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Landlords, are you holding past tenant security deposits improperly?



PROCEDURE FOR HANDLING UNCLAIMED TENANT DEPOSITS

REVISED UNIFORM UNCLAIMED PROPERTY ACT (CO CODE 38-13 (2021))


The Revised Uniform Unclaimed Property Act or "RUUPA", controls what happens to tenant deposits that are not claimed after a statutorily set time period of three years. After three years of the deposit not being claimed (cashed) by a tenant, the deposit is legally “abandoned.” The three-year countdown begins at the earlier of: (1) tenant’s right to demand the deposit arises; or (2) the obligation to pay arises. When the deposit is deemed abandoned under this act, a landlord or property manager must follow the procedure outlined below to properly send notice to the tenant, keep records, report to the Colorado Treasury and to ultimately turn the deposit over to the Colorado Treasury, whereby the landlord’s/property manager’s liability for the deposit ends.


PROCEDURE FOR HANDLING UNCLAIMED TENANT DEPOSITS


1. When the obligation arises, send tenant’s deposit to the tenant’s last known address.


2. Keep records of any correspondence and deposit information for ten years.


3. If correspondence with the tenant is returned and the deposit remains uncashed after three years, the deposit is legally abandoned under the act.


4. When the deposit is legally abandoned, send notice as required under the act to the

tenant.


a. Instructions:


1. Delivery:


a. Send the notice to tenant’s last known address (that identifies the state) or email if tenant consented to email delivery.


b. Send the notice between 60 and 180 days before filing the required report if tenant’s address is sufficient for delivery of first-class U.S. mail, or email if tenant consented to email correspondence.


c. The landlord/property manager may attempt to contact the tenant prior to this but are still required to send this official notice by law within this time frame.


2. Contents:


a. Notice must contain heading that reads substantially as follows: “Notice. The State of Colorado requires us to notify you that your property may be transferred to the custody of the state treasurer if you do not contact us before [insert date that is thirty days after the date of this notice].”.


b. Identify nature and value of the property.


c. State that the property will be turned over to the Colorado Treasury.


d. State that after the property is turned over to the Colorado Treasury, the tenant must seek return of the property by filing a claim with the Colorado Treasury.


e. State that the deposit is not legal tender of the U.S., and it may be sold.


f. Provide instructions for tenant to follow to prevent landlord/property manager from reporting and paying or delivering property to Colorado Treasury.


5. After the notice is sent to the tenant, send report as required under the act to the Colorado Treasury.



6. Upon submission of the report to the Colorado Treasury, send the deposit to the Colorado Treasury.


a. Instructions: Colorado: Great Colorado Payback - Colorado.gov (findyourunclaimedproperty.com) *click on electronic remittance instructions.

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