A security deposit is any advance or deposit of money, regardless of its denomination, the primary function of which is to secure the performance of a rental agreement for residential premises or any part thereof. Colorado case law actually supports the idea that the security deposit is not a payment to the landlord. Rather, it is a security that the landlord holds on behalf of the tenant.
A security deposit can be used by a landlord to ensure the performance of the lease. The “security” in security deposit is actually for the security of the landlord. When a tenant vacates the property, there may be damages or unpaid bills that are now attached to the property. If the damage to the property goes beyond what is considered “normal wear and tear,” i.e., the usual amount of wear that one would expect from an otherwise normally occupied premises, the landlord may use the security deposit to pay for these damages. Likewise, where a tenant has failed to pay their electric bill, cable bill, or other service or utility related invoices, the landlord may use the security deposit to pay those particular invoices. However, if the landlord is going to retain the security deposit, there is a specific set of rules and guidelines that they must follow, or face severe penalties. For more on this issue, Click Here.
What Can The Security Deposit Be Used For?
For different leases, the reasons for withholding the security deposit may range:
- Commercial Lease: Damages to premises, remodeling of the premises (where the lease specified that any remodeling or changes to structure/layout were to be removed or repaired prior to vacating), insurance payments, contractor invoices, other outstanding lien-type invoices, or costs to clean or fumigate the premises.
- Agricultural or Recreational (Hunting) Lease: Earthwork or other landscaping repair, fence and gate maintenance, hunting blind or treestand removal and/or repair, tilling and crop-related damages, unpaid invoices and bills, or road, bridge, and culvert repair.
- Residential: Replacing carpet or hardwood floors, or refinishing hardwood floors, appliance repair or replacement, re-painting, fixing substantial holes in plaster or drywall, fumigation, or fireplace maintenance.
While this is not an exhaustive list, and certainly subject to rules regarding the terms of the lease and what would be considered normal wear and tear and thusly not covered under the definition of a security deposit, the above examples should give a good idea of what the security is and what it is for. If you have questions about your security deposit, or think that your security deposit was wrongfully withheld, consult with Denver Lease Lawyer Nathaniel Gilbert about your possible options and what you can do.