Legal Question in Real Estate Law in Colorado

Re: When does a lease terminate?

CRS 38-12-103 imposes various obligations on a landlord for the return of a security deposit held pursuant to a lease of a residential dwelling unit.

(1) provides that the deposit is to be returned within 1 month after the earlier of lease termination or surrender and acceptance of the premises, unless the lease stipulates a longer period, which shall not exceed 60 days. If cause exists for the retention of all or any portion of the deposit, the landlord is entitled to retain such amount, provided a written notice specifying the reasons for the retention is delivered to the tenant within the applicable period. Your ex-landlord apparently believes that your early surrender and his acceptance of the premises did not effectively terminate your lease for purposes of 38-12-103. I do not believe a court would adopt this interpretation. This interpretation frustrates and violates the legislative intent of the statute. For example, if this interpretation is taken to an extreme, i.e., a lease which contains an initial term of, say 1, 2 or 3 years, the landlord's interpretation would permit for the deposit to be held for the initial specified term, notwithstanding the early surrender and acceptance. I believe, under the circumstances, that your lease termination date was no later than May 13, and possibly earlier, and that the applicable time periods set forth in the statute would commence to run not later than that date. I am not aware of any reported cases wherein this issue was litigated.

(2) provides that the landlord's right to retain any portion of the deposit is forfeited if the written notice described in (1) is not timely given.

(3) provides for damages in the amount of 3 times that portion of the deposit which was wrongfully retained, but requires the tenant to give notice of the intent to file suit 7 days prior to filing. In my opinion, if the full amount of the deposit is returned during the 7 day period, the landlord can avoid liability under the treble damage provision.