Residential landlord-tenant relationships were impacted by several bills passed by the Colorado General Assembly during its 2023 session. Several of these bills (but not all) were signed by Governor Polis into law. Residential lease agreement templates may need to be updated in light of these new laws. In other cases, landlords and property managers will have to adjust the way they conduct business without requiring direct changes to lease agreements. Legislation isn’t always clear, so judicial interpretations will have to be monitored.
The following are summaries of some of the new laws that may affect Colorado residential lease agreements and relationships. Some of the legislation affecting eviction proceedings and responses to property contaminations in 2023 is not discussed in this article.
Please note that these summaries are not exhaustive. This article is not intended to cover all the specifics of statutory text, and certain exceptions may apply.
SB23-206: Disclose Radon Information Residential Property (effective Aug. 7, 2023)
The World Health Organization recognizes radon as a carcinogenic toxin and a leading cause of lung cancer, as it occurs naturally in soil and groundwater. Accordingly, this law requires Colorado real estate sellers and landlords to disclose the presence of radon in residential properties. CREC is tasked with creating disclosures for purchase and sale transactions in accordance with the bill. For leasing transactions, the statute does not require the CREC to create a disclosure.
It is the landlord’s or property manager’s responsibility to disclose the following to potential buyers or tenants:
1. Information about radon’s dangers (included in the statute) and a recommendation to test.
2. Information about the radon concentration in the property, including:
- Has the property been tested for radon;
- Current radon records and reports;
- Information regarding any radon that has been detected, mitigated, or remedied
- Information about radon mitigation in the property; and
- The latest Colorado Department of Public Health and Environment brochure providing advice about radon in real estate transactions.
Tenants may void their leases and vacate the premises according to Colorado’s Warranty of Habitability laws if a landlord or property manager fails to provide the necessary disclosures or fails to mitigate radon concentrations of more than 4 pCi/L. It is the responsibility of property managers to require that owners complete and provide the necessary radon disclosures so that prospective tenants can receive the disclosures.
HB23-1095: Prohibited Provisions in Rental Agreements (effective Aug. 7, 2023)
Residential rental agreements may no longer include:
1. A clause that assigns a penalty to a party who violates the rental agreement by receiving an eviction notice or eviction action.
2. Fee-shifting clauses that only award attorney fees and court costs to 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.”
3. Waiver of the following:
- Trial by jury;
- The right to pursue, bring, join, litigate, or support joint, class, or collective claims or actions;
- Fair dealing and good faith; or
- Implied covenant of quiet enjoyment.
4. Any provision that imposes a fee, damages, or penalty on a tenant for failing to provide notice of nonrenewal before the end of a rental agreement.
5. Any provision that identifies any amount or fee as “rent,” which could lead to eviction if it is not paid on time.
6. A provision that requires a tenant to pay a “fee markup or for a service for which the landlord is billed by a third party; except that a written rental agreement may include a provision that requires a tenant to pay either a markup or fee in an amount that does not exceed two percent of the amount that the landlord was billed or a markup or fee in an amount that does not exceed a total of ten dollars per month, but not both.”
This is the statutory text, which isn’t completely clear. The language could also be ambiguous when applied to property managers and property management agreements. The final text appears to have been jumbled, omitted, or truncated unintentionally.
HB23-1068: Pet Animal Ownership in Housing (effective Jan 1, 2024)
A landlord may not charge more than $300 as a condition of permitting a tenant’s pet to live at the property. Tenants must receive a refund of the additional pet deposit. As a condition of permitting the tenant’s pet to reside at the property, additional rent cannot exceed the greater of (i) $35 per month, or (ii) 1.5% of the monthly rent.
Insurance companies may not refuse to issue, cancel, refuse to renew, or increase premiums or rates for homeowners insurance or dwelling fire insurance based on the breed of dog. 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.”
HB23-1099: Portable Screening Report for Residential Leases (effective Aug. 7, 2023)
As part of the application process, landlords must accept a “portable tenant screening report,” in which case they may not charge an application fee to the prospective tenant. In a portable tenant screening report, a consumer reporting agency provides information about the applicant, such as:
- Contact information;
- Verification of employment and income;
- Last-known address; and
- Rental, credit, and criminal background histories, in compliance with Colorado law.
The portable tenant screening report may be required to meet certain criteria by landlords, including the following:
- Within 30 days of completion;
- Consumer reports are made directly available to landlords by consumer reporting agencies or third-party websites who provide consumer reports regularly, in compliance with all applicable laws.
- Free of charge to the landlord;
- According to the prospective tenant, the information provided in the report has not changed materially.
Landlords must inform applicants that they have a right to obtain a portable tenant screening report before taking any rental application for which they typically charge an application fee. The statute specifies the language, timing, and placement of the advisement.
It is possible for landlords to avoid these requirements if they meet the following criteria:
- If a dwelling unit is rented to more than one occupant, does not accept more than one application fee from each prospective tenant or tenant group at a time; and
- Within twenty calendar days of receiving a written communication from either the landlord or landlord’s agent or the prospective tenant declining to enter into a lease agreement for the dwelling unit, the landlord or landlord’s agent refunds the total amount of the application fee.
SB23-184: Protections for Residential Tenants (effective Aug. 7, 2023)
Landlords cannot consider or inquire about certain aspects of an applicant’s income if they use rental or credit history when considering prospective tenants. For prospective tenants seeking to rent without assistance from a housing subsidy, landlords may not require the applicant’s income to exceed 200% of the annual rent. In addition, the Act limits the security deposit that can be required of residential tenants to two (2) monthly rent payments.
Residential landlord-tenant legislation was a major priority for the Colorado General Assembly in 2023. In order to remain compliant with current laws, landlords and property managers must follow this host of new legislation.