If you own rental property, manage a portfolio, or run a real estate brokerage in Colorado, Colorado’s new AI law should be on your radar. Senate Bill 26-189 was recently signed into law and takes effect January 1, 2027. Depending on how your business operates, you may need to assess the technology you use and potentially build required compliance layers on top of it.
What It Covers
SB 26-189 regulates the use of “automated decision-making technology” (commonly referred to as “ADMT”) that materially affects consequential decisions affecting certain categories of Colorado consumers.
Although the statutory language is dense, the concept is straightforward: if you use technology that processes information about a person and produces a result (a score, a recommendation, a ranking), that influences a decision about them, the law likely applies.
Who It Affects
The law contemplates a handful of impacted industries. Among them, housing is specifically addressed.
Landlords and property managers will be the most directly affected. If you use a tenant screening platform, it almost certainly qualifies. One immediate challenge is identifying responsibilities under the law when the landlord or property manager outsources tenant screening to a third party that deploys covered ADMT.
Brokerage firms need to examine the technology the firm and its brokers deploy. Automated valuation models, AI-powered lead scoring, showing recommendation engines, and offer analysis tools are all candidates depending on how they’re used. There is no black and white rule on what technology is regulated, which means regulated parties must look deeper to the intended and actual use.
What It Requires
At its core, the new Colorado AI law contains four material obligations for anyone using a covered ADMT:
1. Tell people. If your use qualifies, you must provide clear notice that covered ADMT is being used and how to get more information.
2. Explain adverse outcomes within 30 days. If your covered ADMT contributes to a decision that goes against a consumer, you have 30 days to explain the decision, the covered ADMT’s role, and the consumer’s rights.
3. Honor consumer rights. Anyone affected by a qualifying adverse outcome has the right to request the data used, correct inaccurate information, and ask for meaningful human review. Rubber-stamping the algorithm’s output doesn’t qualify as meaningful review under the law.
4. Keep records. Three years of documentation showing the tools used, decisions made, and disclosures provided. Violations are considered deceptive trade practices under the Colorado Consumer Protection Act.
How We Can Help
We’ve studied this new law upside down and inside out so you don’t have to. We’re developing a compliance toolkit built specifically for Colorado real estate professionals to cover everything the law requires. If you want to be notified when it’s available, please complete this Colorado AI Law Compliance Toolkit Interest Form.
