SB25-1249 Tenant Security Deposit Protections: A Disaster for Housing Providers
At Tri Home Life Property Management, we take great pride in providing quality rental housing to the residents of Littleton, Colorado. However, the proposed SB25-1249 Tenant Security Deposit Protections bill threatens to upend the balance between housing providers and residents, creating financial risks that could devastate housing providers and make rental housing less accessible in the long run.
The Risk of Unqualified Residents
Security deposits exist for a reason: they help mitigate the financial risk that comes with renting a property to individuals who may not have the strongest financial credentials. By limiting deposits, this bill would allow underqualified residents to secure housing without demonstrating the financial responsibility necessary to ensure that damages, unpaid rent, or other obligations are covered. While we all want to see people housed, ignoring financial responsibility does a disservice to both housing providers and residents.
Without adequate security deposits, housing providers will be forced to take on greater financial risk. When that risk becomes too high, many housing providers will choose to exit the rental market altogether, leading to fewer available rental units and higher rents overall. The unintended consequence of this legislation is clear: fewer rental options and stricter income and credit requirements, making it even harder for residents to find housing.
The Reality of Move-Out Costs
If SB25-1249 passes, housing providers will face an even tougher road when it comes to turning over properties between residents. The bill proposes a mandatory 10-business-day waiting period before housing providers can even begin necessary repairs or maintenance after a resident vacates. This delay is an unnecessary burden that could cost housing providers thousands in lost rent, especially in competitive rental markets where swift turnover is essential.
Beyond the delay, consider the impact of a resident leaving a unit in terrible condition. What happens when a resident leaves garbage, damaged walls, broken appliances, or worse? Under SB25-1249, housing providers could be restricted in their ability to charge for basic cleaning costs. This leaves housing providers with no recourse other than to absorb the expense themselves or increase rents to cover the financial shortfall. Ultimately, this bill shifts responsibility for a resident's actions onto housing providers, which is both unfair and unsustainable.
The Financial Catastrophe of Insufficient Deposits
One of the most troubling aspects of SB25-1249 is the limitation on security deposits. If housing providers are only permitted to hold minimal deposits—sometimes as low as $40 in cases where residents receive subsidized assistance—who will cover the cost when those residents leave behind thousands of dollars in unpaid rent or property damage? The harsh reality is that many subsidized residents have no collectible income, meaning housing providers would have no way to recoup their losses.
For small housing providers, this financial strain could be catastrophic. If a single resident causes significant damage or skips out on rent, a housing provider could be forced to cover those costs out of pocket. For some, this could mean the difference between keeping their rental business afloat and financial ruin. When rental properties become unprofitable, housing providers will either sell or convert units to other uses, again reducing the available rental housing stock.
The Bigger Picture: A Bill That Hurts Everyone
While SB25-1249 may be well-intentioned, its consequences will be devastating for housing providers and residents alike. By stripping housing providers of necessary protections, it will force housing providers to take extreme measures: higher credit and income requirements, increased rents to offset losses, and even withdrawal from the rental market entirely. In the end, these policies will not help residents but will instead make finding affordable, quality housing even more difficult.
At Tri Home Life Property Management, we urge lawmakers to reconsider SB25-1249. Housing policy must balance resident protections with the financial realities of housing provision. Without security deposits and the ability to manage risks effectively, housing providers will suffer, and so will the families this bill aims to protect. We encourage everyone to stand with us in opposition to this harmful legislation and advocate for policies that truly support both housing providers and families.
PLEASE JOIN THE CHC IN OPPOSING THIS BILL BY JOINING US IN TESTIMONY ON WEDNESDAY 3/12/2025.