Navigating the balance between a landlord's right to inspect and manage their property and a tenant's right to privacy and quiet enjoyment is a delicate task that demands mutual respect and understanding.
On one hand, landlords have a legitimate interest in maintaining their investment, ensuring that the property is in good condition, and verifying that tenants follow the lease terms. This often calls for periodic inspections, repairs, and maintenance visits.
On the other hand, it is a tenants’ right to "quiet enjoyment" of their rented space, which includes a reasonable expectation of privacy. State laws, local laws. and lease agreements often balance these competing interests by establishing guidelines such as requiring "reasonable notice" before entry and limiting the reasons a landlord can enter a rented space.
In the lease agreement, the importance of clarifying expectations around the routine inspection or walk-through on a rental property cannot be overstated. This is a foundation for a transparent, respectful, and lawful relationship between the landlord or property manager and the tenant. Without clear terms, misunderstandings and conflicts can easily arise, leading to strained relationships or even legal disputes.
For landlords and property managers, outlining the specific reasons for a landlord inspection—whether for repairs, maintenance, safety checks, or routine inspections—establishes a guideline to operate within the bounds of the law and the rental agreement. It sets the tenant's expectations right from the start, allowing them to understand their obligations and rights better.
Knowing these terms beforehand gives prospective tenants a clear picture of what to expect and how to prepare. It equips them with the knowledge to protect their own rights, especially their right to privacy and quiet enjoyment of the property. If a tenant knows, for example, that a landlord will conduct quarterly routine inspections, it won't come as a surprise and they can prepare accordingly.
Therefore, both parties must get these terms in writing before signing any lease agreement. Verbal agreements or assumptions are not sufficient and can lead to ambiguity. A written agreement is a formal record that can be referred to in case of any disagreement or dispute, providing security and clarity for both parties.
In summary, clearly outlining the lease agreement's terms regarding inspections and walk-throughs is not just a good practice—it's a necessary step for safeguarding the interests, rights, and responsibilities of both the landlord and the tenant.
Emily had recently moved into a new apartment managed by Mark. Enthusiastic about the new chapter in her life, she skimmed through the lease agreement and hastily signed it without reading it thoroughly. Mark sent her written notice a month later that he would perform a routine property inspection in 48 hours, as stated in the lease agreement.
On the inspection day, Emily's room was messy, with clothes strewn about and personal items cluttering her desk. Feeling uncomfortable with the idea of Mark seeing her space in disarray, she closed her bedroom door when he arrived. As Mark proceeded with the inspection, he noticed that Emily's door was closed and asked if he could inspect the room. Emily, feeling uneasy, politely refused as she felt this was an invasion of privacy.
Mark's suspicions were aroused. To him, a closed door often signified that a tenant might be hiding something that violated the lease terms. Per the lease agreement, Mark gave Emily 24 hours advance notice that he would return to inspect her bedroom.
Distressed, Emily reached out to her friend Sarah, who happened to be an attorney, and asked, "Can a landlord look in my bedroom?"
Sarah first admonished Emily for not reading her written lease agreement carefully but then delved into her rights as a tenant. She explained that landlords or property managers generally have the right to inspect any part of the rental unit for specific reasons like repairs, maintenance, or routine inspections, as long as they provide proper notice and the inspections are performed at reasonable times. She told Emily that the lease agreement Emily signed stipulated that any part of the apartment could be inspected with 24 hours' notice, which Mark had abided by.
Sarah suggested that Emily clean her room and allow the inspection to proceed, as Mark had a valid reason and followed the lease agreement's protocols. She reminded Emily that not complying with the lease agreement might jeopardize her security deposit or, worse, put her in legal hot water.
Sarah then went on to discuss what could happen if Emily did not comply with the landlord's right to inspect. "Let's say you continue to refuse Mark's entry into your bedroom for the inspection," Sarah began. "In that scenario, you're not just jeopardizing your relationship with Mark; you could also be violating the terms of your lease. Depending on state laws and what's outlined in your written lease, refusing a lawful landlord entry for an inspection could result in eviction notices being issued against you."
Sarah continued, "If the situation escalates and you still don't comply, Mark could potentially secure a court order, granting him the legal right to enter your apartment and carry out the inspection, despite your objections. If a court has to intervene, not only would this strain your landlord-tenant relationship, but you could also incur additional legal costs. More importantly, this entire fiasco could end up on your rental history, making it harder for you to rent in the future."
