Security Deposit and Damage Payment Request Process

This process applies to the following Colorado Division of Housing (DOH) supportive housing programs:

• Continuum of Care Permanent Supportive Housing Program (CoC PSH)
• State Housing Vouchers (SHV)
  • Homeless Solutions Program – State Housing Vouchers (HSP-SHV)
  • Mental Health – State Housing Vouchers (MH-SHV)
  • Recovery-Oriented Housing Program – State Housing Vouchers (ROHP-SHV)
  • Community Access Team Voucher Program (CAT-V)
• Family Unification Program (FUP) Youth Housing Choice Voucher (HCV)

Security Deposit Requests Policies

• Security deposits can be requested through all DOH supportive housing programs listed above, except those with project-based HSP-SHV, MH-SHV, and ROHP-SHV.
  • The HSP-SHV, MH-SHV, and ROHP-SHV programs do not pay security deposits for participants with project-based vouchers. DOH expects project-based/single-site supportive housing developments to reduce barriers to program entry, such as established security deposit policies/requirements.
• Up to two (2x) months’ worth of rent can be requested as a security deposit by a program participant.
• CAT-V allows for one security deposit per participant over the lifetime of the program. For all other programs, a new security deposit (up to two months’ worth of rent) may be requested every time a program participant leases up at a new unit.
• DOH can sign the Security Deposit / Damage Request Form to provide documentation or a defacto promissory note to the landlord, but in order to create an adjustment the client must be moved into the unit. Please send the signed form back to your DOH SPOC with the landlord W-9 once the lease up is completed.

Procedures

• First Security Deposit Request
  • Submit a copy of the completed Security Deposit / Damage Request Form to your DOH SPOC for review.
• Subsequent Security Deposit Requests
  • Previous Deposit Documentation: Submit the Security Deposit Retention Form and relevant invoices to DOH SPOC showing how the previous deposit was applied.
  • Participant Meeting: If DOH requires a Participant Meeting to be conducted, provide documentation that a Participant Meeting has occurred with participation from the participant, housing coordinator, and any case management staff focused on the retention of future deposits.
    • In situations where a subsequent security deposit is required due to medical necessity (i.e., participant needs a first floor unit, added a live-in aide), a Reasonable Accommodation (RA) can be submitted in place of a Participant Meeting.
    • In situations where a subsequent security deposit is required due to reasons beyond the participant’s control (i.e., building is sold, no leases being renewed), an email from service provider or housing coordinator can be submitted in place of a Participant Meeting or RA.
  • New Deposit Documentation: Complete a copy of a new completed Security Deposit / Damage Request Form for review by DOH staff.
  • Additional Information: Additional deposits may also require the following:
    • A copy of the current case management housing support or service plan being shared with DOH staff.
    • DOH participation in case consultation to discuss housing support or service planning moving forward.

Security Deposit Returns

DOH Voucher Administrative Agencies will send Property Owners / Landlords the following documents at tenant move-out:

• Security Deposit Reminder Letter
• Security Deposit Retention Form

Damage Payment Requests

When damages are incurred that would result in a Housing Quality Standards (HQS) fail or are considered serious damage, and both the landlord and tenant agree the damages are tenant-caused, the landlord can use the security deposit and/or damage payment to pay for repairs.

Damage payments are only available through the CoC PSH, MH-SHV, HSP-SHV, and ROHP-SHV programs, not the FUP Youth HCV program or CAT-V program. Policies and procedures regarding damage payments are similar across the CoC PSH and three SHV programs except where noted below.

Policies

• CoC PSH Program
  • When to request: At end of lease.
  • Amount: Up to one month’s worth of rent.
  • Frequency: A single damage payment can be requested by a participant throughout the duration of program enrollment. Even if the one damage payment requested does not total one month’s rent, no additional damage payments can be requested.
• MH-SHV, HSP-SHV, and ROHP-SHV Program
  • When to request: Mid-lease and/or at end of lease. Unless the landlord prefers to use the security deposit to pay for repairs mid-lease, a damage payment separate from the security deposit should be requested so that the landlord still has the security deposit as incentive for maintaining tenancy. If mid-lease damages exceed the damage payment amount of one month’s rent, landlords may use the security deposit to cover remaining costs.
  • Amount: Up to one month’s worth of rent.
  • Frequency:
    • Damage payments can be requested during each period of tenancy, i.e., every time an SHV program participant leases up at a new unit.
    • Damage payments per tenancy period should not exceed a total of one month’s worth of rent (damage payments can be requested and utilized multiple times per period of tenancy, as long as the total amount does not exceed one month’s rent per tenancy).
    • For subsequent damage payment requests after the first request, DOH may require the contract agency to conduct a Participant Meeting with the participant to discuss avoiding future damage payments.

