Property Management Education

Housing providers now required by law to offer lease renewals to tenants, and other major impacts of HB 24-1098

Housing providers now required by law to offer lease renewals to tenants, and other major impacts of HB 24-1098.

Grace Property Management is not an attorney firm, and this is not legal advice. The below is simply our interpretation of some aspects of HB24-1098. A legal professional should be consulted before relying on any of the below information. 

HB 24-1098, titled – CONCERNING PROTECTIONS FOR RESIDENTIAL TENANTS, AND IN CONNECTION THEREWITH, REQUIRING CAUSE FOR THE EVICTION OF A RESIDENTIAL TENANT, has been passed in Colorado and signed into law. This bill mandates massive and sweeping changes for Colorado real estate investors, housing providers and tenants, including requiring housing providers to offer lease renewals to tenants except in limited situations.

Download the full bill on this link. HB 24-1098: “Concerning protections for residential tenants, and in connection therewith, requiring cause for the eviction of a residential tenant”

Main points of the bill:

    1. Rent demand notices must be served in the resident’s preferred language

When posting a rent demand notice, the housing provider must now post that notice in the preferred language of the tenant – no matter what language that may be. If the demand notice is NOT served in the tenant’s preferred language, that is cause to have the potential rental eviction filing dismissed and disallowed by a judge. One can imagine the logistical challenges of not only determining the preferred language of the tenant, but also completing a legally compliant demand notice in this language.

    2. Rent demand notices must now have two service attempts on two separate days before it can be posted on the property

Rather than utilizing technology and streaming the legal rental demand process as some states are doing; in Colorado, rental demand notices need to be physically created, printed (in the tenants preferred language), and physically delivered to the property. To further complicate the process, this demand notice must now be attempted to be personally delivered to the tenant two separate times, on two separate days, before it can be legally posted upon the property. Once personal service has been attempted twice, then, and only then, can the notice be posted on the door of the property. Logistically this will increase compliance complexity, increase operational costs, and raise safety concerns for rental housing providers throughout Colorado.

    3. Housing providers are required to renew tenant lease agreements unless they have legal cause to non-renew (now called a no-fault eviction)

Previously, all lease agreements had a start date and an end date. Unless the lease was mutually extended (commonly referred to as ‘renewed’) by both parties, then it would expire on the expiration date and the tenant would need to vacant at that time. The housing provider was under no obligation to extend the lease beyond the expiration date (thus the purpose of an expiration date) – THIS IS NO LONGER TRUE IN COLORADO.

HB-1098 has effectively outlawed a lease non-renewal and reclassified it as a legal ‘no fault eviction.’ In order to non-renew a lease agreement, the housing providers must have a legally allowable cause AND legally inform the tenant that they are initiating a no-fault eviction on the tenant.

This is a major change in Colorado contract law as housing providers may only non-renew (or no-fault evict) a tenant for one of the below reasons as outlined in the new law.

Legally allowable reasons to non-renew a lease agreement (no-fault evict):

  • Demolish the property
  • Convert to non-residential use
  • Convert to short term rental
  • Owner moving into property

If the owner IS moving back into the property there are additional specific requirements – including timeline requirements to ensure the property may not be re-listed for rent for a specific amount of time.

  • Owner selling the property
  • Substantial lease violations
  • History of non-payment of rent

The history of non-payment of rent is conditional and specific as to the details and timeline of non-payment. 

  • Make substantial repairs/renovations

If substantial repairs or renovations are made, the owner has to legally give the tenant the first right of refusal to re-rent the property at a later date. This means that once the repairs are completed, the landlord must go to the tenant and ask if they want to re-rent the property. There are lots of rules governing the specifics of this process.

  • Tenant refuses to sign a new lease under reasonable terms

If the housing provider is non-renewing the lase (no fault evicting) for one of the above listed valid legal reasons, the landlord must provide the tenant with a 90-day notice, and it must be specific in why they are non-renewing and which valid reason applies.

The above information is just some of the new requirements laid out in this 23 page bill. This bill is effective immediately due to the inserted ‘safety clause’, which deems the bill so urgent in protecting the public safety and welfare that it immediately goes into effect upon the Governor’s signature.

This is not legal advice, rather this is our interpretation of the bill as we continue to work through it to determine how operationally we will function under these new rules.

If you are an owner-client of Grace Property Management, please know we are working with our attorneys to ensure full compliance as we continue in our ongoing due diligence and interpretation in this very complex bill.

We believe that when property management is performed with integrity, both tenants and landlords benefit. Property Management is not just our business - it is a relationship between us, our owner-clients, and our tenant-residents. If these are important to you, we may be a good fit to provide you, your property, and your tenant-resident with our award winning property management service. Feel free to reach out to us for assistance.

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