DenCO Property Management and Sales (DenCO) provides a vital service to its owners by keeping current on Colorado and Denver rental property regulations. Real estate investors and professionals still consider Colorado a landlord-friendly state since there are few restrictions regarding evictions for late payments and security deposits. Also, Colorado dodged the bullet when rent control legislation did not get passed this year, so there are no restrictions on how much an owner or property management company can raise rent. There were regulations signed into law by the State or in the City of Denver that owners should be aware of to make informed decisions on how they want their properties managed to preserve rental income and profitability.
Landlord and Tenant Rights and Obligations
According to the Residential Landlord Tenant Guide, landlords and tenants have the following rights and obligations in Denver.
Landlord Rights and Obligations
- Maintain the property.
- Make and pay for necessary repairs.
- Ensure the premises remain safe.
- Deal with other tenants who are causing a problem or violating the terms and conditions of their lease.
- Notify tenants in writing when the property is being transferred or sold.
Tenant Rights and Obligations
- Enjoy a habitable and safe residence.
- Property maintained and repairs made in a timely fashion.
- Have the security deposit returned at lease-end, minus any expenses arising from damage or unpaid rent, within 60 days.
- No discrimination is allowed during the rental or tenancy phases.
- Be informed in writing of any changes to the lease agreement
- Receive proper notice before eviction
- Right to dispute a removal in court.
Warrant of Habitability
By Colorado law, landlords must provide a habitable unit for every tenant by ensuring that the plumbing, wiring, cooling and heating systems, and appliances are in good condition before leasing their property. If problems continually exist and the property owner does not provide the maintenance required to solve the issues, technically, the lease becomes void. They can take their case to court and can collect punitive damages. Courts take a dim view of property owners ignoring the safety of their tenants and put the burden of proof on the owner, not the tenant. Professional property managers would never put their owners in this situation and should avoid managing substandard units. On the other hand, tenants, once they sign a lease, must comply with the following:
- Pay rent on time.
- Keep the property free of trash or waste.
- Keep the property safe and in good condition.
- Provide minor repairs
Colorado tenants may withhold rent if they consider that the unit is not habitable and presents potential harm to them. However, tenants must provide notice of these damages beforehand.
Late Fees and Grace Periods
Professional property management companies state how they deal with late payments in the lease agreement. A landlord may charge late fees as an incentive for Colorado tenants to pay rent, but the late fees must be considered “reasonable.” There are no grace periods for unpaid rent legal requirements in Colorado. Landlords can move to evict renters who consistently pay late.
Security Deposit Laws
Owners count on DenCO to professionally manage the security deposit and the move-out process. A security deposit is a pre-set amount of money a tenant pays the landlord at the start of the lease. The money is kept in escrow under the renter’s name. Security deposits motivate tenant care and are used to pay for any repairs once vacated. Typically, a security deposit equals one month’s rent, but Colorado state law does not define security deposit amounts. DenCO recommends 60 days to allow enough time to hire contractors to fix any tenant damage to prepare the residence for the next tenant. A judge finding any inappropriate use of deposits can deny the property manager/owners’ rights to keep any portion of the money or, worse, will fine them treble times the deposit amount.
Evictions & Early Terminations
A landlord can evict a tenant for the following reasons:
- Withholding rent without cause.
- Tenant not following the terms of the lease
- Criminal activity.
In those cases, landlords must give at least a three-day eviction notice. Alternatively, a tenant in Colorado may terminate the lease early if one of the following required conditions are met:
- Active military service.
- Hazardous or uninhabitable rental unit.
- Domestic violence.
- Early termination clauses.
Check out our blog, “What Happens When a Tenant Wants to Break a Lease?” for more information.
Housing Discrimination
Violating a tenant’s civil rights is something that every owner and property management company in Denver needs to avoid. When DenCO chooses to deny someone tenancy, we have a valid reason, such as the tenants’ criminal and credit histories.
Strong Lease Agreements
DenCO believes a strong lease clearly defines landlord and tenant rights and obligations. A rental agreement is a formal contract that the landlord and tenants sign to serve as a legal tool that indicates the responsibilities of all parties involved in the lease. Sitting down with a potential renter and reviewing the lease creates a foundation for a good property manager/tenant relationship. The agreement should include the following.
Contact information of all the parties involved in the lease should include the following:
- Address and description of the leased property.
- Lease duration.
- Rent amount and due date.
- Lists all landlord and tenant responsibilities.
- Add addenda that meet specific tenant needs, such as allowing pets, showing the property if it is placed on the market, and various other situational conditions.
- Click here for more information about DenCO’s strong rental lease agreement.
What to Expect From a Professional Property Management Company
Collecting rent is great, but after hiring DenCO we become the steward of your most valuable asset. Owners can expect the following level of service.
- We visit the property at least twice yearly to ensure standards and upkeep.
- Since we deeply understand the rental market in Denver’s top neighborhoods, we help owners gain the rents their property deserves to maximize their rental income.
- We guide you in selecting the best tenants from the pool of qualified rental applicants.
- We meet each tenant in person.
- No tenant is always better than a bad tenant.
- Prospective tenants undergo a consistent screening process that includes credit checks, reference checks, and employment verification.
- We execute and enforce the lease.
- Should it become necessary, we manage and oversee the eviction process. Evictions can be a complicated legal process, particularly with the new laws passed by the Denver City Council and the State of Colorado.
- We make suggestions for regular maintenance and necessary repairs to your property. We do not charge markups.
- We deal with emergency repairs. We have a list of service companies who offer after-hours and weekend services.