Procedure

To request a damage payment, submit the following to your DOH SPOC for review:

• Copy of the completed Security Deposit / Damage Request Form.
• Written/email statement from the landlord briefly describing the incident(s) (i.e., reason for requesting a damage payment).
• Written/email statement from the service provider and/or voucher administrative contract agency confirming that the damages are tenant-caused.
• Proof of payment documenting the exact costs associated with the damage request. Photos of the damage may also be requested.

Security Deposit/Damage Request Form

Security Deposit and Damage Request Form Templates

Title 38. Property - Real and Personal Tenants and Landloards Article 12. Tenants and Landlords
Part 1. Security Deposits - Wrongful Withholding

38-12-103. Return of security deposit

(1) A landlord shall, within one month after the termination of a lease or surrender and acceptance of the premises, whichever occurs last, return to the tenant the full security deposit deposited with the landlord by the tenant, unless the lease agreement specifies a longer period of time, but not to exceed sixty days. No security deposit shall be retained to cover normal wear and tear. In the event that actual cause exists for retaining any portion of the security deposit, the landlord shall provide the tenant with a written statement listing the exact reasons for the retention of any portion of the security deposit When the statement is delivered, it shall be accompanied by payment of the difference between any sum deposited and the amount retained. The landlord is deemed to have complied with this section by mailing said statement and any payment required to the last known address of the tenant. Nothing in this section shall preclude the landlord from retaining the security deposit for nonpayment of rent, abandonment of the premises, or nonpayment of utility charges, repair work, or cleaning contracted for by the tenant.

(2) The failure of a landlord to provide a written statement within the required time specified in subsection (1) of this section shall work a forfeiture of all his rights to withhold any portion of the security deposit under this section.

(3)    (a) The willful retention of a security deposit in violation of this section shall render a landlord liable for treble the amount of that portion of the security deposit wrongfully withheld from the tenant, together with reasonable attorney fees and court costs; except that the tenant has the obligation to give notice to the landlord of his intention to file legal proceedings a minimum of seven days prior to filing said action.
(b) In any court action brought by a tenant under this section, the landlord shall bear the burden of proving that his withholding of the security deposit or any portion of it was not wrongful.

(4) 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:
(a)    Transfer the funds, or any remainder after lawful deductions under subsection (1) of this section, 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
(b)    Return the funds, or any remainder after lawful deductions under subsection (1) of this section, to the tenant.

(5) Upon compliance with subsection (4) of this section, the person in possession of the security deposit shall be relieved of further liability.

(6) Upon receipt of transferred funds under subsection (4)(a) of this section, 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.
(7) 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.

Source: L. 71: p. 592, § 1. C.R.S. 1963: § 58-1-28.L. 76: (2) amended, p. 314, § 67.

Examples (Not all inclusive) of Tenant Damage versus "Normal Wear and Tear"

Normal costs of turning over an apartment after a tenant vacates may not be included on a claim to HUD for tenant damages. The costs an owner incurs for the basic cleaning and repairing of such items necessary to make a unit ready for occupancy by the next tenant are part of the costs of doing business. The following is a list of items typically attributable to routine use or "normal wear and tear".

Normal Wear and Tear 

• Fading, peeling, or cracked paint
• Slightly torn or faded wallpaper
• Small chips in plaster
• Nail holes, pin holes, or cracks in wall
• Door sticking from humidity
• Cracked window pane from faulty foundation or building settling
• Floors needing coat of varnish
• Carpet faded or worn thin from walking
• Loose grouting and bathroom tiles
• Worn or scratched enamel in old bathtubs, sinks, or toilets
• Rusty shower rod
• Partially clogged sinks caused by aging pipes
• Dirty or faded lamp or window shades

Tenant damages usually require more extensive repair, and at greater cost than "normal wear and tear", and are often the result of a tenant's abuse or negligence that is above and beyond normal wear and tear. 

Tenant Damage

• Gaping holes in walls or plaster
• Drawings, crayon markings, or wallpaper that owner did not approve
• Seriously damaged or ruined wallpaper
• Chipped or gouged wood floors
• Doors ripped off hinges
• Broken windows
• Missing fixtures
• Holes in ceiling from removed fixtures
• Holes, stains, or burns in carpet
• Missing or cracked bathroom tiles
• Chipped and broken enamel in bathtubs and sinks
• Clogged or damaged toilet from improper use
• Missing or bent shower rods
• Torn, stained, or missing lamp and window shades

Sample Life Expectancy Chart

Many major items have a predictable life span. A list of items and their life expectancy are listed below. Note: If these items were in good condition at the time of move in, and it can be shown that damage, above the normal wear and tear has been sustained, then a damage claim can be submitted.