Emily's eyes widened. She hadn't realized the serious legal implications of not allowing a simple property inspection.
"In extreme cases, continual non-compliance with inspection clauses could provide grounds for eviction," Sarah added, "and trust me, going through an eviction process is something you want to avoid at all costs. It's not just a legal nightmare; it's emotionally and financially draining."
Sarah concluded, "Remember, the lease is a two-way street. Mark has responsibilities, but so do you. Your legal rights as a tenant also come with legal obligations. Ensuring a smooth inspection process by following the guidelines in your lease is an obligation that shouldn't be taken lightly."
After their discussion, Emily fully understood the weight of her responsibilities under her lease agreement. She felt grateful for the free legal advice and made a mental note to be more vigilant in the future. As for Mark, he appreciated Emily's newfound respect for the lease terms, bolstering his confidence in her as a responsible tenant.
With Sarah's advice, Emily tidied her room and prepared for Mark's inspection the next day. Upon seeing that everything was in order, Mark felt satisfied that no lease violations were occurring in the bedroom. From that day on, Emily familiarized herself with all the terms of her lease agreements. Mark continued to conduct his property management responsibilities in compliance with the law.
This experience taught Emily the importance of fully understanding her lease agreement. At the same time, Mark was reminded that clear communication and adherence to legal procedures are key to maintaining a positive landlord-tenant relationship.
The importance of having specific reasons for a rental inspection, along with giving tenants as much notice as possible, is key to a smooth landlord-tenant relationship. For instance, consider Mark from our earlier story. He did everything by the book—sent out a 48-hour notice, and clearly stated the inspection was routine. This clarity removes any guesswork for the tenant and keeps the relationship on solid footing.
Conversely, conducting inspections without adequate notice or a specific reason can be a recipe for trouble. Most places have laws requiring landlords to provide a "reasonable notice"—often 24 to 48 hours—before entering a tenant's space. Failing to do so could lead to legal action. So, being transparent and following the rules is not only good manners. It's smart business and legally prudent.
In summary, establishing clear guidelines for property inspections and giving proper notice are indispensable elements for fostering a harmonious and lawful landlord-tenant relationship. Specificity in the reasons for inspections and adherence to notification rules, as exemplified by property manager Mark, can mitigate misunderstandings and protect both parties legally. Conversely, arbitrary or surprise inspections can erode trust and may lead to legal consequences.
Given the complexities and legal nuances involved in leasing homes, both landlords and tenants should enlist the expertise of professional property managers and real estate attorneys. These professionals can ensure that all actions are compliant with the law, and that lease agreements are comprehensive and fair, and that both parties' interests are adequately protected. In the long run, professional guidance can save time and potential legal hassles, making the leasing experience more straightforward and secure for everyone involved.
Renters insurance is a type of policy that is designed to cover the tenants and their personal belongings in a rented residence. While landlords have their own homeowners insurance policies that cover their structures and financial interests, these policies don’t generally extend coverage to their tenant's personal property.
This means that if a tenant’s property is damaged or stolen, a landlord's insurance is not likely to cover the cost of replacing those items.
Most renters don’t think about protecting their belongings, much less their potential liabilities as a tenant. In many cases, tenants will look to their landlord for compensation for damaged, destroyed, or stolen items.
If the landlord is responsible for losses due to negligence, the tenant may have a case but this is the exception, not the rule. In most cases, the responsibility for their belongings, and liability claims falls to the tenant.
This is why many landlords require tenants to have renters insurance sometimes referred to as apartment insurance, or tenants insurance before occupying a property. They do this to avoid disagreements that may arise as a result of theft, injury, or damage.
A renter's policy should contain liability insurance which helps protect the landlord in case the renters or guests get injured on the property.
Renters insurance works just like most insurance policies. The policy holder chooses the level of personal property coverage, and how much liability coverage they require, these levels will determine how much renters insurance will cost.
In the event the policy holder suffers a loss from a covered event to the tenant or their belongings, such as fire, theft, or other types of damage, the tenant simply files a claim with the insurance company.
The insurance provider will then pay the amount that’s equivalent to what’s covered by the policy after paying any deductible. A replacement cost coverage policy is a good idea as well, this means you won't have a deductible, and you will be paid the current value of your losses.
