Summary of Updated Laws that may affect Colorado Landlords
Historically, Colorado has been a landlord-friendly state, and it remains so today. However, we are seeing a shift with the state legislature and bills being proposed, and sometimes passed, that favor or protect the tenant more. If you own rental investment properties in Colorado, or plan on adding them as part of your portfolio, it’s important to understand what the laws are and keep an eye out for more changes in the future.
Disclaimer: I acquired this information from several sources. I am not an attorney. Anyone with rental or investment properties in Colorado should seek legal advice on their lease agreements and landlord practices.
Licensing - This year, Denver joined Boulder in requiring landlords to hold a current and valid license issued by either the city or county. At this time, I don’t know of other Denver-Metro municipalities that require a license, but be sure to check your local municipality to find out if you need one. I expect more cities and counties to adopt this policy in the future because of the fees they collect for licensing.
Habitability - Naturally, the property must be safe and habitable with working utilities and services. A renter may terminate the lease, withhold rent, or have other legal recourse if a property is not maintained property. The Warranty of Habitability law from Colorado Revised Statutes for more information
Rent - Currently, there are no rent-control measures in place in Colorado law, and landlords may charge (or at least try to charge) what they want, allowing the market to decide if it’s appropriate. Rent control has been written into some bills that have failed to become law, and such a measure may pass in the future.
Pet Rent is limited to $35/mo or 1.5% of the monthly rent, whichever is greater. Landlords are not allowed to charge pet rent if it is a documented service animal.
Late fees - Landlords can charge a late fee if that is stipulated in the lease agreement. However, they cannot charge a late fee unless the rent is 7 days late or more, and the fee is limited to $50 per month or 5% of the amount owed for rent, whichever is greater.
Deposits - The security deposit cannot exceed 200% of the monthly rent. If a landlord is going to keep any portion of the deposit upon moving out, then the amount must be documented in an invoice or something similar. Pet Deposits cannot exceed $300 and must be refundable. Additional pet “fees” are prohibited.
Radon Disclosure - A radon disclosure form must be provided to renters (available through a web search - there is no boilerplate disclosure available yet), and any knowledge of tested radon levels must be disclosed to the renter. Landlords may hire a licensed professional to perform the test, or do the test themselves using a 3rd part test kit and lab service.
Tenant Screening Qualifications - Landlord cannot require an income of more than 200% of monthly rent to qualify. They also may not discriminate on the basis of where the income source. More on screening qualifications can be found in the recent bill.
Equal Housing - More information on equal housing in Colorado can be found here.
Eviction - Eviction can be a complicated process, and landlords and tenants should seek advice from a qualified attorney if they find themselves in a situation that may require eviction. Additional protections for tenants receiving certain types of rent assistance were given in a recent bill.
Prohibited Lease Language -
- A rental agreement that requires fees, damages, or a penalty if a tenant fails to provide notice of nonrenewal before the end of the lease.
- An agreement that characterizes any fees that are not base monthly rent as “rent” that can be collected using certain remedies like eviction (“rent” can only be rent).
- Any provision that requires tenants to pay fees or markups for a third-party service above EITHER (a) 2% of the actual cost what a landlord paid or (b) $10.00, BUT NOT BOTH
- A provision that waives certain rights, including a jury trial
- A provision may not award attorneys fees and costs unless awarded by a Court
- A provision allowing the landlord to evict a tenant for nonpayment of utilities
Exception: These prohibited clauses DO NOT apply to certain rental agreements, including ones in mobile homes or mobile home parks.