Updates to Colorado Renting Laws – Application Fees
In the 2019 Legislative session, Colorado Congress passed several laws relating to rental properties. We’ll cover most of them over the next few months but we’ll start with HB19-1106 (Rental Application Fairness Act).
This bill sets regulations on the process of charging application fees. This is a standard practice among landlords and property managers, but the bill seeks to create a more even playing field for access to housing starting with the application.
As a property owner, it’s imperative that you stay compliant with this new law. Here’s what you need to know:
In order to charge a rental application fee, the entire amount of the fee must be used to cover the costs required to process an application. These costs can include:
- The expense incurred to process an application; or
- The average expense incurred in processing multiple applications
All potential tenants must be charged the same rental application fee when applying to rent:
- The same unit
- Additional units available for rent at the same time
After an applicant pays a rental application fee, the landlord is required to disclose anticipated expenses or an itemization of actual expenses the fee covers
- If a landlord does not use the entire application fee to cover costs, they are required to return the remainder
- Only the past 5 years of credit history can be used as a consideration for a rental application
- Convictions older than 5 years shall not be considered when processing a rental application, except in specified convictions or deferred judgments
- Written notice for a denial of a rental application must be provided stating the reasons for denial
This bill went into effect on 8/2/19. Staying current with changing laws regarding rentals can be incredibly time consuming and is one major benefit of working with a property manager. If you’re in the Boulder or Denver area and are looking to simplify things in 2020, reach out today to see how working with a property manager makes your life easier.