That post gives an overview of all major law updates affecting landlords in 2025, including the HB 25‑1249 Security Deposit Reform.
This support blog dives deeper into what that bill means for landlords — what you can and can’t deduct, how “normal wear and tear” is being redefined, and what documentation you’ll need to stay compliant moving into 2026.
Security deposits used to be fairly simple: keep what’s needed, return what’s fair.
But starting
January 1, 2026,
Colorado House Bill 25‑1249 introduces much tighter rules for how landlords handle deposits, documentation, and deductions.
These updates are meant to protect tenants from unfair or arbitrary charges — but they also increase the compliance burden on landlords.
If you’re a
self‑managing landlord, ignoring these changes could result in disputes, fines, or even
triple damages for “bad‑faith” withholding.
📘 Source:Colorado House Bill 25‑1249(Enrolled)
Under both the current law (C.R.S. 38‑12‑103) and the new HB 25‑1249, landlords can still deduct from a tenant’s security deposit in very specific situations:
If you charge a tenant for carpet replacement, the carpet must be less than 10 years old and the damage cannot have existed prior to their tenancy.
Even then, you may deduct only the cost to repair the specific area damaged — not full replacement.
Starting in 2026, several once‑common security deposit deductions will be explicitly off‑limits:
The bill’s updated definition of “normal wear and tear” expands protections for tenants. According to HB 25‑1249 § 4:
“Normal wear and tear means deterioration, damage, or uncleanliness that occurs … based upon the intended use of the rental unit, without negligence, carelessness, accident, or abuse.…
‘Normal wear and tear’ does not include uncleanliness that renders a dwelling unit substantially less clean than it was when the lease began.”
— HB 25‑1249, Section 4
In plain English: unless the tenant left the property noticeably worse than its original condition, you can’t withhold money for cleanup.
Under HB 25‑1249, tenants have the right to request a pre‑move‑out inspection after they’ve had a chance to remove their furniture.
If they do, the landlord must:
Skipping this process could invalidate any later deductions — even legitimate ones.
To protect your right to withhold part of a deposit, landlords should keep meticulous records:
At Stegner Property Management, our Northern Colorado property managers has systems in place for all of this.
Every inspection, invoice, and notice is documented and stored, so our clients remain protected and compliant.
HB 25‑1249 adds teeth to existing penalty provisions.
If a landlord:
…it may be considered bad faith. Courts can award the tenant up to three times the wrongfully withheld amount, plus legal fees.
That’s why transparent documentation and fast response times matter — not just for tenant satisfaction, but for legal protection.
At Stegner Property Management, we’ve already updated our processes to reflect these upcoming changes:
This proactive approach helps our clients avoid disputes — and keeps their rental investments legally protected.
If you’re self‑managing your property and feeling overwhelmed by all these new rules, you’re not alone.
Stegner Property Management helps many Fort Collins and Northern Colorado landlords and investors make the smooth transition to professional management.
If these new laws sound like a lot to track — that’s because they are.
We can help.
Stegner Property Management in Fort Collins also proudly serves landlords throughout Northern Colorado, which includes Loveland, Wellington, Windsor, and Johnstown. We help them stay compliant and profitable without the day‑to‑day stress.
Fill out the form below to schedule a no‑pressure consultation.
Let our local, experienced team help you safeguard your real estate investment — the right way.