Apart from covering your property, renters insurance covers other types of disasters.
For example, let’s say someone falls on your stairs and sues you for the medical bills, renters insurance can cover it. If you have to move out of your house after a fire tragedy, most policies will take care of the cost of living in a hotel room as well.
However, it’s important to go through your renter's policy and coverage and identify its strengths and weaknesses. The elements covered by policies differ, and may be less detailed if you choose a lower premium.
Renters insurance primarily covers tenant's belongings in the event of damage or destruction. But keep in mind that the policy doesn’t cover for every type of damage or accident. Renters insurance typically deals with four types of covered losses. These are;
These are the basic types of coverage that renters insurance provides to tenants. Some Renters insurance policies may even cover your belongings when you’re traveling, this may require additional coverage which is a good idea.
As much as this insurance policy protects you against unexpected events, it’s still important to realize the type of scenarios that are not covered by this type of insurance.
Renters insurance coverage won’t protect you from everything. Most service providers are consistent about the types of claims they don’t cover. Damages caused by natural calamities are not generally covered. Here are some things that aren’t covered
Liability from pets is a major issue for many landlords. The good news for renters is that renter’s insurance usually covers liability from dog bites, and associated legal expenses. There are liability limits, generally, these fall into the $100,000 to $300,000 range so if the claim exceeds these limits, the dog owner is responsible for the difference.
Fortunately, a typical renters insurance policy isn’t that expensive, these policies can cost you as little as $10 to $20 a month and about $200 to $250 per year. This is a fraction of the replacement cost for the average renter's belongings. It just makes sense to obtain this type of insurance even if it's not required.
The price of your policy is determined by the type of policy, and how much coverage you need. Individuals who own expensive and sophisticated gadgets or an art collection will pay more than those who’ve simple and less expensive items.
It’s all up to you to decide whether you need renters insurance or not. If you’re finding it hard to make this decision, start by evaluating your personal finances and your possessions. If you live in a small studio apartment with simple furnishings, and you’re sure that you can replace them from your pocket without any struggles, you may not want renters insurance.
On the flip side, if you own more household items that you can’t afford to replace at once, a renters policy will benefit you.
Start by doing a home inventory and make a list of the items in your home and how much they will cost to replace.
Don’t forget to include the smaller items, i.e., dishes, books, musical instruments, fine jewelry, clothes, even pots, and pans. Now, sum up the total and if the total amount exceeds the amount you can afford to replace your inventory, you should consider getting a quote for a renters insurance policy.
Obtaining a renters insurance policy is very easy; in fact, you’ll wonder why you haven’t already done it. After you’ve taken stock of all your belongings, find out what’s covered by your landlord’s insurance and note down everything that isn’t covered.
You can then start researching different insurance companies online and make comparisons before choosing. Most insurance companies offer free quotes online, over the phone, or even in person. You can contact an insurance agent and they’ll take you through how much coverage you need for your situation.
Once you’ve decided that you need renters insurance, there are several things to consider before purchasing this type of insurance policy. They include:
Even if you feel that your personal property isn’t worth an insurance policy, simply having liability protection is worth the cost.
Most importantly, ensure that you’re not paying for the coverage you don’t need. See what’s covered by your landlord’s insurance policy and make a comparison with what you need before proceeding to purchase a renters insurance policy.
If you need more information about renters insurance, you can contact renters insurance experts to get estimates or contact us and we can point you in the right direction.
For many tenants, property condition is a deciding factor when choosing a rental unit. If you’ve been renting for a while, you’re probably already in the habit of documenting any damages from a former tenant prior to move-in. But how often do you think about the carpet condition in your rented home or apartment? Probably not often (until it starts to look visibly dirty or worn) and you probably don't know anything about the Landlord Carpet Replacement Law.
Without proper cleaning and maintenance carpet can become both a health risk and safety issue even before it begins to look dingy. Dirty carpets can hold four times their weight in dirt and debris, which settles into the fibers and cannot be removed by dry vacuuming alone. Food, hair, skin cells, pet urine, as well as debris, dragged in by pets or shoes can build up in the carpet, making it a perfect breeding ground for mold and dangerous bacteria.
