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Colorado Transferring Security Deposit After Sale

The Colorado Revised Statutes Title 38, Article 12, Section 103 requires the following steps to be taken with a tenant’s security deposit when the ownership interest in a rental property changes:

Transfer or Return the Funds

Upon cessation of his interest in the dwelling unit, whether by sale, assignment, death, appointment of a receiver, or otherwise, the person in possession of the security deposit, including but not limited to the landlord, his agent, or his executor, shall, within a reasonable time:

  • Transfer the funds, or any remainder after lawful deductions under the section Colorado Returning Security Deposit, to the landlord’s successor in interest and notify the tenant by mail of such transfer and of the transferee’s name and address; or
  • Return the funds, or any remainder after lawful deductions, to the tenant.

Note: Upon compliance with this subsection, the person in possession of the security deposit shall be relieved of further liability. Upon receipt of transferred funds, the transferee, in relation to such funds, shall be deemed to have all of the rights and obligations of a landlord holding the funds as a security deposit.

Tenant Rights Cannot be Waived

Any provision, whether oral or written, in or pertaining to a rental agreement whereby any provision of this section for the benefit of a tenant or members of his household is waived shall be deemed to be against public policy and shall be void.

C.R.S. 38-12-103

Return to Colorado Landlord-Tenant Laws.

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