November 25, 2024

2024 Legislative Updates: New Landlord-Tenant Laws in Colorado

In response to Colorado’s limited affordable housing supply, the General Assembly recently enacted several laws affecting residential landlords and tenants. These new laws involve tenant evictions, occupancy limits, housing costs, the implied warranty of habitability, and discrimination against individuals with disabilities.

This alert summarizes five critical laws that took effect earlier this year:

1. Cause Required for Eviction of Residential Tenant – HB24-1098 (effective April 19, 2024)
2. Residential Occupancy Limits – HB24-1007 (effective July 1, 2024)
3. Pet Security Deposits and Rent – HB23-1068 (effective January 1, 2024)
4. Warranty of Habitability for Residential Premises – SB24-094 (effective May 3, 2024)
5. Modifications to Rental Premises for Tenant with Disability – HB24-1318 (effective August 7, 2024)

Tenant Evictions.

The new law aims to prevent arbitrary displacement of renters. Prior to the enactment of HB24‑1098, a landlord could decline to renew a lease without providing a tenant with a reason. Under the new law, a landlord must either offer a tenant a renewal or demonstrate “cause” to justify nonrenewal. “Cause” exists only in these six instances:

1. Planned demolition or conversion of the premises.
2. Substantial repairs or renovations to the premises.
   • For repairs or renovations expected to last less than 180 days, a landlord must provide a tenant written notice that includes the expected completion date.
   • If a tenant notifies a landlord within 10 days of receiving such notice of a tenant’s desire to return to the premises, a landlord must offer a tenant the first right to sign a new rental agreement with reasonable terms.
   • If a tenant accepts, a tenant has 30 days to reoccupy the residential premises unless both parties agree in writing to an alternate timeline.
3. A landlord plans to reclaim possession of the premises for their own or their “family member’s” use.
   • A “family member” not only includes relatives but anyone with whom the owner has a “close personal bond.”
   • If a landlord decides not to reclaim possession of the premises, a landlord cannot list the premises for long or short-term rental for at least 90 days after the tenant is required to vacate.
4. Sale of the premises.
5. Tenant’s refusal to sign a new lease with “reasonable terms” (the act does not define “reasonable terms”).
6. Tenant’s history of non-payment.

Notice Requirements: If a landlord intends to terminate tenancy for one of the outlined causes, a landlord must provide a tenant with the written notice or demand to vacate required by C.R.S 13‑40‑104 or 38‑12‑1303 in any language that a landlord knows, or has reason to know, is the primary language of a tenant. Such notice can only be posted after a landlord makes two personal service attempts, on two separate days. The timing for such notice depends on the length of the tenancy. Notice to a tenant that has been at the premises for over 12 months must be delivered 90 days prior to the date when the tenancy will terminate.

Rental Agreements: Any provision of a rental agreement or other agreement that purports to effectuate a waiver or modification of the act is void and unenforceable.

Exemptions: The new law does not apply to:

• Short-term rentals (leases less than 30 days).
• Tenants who have been at the premises for less than 12 months.
• Owner-occupied properties with less than 4 units.
• Mobile home space.
• Employer-provided housing.

Penalties/Damages: A landlord’s failure to comply is an affirmative defense to eviction for a tenant. If a landlord proceeds with an eviction of a tenant in violation of C.R.S 38-12-1301 et seq., and a tenant loses possession of the premises without a court order, the tenant may seek to recover the higher amount of either three times the monthly rent or $5,000, as well as any other economic damages, court costs, and attorneys’ fees.

For Cause Evictions During the Term of the Lease: A landlord may continue to initiate evictions during the term of a lease for:

• Unlawful entry.
• Nonpayment of rent.
• A violation (or repeated violation) of the lease agreement.
  • If a tenant commits significant lease violations, a landlord can evict a tenant for such violations, but a landlord may NOT non-renew the lease for those violations.
• Continued possession after a legal sale.
• Violent or criminal acts.
• Nuisance and/or negligent property damage by tenant.

Residential Occupancy Limits.

The new law prohibits counties, cities, and municipalities from limiting the number of people who may live together in a single unit based on familial relationships. However, local governments retain the ability to implement residential occupancy limits based on:

• Demonstrated health and safety standards, such as international building code standards, fire code regulations, or Colorado Department of Public Health and Environment wastewater and water quality standards; or
• Local, state, federal, or political subdivision affordable housing program guidelines.

By allowing more unrelated individuals to cohabitate, this law aims to provide affordable housing options, particularly for young professionals, college students, and recent migrants.

Pet Security Deposits and Additional Rent.

The new law was introduced to address financial hurdles faced by tenants with pets. C.R.S. 38‑12‑106 now provides that a landlord may not demand a pet security deposit of more than $300.00 from a prospective tenant or current tenant as a condition to allow a tenant’s pet animal to reside at the premises. Furthermore, the pet security deposit must be refundable, whereas previously, landlords could require non-refundable security deposits for pets. Additionally, C.R.S. 38‑12‑106 now limits the amount of additional pet rent a landlord may charge to mitigate potential wear and tear to a maximum of $35 per month or 1.5% of the monthly rent, whichever is greater. While the caps are clear, the statute does not explicitly state whether the limits apply on a per-pet basis or a per-unit basis; however, the law’s emphasis on affordability suggests that applying the limits on a per-unit basis better aligns with its goal of reducing financial barriers for tenants with pets.

Pet Screening/Limits: A landlord can continue to implement pet screening processes to assess suitability for its properties and set limits on the number of pets per household to mitigate risks associated with pet-related damages.

