Cal. Civ. Code § 38-12-102.5

Security deposits - maximum amount - exception for post-closing occupancy agreements - rules.

In Force
Verified 10/16/2026 · Next check 10/23/2026
effective 10/16/2026ColoradoDeposit Limits

Operative Text

Cal. Civ. Code § 38-12-102.5
(1) 
Except as described in subsection (2) of this section, a landlord shall not
require a tenant to submit a security deposit in an amount that exceeds the
amount of two monthly rent payments under the rental agreement.

(2) On
and after January 1, 2027, subsection (1) of this section does not apply if the
landlord and tenant have executed a post-closing occupancy agreement pursuant
to a purchase contract whereby the landlord purchased the residence from the
tenant.
Source: Legislative text reproduced verbatim
Plain English

Colorado Revised Statutes § 38-12-102.5 caps the security deposit a landlord may collect at no more than two months' rent under the rental agreement. This limit applies broadly to residential tenancies in Colorado, with one narrow exception: starting January 1, 2027, the cap does not apply when the parties have entered into a post-closing occupancy agreement arising from a purchase contract in which the landlord bought the home from the tenant. In that specific seller-leaseback scenario, the two-month ceiling is lifted.

Written by anthropic/claude-sonnet-4.6 · Reviewed on October 16, 2026

Plain English — not legal advice.

For Property Managers

Under Colo. Rev. Stat. § 38-12-102.5, compliant landlords set security deposit amounts at or below the equivalent of two months' rent as stated in the rental agreement. Operators who collect deposits exceeding that threshold—outside the post-closing occupancy agreement exception effective January 1, 2027—risk exposure to legal challenges from tenants. Landlords involved in seller-leaseback arrangements should document the underlying purchase contract carefully, as that documentation is what triggers the statutory exception.

General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.

For Tenants

Colo. Rev. Stat. § 38-12-102.5 gives Colorado tenants a clear ceiling on what a landlord can demand as a security deposit—no more than two months' rent in most residential situations. If a landlord requests a deposit above that amount, a tenant may have grounds to raise the excess as a violation, potentially through a complaint to a local housing authority or as a defense in a court proceeding. Tenant-rights organizations in Colorado can help explain what remedies may be available and how the post-closing occupancy exception—effective January 1, 2027—might or might not apply to a particular rental arrangement.

General guidance for tenants — not legal advice for your specific situation. Consult a tenant-rights organization or attorney for advice on your case.

Generated October 16, 2026 — auto-generated, not yet human-reviewed. See /transparency for methodology.

Effective Timeline

Current
Oct 16, 2026
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Related Rules

§ 1950.5
§ 554.602
Security deposit; amount.
§ 250.511a
Escrow Funds Limited

Source Information

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Fetched:Oct 16, 2026, 05:03 PM UTC