A newly passed Colorado law (HB 19-1106) going into effect August 1, 2019, for residential landlords limits application fees and considerations in reviewing applications and requires certain disclosures and communications with prospective tenants on denial. The new law is titled the Rental Application Fairness Act.
As to fees, the law prohibits a landlord from charging a prospective tenant a rental application fee unless the entirety of the fee will be used to cover the landlord’s costs for processing the rental application. These costs can include the actual expense the landlord incurs to process the rental application or the average expense the landlord incurs per prospective tenant in course of processing multiple rental applications.
The new law further states that a landlord shall not charge a prospective client a rental application fee different than one charged to another prospective client who applies to rent the same dwelling unit, or if the landlord offers more than one dwelling unit for a rent at the same time, any other dwelling unit offered by the landlord.
Under the new law, Colorado landlords are required to provide any prospective client who paid an application fee disclosure of the landlord's anticipated expenses for which the fee will be used or an itemization of the landlord's actual expenses incurred. The landlord is required to make a good-faith effort to refund any unused portion of an application fee within 20 days. The landlord is also required to provide the prospective tenant with a receipt for the paid application fee.
As to consideration of applications, the Rental Application Fairness Act further states that a landlord using rental history or credit history in consideration of an application shall not consider any rental history or credit history seven years immediately preceding the date of the application. If a landlord considers criminal history, the landlord shall not consider an arrest record of a prospective tenant from any time or any conviction of a prospective tenant occurring more than five years before the date of the application. Excepted from this limitation are specific activities including criminal conviction relating to certain offenses involving methamphetamine, any felony offense that required the prospective tenant to register as a sex offender or any offense classified as a homicide.
Should a landlord deny a tenant’s rental application, the landlord is required to provide written notice of the denial stating the reasons for the denial.
A landlord who violates any of the requirements of the bill is liable to the applicant for triple the amount of the rental application fee, plus reasonable court and attorney costs. A landlord who corrects a violation within seven calendar days of receiving notice of the violation is no longer liable.