Colorado Caps Renter Income Requirements and Security Deposits; Limits Credit Inquires
Affordable housing is difficult to come by in Colorado. In an effort to make the search a little easier for renters, state lawmakers passed a series of bills that strengthen tenant protections. This means quite a few changes for landlords. This article covers caps on income requirements and security deposits, as well as new rules about inquiries on credit.
New Rules About Income Requirements & Credit Inquiries
Requesting Income Information
New to the Colorado law that governs rental application considerations is the amount of income a landlord can require from a prospective tenant.
Landlords cannot require potential renters, including those using housing vouchers, to earn more than 200 percent, or double, what they would pay annually in rent. Landlords may only ask about a potential tenant’s income to see if it is equal to or double the cost of rent. C.R.S §§ 38-12-904 (1)(c)-(d)
Landlords who receive money from nonprofits or government entities to rent subsidized housing may gather financial information to determine if a prospective tenant is eligible to rent the unit as long as the organization or agency requires that information to be collected as a condition for payment.
Gathering Details About Credit
Landlords may consider rental or credit history as part of the application process for individuals using housing assistance. However, the law limits how much additional information a landlord may inquire about credit status. For instance, landlords cannot ask questions related to credit scores or adverse credit events. C.R.S. § 38-12-904 (1)(c)(II)
Violations and Penalties
Breaking either of these rules constitutes “unlawful discrimination against an individual on the basis of the individual’s amount of income” in violation of Colorado’s fair housing practices. This subjects the landlord to possible legal action by the tenant, state attorney general, and the Colorado Civil Rights Division.
Landlords who violate either of these laws must pay the tenant $50. If the landlord fails to correct the violation the landlord will owe the prospective tenant $2,550, as well as any economic damages, court costs, and attorney fees they may incur. C.R.S. § 38-12-905 (5)(a)
New Security Deposit Limit
Until now, security deposits were at the landlord’s discretion as long as they were “reasonable.” Moving forward, a security deposit can be no more than two month’s rent.
Affirmative Defenses for Evicted Tenants
Renters who face eviction may assert that their landlord has violated Colorado’s fair house laws as an affirmative defense in their case. C.R.S. § 13-40-113 (2.5)
Make Sure You Know Colorado’s Rental Laws
As a landlord, it’s more important than ever to understand Colorado’s rental laws so you’re not faced with stiff penalties that cut into your livelihood and affect your reputation. Our landlord attorneys can ensure your rental agreements are in line with the law. Call 303-688-0944 to begin your case assessment.