Boulder, Colorado: security deposit interest
Boulder requires a landlord to pay interest on a residential security deposit at a rate the city sets each December, and the rate in force when the lease is signed governs that lease.
Cited to Boulder Rev. Code title 12, ch. 2 (landlord-tenant relations): §§ 12-2-2, 12-2-4 through 12-2-7 and 2 more sources · Verified August 28, 2026
The figure for leases entered during 2026 is 2.08%, determined by the city manager by averaging the rates paid on one-year certificates of deposit at three banks doing business in the city (§ 12-2-7(a)). The deposit and its interest remain the sole property of the tenant, and accrued interest must be returned within one month after the lease ends or the premises are surrendered and accepted, whichever happens last (§§ 12-2-5, 12-2-6(a)). Every refundable deposit counts, pet deposits included; interest is not due on last month's rent. Colorado state law requires no deposit interest at all, so this duty is purely local, and it cannot be waived (§ 12-2-8). A landlord who willfully and wrongfully keeps the interest owes the tenant $100 or three times the amount kept, whichever is greater, plus reasonable attorneys' fees and court costs (§ 12-2-6(c)).
Boulder deposit interest at a glance
| Interest owed under local law | Yes — required by local law |
|---|---|
| How the rate is set | A figure announced on a published cycle |
| Current figure | 2.08% for leases entered during calendar year 2026, determined by the city manager and published by the city in December 2025. |
The rate
The city manager fixes one rate a year by averaging the interest rates being paid on one-year certificates of deposit by three banks doing business within the city that the manager regards as significant participants in the local banking industry. The average is taken as of December 15 (or the first business day after, where that falls on a weekend or holiday), rounded to no more than two places after the decimal point, and published in a newspaper of general circulation or posted on a city website; the manager's determination is final. The figure becomes the rate on any security deposit provided to a landlord during the calendar year starting the following January 1 (§ 12-2-7(a)). Deposits under leases entered before March 19, 2004 carry a rate the code sets itself: five and one-half percent per annum simple interest on the full amount of the deposit (§ 12-2-7(d)). Interest is simple by definition — the code defines it as simple interest on the full amount of the deposit on deposit (§ 12-2-2) — and interest for a multi-year tenancy is calculated separately for each year of the tenancy (§ 12-2-7(c)).
Accrual and payment
The city's published formula, which § 12-2-7(c) requires the manager to provide, multiplies the entire deposit by that year's rate, divides by twelve to get a monthly amount, and multiplies that by the number of months the deposit was in the landlord's possession — counting the 30 or 60 days the landlord holds it after the lease ends while the reconciliation is done, at the final rate. Accrued interest must be returned within one month after the lease terminates or the premises are surrendered and accepted, whichever happens last, following state law on returning the deposit, noticing deductions and the legality of those deductions; any further accrued interest goes back at the same time as the deposit itself (§ 12-2-6(a)). The lease must also tell the tenant that interest is payable on the deposit (§ 12-2-4(a)(1)(F)).
Who and what is covered
The duty covers any advance or deposit of money, whatever it is called, whose primary function is to secure performance of a residential rental agreement (§ 12-2-2). The city states the practical consequence plainly: every refundable deposit belongs in the calculation, pet deposits included, and interest is not due on last month's rent held by the landlord. Deposits paid to a mobile home park for the lease of a mobile home space are outside §§ 12-2-5 and 12-2-6 altogether (§ 12-2-6(f)). Nothing here can be contracted away — a lease provision waiving any part of the chapter is against public policy and void (§ 12-2-8).
Custody of the deposit
The security deposit is and remains the sole property of the tenant who advanced it, and the deposit plus interest may not be kept after the tenancy ends except for actual cause under state law (§ 12-2-5). The same section is express that it does not create a fiduciary relationship between the parties: what it creates is a duty to account for interest when the tenancy ends. Boulder requires no escrow, trust account, separate account or interest-bearing account — the landlord owes the published rate whatever the money was doing in the meantime.
