Property Management Education

Lease Renewals REQUIRED by law in Colorado - except in these 6 instances: HB24-1098

Lease Renewals REQUIRED by law in Colorado - except in these 6 instances: HB24-1098

Key points:

  • Housing providers may NOT terminate or non-renew a lease at the end of the lease term without legal cause and 90 day notice
  • HB 24-1098 redefines what it means to non-renew a lease -  now called a “no fault eviction”
  • Instances of legally accepted “no fault evictions” in which housing providers may non-renew have very specific criteria that have to be met

Recently passed Colorado House Bill 24-1098 requires housing providers to offer lease renewals to tenants at the end of every lease term with only six exceptions in which housing providers may non-renew, or “no-fault evict” a tenant.

Grace Property Management is not an attorney firm, and this is not legal advice. A legal professional should be consulted before relying on any of the below information. 

The Six reasons a housing provider may choose to NOT renew a tenant lease agreement include:

1. Property Demolition

This includes either demolishing the property or converting it to non-residential use.

2. Substantial Repairs/Renovations to the Property

HB24-1098 provides several criteria for what qualifies as a substantial repair or renovation:

  • Only if the repair needed cannot be accomplished with the tenant in place . If the tenant would be able to live in the property while the repair is being made, then it would not qualify as a substantial repair for a non-renewal.
  • Only if the repair is not necessary to remedy a breach of the warranty of habitability law. However, many habitability items that would require substantial repairs are going to fall into this category, meaning that it will not often be applicable for a non-renewal.
  • Only if the repair requires the tenant to vacate for 30+ days. If the repair can be done in less than 30 days, it does not qualify for non-renewal.

If the substantial repair DOES qualify for a non-renewal per the specifications of the bill, then the notice to vacate given to the tenant must include a description of the work that will be done and the expected completion date. The tenant must ALSO be offered the first right of refusal to re-rent the property once the repairs are completed.

3. Owner or Family Member Moving Into the Property

The law includes a maximum timeline (of 3 months) for which the owner or family member must move back into the property. The legal definition of “family member” in Colorado is expansive – it not only includes relatives, but anyone that the owner has a ‘close personal bond’ with. If the owner of the property decides to NOT move into the property after the tenant has vacated, they may not relist the property for rent for a period of 90 days.

4. Owner Selling the Property

If the owner decides to sell the property, they can non-renew (no fault evict) the tenant. However, if they then decide to re-rent the property, they cannot relist it for rent for 90 days unless they provide evidence that it was listed for sale on the Multiple List Service (MLS).

5. Tenant Refuses to Sign a New Lease

The terms of the new lease offered must be “reasonable.” The bill does not specify what “reasonable” terms include, so it will ultimately be up to the interpretation of the judge. While some rent increase amounts would clearly be unreasonable (for example,  doubling the rental rate), discerning what “reasonable” terms include will be up to the discretion of each individual housing provider. Housing providers must also give tenants a reasonable amount of time to sign the lease renewal offer. Most attorneys recommend a minimum of two to three weeks as a reasonable amount of time for the tenant to accept the renewal offer. If the tenant does NOT accept and sign the renewal offer, then a 90-day notice of non-renewal may be given after the renewal offer expiration date.

6. Three or More Late Payments by Tenant

This does NOT mean that if a tenant has paid rent late 3 or more times the landlord may non-renew the lease. HB24-1098 redefines what a late payment is. To be considered late per the terms of 1098 the late payment must fit the qualifications of the bill. According to HB24-1098, for a payment to be considered “late,” the below must have occurred:

  • Rent demand notice must have been served upon the property
  • Payment was received after the demand notice period (a minimum of 10 days) expired
  • All three late payments must be during the current lease period
  • These late payments and timelines must be documented

In all of the above cases in which a no-fault eviction (non renewal) may take place, a 90-day notice is required. For each instance, the notice must specify the reason for the non-renewal and provide details regarding how the qualifications were met. Housing providers should use an attorney prepared and legally compliant letter of non-renewal to serve to their tenant for every case.

In addition, this bill also requires that personal service of demand notices must be attempted two times before the notice may be posted on the property, and the notice must be in the primary language of the tenant (whatever language that may be).

What about non-renewals for lease violations?

Even if the tenant has, or is, committing significant lease violations, housing providers are still required by law to offer a lease renewal. Leases may NOT be non-renewed for ANY reason other than the 6 reasons listed above.

If tenants are committing significant lease violations, they can be evicted for these lease violations, but they may NOT be non-renewed for them. This means that the only option for removing tenants who are in violation of significant lease violations is going through the time consuming and expensive legal process of eviction, which includes additional notices to the tenant.

To view and read the full bill click here. HB 24-1098: “Concerning protections for residential tenants, and in connection therewith, requiring cause for the eviction of a residential tenant”

For existing owner-clients of Grace Property Management -  please know we are working with our attorneys to ensure full compliance and legal protection 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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