Boulder Security Deposit Rules: What the Landlord-Tenant Relations Ordinance Adds to Colorado Law

A landlord in Boulder has to satisfy two sets of rules at once: the Colorado statute, Colo. Rev. Stat. § 38-12-103, and the city's own Landlord-Tenant Relations Ordinance (B.R.C. §§ 12-2-5 to 12-2-7). The state law sets the 30-day return deadline after termination of the lease or surrender of the premises; the local ordinance adds a rule on interest on the deposit. Where the two overlap, the landlord has to meet the stricter one.

What the Landlord-Tenant Relations Ordinance adds

• Interest on the deposit: The deposit stays the tenant's property and it earns interest for the tenant. Section 12-2-5 makes the deposit and its interest the tenant's, and creates a duty to account for that interest when the tenancy ends. Section 12-2-6(a) requires the accrued interest to be returned within one month after the lease terminates or after surrender and acceptance of the premises, whichever happens last. Section 12-2-7 sets the rate: each December 15 the city manager fixes it at the average one-year certificate-of-deposit rate at the three largest local banks, and that figure applies to deposits given during the following calendar year, calculated separately for each year of a multi-year tenancy. Pet deposits and other refundable deposits earn interest; last month's rent does not. Colorado state law requires no interest on deposits at all. (12-2-5 to 12-2-7)
• Interest on the deposit: A landlord who willfully and wrongfully keeps that interest owes the tenant $100 or three times the amount kept, whichever is greater, plus reasonable attorney's fees and court costs, and the tenant has to give notice of the intention to sue at least seven days before filing. Two neighbouring subsections do as much work: under 12-2-6(b) a landlord who fails to give the state-law retention notice as to interest forfeits the right to withhold any of it, and under 12-2-6(d) the burden of proving a retention was lawful sits on whoever holds the deposit. Section 12-2-8 voids any lease clause that waives these rights. (12-2-6(c))

Who it covers: Residential security deposits held by landlords in the City of Boulder, including pet deposits and any other refundable deposit, but not last month's rent. Sections 12-2-5 and 12-2-6 do not reach a deposit paid to a mobile home park for a mobile home space.
Worth knowing: Ordinance No. 7320 (adopted February 17, 2004) is widely cited as the source of Boulder's whole deposit chapter, but it created only the variable annual rate in 12-2-7, replacing a flat 5.5% that ran from December 5, 1985 to March 18, 2004. The ownership and enforcement rules in 12-2-5 and 12-2-6 come from Ordinance Nos. 4969 (1986) and 7158 (2002). The lease itself has to tell the tenant that interest is payable, under 12-2-4(a)(1)(F), and a violation of 12-2-4 carries a penalty of up to $500.

What Colorado law already requires

• Return deadline: 30 days after termination of the lease or surrender of the premises.
• Detail: Up to 60 days if the lease says so.
• Itemized deductions: required in writing.
• Forwarding address: not a statutory condition of getting the deposit back.
• Penalty for wrongful withholding: Willful retention exposes the landlord to three times the amount wrongfully withheld plus attorney's fees.
• Deposit cap: Two months' rent (SB 23-184).
• Small claims limit: $7,500.
• Statute: Colo. Rev. Stat. § 38-12-103.

Using both rules together

1. Read the lease for the deposit amount, the move-in date, and any clause that mentions the ordinance.
2. Check the local rule first: interest on the deposit under B.R.C. §§ 12-2-5 to 12-2-7.
3. Count the Colorado deadline of 30 days from termination of the lease or surrender of the premises.
4. A written demand that cites both Colo. Rev. Stat. § 38-12-103 and B.R.C. §§ 12-2-5 to 12-2-7 carries more weight than one that cites either alone. Willful retention exposes the landlord to three times the amount wrongfully withheld plus attorney's fees.

Frequently Asked Questions

Q: Does Boulder require interest on security deposits?
A: Yes. The deposit stays the tenant's property and it earns interest for the tenant. Section 12-2-5 makes the deposit and its interest the tenant's, and creates a duty to account for that interest when the tenancy ends. Section 12-2-6(a) requires the accrued interest to be returned within one month after the lease terminates or after surrender and acceptance of the premises, whichever happens last. Section 12-2-7 sets the rate: each December 15 the city manager fixes it at the average one-year certificate-of-deposit rate at the three largest local banks, and that figure applies to deposits given during the following calendar year, calculated separately for each year of a multi-year tenancy. Pet deposits and other refundable deposits earn interest; last month's rent does not. Colorado state law requires no interest on deposits at all. A landlord who willfully and wrongfully keeps that interest owes the tenant $100 or three times the amount kept, whichever is greater, plus reasonable attorney's fees and court costs, and the tenant has to give notice of the intention to sue at least seven days before filing. Two neighbouring subsections do as much work: under 12-2-6(b) a landlord who fails to give the state-law retention notice as to interest forfeits the right to withhold any of it, and under 12-2-6(d) the burden of proving a retention was lawful sits on whoever holds the deposit. Section 12-2-8 voids any lease clause that waives these rights. The City publishes the rate every year. Deposits given during 2026 earn 2.08%, the average one-year certificate-of-deposit rate at Boulder's three largest banks as of December 15, 2025; the 2025 rate was 2.92% and the 2024 rate 2.33%. To compute it, multiply the deposit by that year's rate, divide by twelve, then multiply by the number of months held. The City's rate table and worked example are at bouldercolorado.gov/city-boulder-interest-security-deposits-calculation-formula.

Q: Is the Boulder deposit return deadline different from Colorado law?
A: No. The Landlord-Tenant Relations Ordinance does not change the return deadline, so the Colorado rule applies: 30 days after termination of the lease or surrender of the premises under Colo. Rev. Stat. § 38-12-103.

Q: Does the Landlord-Tenant Relations Ordinance apply to my unit?
A: Residential security deposits held by landlords in the City of Boulder, including pet deposits and any other refundable deposit, but not last month's rent. Sections 12-2-5 and 12-2-6 do not reach a deposit paid to a mobile home park for a mobile home space. Check the section cited below for the full list of exemptions before relying on it.

Q: Can I sue my landlord in small claims court for my Colorado deposit?
A: Yes. Colorado small claims court hears claims up to $7,500, which covers most deposits plus the statutory penalty. A dated written demand that cites Colo. Rev. Stat. § 38-12-103 is the usual first exhibit.

Sources Checked

• Boulder Revised Code §§ 12-2-5 (ownership of security deposit and payment of interest), 12-2-6 (return of accrued interest; enforcement) and 12-2-7 (interest rate on security deposits), ch. 12-2; 12-2-5 and 12-2-6 from Ordinance Nos. 4969 (1986) and 7158 (2002), 12-2-7 from Ordinance No. 7320 (Feb. 17, 2004); codified through ordinances effective July 30, 2026, Landlord-Tenant Relations Ordinance: code text, read 2026-09-20
• Colo. Rev. Stat. § 38-12-103 (the Colorado statute cited above)
• LeaseLenses Colorado deposit data set, last reviewed 2026-09-19; the same data powers the Colorado demand letter tool
• Colorado landlord-tenant overview and the Colorado deposit rules page

This page is general legal information for Boulder, Colorado, not legal advice. Local ordinances are amended more often than state statutes; read the current code text before relying on a figure in court.