New Landlord-Tenant Laws effective 10-1-2021; Annie Murphy to teach Landlord Class 9-21-21
Dufford Waldeck will be hosting a free class (taught by Annie Murphy) to review the new landlord-tenant laws on Tuesday, September 21st at 11:30 am to 12:30 pm at the Grand Junction Area Realtors Association, 2743 Crossroads Blvd., Grand Junction, CO 81506.
To register, follow this link. In-person seating is limited and available on a first come first serve basis.
New Colorado Landlord-Tenant Laws:
More Help for Tenants
In the wake of the U.S. Supreme Court’s decision that invalidated the Centers for Disease Control and Prevention’s (CDC) eviction moratorium, Colorado’s new housing laws, some of which are now in effect and others which go into effect on October 1st, were passed with the hope that they will provide help to tenants who are struggling to pay rent. It has already been a tough year and a half for landlords wanting to end tenancies with residents who are failing to pay rent with the CDC and state eviction moratoriums. This article will also discuss the two laws which went into effect on January 1, 2021 regarding unfair housing practices.
SB21-173, SB21-242, HB21-1121, SB20-224 (the “Immigrant Tenant Protection Act”), and HB 20-1332 (the “Source of Income Law”) provide housing assistance, expand tenant rights, prohibit landlords from issuing certain late fees and rent increases, and change the legal procedures for evictions. Colorado landlords need be aware of these new changes in drafting leases and successfully terminating tenancies.
A landlord that fails to follow the new requirements can potentially be fined $50 for each violation, and face a civil action filed by tenants. Understanding the new requirements will help ensure landlords remain compliant, avoid fees and litigation, and successfully terminate tenancies.
Pre-Lease Requirements
Immigrant Tenant Protection Act
The Immigrant Tenant Protection Act became effective January 1, 2021. Under this Act, landlords are prohibited from engaging in certain housing practices or related activities based on the immigration or citizenship status of a tenant:
· Landlords may not ask about a person’s citizenship status in housing unless the Landlord is also the person’s employer.
· Landlords may not threaten to call ICE or others on the basis of citizenship status and may not harass or intimidate a resident because of immigration status or evict due to citizenship status.
· Landlords must ask for the same documentation for every prospective tenant/applicant, which may include SSN, Tax ID no., or other proof of identity sufficient to properly screen the individual.
Tenants may bring civil actions against Landlords for violating the Act. A successful tenant may seek punitive (up to $2,000) and compensatory damages plus attorney fees and costs. In a civil action brought under the Act, the tenant’s immigration or citizenship status is irrelevant. Please note, there are NO exceptions for small landlords under this law.
Source of Income Discrimination
Effective January 1, 2021, Landlords are prohibited from discriminating on the basis of a tenant’s “source of income.” “Source of income” is defined to include any source of money paid directly, indirectly, or on behalf of a person, including income from any lawful profession or from any government or private assistance, grant, or loan program, such as SSDI, VA benefits, etc. A person is prohibited from refusing to rent, lease, show for rent or lease, or transmit an offer to rent or lease housing based on a person's source of income. In addition, a person cannot discriminate in the terms or conditions of a rental agreement against another person based on source of income, or based upon the person's participation in a 3rd-party contract required as a condition of receiving public housing assistance, such as section 8 Choice Vouchers, CCH, VASH, CAP etc. Landlords are prohibited from advertising a source of income preference in rental ads. This law does NOT apply to property owners with 3 or fewer rentals. And, a landlord with 5 or fewer rentals is not obliged to accept federal housing choice vouchers for single family homes; but, the remaining requirements apply. Landlords are permitted to continue to check the credit of prospective tenants IF they do so for all prospective tenants.
Pre-Eviction Requirements
The following provisions are prescribed by SB21-173 and are set to go into effect on October 1, 2021.
Late Fees
Landlords are still permitted to charge late fees but may need to update their lease agreements as SB21-173 places new restrictions on the issuance of late fees. Under the new requirements, landlords cannot require a tenant to pay a late fee unless the late fee is disclosed in the lease agreement. And, late fees
are capped – they cannot exceed the greater of $50 or 5% of the amount of the past due rent payment
In addition to the late fee cap, new late fees restrictions. These restrictions prevent landlords from:
· Classifying late fees as “rent” in the lease agreement;
· Charging interest on late fees;
· Charging a late fee on tenants unless rent is more than seven days late;
· Charging a late fee that exceeds the cap mentioned above ($50 or 5% of the past due rent);
· Charging a late fee more than once for a late payment;
· Charging a late fee without written notice of the fee within 180 days after the due date of a rental payment;
· Collecting late fees on tenants for the late payment or nonpayment of any portion of rent that a rent subsidy provider is responsible for;
· Recouping a late fee from a rental payment; and
· Starting eviction proceedings or the removal of a tenant solely on the basis of failure to pay late fees.
The new law requires Landlords to wait seven days after the missed rent payment before charging a late fee and to provide tenants written notice of the fee. This can be done in conjunction, with a Demand for Compliance, but should not be contained in the Demand itself. Remember that landlords are no longer permitted to begin eviction proceedings for a tenant’s failure to pay one or more late fees.
