If you are a landlord in Colorado then this is BIG. We have just seen 4 new Colorado laws passed, affecting property owners and managers that are effective immediately state-wide. We want to do a brief overview of the 4 laws for you today. 

new colorado laws

One – Application Fees

The first new law deals with application fees and applies to all landlords across the board, not just property managers. If you own one condo or one single family home and you rent that out, it doesn’t matter the size of your company or the size of your portfolio– these laws apply to you. 

This new law limits the amount that can be charged for an application fee. It also requires disclosure of what you are going to use those fees for and it requires receipts for the application. You might think that seems fair, that seems reasonable but it also requires specific action to be taken when an application is denied. So you can’t just say “Sorry you’re denied” you have to follow the requirements to deny those applicants. It also requires you to refund any of that application fee that is unused, back to the applicant.

Another interesting area that this law applies to is, it limits the information you can consider when processing an application. Now this is really big because you may not take into account the applicants history beyond seven years for rental and credit history. For criminal background, you cannot go beyond five years, with certain exceptions, that are stated in the law.

Two – Bed Bugs

The second new law is tightening up bed bugs requirements. Say if you are a property manager or a landlord and you are notified that a tenant thinks they might have bed bugs. The clock starts ticking the moment you are notified and you are required now to find a qualified inspector to determine if this is a bed bug issue. You will have 96 hours to do this. It now must be a qualified inspector, you cannot just go to Home Depot and buy the “bed bug getting rid of thing.”

They must report their findings to you and the tenant and then the treatment to eradicate is at the landlord’s expense, no matter where the bed bugs came from.

Three – Warranty of Habitability

Colorado had a pre-existing law of habitability, but the new law expands the tenant’s rights within the warranty of habitability. So, this law really means that we as landlords are required to provide a habitable property to a tenant. 

Included in those requirements is: you have to have running water and you have to have heat. This new rule though expands what those requirements are and greatly reduces the leverage a property manager or a landlord has in fixing these items that might be questionable and how quickly you get them fixed.

For example you are now required to give specific responses from landlords in a specific time frame. The clock starts ticking once a notification comes in from a tenant. If they suspect that something is broken or needs repair and it is on the habitability list or issue. This bill now allows tenants to legally withhold their rent or not pay it, if it is a habitability issue. It also greatly expands the landlord’s potential liability for retaliation and getting back in specific ways to their tenant. Let’s go through an example:

When a tenant gives a warranty of habitability notice, for example they say “Hey! I think I have mold” this is going to fall under the umbrella of warranty of habitability. The new law now requires that you must respond within 24 hours of getting that notice. So this could be really tricky, what if you get that notice at 12am midnight on a Friday night, that doesn’t matter, you still have 24 hours and the response must indicate the landlord’s intent for remedying the condition, providing an estimate of when the remediation will begin, this is tough because we don’t even know the contractors schedule yet. So within 24 hours we have to acknowledge, respond, provide an estimate of when work will begin and then we must provide an estimate of when the remediation will be complete. As landlords, we have no idea of what is going on. A tenant calls and says he has mold. Well is it cleaning of the wall or remediation of the entire house? The landlord has 24 hours to figure it out and get it solved.

Four – 10 Day Cure

The final new law is the 10 day cure. You may have heard of 3 day notice, when a tenant doesn’t pay rent, you post what is called a 3 day demand for possession or compliance stating the tenant has 3 days to pay the rent or we can potentially begin the filing for an eviction process. The new law has changed that notice from three days to 10. There are some caveats, however:

An example would be if you are the owner of a single family home and you don’t own too many properties then you don’t need to do a 10 day notice, you can do a 5 day notice, but if it is a condo or a town home then you are required to do a 10 day notice. If you own more than a certain number of properties then you can issue a 10 day as well. But we want you to understand that the 3 day notice is gone, it is all at a 10 day notice or potentially a 5 day notice with caveats of course. 

This applies to rent demands, so if the tenant hasn’t paid rent this is applicable. It applies to demand for compliance for non-monetary violations, perhaps it’s an HOA violation or violating a term or condition in your lease you want to evict for. Or repeated notice to quit for repeated violations.

Here is what is interesting, our attorneys are stating that with this new 10 day requirement the absolute soonest you can get a court date for non payment of rent would be the 22nd of the month. So rent is due on the 1st of the month, you get out there and post your notice, the soonest you will be in court is the 22nd. 

What this does is greatly expands the eviction process. Before 30 days would be tight but we could probably do it, but for sure usually an eviction could happen within 45 days. Now we are looking more like 60 days. In our opinion this rule doesn’t allow us to work well or easier with tenants to try and find a solution which we really want to do and we are seeing that it could. Where our eviction rates in our company have been less than 1% per year. We could see that this could go higher because tenants can’t catch up and they are falling behind with late payments or partial payments.

If you are a client of Legacy Property Management, don’t worry we have had our attorneys reviewing contracts to incorporate the verbiage that is required for these new laws and we are ensuring that we are operating under the convines of these laws and all the laws with regards to tenants and real estate laws.

If you are not a client of ours then please talk to your property management company to ensure that you are doing these things to protect yourself. It doesn’t really matter if you are apart of a PM or managing on your own, you need to ensure that you are adhering to these new laws and it is definitely shaking up some things in our industry.