Even if you are scrupulously clean the entire carpet, you will still have some level of build-up in your carpet. There’s also no guarantee that a property’s previous tenants shared your standards of cleanliness. Knowing your rights as a tenant and asking your prospective landlord or property manager a few questions about the potential replacement of carpet before signing a lease agreement, could spare you a few headaches down the line.
Colorado has passed a number of landlord-tenant laws governing both the tenant and landlord’s responsibility, which includes laws about property condition. The Colorado Warranty of Habitability, for example, was designed to protect tenants from unscrupulous landlords and requires rentals to be adequately waterproofed, have working heat, plumbing, and electricity, as well as proper sanitation. Under this warranty, it is the responsibility of the landlord to keep the property habitable.
Beyond the general requirement of habitability, which would ostensibly include properly maintained flooring, there are no state or local laws regulating carpet replacement or maintenance. As a result, landlords or the property owner are only legally required to replace the carpeting in rental properties if it makes the house unlivable, such as in cases of mold or pests.
Under these laws, how frequently carpets should be replaced is left to the landlord’s discretion. When touring a rental, you may want to ask about the age of the carpet and when the landlord intends to install new carpets. With normal wear and tear, the life expectancy of a carpet is approximately 15 to 20 years, but the Department of Housing and Urban Development recommends replacing rental property carpet every 5 to 7 years which is the end of the carpet’s useful life.
So what should you do if you’re touring a house or apartment with dingy carpets that have never been replaced? As a potential tenant, you have a few options—
As a tenant, you may also bear some responsibility for the cost of the replacement of damaged carpets, which is why it’s important to document any potential issues before move-in. You do not want to be charged for damages that you did not cause via normal use and disputes over security deposits are common but avoidable. The deposit that you pay at the beginning of your lease will be used to do any repair work for unusual damage, when you move out, which could include cleaning costs, any necessary repairs, or replacing carpets.
If the landlord decides to withhold part of the tenant’s security deposit, he or she must provide a written report explaining the deductions. Deposits can only be used to cover damages, not normal wear and tear. When it comes to carpet, reasonable wear includes issues such as matting, dirt, or ordinary wear in heavily trafficked areas and impressions from any furniture. Cigarette burns, stains, or tears in the carpet would be considered damages, and your deposit could be used to pay for cleaning or the cost of repair or replacement to the affected areas. Normal wear and tear would be a landlord charge.
In most courts, the replacement cost of the carpet would be prorated over the course of five years, since that is considered the useful life of carpeting in a rental home.
In other words, if the carpet is already 3 years old when you moved into the house, you could not be charged the full cost for replacing a damaged carpet, since it was already halfway through its expected lifespan. If you were to be charged, for a complete replacement, you should seek legal advice before agreeing to any charges.
The method of carpet installation can also affect how the carpet depreciates. Since tacked-down carpet is easily removed, it is not considered “attached” to the property and would depreciate over the span of 5 years. Glued-down carpet is considered more permanent and would depreciate over 27.5 years like most other types of flooring.
Conclusion
Though you may not think of carpet condition as a deal-breaker in a rental property, take a moment to consider the extent of damage or wear before committing to any lease.
Considering the amount of bacteria and dirt that can live in a carpet, negligence in cleaning and replacing the carpet could put you and your family at risk.
Asking for the carpet cleaning and replacement schedule during a tour is a great place to start and could help you and your landlord come to a better understanding of each other’s priorities and expectations.
Updated June 15, 2021
Colorado Springs Airbnb laws changed significantly at the end of 2019. If you are a real estate investor or property owner looking to get into the Short-Term Rental (STR) market, that may be more difficult than you think, at least in the city of Colorado Springs.
The Colorado Springs City Council has implemented some new Colorado Springs Airbnb Laws that make investing in Short Term Rentals more challenging. We are going to take a look at why those rules were implemented, what the rules are, and how to move forward as a real estate investor.
The phrase short-term rental has traditionally meant a rental property that is leased for less than one year. This type of rental was generally used by people who were waiting for a home to be built or were new to an area. Short Term Rentals were usually difficult to find and didn’t create much controversy.
This all changed with the introduction of online platforms like Airbnb and VRBO.
Both of these services allow homeowners to lease their own place directly to guests for short periods of time, much like a hotel would. These transactions are now referred to as Short Term Rentals or STR’s
These new types of short-term rental properties are actually for very short periods of time. Short Term now means by definition less than 30 days but in practice, the lease periods are more commonly 3 to 5 days.
