In late 2021, the Colorado General Assembly passed significant landlord-tenant law reform via HB 21-1121 and SB 21-173. These changes affect the responsibilities that landlords owe to tenants and the steps required for evictions. Significant changes also were made with reference to mobile home parks, but those changes are not addressed here. This alert is for commercial and residential landlords looking for a quick summary of the new laws.
What Are the New Rules for Landlords?
The most significant changes to a landlord’s obligations relate to rent increases, late fees, unlawful removal or exclusion, and prohibited clauses in rental agreements.
- Landlords may increase rent only one time per 12-month period.
- Where no written lease agreement exists:
- Landlords must give commercial tenants 20 days’ notice of a rent increase. This applies only to tenancies between one and six months.
- Landlords must give residential tenants 60 days’ notice of a rent increase, regardless of the length of the tenancy. Landlords may not terminate such a tenancy to raise rent.
- Landlords may not:
- charge any late fees at all unless they are disclosed in the lease;
- charge late fees until rent is seven days late;
- charge late fees unless the landlord has provided written notice of the late fee within 180 days after the rent payment was due;
- charge a late fee in excess of $50 or 5% of the past-due rent payment owed, whichever is greater;
- remove or evict a tenant or terminate a lease based only on unpaid late fees;
- charge a late fee if a rent-subsidy provider, rather than a tenant, makes a late payment;
- require a tenant to pay interest on late fees; or
- recoup late fees from a rent payment.
- Any lease provision or landlord action that violates any of the above rules is void and unenforceable, and the landlord will be charged an automatic $50 penalty per violation.
- Landlords have seven days to cure a violation.
- Failure to cure a violation allows a tenant to sue the landlord for an injunction, compensatory damages, a penalty between $150–1,000 per violation, attorney’s fees and costs, and any other equitable relief the court finds appropriate.
- A tenant may raise any of the violations above as an affirmative defense in an eviction action.
Unlawful Removal or Exclusion
- The revised law provides a new cause of action for a tenant who has been removed or excluded from a residential unit without a court order. Residential tenants can sue landlords for the following:
- a restraining order;
- the tenant’s actual damages;
- the higher amount of $5,000 or three times the monthly rent;
- any other damages; and
- attorney’s fees and costs.
- The court can also restore possession to a tenant if the landlord violates these rules.
Prohibited Clauses in Rental Agreements
- A lease may not include:
- an unreasonable liquidated damages clause that assigns costs stemming from an eviction to a party; or
- a one-way fee-shifting clause that awards attorney’s fees and costs only to one party.
- Any clause that violates these rules is void and unenforceable.
Breach of Warranty of Habitability (Residential Only)
- A tenant in an eviction or collection action relating to a residential lease may assert an alleged breach of warranty of habitability as an affirmative defense as long as the landlord has previously received notice of an alleged breach of this warranty. If the tenant is indigent, then the tenant shall not be required to post a bond.
- If a residential tenant prevails on a breach of warranty of habitability defense, the court may order damages to the tenant, such as a reduction in the rental value caused by the breach. The court may also order the landlord to make repairs, and it retains jurisdiction over the matter to ensure compliance.
What Do Landlords Need to Know About Evictions?
The new laws significantly reformed the eviction process in Forcible Entry and Detainer (FED) actions. The most important changes relate to pleadings and court proceedings.
Changes to Pleading Requirements
- An FED summons must now describe the requirement that the tenant file an answer.
- Such a summons must also contain a list of available resources with a website link and phone numbers for residential tenants to obtain civil legal aid and rental assistance. Landlords can find this information on the Colorado Department of Local Affairs website.
- The summons must now include a blank answer form and a new form that allows either party to request all relevant documents in each other’s possession, with which both parties must comply.
- Tenants can file an answer any time on the day that it is due.
- A tenant does not waive any defense related to notice by filing an answer, and instead can raise lack of notice as a defense in the answer or by filing a prehearing motion. But a tenant cannot raise lack of notice as a defense for the first time at the hearing.
Changes to Court Proceedings After Tenant Files an Answer
- The court must set a trial date between seven and 10 days after the answer is filed. This timeline can be extended if either party demonstrates good cause. A trial can be held sooner if the landlord alleges a substantial violation (including if the tenant or a guest of the tenant poses a danger to people or property, commits a violent or drug-related felony, or commits certain other crimes).
- If a tenant pays the full amount sought in an FED action together with any rent that remains due under the rental agreement at any time before the judge issues a judgment for possession, the landlord must accept this money and let the renter stay in the unit. Once a court has confirmed that the full amount has been timely paid, the court must vacate any judgments that have been issued and dismiss the action with prejudice. This provision may not be waived by any written agreement between a landlord and tenant.
- If a court enters a writ of restitution, a sheriff may not now execute that writ until at least 10 days after the entry of judgment.