Changes to Tenant Screening and Applications in Colorado for 2023
Colorado’s 2023 legislative sessions resulted in several changes to residential landlord-tenant laws, including changes in the process for tenant applications and screening. All property owners and management companies should be aware of the changes to ensure their application processes and lease agreements are in compliance with updated state laws.
If you have any questions about these legal updates, speak with a Colorado real estate attorney today. Most Colorado leases will need to be updated to comply with these recent changes.
The New Option for Portable Tenant Screening Reports
HB23-1099 went into effect in August 2023 and amended Colorado’s Rental Application Fairness Act. The bill changes the way landlords can charge application fees and screen tenants. Now, landlords must inform tenants they can provide a portable tenant screening report from a consumer reporting agency as part of the application process. If the tenant chooses to provide this report, a landlord must accept it and cannot charge an application fee from the tenant.
This portable report must contain the tenant’s name and contact information, last-known address, income and employment verification, as well as background information regarding credit, rental history, and criminal record, as allowed by state law.
Landlords must accept this type of report but can require that it be current within 30 days and that they can access it directly from the reporting agency at no cost. There are certain exemptions from this new requirement, but landlords should not assume these exemptions apply to them without first consulting with a Colorado real estate attorney.
Limitations on Income Considerations for Prospective Tenants
SB23-184 prohibits a landlord from considering certain information relating to a prospective tenant’s income. The change applies when:
- A landlord relies on credit and rental history to make decisions regarding tenant applicants
- The prospective tenant does not rely on a housing subsidy to assist with rent payments
If both are true, a landlord cannot mandate that a prospective tenant earn more than 200 percent of the yearly rent amount.
If the landlord relies on credit and rental history to make decisions regarding tenant applications, and the prospective tenant relies on a housing subsidy to assist with rent payments, a landlord cannot mandate that a tenant earn more than 200 percent of the portion of the annual cost that is to be paid by the prospective tenant. In the case of a prospective tenant relying on a housing subsidy, the landlord also may not consider the prospective tenant’s creditor score unless required by federal law.
Security Deposits
Another important provision of the updated law is that landlords have new restrictions on security deposits. Also effective in August 2023, Colorado landlords cannot require residential deposits of more than the value of two monthly rent payments.
Regularly Consult with Colorado Real Estate Attorneys
Colorado real estate lawyers play a vital role in advising landlords on ever-evolving legal matters. At Brown Dunning Walker Fein Drusch PC, we are knowledgeable of recent changes to landlord-tenant laws to ensure compliance and avoid legal disputes or liability. This includes updates on leasing regulations, eviction procedures, and compliance with housing codes. Additionally, we can assist in drafting and reviewing leases to ensure they align with current legal standards.
In the event of a dispute, our skilled attorneys can provide guidance on the best course of action, whether it may be negotiation, mediation, or litigation. Ultimately, having a knowledgeable real estate lawyer is crucial for landlords to navigate the complex legal landscape effectively.
Contact Brown Dunning Walker Fein Drusch PC today for more information about how we can counsel and represent landlords and property managers in Colorado.