Investors soon figured out that they could purchase properties in popular neighborhoods, and turn them into short-term rental units. These were good investments because the rental rates were significantly higher than a traditional long-term lease.
In addition to receiving much higher returns, the tenants were less demanding in terms of things like repair requests and service issues. Yes, there were issues with preparing the units to be turned over quickly for new tenants but there were cleaning fees charged to help with that.
Many investors turned their entire rental portfolios into short-term rental operations. Investor owners of short-term rentals were getting along nicely until neighboring homeowners got tired of living near STRs.
Complaints and controversy are what motivated the Colorado Springs City Council to institute new regulations regarding short-term rentals in 2019. While short-term rental owners are attracted to these types of investment because they yield high returns, Neighbors on the other hand detest them because of the increase in traffic, noise, and people coming and going.
There were frequent complaints about loud parties, empty beer bottles, and the constant smell of marijuana.
The effects the short-term rental industry has had on local housing supplies and pricing is another complaint about STR’s. The problem is that they take away housing for local residents, reducing potential inventory and driving up both rents and prices. In many popular STR destinations, we hear about problems with affordable housing. This is another issue that makes restricting STR’s popular with many.
These complaints and objections about STR’s from neighboring permanent residents eventually led city officials to implement new STR regulations. In a recent move, the Colorado Springs City Council approved new short-term rental regulations on 25th November 2019.
Other cities that have passed similar Airbnb rules are Destin Florida and Wellington Florida.
The Colorado Springs City council members voted 5-4 to approve the new provisions for short-term rentals which are more stringent than existing provisions. These new provisions were recommended by the City Planning Commission.
The goal was to regulate properties rented out by online platforms such as VRBO and Airbnb. The City Council decided that these provisions were needed to establish a standard for all the short-term rentals within Colorado Springs.
The primary focus of this new ordinance seems to have been non-owner-occupied short-term rentals. While the ordinance doesn’t do away with non-owner-occupied short-term rentals, it does make it more difficult to find and license them.
There are certain zoning designations that will allow for non-owner-occupied short-term rentals in the City of Colorado Springs. Those zoning codes are R-2, R-4, R-5, SU, non-single family PUDs, OR, OC, PBC, C-5, C-6, and M-1. The property must have one of these zoning designations, and cannot be within 500’ straight line distance of another STR.
These zoning codes can be found on the Colorado Springs Springsview website. This tool allows you to search for properties and then dig into some real detail about that particular property. Once you locate the parcel you're interested in you simply click on the identify button at the top of the tool to find out about the zoning, building licenses, and more.
In a major part of the non-owner occupancy clause, the City Planning Commission also specified that there must be at least a five hundred (500) foot of operation buffer between any two new newly licenseted short-term rentals.
They have also clarified that this distance of five hundred feet will be calculated on the basis of a straight-line distance between two new short-term rentals and any intervening structures will not be regarded. So, a new short-term rental property must be situated at a distance of about five hundred feet in any direction in a straight line from another short-term rental property.
If you are considering purchasing a property to use as an STR, the best way to find out if there are any existing STRs within 500’ is to e-mail shorttermrentals@coloradosprings.gov . They will usually get back to you in 24 to 48 hours. The short-term rental search function on the Springsview page has been disabled due to security and privacy concerns.
The next provision that was introduced limited the overnight occupancy. Pursuant to Section 7.5.1706(H), “maximum overnight occupancy of a short-term rental unit shall be limited to two (2) occupants per bedroom, plus an additional two (2) occupants per dwelling unit. The maximum occupancy per dwelling unit shall be fifteen (15) occupants.”
Short-Term Rental operators will be required to obtain a valid permit to operate. The operator must display their approved permit and Good Neighbor Guidelines (with the permit number, valid through date, and local emergency contact) in a prominent location within your short-term rental unit.
The permit is valid for one (1) year from the date the permit was issued by the Planning & Community Development Department. After the expiration, the permit becomes invalid and the operator can renew the permit for an additional period of one year.
The Ordinance also clearly states that the permit is issued to the owner, not the property. This means that the permit is issued to the operator or the specific owner in order to operate or use the short-term rental unit.
Once the property transfers from one owner to another, the permit becomes invalid. The new owner will have to reapply for a new permit.