Liability Insurance: A landlord may also require tenants with restricted breeds to carry liability insurance. Specific breeds known for aggression, like pit bulls and Rottweilers, are considered restricted breeds.

Pet-Related Damages: While C.R.S. 38-12-106 now limits the amount that a landlord can charge as a pet deposit and pet rent, tenants remain responsible for any damage caused by their pets.

Exemptions: Emotional support animals (ESAs) and service animals are exempt from pet fees and restrictions under the Fair Housing Act and the Americans with Disabilities Act. A landlord must make reasonable accommodations for ESAs and service animals and cannot charge pet fees or impose pet restrictions on them.

Warranty of Habitability for Residential Premises.

Updates to the existing warranty of habitability laws clarify actions that constitute a breach of the warranty of habitability and procedures for both landlord and tenant when a warranty of habitability claim is alleged by a tenant.

A landlord breaches the warranty of habitability if a residential premises is uninhabitable or in a condition that materially interferes with the tenant’s health or safety, and a landlord has notice of the condition and fails to have the residential premises remediated.

Uninhabitable Conditions: A residential premises is uninhabitable if:

• There is mold associated with dampness; or
• It lacks functioning appliances, waterproofing, weather protection, plumbing, gas, running water, sufficient hot water, heating, and electrical lighting.
  • Includes damage to the premises due to an “Environmental Public Health Event.”
  • An “Environmental Public Health Event” is defined as a disaster or environmental event, such as wildfire, flood, or release of toxic contaminants that could create negative health and safety impacts or otherwise makes residential premises uninhabitable.
  • Deficiencies of a property’s common areas will not render a premises uninhabitable unless they materially affect a tenant’s use of the premises.

Timeframes for Remedial Action: A landlord must communicate with a tenant and start remedial actions within a specified time after receiving a notice from a tenant.

• A landlord must remediate a reported condition within 24 hours of receipt for matters of life, health, and/or safety, and within 72 hours for any premises that is uninhabitable.
• If a condition persists for seven or 14 days after notice, a rebuttable presumption arises that a landlord has failed to commence remedial action.
• It is considered a breach of the warranty of habitability if work is discontinued prior to full remediation of such conditions (unless due to circumstances beyond a landlord’s control) or a landlord leases premises that are uninhabitable from the beginning of a tenant’s occupancy.

Documentation and Records: All records, including correspondence and other documentation, relevant to a claim and any remedial actions taken by the owner/property manager must be well documented and easily retrieved.

Required Language in Leases. Rental agreements entered into after January 1, 2025, must include:

• A statement in at least 12-point bold-faced type font stating that:

“EVERY TENANT IS ENTITLED TO SAFE AND HEALTHY HOUSING UNDER COLORADO’S WARRANTY OF HABITABILITY AND LANDLORD IS PROHIBITED BY LAW FROM RETALIATING AGAINST A TENANT IN ANY MANNER FOR REPORTING UNSAFE CONDITIONS IN THE TENANT’S RESIDENTIAL PREMISES, REQUESTING REPAIRS, OR SEEKING TO ENJOY THE TENANT’S RIGHT TO SAFE AND HEALTHY HOUSING.”

• A statement in English and Spanish in at least 12-point bold-faced type that states a physical address, and online portal or email address, where written notice of an uninhabitable condition can be delivered to a landlord. A landlord’s online portal or platform must also post in a conspicuous place, in English and Spanish, the same information where a tenant may submit written notice of uninhabitable conditions.

Temporary Housing: Under certain circumstances, a landlord must provide a tenant with comparable premises. A landlord is required (upon a tenant’s request) to provide comparable premises or hotel rooms at no cost to a tenant within 24 hours when remedial action is required due to issues of life, health, or safety. If a condition cannot be remediated, the landlord is only required to provide accommodations for up to 60 days. Under such conditions, a tenant may terminate their tenancy without penalty by delivering written notice and a landlord must return a tenant’s full security deposit.

Penalties/Damages: A penalty of up to $20,000 per violation. A violation constitutes a separate violation with respect to each tenant.

Modifications to Rental Premises for Tenant with Disability.

Under existing law, it is unlawful to discriminate against a renter of a unit because the renter has a disability and to refuse to allow a tenant with a disability to make reasonable modifications to the premises if the modifications are necessary to afford a tenant full enjoyment of the premises. Under the new law, a landlord cannot require that a modification be at the expense of a tenant with a disability nor condition its permission on a tenant agreeing to restore the premises to the condition that existed before the modification. Thus, a landlord must now pay for the requested reasonable modifications.

Reasonability and Financial Implications: The “reasonability” test remains a critical factor for determining whether an accommodation or modification is required. However, prior to HB 24‑1318, financial considerations were not part of this test since tenants were responsible for the costs. Now, landlords may find themselves financially burdened by expensive modifications and may have grounds to challenge excessively costly modifications as financially unreasonable. How courts will interpret and enforce these new laws remains to be seen.

Key Takeaways and Next Steps for Landlords.

To stay compliant with Colorado’s new landlord-tenant laws, landlords should take the following actions:

1. Update Lease Agreements: Update lease agreements to reflect changes related to renewals, occupancy limits, pet deposits, pet rent, and tenant rights.
2. Train Your Team: Ensure property managers understand the new eviction standards, habitability requirements, and guidelines for tenant modifications.
3. Recordkeeping: Establish clear policies and maintain detailed records of tenant behavior, payments, and routine inspections.