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.