For example. "Mr. X" the operator of a short-term rental unit received a permit on January 1st of 2020. This permit is valid for one year from the date of issuance or December 31st. of 2020.
If "Mr. X" sells the short-term rental unit to "Mrs. Y" on, November 1st. of 2020, "Mrs. Y" will need to apply for a new permit if she intends to continue operating the property as a short-term rental.
In the case of non-owner occupied STR’s, existing owners (Pre-November 2019) are grandfathered in and therefore eligible for a Permit. Although these non-occupant owners are grandfathered in, they still need a permit to operate and if they sell or transfer the property, the new owner is not eligible unless they live in the property for more than one hundred and eighty-five (185) days.
In these new provisions, the Council has provided a definition of owner-occupied short-term rentals to clarify whether a person falls under this category or not.
The council defines owner-occupied short-term rentals as an owner who has been inhabiting a property for a continuous period of one hundred and eighty-five (185) consecutive days in a particular year. This makes it difficult to be a compliant, non-owner-occupied STR owner, at least in the City of Colorado Springs.
Owner-occupied STRs are allowed in any lawful dwelling unit as long as the property is within any of the following residential zoning types: A, R, R-1 9000, R-1 6000, R-2, R-4, R-5, SU, PUD, OR, OC, PBC, C-5, C-6 and M-1.
The Colorado Springs Springsview website can help you determine if your property is located in the appropriate zoning code.
A short-term rental license is now required to operate any short-term rental unit in the City of Colorado Springs. The operator must display their approved license and Good Neighbor Guidelines (with the license number, valid through date, and local emergency contact) in a prominent location within your short-term rental unit.
Licenses cost $119 per year and are valid for one (1) year from the date the license was issued by the Planning & Community Development Department. After the expiration, the license becomes invalid and the operator can renew the license for an additional period of one year.
It’s important to note that as an STR owner/operator, you will also be responsible for sales tax. Application for a short-term rental license can be made at the City of Colorado Springs Planning and Development website.
The Ordinance also clearly states that the license is issued to the owner, not the property. This means that the license is issued to the operator or the specific owner in order to operate or use the short-term rental unit.
Once the property transfers from one owner to another, the license becomes invalid. The new owner will have to reapply for a new license.
For example. "Mr. X" the operator of a short-term rental unit received a license on January 1st of 2020. This license is valid for one year from the date of issuance or December 31st. of 2020.
If "Mr. X" sells the short-term rental unit to "Mrs. Y" on, November 1st. of 2020, "Mrs. Y" will need to apply for a new license if she intends to continue operating the property as a short-term rental.
In the case of non-owner occupied STR’s, existing owners (Pre-November 2019) are grandfathered in and therefore eligible for a license. Although these non-occupant owners are grandfathered in, they still need a license to operate and if they sell or transfer the property, the new owner is not eligible unless they live in the property for more than one hundred and eighty-five (185) days.
There are still opportunities for investors to be a successful Airbnb landlord in other cities and towns within the Pikes Peak region. The key is to find areas that are desirable to visitors.
Probably the best opportunity for non-owner-occupied short-term rentals. Manitou Springs is a small tourist-friendly town located just west of Colorado Springs. The city of Manitou Springs adopted regulations for the very first time in 2016. The Planning Department recommended changes to those rules in 2018 and at this point in time has yet to implement those changes.
As of now, the regulation states that the permission of the Manitou Springs City's Planning Commission is required for the rental of the dwelling unit which is given on rent for the sole purpose of lodging for at least one day and for a maximum period of twenty-nine days. The planning commission of the city provides the occupier with a minor conditional use permit.
Monument, Colorado is a small town located just north of Colorado Springs. While Monument doesn’t possess the same tourist appeal as Manitou Springs, there are limited possibilities to find tenants for a short-term rental in Monument.
Monument is close to the United States Air Force Academy and both Cadets and Parents look for short-term rentals. Monument is also home to some great outdoor activities like hiking and mountain biking. An STR investment in Monument would certainly be more difficult to keep occupied but it’s not out of the question.
In the town of Monument, there are no regulations around short-term rentals.
Palmer Lake is located just west of Monument, Colorado and falls into the same category as Monument when it comes to STRs. There is limited availability but also not a strong demand either.
