Every recent legislative session in Colorado continues to have a few bills that are perplexing. The most recent law would allow someone who is renting a property to not pay for any damages to the property and be fully refunded their security deposit. What is the new law and what does this mean for property owners in Colorado.
There was so much in this Colorado legislative session that I didn’t think too much of this bill until I read the details and huge changes the new law enacts. Unfortunately the way the bill is titled I doubt any lobbying group would want to take issue with it due to the name alone.
Housing Protections for Victim Survivors
The new bill extends protections to include victims of unlawful sexual behavior and stalking. The biggest change is that now the only requirement to gain protections under the law is self-attestation meaning all that is needed is a statement from the tenant as opposed to a police report or other third-party report. The new law would provide changes to security deposits, evictions, late payments, and
Big changes for property owners as a result of the new law
Here are the key changes:
- Damage to unit responsibility of property owner: Here is the text: “If a tenant who is a victim-survivor terminates a lease and provides the required documentation, the tenant is not liable for damage to the dwelling unit caused by the responsible party or during the course of an incident of unlawful sexual behavior, stalking, domestic violence, or domestic abuse. “ Long and short the property owner will be paying for damage to the unit.
- Ability to terminate the lease with no penalty: Allows a tenant to terminate the lease regardless of the time remaining on the lease with maximum penalty 30 days of rent
- 5k liability to property owners: If a landlord doesn’t comply with the new law to the T they are subject to a minimum of 5k to the tenant along with attorney fees
- Required payment plans: if the tenant doesn’t pay, the property owner must accept a payment plan for past due amounts
- Requires Personal Service: You must attempt to serve the tenant 3 separate times with personal service and then you can post and send by certified mail. This adds expense to property owners along with time.
- No debt collection: Even if the tenant doesn’t pay, you can’t collect deficiencies
Fundamental flaw in the victim law:
On the surface who wouldn’t support a bill that would help victims of sexual assault, but should property owners now be on the hook for societal issues? Furthermore the ability to abuse this law is huge as it is no longer required to have a police report or other third party verification.
Here is an example: Assume a tenant has her boyfriend/girlfriend over. They are both drinking, things get heated and the tenant throws a chair out the window causing thousands in damage. The tenant doesn’t pay rent this month and states they were the victim of assault. Now the property owner has to offer a payment plan for rent, personally serve notice, and also pay to fix the window that was damaged. The property owner can’t collect for the damage to the unit and is liable for a min of 5k if they don’t eat the cost of the window and damages and follow the other rules above.
As you can probably guess landlords are going to have substantial liability and costs as the burden of proof is now so low. The law should state that at a minimum a police report is required.
Elimination of affordable housing in Colorado
As the laws regarding habitability, collections, housing protections for victims of assault continue adding up, there is no way to offer affordable housing in the state of Colorado. The liability and costs far outweigh any possible profit. This will in turn exacerbate the homeless populations in cities throughout Colorado.
Fundamental flaw in Colorado’s housing policies
Colorado is making a huge mistake by continuing to push larger societal issues onto private property owners and the consequence will be huge for the entire state. We can look at the homelessness issue in Denver, private property owners are now hugely impacted by homeless encampments that are causing tenants to leave, property destruction, etc… The new victim law continues this trend with property owners responsible for damage, prohibitions on collecting past due amounts, and increased liability.
It is important to note that none of the items like homelessness or abuse were caused by property owners and yet property owners are forced to face huge financial consequences. We already know how this is going to end up as there is a flight from places like Denver and affordable housing is no longer constructed and/or available due to huge liability for property owners and unknown expenses. We have seen this play out throughout California in every major city that has passed similar laws as property owners cannot absorb all the costs of the societal woes.
There is an easy way to solve all these laws impacting property owners. There should be a ballot initiative that any law that is passed must compensate property owners for the societal expenses they are asked to bear. For example, if there is a homeless encampment then the property owner can deduct from their property taxes the cost to clean up the encampment along with the costs of increased security. For the new victim law, property owners would be able to also deduct from their property taxes the costs to repair damaged units that are no longer able to be collected from the tenants.
The proposal above has already been done in Arizona, if Colorado wants to continue to attract businesses and property owners there must be a balance so that every societal issue is not passed on to property owners. Colorado must replicate Arizona to stop the bleeding of property owners
Unfortunately at the pace Colorado is going look for the exodus of companies from Denver to continue/accelerate, property values to fall, and affordable housing to be basically eliminated due to these laws.
Additional Reading/Resources:
https://www.fairviewlending.com/property-tax-measure-to-make-cities-pay-for-homeless-impacts/
Housing Protections for Victim-Survivors | Colorado General Assembly
