• DW

Preparing a Residential Rental Property to Sell



Thinking of selling a residential rental property? Here’s a checklist that may come in handy before you list the property for sale.

WRITTEN RENTAL AGREEMENT

As of August 8, 2018, when there is a written rental agreement, the landlord is required to provide a copy to the tenant no later tan the seventh day after the tenant has signed the lease. An electronic copy is sufficient unless the tenant reques

ts a paper copy. C.R.S. § 38-12-801. A copy of the written rental agreement will likely be requested during the due diligence period of your real estate contract and, in any event, the original should be transferred to the new owner at Closing.

CARBON MONOXIDE DETECTORS

Under Colorado law, all rental dwellings that includes fuel-fired appliances must contain an operational carbon monoxide alarm within fifteen feet of the entrance to each bedroom. C.R.S. § 38-45-101, et seq.



WARRANTY OF HABITABILITY

Colorado law provides that a dwelling must comply with the following requirements in order to be considered habitable:

o The dwelling must not contain mold except for minor spots on surfaces that accumulate moisture as part of their proper function or intended use, and the premises must not be damp, generally;

o The dwelling must contain functioning appliances (if they are included in the lease) which conform to applicable codes at the time of installation and are maintained in good working order;

o The premises must be sufficiently waterproof and weather protected - the roof and exterior walls must be maintained in good working order;

o The premises must contain broken windows or doors;

o All plumbing and gas facilities must conform to applicable codes at the time of installation and maintained in good working order;

o Running water and reasonable amounts of hot water must at all times be furnished to appropriate fixtures and connected to a sewage disposal system approved under applicable law;

o The premises must contain functioning heating facilities;

o Electrical lighting, with wiring and electrical equipment must be maintained in good working order;

o Common areas (if applicable) and areas under the control of the landlord must be kept reasonably clean, sanitary, and free from accumulations of debris, garbage, etc.;

o Appropriate extermination in response to vermin or rodent infestations in premises and common areas;

o The premises must contain an adequate number of appropriate exterior receptacles for garbage (if applicable);

o Floors, stairways, and railing must be maintained in good repair;

o Locks must be present on all exterior doors and locks or security devices must be on all windows designed to be opened and all must be maintained in good working order; and

o The premises must comply with all applicable building, housing, and health codes, the violation of which would be condition that materially interferes with a tenant’s life, health, or safety.

C.R.S. § 38-12-505. It is better to address these items prior to listing the property for sale to avoid inspection disputes while under contract.

TENANT SECURITY DEPOSITS

When ownership of the rental property changes through sale (or any other reason), the owner (or holder of the security deposit) is required to transfer the deposit to the owner’s successor in interest. C.R.S. § 38-12-103(4). This is generally done at Closing. The owner must also notify the tenant(s) by mail of the transfer and of the new owner’s name and address. The owner also has the option of returning the security deposit directly to the tenant after making any lawful deductions. The best option, however, is to transfer the deposit to the new owner (rather than to the tenant), as upon receipt of the deposit, the new owner assumes all of the rights, obligations, and liabilities associated with holding the money as a security deposit. C.R.S. § 38-12-103(6).

We would be happy to help you through the process of selling, buying, and leasing your property.

Annie D. Murphy

D. Ross Smith

Dufford Waldeck

744 Horizon Court, Suite 300 
Grand Junction, Colorado 81506

dwmk@dwmk.com

CO: 970.241.5500

UT: 435.259.2225

© 2020 Dufford Waldeck | All Rights Reserved.