Quick Answer
Under C.R.S. § 38-12-102.5, starting August 7, 2023, a Colorado landlord cannot demand a security deposit larger than two months’ rent, based on the terms of the rental agreement. Set the deposit in the written lease and record how you calculated it. Statute text last checked October 22, 2026.
Key Takeaways
- Two months’ rent is the ceiling. The cap applies from August 7, 2023.
- It is measured against the lease. The calculation uses the rent in the rental agreement.
- Write the amount in the lease. The figure and the rent it relates to should be easy to see.
- The cap is separate from return rules. Return deadlines are in § 38-12-103.
- Review older leases when you renew them.
1. What the Cap Says
The statute prevents a landlord from demanding a deposit larger than two months’ rent, using the rent stated in the rental agreement. If the monthly rent is $1,800, the ceiling is $3,600. A lower deposit is a business decision that the statute leaves to you.
2. Documenting the Amount
Put three numbers next to each other in the lease: monthly rent, deposit amount, and the multiple. A short sentence such as “the deposit is one month’s rent” removes doubt. Keep the receipt and the date the deposit was received.
3. Rent Increases and Renewals
If rent rises at renewal, you should not assume the deposit follows. Decide whether to ask for more, and if you do, check that the total stays within two months of the new rent. Record the decision and the date.
4. Pet and Other Charges
Check how your lease labels pet or other deposits. Treat anything held as a deposit with the same care, and check the total against the cap before you collect it. When unsure, ask a Colorado attorney how the statute treats a particular charge.
5. A Checklist
- Find the monthly rent in the lease.
- Multiply by two to get the ceiling.
- Set the deposit at or below the ceiling and write the amount in the lease.
- Keep the receipt with the date.
- Recheck at each renewal.
Worked Examples
Monthly rent of $1,200 gives a ceiling of $2,400. Monthly rent of $2,750 gives a ceiling of $5,500. A landlord who prefers a one-month deposit on $1,200 collects $1,200 and notes in the lease that it equals one month’s rent. Either way, put the figure in the lease and keep the receipt with the date, so the amount is a fact in your file.
Why a Lower Deposit Can Make Sense
A smaller deposit can widen your applicant pool and reduce friction at move-in. The trade-off is less cushion at move-out, so pair a lower deposit with a thorough move-in condition report and a clear lease. The statute leaves that choice to you.
Record Keeping at Move-In
At move-in, give the tenant a receipt that shows the amount, the date, and where the deposit is held. Pair it with a signed condition report and dated photographs. Those three documents, kept together, are the foundation for any later deposit accounting and show the tenant that the amount was handled in an organized way.
Talking Points With Applicants
Applicants often ask why the deposit is the amount it is. A short, plain answer helps: the lease states it, it is within the statutory ceiling, and it is returned under the timeline in the deposit return rules. Put the same explanation in your application packet so every applicant gets the same information.
6. What This Guide Does Not Cover
This guide covers the cap in § 38-12-102.5. It does not cover return deadlines, deductions, or local ordinances. It states the statute and does not predict how a court will rule.
7. Questions Owners Ask
Does the cap apply to leases signed before August 7, 2023? The statute states the date it applies from. Review older leases at renewal and keep deposits within the cap.
Can I take a smaller deposit? Yes. The statute sets a ceiling, not a minimum.
Where do return rules live? In § 38-12-103, covered in the companion guide.