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How Do Landlords and Property Managers Comply with the Rental Application Fairness Act?

What actions must Colorado landlords and property managers take after passage of the new state law known as House Bill 19-1106?

The purpose of this article is to summarize a Colorado property manager’s ‘action items’ arising out of the passage of House Bill 19-1106 (HB 1106) in Colorado’s 2019 legislative session and to introduce Frascona, Joiner, Goodman and Greenstein, P.C.’s new product: the Rental Application Fairness Act Compliance Packet (RAFA Compliance Packet).

This article does not provide an in-depth review of HB 1106. Should the reader desire additional commentary on the topic, Frascona, Joiner, Goodman and Greenstein, P.C. attorney, Britney Beall-Eder, wrote a summary of HB 1106, which can be found here. The actual text of HB 1106 in its entirety can be accessed by clicking here.

I. Rental Application Fee Disclosure

First, a Landlord[1] may not charge a rental application fee to a prospective tenant unless the Landlord uses the entire amount of the fee to cover the Landlord’s costs in processing the rental application. To comply with the new requirement, a Landlord must disclose to the prospective tenant certain details concerning the rental application fee. The RAFA Compliance Packet includes a Rental Application Fee Disclosure that incorporates all of HB 1106’s disclosure requirements to keep the Landlord in compliance with the law.

II. Rental Application Fee Receipt

Second, a Landlord must also provide each prospective tenant with a receipt whenever it receives a rental application fee. The RAFA Compliance Packet also includes a Rental Application Fee Receipt specifically crafted based on the language of HB 1106 for Landlords to provide to prospective tenants.

III. Rental Application Denial Letter

Third, a Landlord is required to provide any denied prospective tenant with notice of such denial. Not only must the Landlord provide the denied prospective tenant with notice of the denial, but it must also explain the reason for the denial. The Rental Application Denial Letter included in the RAFA Compliance Packet includes ‘check-the-box’ options individually tailored to HB 1106 and other state and federal laws so that the Landlord can quickly and efficiently process and distribute each required denial letter. The RAFA Compliance Packet also includes an Adverse Action Addendum for use when a Landlord denies a prospective tenant for particular reasons that, by law, require the provision of additional information.

IV. Rental Application Fee Refund Receipt

Lastly, HB 1106 requires that a Landlord refund to a prospective tenant all unused portions of the rental application fee. If the Landlord does not use the entire rental application fee in processing the rental application, then it can utilize the Rental Application Fee Refund Receipt included in the RAFA Compliance Packet to close the loop on HB 1106 compliance.

This article is not intended to provide legal advice to the reader. If you have any questions about HB 1106 please contact Zachary Grey or Britney Beall-Eder. To purchase the RAFA Compliance Packet, click here.

[1] C.R.S. § 38-12-902(2) defines “Landlord” as an owner, manager, lessor, or sublessor of a dwelling unit. C.R.S. § 38-12-902(1) defines “Dwelling Unit” as a structure or the part of a structure that is used as a home, residence, or sleeping place.

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