In its 2023 legislative session, the Colorado General Assembly passed several bills that impact relationships between residential landlords and tenants. Some of these new laws may require updates to residential lease agreement templates. Others may not require direct changes to lease agreements but will impact how landlords and property managers conduct business. Below is a high-level overview of the major changes to help anyone not working with a property management company make the necessary changes to your processes to ensure you are still compliant.
***Disclaimers: I am not a lawyer, and these summaries are not intended to be exhaustive or considered legal advice.
Sb23-206: Disclose Radon Information Residential Property
Radon is a naturally occurring radioactive gas that is found in soil and groundwater, is recognized by the World Health Organization as a carcinogenic toxin, and is a leading cause of lung cancer. As a result, this law requires sellers and landlords of residential Colorado real estate to make certain disclosures regarding the known existence of radon in the property. Landlords and property managers of residential Colorado real estate must disclose and provide the following to potential purchasers or tenants:
- A warning statement (included in the statute) about the dangers of radon and a recommendation to conduct testing.
- Any knowledge the owner has about radon concentrations in the property, including:
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Whether radon tests have been performed in the property;
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The most current records and reports pertaining to radon in the property;
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A description of any radon detected, mitigated, or remediation performed;
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Information regarding any radon mitigation system in the property; and
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A copy of the most recent brochure published by the Colorado Department of Public Health and Environment that provides advice about radon in real estate transactions.
If a landlord or property manager fails to provide the necessary disclosures or fails to make a reasonable effort to mitigate radon concentrations of more than 4 pCi/L, then the tenant may void their lease and vacate the premises in accordance with Colorado’s Warranty of Habitability laws.
Best Practice is to complete the disclosure and send it to current tenants for signatures. If you know your radon levels are 4 pCi/L or above, you need to work on mitigating immediately. Please contact me and I can send you a radon disclosure that you can start using.
**Not new, but don’t forget to provide a Lead-Based Paint Disclosure Form and Brochure to tenants if your property was built on or before 1978.**
Hb23-1095: Prohibited Provisions in Rental Agreements
A residential rental agreement can NOT contain:
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Eviction penalty clauses.
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A one-way, fee-shifting clause that awards attorney fees and court costs to only one party. Any fee-shifting clause must award attorney fees to the prevailing party “following a determination by the court that the party prevailed and that the fee is reasonable.”
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Waiver of any of the following:
- A jury trial;
- Restricts ability to bring class action;
- The implied covenant of good faith and fair dealing; or
- The implied covenant of quiet enjoyment.
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4. A provision that purports to affix any fee, damages, or penalty for a tenant failing to provide notice of nonrenewal of a rental agreement before the end of the rental agreement.
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Except for the set monthly payment for occupancy of the premises, any provision that characterizes any amount or fee as “rent,” could lead to remedies such as eviction in the event of non-payment, e.g. utilities.
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Excessive “mark-ups that would make tenants pay a markup above what a 3rd party service provider would charge the landlord. Excessive is over 2% of the billed amount or fee that exceeds $10 per month.
Best Practice: Residential lease agreement templates should be reviewed and updated to confirm that they do not include any prohibited terms. Any provision(s) that violate these terms is void and unenforceable.
Hb23-1068: Pet Animal Ownership in Housing
Limits fees relating to pet ownership. Limits additional security deposit to $300 and must be refundable. Limits pet rent to the greater of $35/month or 1.5% monthly rent.
This Act also prohibits insurance companies from refusing to issue, cancel, renew, or increase premiums or rates for a homeowner’s insurance policy or a dwelling fire insurance policy based on the breed or mixture of breeds of dog that is kept at the dwelling. However, these prohibitions do not apply if a particular dog kept at the dwelling is known to be dangerous or has been declared to be dangerous and the decision is “based on sound underwriting and actuarial principles.”
Best Practices: Lease agreement templates containing a blanket lump sum for additional pet charges that are not treated as a refundable deposit should be modified to comply with the statute. Landlords must know the maximum amounts that can be collected as an additional pet security deposit or additional monthly pet fee. If you are charging more than the allowable pet rent reduce the amount charged and refund any security deposit you are holding that exceeds $300.
Hb23-1099: Portable Screening Report for Residential Leases
Requires landlords to accept a “portable tenant screening report” as part of the application process, in which case the landlord may not charge the prospective tenant an application fee. A portable tenant screening report includes information about the applicant from a consumer reporting agency, including the applicant’s:
- Name;
- Contact information;
- Verification of employment and income;
- Last-known address; and
- Rental, credit, and criminal background histories, in compliance with Colorado law.
Landlords may require that the portable tenant screening report meet certain criteria, including that the report was:
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Completed within the last 30 days;
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Made directly available to the landlord by the consumer reporting agency or through a third-party website regularly engaged in the business of providing consumer reports, in compliance with all applicable consumer reporting laws;
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Provided to the landlord at no cost; and
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A statement from the prospective tenant that there has not been any material change in the information provided in the report.
Before taking any rental application for which the landlord would typically charge an application fee, landlords must advise applicants that they have a right to obtain a portable tenant screening report. Required language, timing, and placement of the advisement are included in the statute.
This Act, in particular, contains many specific details that are not included in this brief summary. Please contact an attorney if you have questions or want more info about the Rental Application Fairness Act and its compliance matters.
Best Practice: Disclose in all rental advertising, and when sending a rental application, ask if the prospective tenant has a past portable screening report available.
Best Practice: Disclose in all rental advertising, and when sending a rental application, ask if the prospective tenant has a past portable screening report available.
Sb23-184: Protections for Residential Tenants
If landlords use rental or credit history when considering prospective applicants, this Act limits the landlord’s ability to consider or inquire about certain aspects of the applicant’s income. Landlords renting to prospective applicants who are seeking to rent without the assistance of a housing subsidy shall not require that the applicant’s annual income exceeds 200% of the annual rent amount. The Act also limits the security deposit that can be required of residential tenants to no more than two (2) monthly rent payments under the lease.
Residential Rental License for the City & County of Denver
Starting 1/1/2024, a license will be required for anyone offering, providing, or operating a residential rental property consisting of a single rental dwelling unit on a single parcel in the City & County of Denver. A passing inspection from a certified, private home inspector is required as well as the license fee. The license is good for four years unless ownership changes. Once you receive your residential property license number, all license numbers must be displayed in all advertisements.
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Link to application/more info: denvergov.org
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Link to list of certified Inspectors: view.officeapps.live.com
Conclusion
Legislation governing the relationship between residential landlords and tenants was a major priority for the Colorado General Assembly in 2023. This host of new legislation directly impacts how landlords and property managers must conduct business to remain in compliance with current laws. Please don’t hesitate to reach out to me with any questions/if you need help with any of these changes. I am also happy to help anyone in the City & County of Denver with their rental license.