Lease Agreements
The new requirements described below will affect lease agreements and the ability of landlords to increase rent. The following clauses, if included in a lease agreement, will be void and unenforceable on October 1, and are prohibited from being included in future lease agreements. These include:
· A liquidated damages clause that assigns a sum to a party stemming from an eviction notice or an eviction action which arose from a violation of the lease agreement.
· A one-way fee-shifting clause that awards attorney fees and court costs to only one party.
Lease agreements may contain a fee-shifting clause, but that clause must award attorney fees to
the prevailing party. If these clauses exist in your lease, they will be unenforceable.
HB21-1121 went into immediate effect on June 25, 2021, for the “preservation of the public peace, health, or safety.” The immediate changes prescribed by HB21-1121 are discussed below.
Notice of Rent Increases
Landlords wanting to increase residential rent are now only allowed to do so once a year. This requirement applies regardless of the type or duration of the landlord-tenant relationship. For tenants in which there is no written lease, landlords must provide the tenant written notice of a rent increase 60 days in advance of the increase. Landlords are also prohibited from removing a month-to-month tenants with an end of term notice to quit if the landlord’s primary purpose for removing the tenant is increasing the rent.
Landlords with nonresidential tenants that do not have a written lease agreement, and whose lease is longer than one month, but shorter than six months, are permitted to increase rent after providing the tenant 21 days written notice.
Eviction Proceedings
Landlords who begin proceedings to terminate tenancies on the basis of a tenant’s failure to pay rent must also follow new procedures. Due to public Most notably, the summons, time for tenants to prepare for trial, and time for a tenant to cure nonpayment have been changed. These changes are meant to aid tenants in legal proceedings and provide them with a better opportunity to prevent eviction. Landlords will be forced to be patient with longer cure periods and eviction proceedings.
Summons
After filing an eviction complaint, the court or the landlord’s attorney must provide tenants with certain information and resources in the summons. The summons must now include:
· A statement that tenants who assert a warranty of habitability defense and that meet income requirements can do so without having to post bond[1];
· A list and contact information of available resources to aid the tenant in the eviction proceeding, including legal aid and rental assistance;
· A copy of a blank answer form; and
· A form that allows for either party to request documents from the tenant or landlord that are relevant to the eviction proceeding.
Courts must now wait until the close of the business day upon which an appearance is due to enter a default judgment against a tenant who fails to appear or file an answer after the summons has been issued. The new summons requirements will provide tenants with more time, information, and resources to prepare a strong defense.
Procedures
Tenants will also have more time to prepare for trial and cure nonpayment. If a tenant files an answer, the court must set for the date for trial seven to ten days after the answer is filed (although tenants may waive this requirement). Tenants who fail to assert a defense after filing an answer will be allowed to motion a defense at any time before the hearing. Additionally, either party may request an extension of the trial date for good cause, or if the court finds a different justification.
If a landlord files an eviction action for the nonpayment of rent, landlords must now accept any payment from the tenant before a judgment of possession is issued. This is a significant departure from the current law which does not require a landlord to accept payment after the expiration of the Demand for Compliance. The right of the tenant to cure nonpayment at any time before a possession judgment is issued cannot be waived by any written agreement.
Writ of Restitution
After exercising patience for the longer eviction proceedings, landlords who comply with all the new requirements and have a judge issue a writ of restitution must extend their patience further. Courts must wait 48 hours after the time and entry of judgment to issue a writ of restitution. Once the writ is issued, the Sheriff’s Department cannot execute the writ until 10 days after the entry of judgment.
Expanded tenant rights and longer eviction proceedings will afford tenants more time to cure nonpayment violations and prepare a sophisticated defense. Landlords who are aware of the new requirements can still successfully evict tenants, but should prepare themselves for a longer (and perhaps more challenging) legal battle.
Dufford Waldeck will be hosting a free class (taught by Annie Murphy) to review the new landlord-tenant laws on Tuesday, September 21st at 11:30 am to 12:30 pm at the Grand Junction Area Realtors Association, 2743 Crossroads Blvd., Grand Junction, CO 81506.
To register, follow this (link). In-person seating is limited and available on a first come first serve basis. A recording of the class will be emailed to all registrants.
If you would like to speak with Annie Murphy or another attorney about the new Colorado landlord requirements, please give our office a call at 970-241-5500.
[1] Tenants may claim, as an affirmative defense to an eviction action, that the nonpayment of rent was caused by a Landlord’s failure to make the premises fit for human habitation (after receiving notice from the tenant about the uninhabitable condition) under C.R.S. § 38-12-507. Before the new laws, tenants who asserted this defense had to post a bond with the court, including the portion of rent that was due minus the expenses incurred by the tenant. Now, under SB21-173, Courts may waive the bond requirement if they believe tenants asserting this defense are unable to deposit the bond because of low income. This includes tenants whose income is five times or less an annual lease’s rental amount or is less than 250% of the federal poverty line (excluding tenant assets). See SB21-173 § 12(c)(II)(A-B).