Penalty for violation
Failing to give the notice state law requires for keeping any part of the interest forfeits the right to withhold any of it (§ 12-2-6(b)). Willful and wrongful retention of deposit interest makes the person holding the deposit liable to the tenant for $100 or treble the amount retained, whichever is greater, together with reasonable attorneys' fees and court costs — because $100 is a floor, it is what controls on small amounts of interest — and the tenant must give at least seven days' notice of an intention to file before suing (§ 12-2-6(c)). In court the person holding the deposit carries the burden of proving that the retention was lawful (§ 12-2-6(d)), and a tenant may bring the state security deposit claim and the local claim in the same lawsuit (§ 12-2-6(e)).
How this interacts with state law
Colorado's security deposit law requires no interest on residential deposits at all, so the Boulder duty is purely local and adds a right state law does not give. The local chapter still leans on state law for the mechanics of returning a deposit and noticing deductions, and § 12-2-6(e) expressly allows a tenant to bring a claim under the state security deposit act and a claim under this chapter in the same lawsuit.
Mobile home parks
Section 12-2-6(f) carves mobile home parks out: neither the ownership and interest section (§ 12-2-5) nor the return and enforcement section (§ 12-2-6) applies to a security deposit paid to a mobile home park on account of the lease of a mobile home space. Colorado's mobile home park law is the separate track for those tenancies.
Published rate tables
Boulder security deposit interest rates, 1985 to 2026
The city's published list of prior-year rates, kept and provided by the city manager under § 12-2-7(c). Each figure is an annual simple rate, and the city publishes it alongside a decimal multiplier used in its own formula (2.08% appears as .0208). The rate in force when a lease is signed governs that lease period until termination or renewal, so a deposit taken in one year keeps that year's rate for the whole lease, while a month-to-month tenancy renews each month and moves to the new figure every January 1. The first two windows are date bands rather than calendar years.
| Period | Rate | Note |
|---|---|---|
| before December 5, 1985 | No duty yet in force | No interest was required on Boulder security deposits before December 5, 1985, and the city's table records no rate for that period — this is the start of the duty, not an unpublished figure. |
| December 5, 1985 – March 18, 2004 | 5.5% | Set by the code itself, not by the manager: § 12-2-7(d) fixes five and one-half percent per annum simple interest for leases entered before March 19, 2004. |
| March 19, 2004 – December 31, 2004 | 1.08% | The first manager-determined rate, made within ten days of March 19, 2004 under § 12-2-7(b). |
| calendar year 2005 | 1.85% | |
| calendar year 2006 | 3.01% | |
| calendar year 2007 | 3.89% | |
| calendar year 2008 | 3.69% | |
| calendar year 2009 | 1.88% | |
| calendar year 2010 | 0.43% | |
| calendar year 2011 | 0.35% | |
| calendar year 2012 | 0.3% | |
| calendar year 2013 | 0.25% | |
| calendar year 2014 | 0.17% | |
| calendar year 2015 | 0.16% | |
| calendar year 2016 | 0.16% | |
| calendar year 2017 | 0.16% | |
| calendar year 2018 | 0.16% | |
| calendar year 2019 | 0.75% | |
| calendar year 2020 | 0.39% | |
| calendar year 2021 | 0.07% | |
| calendar year 2022 | 0.06% | |
| calendar year 2023 | 2% | |
| calendar year 2024 | 2.33% | |
| calendar year 2025 | 2.92% | |
| calendar year 2026 | 2.08% | The rate now in force, announced by the city on December 16, 2025 from the manager's determination as of December 15, 2025. |
A current series — the city, from the city manager's determination as of December 15 each year, published in mid-December for the calendar year beginning January 1. Source: official source · verified August 28, 2026.
Work out a figure: the deposit interest calculator computes Boulder interest from this table using the locality's own published method.
Notes and caveats
- The rate is fixed when the lease is signed — Boulder does not re-rate a running lease every January. Section 12-2-7(a) attaches the rate to the year the deposit is provided to the landlord, and the city puts it plainly: the rate in effect at lease signing stays in effect for that lease period, until termination or renewal. A renewal starts a new period at the then-current rate, and a month-to-month tenancy counts as renewed each month, so its rate changes every January 1. Section 12-2-7(c) sits alongside that, requiring interest for a multi-year tenancy to be calculated separately for each year of the tenancy; both subsections are part of the rule and the city's renewal reading is how it reconciles them.
