What Home Owners Should Know: HB 25-1249 & Security Deposits In 2026
1. Cap on deposit + installment payments
•Landlords may require no more than one month’s rent as a security deposit (down from two months).
•Tenants must be allowed to pay that deposit in equal installments over at least six months, with payments due no more than once per month.
•If a tenant misses an installment, the landlord may sue to recover it — but cannot evict or get possession solely based on nonpayment of deposit installments.
2. Stricter limits on deductions / “normal wear & tear”
•The law expands what qualifies as “normal wear and tear” to include some deterioration, damage, or uncleanliness from ordinary use — unless the unit is left substantially less clean than at move-in.
•Landlords cannot deduct for damage or defects that already existed before the tenant moved in.
•For carpet & paint:
•Deductions only allowed for substantial and irreparable damage, not for fading, light stains, or general wear.
•If carpet is 10 years old or more, it can no longer be considered “substantially damaged.”
•If only part of a wall or patch of carpet is damaged, you cannot charge for full-room replacement or repainting.
•Automatically imposed cleaning fees (via lease clauses) are void; only cleaning that restores from beyond normal use may be charged.
3. Move-out walkthroughs, documentation & statements
•At tenant’s request, the landlord must offer a pre-move-out walkthrough (in person or via video) after the tenant has removed furniture, to document any damage beyond normal wear.
•If a walkthrough is done, the landlord cannot withhold funds for damage not documented in that inspection.
•When retaining any portion of the deposit, the landlord must provide a written itemized statement of exactly why, and — if tenant requests — supporting documentation (photos, receipts, estimates) within 14 days.
4. Refund timing, ownership transfer, and penalties
•The default period to return (or reconcile) deposits remains 30 days, unless the lease allows up to 60 days.
•If a landlord wrongfully withholds any portion, they may be liable for treble damages (three times the amount) plus fees and costs.
•If the deposit held exceeds what is legally allowable, the excess must be returned within 7 days of a written demand, or face treble liability on the excess.
•If the property ownership changes (sale or transfer), the deposit must either be transferred to the new owner or returned to the tenant within 60 days.
What Action Team Realty Serviced Home Owners Should Do
•Update your lease forms and policies now to remove any clauses that conflict (e.g. blanket cleaning fees, full-room repainting charges).
•Train your team or contractors on distinguishing between “ordinary wear” vs. damage, and on documenting property conditions thoroughly (photos, move-in/move-out reports).
•Implement a walkthrough offer process and establish a standard timeline to handle document requests (within 14 days).
•Organize your record-keeping, so that when deductions are made, the proofs are clear and defensible.
As always, having a Property Manager In Colorado Springs to help manage and maintain your property is what we strive to do. For those who want to dig deeper, you can review the full legislative text and details on the Colorado General Assembly site:
