Colorado’s Democrats entered the 2023 Legislative Session with a 46-19 supermajority in the House and a 23-12 near supermajority in the Senate. They introduced a whopping 617 bills in the 120-day session ending on May 10. Housing and property tax matters got much attention as lawmakers tried to deal with the State’s housing problems. Probably the most ambitious was Land Use Senate Bill 213. In its original form, the landmark legislation would make all land use and zoning decisions at the state level in Denver, preempting traditional local government authority on zoning issues. The bill did not get out of committee and handed Polis his first significant defeat as governor.
Proposition HH’s Effect On Second Homes
The only tax issue on the ballot this November is Proposition HH (Prop HH). It takes up 12 pages or 75 percent of the 2023 State Ballot Information Booklet (The Blue Book). It is the most complex issue presented to Colorado voters by the initiative process. Initiatives and referendums allow Coloradans to place new legislation on a ballot for a popular vote. In a nutshell, if passed, Prop HH enables the State to retrain more money that otherwise would be refunded under the Taxpayer’s Bill of Rights (TABOR). Most of the funds raised will go to education, and property owners self-fund their property tax relief.
According to the Summit Daily, historically, the State of Colorado defined property in two ways – residential and commercial. Prop HH, if passed, will create a new state-level distinction for people who own homes in Colorado but do not live in them and would add layers of complexity to the State’s property tax mechanism. The bill reduces the tax rate by .06 percent in 2023, and homeowners can exempt the first $50,000 of their home value from taxation. Then, over the next eight years, they can exempt another $40,000. But non-owner-occupied houses, such as rental properties, would only be eligible for home value exemption through the 2024 tax year. Rental home investors will lose that exemption in 2025. Primary homeowners must notify their assessor offices about their property’s status to gain their exemption, which means over 2.5 million Colorado homeowners will need to contact their assessors in 2023. We wonder if the counties have the staff and IT infrastructure to handle all these requests this year. For more information, click here to read our latest blog titled “What Made Property Taxes Go Up in Colorado in 2023?”
2023 Legislative Session Review
Below is a review of 2023 legislative session laws passed, and the governor signed the following bills affecting investors who own rentals.
Portable Screening Report For Residential Leases
HB23-1099 allows renters to use background screeners when applying to lease a home, condo, or apartment, so long as the report is no more than 30 days old. Landlords must inform potential tenants about the portable background screeners. If a landlord decides to reject a prospective tenant’s application, they must provide a copy of the background report. HB23-1099 intends to reduce application fees, which can add up during rental hunts.
Prohibited Provisions In Rental Agreements
HB23-1095 prohibits landlords from adding lease clauses that require that tenants waive certain legal rights in their leases, like the ability to participate in class-action lawsuits. It also prohibits landlords from charging renters a penalty if the renter does not give proper notice about not renewing their lease. Landlords can charge a fee if they suffered a loss because they did not receive notice.
HB23-1095 also limits how much landlords can charge in third-party fees, like for trash collection. Traditionally, landlords mark up any third-party services. Now, fees are capped at $10 per month or 2% of the amount billed by the third-party service provider, with the greater amount enforceable. The bill will probably force property owners to increase rents to cover operational costs typically covered by the fees.
Protections For Residential Tenants
SB23-184 restricts a landlord from considering a prospective tenant’s amount of income and credit history in their screening process. The law caps income requirements at double the cost of rent. It also limits security deposits to double the cost of a month’s rent.
Eviction Protections for Residential Tenants
Signed into law on June 6, 2023, HB23-1120 is effective immediately. The bill requires landlords and tenants to mediate before an eviction action if the tenant receives financial assistance from Supplemental Security Income, federal Social Security Disability Insurance, or cash assistance through Colorado’s Temporary Assistance for Needy Families. If a court authorizes an eviction, the bill prevents law enforcement from executing an eviction for at least 30 days.
New Colorado Pet Laws
The new Colorado pet law changes how insurers, law enforcement, and landlords are allowed to treat pet owners. The new law limits the amount charged for pets. The State caps any pet-related security deposits to $300, no matter how much the renters pay each month. Also, any monthly ‘pet rent’ paid can be no more than $35 or 1 percent of rent, whichever is greater.
The law prohibits insurance companies from denying rental insurance based on a dog’s breed. Insurers are not allowed to inquire about the breed of a pet dog, though they can ask if a specific animal has been deemed dangerous.
During evictions, sheriff or police officers must give pets to tenants if they are present during the eviction process. If not present, they must move the animal to local animal control with efforts made to inform the tenant of its location.
DenCO keep owners up to speed on Colorado real estate laws and regulations. We manage 150 rentals in the DU, Washington Park, and other neighborhoods in the Denver area and has been in business since 1999. Call us at 303-722-9688 or click here to complete a Contact Us form.
Recent Comments