- The holdover months count — The city's formula counts the months the deposit was in the landlord's possession "including the 30 or 60 days after the end of the lease" — the reconciliation period while the landlord decides on deductions — and applies the final rate to them. It is easy to miss and it changes the figure: on a $1,500 deposit at the 2026 rate, twelve months comes to $31.20 and fourteen months to $36.40.
- Rounding to the cent is not addressed — Section 12-2-7(a) says how to round the rate — no more than two places after the decimal point — but neither the code nor the city's published formula says how to round the dollar figure the formula produces, and a result can land exactly on a half cent (2.33% on an $1,800 deposit held thirteen months comes to $45.435). The city has published no rounding rule, so none is stated here; the figure shown is the one the city's own formula produces.
- No fiduciary duty, but a duty to account — Section 12-2-5 says the deposit is and remains the sole property of the tenant, and then says the section "does not create a fiduciary relationship between the parties, but creates a duty to account for interest upon the termination of the tenancy." That is a deliberate line, and it is the opposite of the choice Berkeley made: Berkeley's ordinance holds the deposit in a fiduciary capacity for the benefit of the tenant. Both cities require the interest; they differ on what kind of holder the landlord is.
- The duty is spread across five sections — Accounts that cite only § 12-2-5 give a third of the rule. Section 12-2-2 defines the deposit and defines interest as simple interest on the full amount; § 12-2-4(a)(1)(F) requires the lease to disclose the duty; § 12-2-5 makes the deposit and interest the tenant's property; § 12-2-6 sets the return deadline and the remedy; § 12-2-7 sets the rate. The city cites the cluster the same way, as sections 12-2-2 and 12-2-4 through 12-2-7.
- Pet deposits are in, last month's rent is out — Because the code reaches any advance or deposit of money "regardless of its denomination" whose primary function is to secure performance of the lease, all refundable deposits including pet deposits go into the calculation. Money taken as last month's rent is payment rather than security, and the city states that interest is not due on it.
- A missing word in the waiver section — Section 12-2-8 reads, as published, that a provision waiving any part of the chapter "shall deemed to be against public policy and shall be void." The dropped word is in the official text and is reproduced here as printed; the meaning is not in doubt, and the waiver is void.
Cite this page: "Landlord Atlas, Boulder, Colorado: security deposit interest (verified August 28, 2026), landlordatlas.com/laws/deposit-interest/colorado/boulder/" — free to cite and quote with a link (how these records are verified).
Citations
- Boulder Rev. Code title 12, ch. 2 (landlord-tenant relations): §§ 12-2-2, 12-2-4 through 12-2-7 · §§ 12-2-2 (definitions), 12-2-4(a)(1)(F) (lease disclosure), 12-2-5 (ownership and payment of interest), 12-2-6 (return of accrued interest; enforcement), 12-2-7 (interest rate), 12-2-8 (waiver void) (verified 2026) Official source
- City of Boulder, interest on security deposits calculation formula and rate table (verified 2026) Official source
- City of Boulder, 2026 security deposit interest rate announcement (December 16, 2025) (verified 2026) Official source
How this record was verified: Direct read of Boulder Revised Code title 12 (Human Rights), chapter 2 (Landlord-Tenant Relations, Eviction Prevention and Rental Assistance Services) in the current supplement published by the city's official code publisher, containing all ordinances effective July 30, 2026: all nine sections of the chapter enumerated, §§ 12-2-2, 12-2-4, 12-2-5, 12-2-6, 12-2-7 and 12-2-8 read in full, and every occurrence of the word 'interest' in the chapter examined in context. The city's published interest calculation formula page — the list of prior-year rates and the standard formula that § 12-2-7(c) requires the city manager to provide — read for the complete rate and multiplier table from before December 5, 1985 through 2026 and for the inclusion and exclusion rules; and the city's rate announcements for 2024, 2025 and 2026 read for the setting method, the authority cited and the publication cycle.
This page records local law on deposit interest. The statewide position — Colorado requires no interest on a residential security deposit, and the legislature's recent work on the subject makes that a current answer rather than a stale one. — lives on the Colorado deposit-interest page with its own citations and verification date.