Staying current with Golden, Colorado rental laws is part of what we do as professional property managers. We know keeping up with all of the latest requirements and regulations can be challenging for our owners and investors.
We do it for you.
Thanks to our legal knowledge and expertise around the state, local, and federal laws, we can make sure you’re complying with all of them.
If you haven’t been paying attention, we can tell you that there have been quite a few changes in the law over the last few years. We’re going to highlight those changes and also talk about some of the long-standing laws that are critical for every rental property owner to know and understand.
Updated Colorado Laws You Need to Know
Tenant protections have increased over the last two or three years in Colorado. In 2021, the assembly passed SB21-173, which Governor Polis signed into law. This law included a lot of extra protections for tenants, specifically those tenants trying to avoid eviction. Here are the most important things you need to know about this law:
- Eviction and Rental Payments
Colorado has a just cause requirement when it comes to filing for eviction, but you’ve always been able to evict for nonpayment of rent. The difference now is that your tenants have the opportunity to get the eviction called off by coming up with the rent that is owed. If this happens before a court signs off on the eviction, you are legally required to cancel the eviction and accept the rental payment. It has to be a full payment, however. You are under no obligation to accept a partial payment.
- Health and Safety Considerations During Eviction
Previously, if you were evicting a tenant for nonpayment of rent and that tenant defended themselves against the eviction by claiming that you were not maintaining the home or it wasn’t habitable, the tenants would still have to pay almost all of the rent that was owed if they wanted to stay in their rental home and not get evicted. That’s not exactly required anymore.
Tenants can now use a health and safety defense in court, even if they owe you rent. This is a valid reason for them not to be evicted by the courts. Don’t go to court to evict if there are credible complaints about habitability or maintenance issues that might expose you during the process.
Colorado Laws on Late Fees
There is a lot you need to know about late fees when you’re renting out a home in Colorado. We always recommend a consistent rent collection policy that’s clear and easy to understand. Typically, it would include late fees and how much you’ll charge when rent does not come in on time.
Not only do you have to follow all of the recently adopted laws around late fees, you also need to amend your lease agreement to reflect new language pertaining to late fees.
This is a step that a lot of landlords may have missed, especially those who were managing their own homes.
Since October of 2021, late fees in residential Colorado leases are limited. You are permitted to charge whichever is greater: $50 or five percent of a tenant’s outstanding rent balance. Do the math and decide which one works out best for you.
Before the adoption of this law, owners were able to charge unlimited fees for late payments. You could even charge a daily fee for each day that the rent was late. Now, you have to wait for seven calendar days before a late fee can go into effect. Once you do charge that late fee, it has to be the $50 or the five percent of what’s owed.
Other changes to the way we manage late fees are as follows:
- You cannot charge a late fee unless you have your late fee policy clearly outlined in your lease agreement.
- You cannot evict your tenants for failing to pay late fees.
- You cannot charge a late fee on any part of the rent that a subsidy program (like Section 8) is responsible for paying.
- You cannot charge late fees more than once for each late payment.
- You cannot require tenants to pay interest on the late fees.
- You cannot put a rental payment towards existing late fees.
When you’re charging a late fee, a notice of the late fee must be provided to the tenant within 180 days of the date on which the rent payment was due.
It’s also worth noting that you cannot evict a tenant just because they have not paid their late fees. Nonpayment of rent is a just cause for eviction in Golden, but nonpayment of late fees does not meet the legal requirement for eviction.
Landlord/Tenant Laws: Rental Application Fairness Act
Colorado law has established limits on the amount you can collect in application fees. There are also a number of disclosures you need to include when it comes to denying a tenant for residence in your property. Make sure you understand these and include them in any correspondence you send letting an applicant know they were not approved for your property.
Application fees are not meant to make you money as a property owner. As a Golden property management company, we can’t charge more than we need to conduct a thorough screening. The application fee must be used, it its entirety, to cover your costs for processing the rental application. You need to charge consistent fees as well; you cannot charge one applicant $35 and another applicant $50.
To comply with this law, Colorado landlords and property managers must provide any prospective tenant who paid an application fee disclosure of the landlord’s anticipated expenses for which the fee will be used or an itemization of the landlord’s actual expenses incurred.
The Rental Application Fairness Act also says that if you’re using rental history or credit history in your rental criteria, you cannot consider any rental history or credit history seven years immediately preceding the date of the application. If you’re going to consider criminal history when screening, you cannot consider an arrest record from any time or any conviction of a prospective tenant occurring more than five years before the date of the application.
There are some specifics that are exempt from that limitation. For example, criminal convictions relating to methamphetamines or sex offenses or homicides can be considered.
Colorado Security Deposit Laws
It’s easy to make a security deposit mistake. While there are no limits to how much you collect, you are required to return the deposit to your vacating tenant within 30 days of their departure unless your lease gives you up to 60 days.
You’ll also need to be careful with deductions. You can use the tenant’s deposit to pay for damage and unpaid rent. You cannot use it to pay for general wear and tear deterioration. This is normal and expected in a rental property.
Don’t Forget the Federal Laws
Colorado landlords have to follow federal laws as well. The most important is probably fair housing.
Fair housing laws start at the federal level through the Fair Housing Act. This law protects people against discrimination based on race, skin color, religion, national origin, sex, disability, and familial status.
Colorado was actually the first state in the U.S. to pass their own statewide fair housing laws. We also have stricter state laws when it comes to battling discrimination. Colorado has more protected classes than the federal law. In addition to the seven protected classes we mentioned above, you also cannot discriminate in Colorado based on ancestry, creed, marital status, sexual orientation, and source of income. The law also applies to more properties. Federal law does not apply to owner-occupied buildings with four or fewer units, but Colorado law does.
Most landlords don’t intentionally discriminate. But, you could make a mistake in your marketing language that might cause others to believe you’re discriminating. You don’t want to say that a home is perfect for families. You don’t want to make it sound like your property is better suited for one class of people over another. Advertise your home around what it offers to everyone.
Tenant screening also needs to be fair and consistent. Document your set of rental criteria and provide it to all applicants so they can decide whether they’re likely to be approved. You must show that everyone gets treated the same way.
Service and Companion Animals
One of the fastest growing areas of fair housing litigation is around tenants with disabilities. Animals become a fair housing issue when a tenant or an applicant has a service animal or a companion animal. You have to allow them, even if you don’t allow pets. That’s because fair housing laws do not see service and support animals as pets. They’re seen as accommodations.
Not only are you required to accept the qualified tenants and their service or companion animals; you also cannot charge a pet fee, pet deposit, or pet rent.
We don’t want you to run into trouble with these Colorado landlord/tenant laws. The best way to protect yourself and your property is by working with a Golden, CO property management company.
Like ours!
For more information, please contact us at Laurel Property Services, Inc. In addition to providing property management in Golden, we also serve Wheatridge, Morrison, Lakewood, Arvada, and Genesee, CO.