- We collect rent and disperse monthly income directly into our owners’ checking accounts.
- We do everything we can to enforce strict and timely monthly rent payments.
- We send monthly statements, so owners stay informed about their properties to make well-informed financial decisions.
- We send year-end statements, 1099 forms, and year-end expenses.
New Developments in Colorado and Denver Landlord-Tenant Law and Regulations
Licensing of Denver Rental Properties
Denver City Council passed a law requiring rental-housing inspections and licenses for landlords beginning next year. Property evaluations will be required every four years by certified inspectors. The program’s goal is to ensure the habitability of the rentals and tenant safety. In 2023, DenCO arranged for the inspection, application, and licensing of properties it manages and met all deadlines. Typically the cost of these inspections is passed on to the owners.
Click here for more information.
Denver Trash, Recycling & Compost Fees
In 2023, the City of Denver started charging monthly fees for trash collections. Recycling and composting removals are now weekly and free. Single-family homes and small apartment buildings will pay between $9 and $21 per month for trash pickup, depending on the size of their trash bins. Owners of multi-unit buildings will pay the fees, while tenants of single dwellings will pay the City directly.
Click here for more information.
New Pet Legislature
In 2023, the Colorado Legislature passed, and Governor Polis signed new legislation regarding renters and their pets. The law ensures the emotional well-being of pets and their owners who rent. The regulation defines a pet as a dog, cat, rabbit, guinea pig, fish, reptile, or any other species kept as a household pet. Some view the bill’s passage as a victory for pet-owner rights; others worry that new limits on pet rent and security deposits may result in fewer landlords renting to pet owners. Effective January 1, 2024, the law provides the following:
- A Pet Security Deposit cannot exceed $300.00 per animal and must be refundable to the tenant, subject to deduction for damages.
- Non-refundable pet deposits or fees are no longer allowed, and the law applies to new and existing tenants.
- Landlords may not charge additional pet rent of more than $35.00 per month/per animal or one and one-half percent per month of the tenant’s monthly rent, whichever amount is greater.
- Pets are exempt from any statutory landlord’s lien on a tenant’s personal property.
Tenant Screening Documentation for Residential Leases
Colorado’s Governor Polis signed a law that goes into effect on August 8. 2023 that helps tenants avoid paying multiple rental application fees when looking for a place to live. Instead of paying each landlord to run a separate background check, prospective tenants pay for a single report from a consumer reporting agency that property management companies must accept for up to 30 days of issuance. The reports include:
- Verification of employment and income.
- A rental and credit history.
- A criminal record check.
Landlords must tell each prospective renter that they accept portable screening reports, and property managers have the right to get a copy of the background report directly from the screening company. Also, property managers and owners can still charge fees for the administrative cost of processing applications, even if the tenant provides the background check themselves.
Smaller landlords who accept applications from one tenant at a time can still charge application fees. The owner or property manager must offer a refund if the tenants do not sign a lease by their choice or that of the property manager or owner.
New Restricted Residential Lease Agreement Provisions
This summer, Governor Jared Polis signed a bill that prohibits or restricts the inclusion of specific provisions in written residential rental agreements. The law mainly gives tenants statutory protection against third-party and other rental fees, evictions based on non-payment of utilities, and prohibits particular waivers in residential lease agreements.
Restricted Waivers
The prohibitions listed below are boilerplate clauses commonly found in rental agreements and are no longer allowed.
- Right to a jury trial.
- Right to pursue, litigate, or support any joint, class, or collective claim relating to tenancy.
- The implied covenant of good faith and faith dealing.
- The implied covenant of quiet enjoyment.
However, rental agreements can say landlords are not responsible for violating the implied covenant of quiet enjoyment committed by a third party beyond their control.
Penalties for Eviction Notice or Eviction Actions
Previously law prohibited unreasonable liquidated damages paid by tenants if evicted. The new law prohibits other eviction penalties because of rental agreement violations.
No Penalty Fees for Tenant’s Failure to Provide Notice of Non-Renewal
Residential lease agreements now cannot include many provisions that affix fees for a tenant’s failure to provide notice of nonrenewable before the end of the lease term. However, landlords can recoup some losses incurred due to renters’ failure to provide proper notification.
Other Provisions
- Limitations on Characterization of Rent – Utilities or service fees can no longer be considered rent for occupancy, and non-payment of these fees can no longer be used for the cause of eviction.
- Limitation on Markups for Third-Party Fees – Landlords can only mark up third-party services by 2 percent or $10/month (but not both).
- Fee Shifting Provisions – The new law states that any fee-shifting usually associated with legal fees must be determined by the court to be reasonable.
Radon Disclosure Requirements
Radon is a colorless and odorless radioactive gas produced by the decay of uranium. It emits alpha radiation. Radon gas can seep into rental units from the ground and is considered a leading cause of lung cancer by the Federal government.
The Colorado Legislature passed a law that adds radon to Colorado’s Warrant of Habitability. Property management companies must now provide information to potential renters before lease signing. These radon disclosures are similar to those associated with buying a home in Colorado. If not provided or the owner/property manager fails to make a reasonable effort to mitigate radon if found in the property within 180 days, a tenant may void any lease agreement and vacate because of lack of habitability.
Property owners, if you are looking for a professional property management company, please consider DenCO. DenCO manages over 150 rentals in the DU, Washington Park, and other neighborhoods in the Denver area and has been in business since 1990. Call us at 303-722-9688 or click here to complete a contact us form.
Recent Comments