Colorado landlords must follow specific state (as well as federal, and often local) rules when it comes to running a rental property business. Landlord-tenant law in Colorado covers everything from the questions you can include on a rental application, to how and when you can increase rent or terminate a tenancy. Failure to comply with your legal responsibilities can lead to costly disputes with tenants and hefty financial penalties (for example, if you fail to disclose lead-based paint hazards in the rental or illegally discriminate when choosing tenants).
Here are nine ways to stay out of legal trouble and run a successful property management business in Colorado.
Before you advertise a vacant apartment, it is crucial that you understand fair housing laws and what you can say and do when selecting tenants. This includes how you advertise a rental, the questions you ask on a rental application or when interviewing potential tenants, and how you deal with tenants who rent from you. Failure to know and follow the law may result in costly discrimination complaints and lawsuits.
While Colorado landlords are legally free to reject applicants—based on a bad credit history, negative references, from previous landlords, past behavior, such as consistently paying rent late, or other factors that make them a bad risk—this doesn't mean that anything goes. You are not free to discriminate against prospective tenants based on their race, religion, national origin, sex, familial status (such as having children under age 18) or physical or mental disability. These are "protected categories" under the federal Fair Housing Act of 1968, as amended (42 U.S. Code § § 3601-3619 and 3631). There are a few exemptions to federal antidiscrimination rules, including owner-occupied buildings with four or fewer units, and single-family houses, as long as the owner owns no more than three rental houses at a time.
Colorado state law also prohibits housing discrimination on the basis of sexual orientation and gender identity.
The HUD website provides extensive details on fair housing laws. Be sure to also check with your state fair housing agency for additional laws prohibiting discrimination or limiting landlord exemptions.
All landlords want their tenants to pay rent on time and without hassle. If you need to raise the rent or evict a tenant who hasn't paid rent, you'll want to be sure you comply with the specific rules and procedures in Colorado. State law regulates several rent-related issues, including the amount of notice (at least 10 days in Colorado) landlords must give tenants (with a month-to-month rental agreement) to raise the rent, and how much time (three days in Colorado) a tenant has to pay rent or move before a landlord can file for eviction. For details, see Colorado Termination for Nonpayment of Rent and Other Rent Rules.
Security deposits are among the biggest sources of dispute between landlords and tenants. To avoid problems, be sure you know state rules, such as when the deposit must be returned (usually within one month of the tenant moving out--although there are some exceptions). Using a landlord-tenant checklist when a tenant moves in (and moves out of) a rental, and sending a written security deposit itemization when the tenant leaves will go a long way in avoiding disputes.
You are legally required to keep rental premises livable in Colorado, under a legal doctrine called the "implied warranty of habitability." If you don't take care of important repairs, such as a broken heater, tenants in Colorado may have several options, including the right to withhold rent until repairs are made.
Every Landlord's Legal Guide, by Marcia Stewart, Ralph Warner, and Janet Portman (Nolo) includes extensive advice on establishing a repair and maintenance system that will help prevent problems, such as tenant rent withholding or injuries to tenants due to defective conditions in the rental.
The rental agreement or lease that you and your tenant sign sets out the contractual basis of your relationship with the tenant, and is full of crucial business details, such as how long the tenant can occupy the rental and the amount of the rent. Taken together with federal, state, and local landlord-tenant laws, your lease or rental agreement sets out all the legal rules you and your tenant must follow.
Problems arise when landlords include illegal clauses in the lease, such as a waiver of landlord responsibility to keep premises habitable, or when landlords fail to make legally required disclosures (discussed in the next section). And even if it's not required that you cover a particular issue in your lease, such as how when and how you can enter rental property, you can avoid all kinds of disputes by using an effective and legal lease and rental agreement that clearly informs tenants of their responsibilities and rights.
Landlords must comply with required federal disclosures regarding lead-based paint on the property, or face hefty financial penalties.
It is illegal to retaliate in Colorado —for example, by attempting to raise the rent or evict a tenant for complaining about an unsafe living. To avoid problems, or counter false retaliation claims, establish a good paper trail to document how you handle repairs and other important facts of your relationship with your tenant.
State laws specify when and how a landlord may terminate a tenancy. Failure to follow the legal rules may result in delays (sometimes extensive) in terminating a tenancy. Under Colorado law, for example, you may need to give a tenant who violates a lease clause three days' notice before you can file for eviction. See State Laws on Unconditional Quit Terminations and State Laws on Termination for Violation of Lease for more information on termination notices in Colorado.
Be sure to check out government agencies, such as the U.S. Department of Housing and Urban Development (HUD)and state fair housing agencies which provide useful legal information and publications on their websites. You'll also find helpful guides to tenant rights and landlord-tenant law on the website of your state attorney general's office or consumer protection agency.
Finally, if you have legal questions about your rental unit, you should consult with an experienced landlord-tenant attorney in Colorado.