Are you confident that your rental properties comply with all state and local rental laws in Colorado?
Legal mistakes are easy to make, and recovering from them can be time consuming and expensive.
Colorado’s rental landscape is evolving quickly, shaped by a mix of statewide legislation and increasingly nuanced local ordinances. For landlords, property managers, and even tenants, keeping up with these changes is essential to protecting investments, avoiding costly penalties, and creating positive rental relationships.
Colorado is taking a more active role in regulating rental housing, thanks to new development, increasing tenant demand for fair, affordable housing, and stricter tenant protections in other states like California and Oregon.
Understanding Colorado’s rental laws requires attention to a shifting regulatory environment, and we can provide the information and support you need. Here are some good things to know if you want to stay ahead of the curve.
Our Overview:
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Local Laws: Licensure in Boulder
Rental property owners in Boulder need to have a license from the city. This license is dependent upon the property meeting habitability standards, in particular city safety and housing codes that ensure fire safety, smoke/CO detectors, and proper heating/plumbing.
This process starts with a registration on the city’s online portal. After that, an inspector will check for habitability issues and energy efficiency at the property. Then, you’ll submit your application and licensing fees and it’s your responsibility to remain compliant with all safety and habitability standards as long as you’re renting the property to tenants.
If you own and occupy the property and you’re renting to fewer than two people other than yourself, you may be exempt from this requirement.
Pricing Transparency Laws in Colorado
A new law that went into effect at the beginning of 2026 requires advertised rental prices to include any and all additional fees and costs so prospective tenants know the totality of what they’ll be paying upfront.
Essentially, this means you cannot advertise one rental amount when tenants will actually be paying a different (and higher) monthly rent once all fees and additional costs are included. Complete transparency is required from the marketing process to the lease signing.
Security Deposit Laws in Colorado
Security deposit protections have become a bit stricter in Colorado in 2026 as well.
The newest security deposit law (HB 1249) requires security deposits to be returned within 30 days of the tenant moving out. Not only that, landlords are prohibited from withholding any part of the deposit to cover costs for any damage or defective condition that preexisted the tenancy.
This means that documenting the condition of your property before a tenant moves in and after a tenant moves out is even more important.
Landlords in Colorado are permitted to withhold a reasonable amount of the security deposit to cover:
- Nonpayment of rent
- Nonpayment of utility charges
- Other lawful charges listed in the lease
- Any necessary repair work from damage that did not preexist the lease
Landlords will be liable for damages for wrongful retention of the security deposit or for any delay in returning the security deposit.
Late Fee Limits for Colorado Landlords
It’s frustrating and disruptive to have rental payments come in late, but Colorado rental laws limit the actions you can take and establish a timeline for when you can take them.
Most important is the late fee limit. According to the law, you cannot charge a late fee that’s more than 5% of the rent or $50. You have to wait until the rent is late for seven days. This is essentially a mandated grace period for tenants to catch up with the rent.
Make sure you include the late fee in your lease agreement. And remember that you cannot charge interest on late fees nor can you use unpaid late fees alone as a reason for evicting a tenant.
Evicting Tenants in Colorado
When a tenant has been in place for at least 12 months, and you’re not an owner/occupant in the property you’re renting out, there’s a good chance you have to follow Colorado’s “For Cause” eviction laws, which went into effect in 2024.
Tenants in Colorado are typically evicted for nonpayment of rent or for lease violations that remain uncured. If this occurs, you’ll have to serve the tenants a notice, which can be found on the website of Colorado’s state courts website. Serve the termination notice and if rent isn’t paid or the tenant does not move out or correct the problem, you’ll have the opportunity to file for an official unlawful detainer (which is an eviction) through the courts. The tenant will be served with the Summons and Complaint, and then it’s up to them to respond to that action. Next, you’ll have mediation if it’s court-ordered, or a court date in which you can make your case for eviction to a judge. As the plaintiff, you have the burden of proof. Show up with the lease, the correspondence, the notice, and your accounting which shows a lack of payment.
Assuming you win your eviction, the Writ of Possession will allow you to take back your property from the tenants, and if necessary, the Sheriff will remove your tenants.
Colorado Fair Housing Laws
Colorado fair housing laws expand on federal protections by covering additional protected classes, including sexual orientation, gender identity, marital status, and source of income. For rental homes, this means landlords face tighter rules on advertising, screening, and lease terms. Practices allowed under federal law may still violate Colorado statutes, increasing compliance responsibilities statewide for property owners and managers across the state.
Prevent fair housing mistakes in advertising, screening, and leasing by understanding the law and asking for help from us if anything feels unclear.
We know how important it is to stay ahead of the newest legal changes. Contact us at Pennant Investment Company. We serve Boulder and Broomfield Counties, offering customized property management services and investment advice.
