More than 50% of homes in Denver, Colorado are renter occupied. With such a large market, more and more investors are getting into the game.
Are you a Denver, Colorado landlord looking for more information on how to collect security deposits?
Collecting security deposits is essential when leasing out investment and rental properties. It provides a cushion for the landlord against possible problems. Stick around as we reveal the key facts landlords need to know.
What is a Security Deposit?
Any time someone rents a home or apartment, they pay a security deposit when signing the lease. A landlord collects this sum of money at the beginning of a new lease term.
The amount varies and the tenant gets it back at the end of the lease if the property is without damage and the tenant is current on rent payments.
4 Facts Landlords Need to Know
Colorado security deposit laws are in place to protect the landlord and the tenant. Let's take a look at some of the facts landlords should consider regarding security deposits.
1. No Limit on Amount Collected
There is no limit on the amount a landlord can charge for a security deposit. Most of the time, the deposit is equal to one month's rent. Remember, making the security deposit too high may scare off potential renters.
There are no rules about holding the deposit. It doesn't need to go into any certain type of account.
2. Can Add a Pet Deposit
Landlords can choose to add a separate pet deposit if the renters have a cat, dog, or other domestic pet. If the tenant uses a service animal, the landlord is prohibited from collecting a pet deposit.
3. Selling The Property
If a landlord sells the property while the current tenant is still within the timeframe of the lease, there are two choices. One is to transfer the deposit to the new property owner and notify the tenant.
The second is to return the security deposit. If the landlord needs to make deductions from the security deposit, it's allowed under either scenario.
4. Returning Security Deposits
According to security deposit laws in Colorado, landlords have 30 days to return security deposits as long as the tenant followed the lease terms and did not cause any damage to the property.
Some lease agreements can stipulate a 60-day period in which to return a deposit. The period cannot extend past 60 days.
If a landlord intends to keep part or all of the security deposit, the reason needs to be put in writing for the tenant. There must be a detailed list of deductions.
Do you know who can help you with security deposits and other aspects of rental properties in Denver? We at Property Management Inc. can help you manage your rental properties and keep you legally compliant.
Get in touch with us today to learn more about our services. We have more than 20 years of experience in real estate and investment property. We are here to serve you and your property's management needs.