Don’t Limit Your Options-Promptly Evaluate And Respond To Tenant Security Deposit Demand Letters


Under Colorado landlord tenant law, the landlord has to account for a tenant’s security deposit when the tenant moves out. In apartment world, landlord’s accounting is commonly referred to as a SODA (statement of deposit account).  If the tenant disagrees, a tenant has a right to dispute landlord’s SODA and sue the landlord for three times the amount of the deposit (treble damages) that the tenant contends landlord wrongfully withheld.  However, before a court will award a tenant treble damages in a security deposit lawsuit, the tenant has to give the landlord one last chance to return the deposit within seven days.

Tenants frequently send landlords seven day security deposit demand letters.  Upon receipt of a tenant security deposit demand letter, landlords should immediately evaluate the landlord’s legal options prior to the expiration of the seven-day demand.  If a landlord fails to promptly evaluate options after receiving a tenant security deposit demand, the landlord has severely limited his options and given the tenant significantly more leverage in the dispute. Because liability for treble damages and attorneys fees kicks in after the expiration of the seven-day demand letter, difficult tenants can now hold the landlord’s feet to the fire for three times the amount of the deposit.

Clients frequently forward tenant security deposit demand letters to us for review and evaluation. Unfortunately, all too often the letters are sent to us after the expiration of the seven-day demand.