1, 2022).

☐ $50 Receipt/Estimate Threshold is New and Often Missed: C.R.S. § 38-12-103.5 requires that for any deduction exceeding $50, the landlord must attach actual receipts or written third-party estimates. A bare itemization without documentation is legally deficient and renders those deductions unlawful.

☐ Move-In Statement Creates a Complete Defense: If the landlord never provided a written move-in condition statement, the tenant has a complete defense to all deductions for repairs and cleaning — the landlord forfeits the right entirely. Check this threshold issue first.

☐ "Wrongful Withholding" vs. "Willful" Standard: Note that C.R.S. § 38-12-103(3) uses "wrongfully withheld," not "willfully withheld." Colorado courts have interpreted this broadly. Mishkin v. Young, 107 P.3d 393 (Colo. App. 2004) discussed the standard; post-2021 case law continues to develop.

☐ Forwarding Address and Return Deadline: The return deadline runs from surrender of possession. Confirm the exact date keys were returned — not just the lease end date. If the landlord was never given a forwarding address, the deadline may be tolled until the address was provided.

☐ Denver Rental Licensing: Denver requires landlords to register rental units. If the landlord is unlicensed, report to the Denver Community Planning and Development office. This is a separate violation that may strengthen leverage.

☐ Boulder Rental Licensing Program: Boulder requires landlord rental licensing under Boulder Rev. Code § 10-3-1 et seq. Failure to comply is a separate violation.

☐ Venue: File in the county where the rental property is located, not necessarily where the landlord resides. C.R.C.P. 98(a).

☐ Small Claims Is Efficient for Straightforward Cases: Colorado Small Claims Court (up to $7,500) is attorney-accessible in many counties, inexpensive, and resolves quickly. For larger claims, County Court is the proper forum. Neither requires a jury and both allow attorney fees under the statute.

SOURCES AND REFERENCES

• C.R.S. § 38-12-101 through § 38-12-105 — Colorado Security Deposit Act: https://leg.colorado.gov/sites/default/files/documents/2021A/bills/2021a_1121_enr.pdf
• 2021 HB 21-1121 Enrolled Bill (Security Deposit Reform): https://leg.colorado.gov/bills/hb21-1121
• C.R.S. § 13-6-403 (Small Claims — $7,500 limit): https://casetext.com/statute/colorado-revised-statutes/title-13-courts-and-court-procedure/article-6-county-courts/part-4-small-claims-court
• C.R.S. § 13-6-405 (County Court jurisdiction — up to $25,000)
• Colorado Attorney General Consumer Protection Section: https://coag.gov/resources/consumer-protection/
• Colorado Division of Housing: https://cdola.colorado.gov/housing
• Mishkin v. Young, 107 P.3d 393 (Colo. App. 2004) (security deposit damages standard)

This template is for informational purposes only and does not constitute legal advice. Security deposit law may vary by local ordinance (Denver, Boulder). Consult a licensed Colorado attorney before use.