2022 Legislation for Landlords & Tenants

2022 Legislation for Landlords & Tenants
Presented by
The Skinner Team |KW Top of The Rockies

Information provided by the Colorado Department of Regulatory Agencies

With many of our clients owning investment properties that are utilized for rentals, we thought it would be beneficial to share the updated Colorado Landlord & Tenant Laws and Responsibilities for 2022. This includes some of the most important changes, but not all. Changes on property managers are wide ranging. Our hope is that you’ll find this information beneficial as the landlord and property owner. As always, we advise that you seek the assistance of your legal counsel to keep your rental lease agreements up-to-date. There is no formal word yet, but rental assistance is expected to be available as long as the funds hold out and income hardships are related or linked to COVID. Landlord or tenant can apply from this website: Emergency Rental and Mortgage Assistance | Department of Local Affairs (colorado.gov)

Existing Lease Language

New and renewed leases should be reviewed and adjusted to cover required changes. Existing leases typically do not need to be re-executed, BUT the new laws may still apply. Clients need to be advised that language in their existing lease may conflict and failure to follow the new changes may put the landlord at risk of penalty. Seek the assistance of your legal counsel. 

Landlord Liability
Landlords who do not comply with the legislation risk:

  • Failure to cure will result in damages and penalty of $150 to $1000 plus attorneys’ fees and costs
  • Non-complying provisions is “void” and unenforceable 
  • Liable for $50 for each violation
  • Tenant may be awarded damages and the penalty of $150 to $1000 per violation

Late Fees 

  • Cannot exceed the greater of $50 or 5% of rent per month and must be stipulated in the lease
  • 7-Day grace period on late fees from due date
  • No interest on late fees, no compounded late fees
  • Tenant cannot be evicted for failure to pay late fees
  • Lease may not stipulate that late fee becomes RENT
  • Cannot charge a late fee if rent paid by subsidy provider is paid late
  • “Rent Payment” cannot be applied to past due late fee
  • Written notice of late fee within 180 days of rent due or forfeited
  • Landlord has 7 days to cure any error in charging late fees after written or electronic notice of error from tenant
  • PROHIBITS- Evictions for non-payment of late fees, terminate lease for non-payment of late fees, collecting late fees from base rent payments

Rent Increases 

  • Residential landlords can only increase rent once every 12 moths for the same tenant
  • WITHOUT A WRITTEN LEASE: Commercial 21 days notice required, Residential 60 day notice required
  • Residential tenants without a written lease cannot be given a notice of non-renewal if purpose is to increase the rent

“Wear and Tear” 

  • Commercial compared to residential is not always the same.  
  • Examples of normal wear and tear for residential:
  • Word or faded carpet
  • Small scuffs on walls
  • Sun-faded blinds
  • Warped door frames
  • Dirty of loose grout around bath tiles
  • Examples of property damage for residential
  • Burns or pet stains on carpet
  • Holes in doors or walls
  • Damaged blinds
  • Missing screens or broken windows
  • Chips in sinks, toilets or bathtubs

Management Fees

  • Many things are now considered Unauthorized Fee Collection:
  • Prior written consent from owner required to assess or receive mark-ups
  • Selling or brokering a brokerage or 3rd party service without disclosing that the brokerage will be compensated for said service
  • Not disclosing in Management Agreement brokerage charges and collection fees from tenant
  • Changes in fees to Management Agreement are not allowed without current written permission
  • A unilateral clause allowing fee changes with notice are not accepted as being authorized by the owner

Warranty of Habitability 

  • Eases tenant requirements to file a claim under the Warranty of Habitability
  • No Habitability Bond or deposit of rent with court required for tenants with:
  • Income less than 5 times the rent amount of less than 250% of Federal poverty line
  • Removes safeguards against potentially bogus claims
  • In addition to damages, court allowed to reduce rent

Removal or Exclusion 

  • Removal or exclusion of a tenant from property requires a court process, except for the following:
  • State Board of Health rules for the cleanup of an illegal drug lab
  • Mutual consent of landlord and tenant
  • Abandonment of property by tenant
  • Improper actions involving removal or exclusion of tenant from property may now result in large financial damages:
  • Tenant’s actual damages
  • Plus 3 times the monthly rent of $5,000, whichever is greater
  • Plus, attorney’s fees and costs

Eviction Procedures

  • Tenant can challenge Service of Demand- landlord must be able to show attempt to deliver in person
  • Discovery Rights- both parties may request documents, such as tenant ledger (includes commercial properties)
  • Landlord required to accept full payment as identified in Demand up until Judgement issued for possession at end of day
  • Writ of Restitution (order to evict) can be issued no earlier than 48 hours after the judgement. Sheriff cannot perform a residential move out for an additional 10 days

Awarding of Court Costs and Attorney Fees 

  • Residential lease must contain reciprocal attorney fee provision for prevailing party
  • Prohibits unreasonable liquidated damages clause that assigns cost to tenant from an eviction notice or action- applies to commercial properties as well
  • Any provision not meeting these provisions is “void and unenforceable”

Don’t hesitate to reach out if you have any questions!

Anne Skinner, SASRSPSCNE
Lead Broker
Keller Williams Top of the Rockies Realty
605 Main St, #103
Frisco, CO 80443