New Laws on Prohibited Lease Provisions in Colorado Leases

Posted May 23, 2024 in Contracts, Landlord Tenant and Leasing, Real Estate

What provisions are prohibited or unenforceable in Colorado Leases? As discussed in our summary blog here, landlord tenant law in Colorado has seen significant change since the pandemic era.

Below we have provided a summary of the new laws that every landlord, property manager, and tenant needs to know. If you are a landlord, owner, or property manager, read carefully, and do your own research, as these changes may impact how your leases need to be drafted. And, many changes include penalties for non-compliance.

Illegal Lease provisions per 2021 amendments (2021 Colo. S.B. 173)

• Late Fees may not be classified as “rent” in a lease agreement for purposes of eviction. (See 2021 Colo. S.B. 173, as codified at C.R.S. 38-12-105(7)).
• Unreasonable liquidated damages clause stemming from eviction activities are prohibited (See C.R.S. 38-12-801) (amended by 2023 Colo. H.B. 1095)
• One-way attorney fee shifting provisions prohibited (See C.R.S. 38-12-801)

Illegal Lease Provisions per 2023 amendments (2023 Colo. H.B. 1120, 2023 Colo. H.B. 1095)

• Lease agreements must now include a statement about income discrimination for non-exempt landlords (exempt landlords have five or fewer single-family homes and no more than five total rental units) (See C.R.S. 38-12-801(2.5)).
• Lease agreements may not waive mandatory mediation as required by the new eviction procedures in C.R.S. 13-40-110(1) and may not allow landlord to recoup mediation costs for the same.
• Penalties for eviction notices or evictions are prohibited. (See C.R.S. 38-12-801(3)).
• Jury waivers. (See C.R.S. 38-12-801(3)).
• Class action waivers. (See C.R.S. 38-12-801(3)).
• Good faith/fair dealing waivers. (See C.R.S. 38-12-801(3)).
• Quiet enjoyment waivers. (See C.R.S. 38-12-801(3)).
• Fees, damages, or penalties for failure to provided notice of nonrenewal of lease, beyond actual damages to the landlord. (See C.R.S. 38-12-801(3)).
• Provisions that attempt to characterize any non-rent amounts due as rent. (See C.R.S. 38-12-801(3)).
• Provisions requiring a tenant to pay a markup for any service the landlord is billed for by a third party, which exceeds a 2% markup or $10/per month. (See C.R.S. 38-12-801(3)).
• Provisions allowing a provider using a subsidy or voucher program to evict based on nonpayment of utilities. (See C.R.S. 38-12-801(3)).

Illegal Lease Provisions per 2024 amendments (2024 Colo. H.B. 1098).

• Leases may not waive or modify any part of the for-cause eviction statutes. (See C.R.S. 13-12-1305).
• Leases may not alter, modify, or waive any right, remedy, obligation, or prohibition in the habitability statutes. (See C.R.S. 38-12-503(10)).