Co-Author: Caroline W. Young
The Colorado General Assembly recently passed HB24-1098 (“Cause Required for Eviction of Residential Tenant”), which significantly overhauled the landscape of Colorado’s residential lease and eviction laws. In short, residential landlords are now required to offer existing tenants lease renewals on reasonable terms, subject to some statutory exceptions. When Gov. Polis signed the legislation on April 19, 2024, it went into effect immediately, putting many landlords and property managers in a challenging compliance position.
Historically, residential landlords have had the option to offer to renew or not renew a tenant’s lease when the term expired. If the tenant did not vacate the property at the end of the lease term and no written extension agreement was reached, the landlord could pursue an eviction action to recover possession. Now, due to Colorado’s new “for cause” eviction legislation, that is no longer the default process.
“No Fault” Non-Renewals
Residential landlords are now required to offer tenants lease renewals on reasonable terms, subject to a few statutory exceptions. Those exceptions include the following “no fault” reasons for declining to renew the lease, which may be implemented after proper notice is provided to the tenant and rigorous related compliance requirements are met:
A. Demolition or conversion of the premises;
B. Planning for substantial repairs or renovations to the premises;
C. Landlord or family member planning to assume occupancy of the premises;
D. Withdrawal from the rental market for the purpose of selling the premises;
E. Tenant refusing to sign a new lease with reasonable terms; or
F. Tenant history of non-payment of rent.
Unless one of these grounds for non-renewal exists, the landlord must provide the tenant the opportunity to continue renting the residential property on reasonable renewal terms. As noted, several other requirements are coupled with each of the exceptions for non-renewal. For example, non-renewal due to planned “substantial repairs or renovations” requires the landlord to:
A. Provide written notice of the planned repairs at least 90 days prior to the end of the lease term;
B. Provide proper service of the written notice, with the date by which the tenant must vacate the premises;
C. Provide a description of the planned repairs and expected completion date;
D. Proceed with the substantial repairs or renovations without unreasonable delay; and
E. Provide the tenant a right of first refusal to re-rent the premises if repairs are expected to last less than 180 days.
“Substantial repairs or renovations” are defined as repairs or renovations that cannot be reasonably accomplished in a safe or efficient manner with the tenant in place, are not necessary to remedy an alleged breach of the Warranty of Habitability, and which require the tenant to vacate the premises for at least 30 days. The other “no fault” reasons for declining to renew a residential lease contain similar substantial additional process and notice requirements. If the tenant does not vacate at the end of the lease term and the landlord files for eviction, the consequence of failing to strictly comply with the statutory obligations is possible dismissal of the eviction action.
Further, inherent statutory ambiguity will inevitably lead to disputes about the “no fault” eviction process. For example, a landlord may pursue eviction at the end of a lease term (after at least 90 days’ notice prior to the end of the term) if the tenant “refuses to sign a new rental agreement with reasonable terms.” However, the statutes do not define what constitutes “reasonable terms” in a new rental agreement, although landlords are prohibited from increasing rent in a “discriminatory, retaliatory, or unconscionable manner to circumvent the requirements and prohibitions” in the legislation.
As a result, a new realistic lease renewal timeline might look like the following:
- 120 days before term ends: Landlord presents lease renewal agreement to tenant with reasonable terms;
- 105 days before term ends: Landlord requires a written decision by tenant accepting or declining the renewal offer;
- 90+ days before term ends: If the tenant declines to renew or fails to timely respond, landlord provides tenant proper service of landlord’s intent to terminate the tenancy at the end of the term; notice must include the date on which the tenant will be required to vacate.
“For Cause” Evictions
Residential landlords may still pursue eviction actions during existing lease terms “for cause.” As defined by statute, these “for cause” evictions include general tenant lease defaults such as the following (in addition to some others not mentioned here):
- Non-payment of rent;
- Substantial lease violations, as described in CRS §13-40-107.5;
- Material violations of the lease;
- Repeat violations after receipt of proper notices of violation; and
- When a tenant has engaged in conduct that creates a nuisance or disturbance that interferes with the quiet enjoyment of the landlord or other tenants, or where the tenant negligently damages the property.
Definition of Residential Premises
It is important to understand that HB24-1098 applies to all residential premises in Colorado, subject to a few exceptions. The following examples are types of residential premises or lease arrangements that are specifically excepted from the legislation:
A. Short-term rental properties, being a residential premises that is leased:
- i. For less than 30 consecutive days for temporary, recreational, business, or transient purposes; or
- ii. Pursuant to post-closing occupancy agreement of less than six months, where the seller leases the property back from the buyer after closing.
B. A premises where the owner lives in or adjacent to the property as their primary residence, subject to certain maximum number of units restrictions;
C. A mobile home space that is leased pursuant to a lease-to-own agreement, purchase option, or similar agreement;
D. A premises leased to a tenant pursuant to an employer-provided housing agreement;
E. A residential tenant who has not been a tenant of a residential premises for at least 12 months; and
F. A residential tenant who is not known to the landlord to be a tenant of the property.
For these types of properties or lease arrangements, the landlord is not required to provide the tenant the opportunity to renew their lease agreement or otherwise continue residing in the residential premises at the end of the lease term. These properties and lease arrangements are also not subject to the end-of-term notice requirements of the “no fault” non-renewals discussed above. One response may be that residential landlords choose to offer leases with an initial term of less than 12 months to new tenants, in order to fit within the exception described in C.R.S. §38-12-1302(1)(e).
Enforcement and Eviction Considerations
In the event a landlord wishes to pursue a “for cause” eviction, the landlord must comply with updated written notice requirements. Even if the landlord may be willing to overlook a single late rent payment and not pursue an eviction at the time, failure to properly document the default may have serious implications later in the term.
For example, if a residential landlord grows frustrated with a tenant’s history of late rent payments and does not wish to offer a renewal of the lease at the end of the term, the landlord must properly document each violation and serve written notice of each default pursuant to C.R.S. §13-40-104(1)(d). Based upon the new statutory definitions, rent qualifies as late if it is submitted more than ten (10) calendar days after the day it is due, and only if the rent payment default is not cured after providing proper notice. Failure to comply with the recently enacted statutory requirements may result in the dismissal of the eviction proceeding.
In sum, documenting tenant violations throughout the duration of the lease by providing proper notice of defaults per C.R.S. §13-40-104 will be of the utmost importance for landlords in light of these statutory changes. Notably, service requirements when providing a Notice to Vacate or Demand for Compliance were updated, likely increasing the costs incurred by landlords when commencing an eviction. For example, the landlord or process server must attempt personal service on the tenant on at least two separate days before being permitted to serve legal notice by posting the Notice to Vacate or Demand for Compliance in a conspicuous place at the rental property.
Conclusion
Moving forward, the immediate implementation of these new statutes is bound to create challenges. Residential landlords are now essentially required to offer existing tenants lease renewals on reasonable terms, subject to some statutory exceptions for “no fault” non-renewals. To qualify for any of the statutory exceptions, landlords must strictly comply with the applicable process and notice requirements. As a result, landlords and property managers may reconsider their tenant application criteria (which also changed in 2023) and various lease terms offered. The residential lease agreement utilized by landlords remains an important compliance tool.
These summaries are not intended to be exhaustive. Statutory text should be reviewed for specifics and certain exceptions may apply that are beyond the scope of this article.
For assistance with residential lease terms and agreements, contact attorney Michael Smeenk. For lease enforcement and eviction guidance, contact attorney Caroline Young.