The City of Fountain, Colorado is located just south of Colorado Springs. The City Fountain is home to the Fort Carson Army Base. This creates the potential for short-term rental guests from friends and family visiting service members. Additionally, Fountain is close to both Schriever Air Force Base and Peterson Base. Both of these air stations provide potential guests as well.
Fountain is currently looking to adopt the zoning rules for both tiny homes and short term rental units which are advertised by online platforms like Airbnb and also for other houses that are rented for a continuous period of thirty days at any particular given time. However, regulations or official notification from Fountain have yet to be announced.
Woodland Park is a small eclectic mountain town located west of Colorado Springs in adjoining Teller County. While not as popular as Manitou Springs, this city does have a strong draw for tourists. The upside to Woodland Park for inventors is that there is generally more available inventory here than in Manitou Springs.
Woodland Park has yet to institute rules around short-term rentals.
Another niche might be to look into short term rentals that require a stay of 30 days or more. Leases of more than 30 days do not require a permit.
These have traditionally been called corporate rentals and were intended for corporate employees traveling for work for extended periods of time. They afforded these road warriors the amenities of home in a setting that was more comfortable than a hotel.
Much of the corporate rental market jumped into the Airbnb model of leasing simply because it was so profitable. This has left a vacuum in inventory for those people looking at short term rentals for more than 30 days but less than a year. This is people that are building houses, new to the area or corporate travelers.
While the rates for a corporate rental are less lucrative than those for the Airbnb type rentals, they are still more attractive than what you would see on a traditional long-term lease.
Recently it was brought to the attention of the Colorado Springs City Council that there is a loophole that allows for limited liability companies to hold short-term rental permits forever. Even though the number of LLC companies that hold permit for short term rentals is relatively small, the issue created some discussion. The commission ruled against a permit holder who wanted to keep his permit after transferring ownership of the rental house to a limited liability company for liability and estate planning reasons. The intent of the city code was for short-term rental permits to expire when homes are sold. Neighborhood advocates are encouraging the Colorado Springs City Council to close this potential loophole to maintain the intent of the city code.
At this point, the Colorado Springs City Council has committed to revisiting the rules around short term rentals within the city limits again at some point in the future. Until then we have to live with the current regulations.
If you aren't an existing pre-November 2019 non-occupant owner of a short-term rental in Colorado Springs the good news is you've been grandfathered in and as long as you acquire a permit can continue to do business until you sell the property.
If you are a homeowner leasing out an accessory dwelling unit or small apartment within your home. You're OK as long as you have a permit and follow the rules regarding number occupants allowed.
Finally, if you are a non-owner occupied investor looking to get into the short term rental market in the Pikes Peak Region, your best bet is going to be to lookout in one of the surrounding areas that don't yet have restrictions in place. Airbnb and VRBO properties do well in areas that are a popular destination for visitors and tourists.
Until something changes, this is the current status of the Short-Term Rental market in Colorado Springs. If you have any additional questions on short-term rentals or real estate investing in general, please feel free to contact us.
If you’ve been renting or looking to rent for a while, you’ve probably come across the “3x rent rule.” The 3x rule is a common way landlords and property managers vet potential tenants. It states that a tenant’s adjusted
gross income, or take-home pay, should be 3x the proposed rent on a property.
Adjusted gross income is your total monthly income minus any deductions, like taxes, alimony, interest from student loans, contributions to an IRA or 401k, or a car payment.
If we look at a property with a monthly rent of $2,000, for example, the 3x rent rule states that a tenant must have a gross monthly income of $6,000 or $72,000 annual salary to qualify for that rental. The income itself can come from wages, dividends, capital gains, or retirement accounts.
The rule generally applies to household income, so a couple’s combined annual gross income must be 3x the monthly rent amount. But in many roommate situations, the landlord will require each roommate to meet the 3x rule separately to ensure that they still have a viable tenant if someone decides to move out.
While this can be a headache for prospective tenants, especially in areas where rental rates outpace average income, the 3x rule protects landlords from missed payments and helps prevent evictions.
The 3x rule originated in the Housing Act of 1937, which was part of FDR’s New Deal. The Housing Act offered housing assistance to low and moderate-income families.
The Act was originally proposed in 1934, but wasn’t passed until FDR’s second term. In his second inaugural address, President Roosevelt promised to make adequate housing a priority and signed the act into law in September of 1937.
Section 8 of the Housing Act offers federally-subsidized rent assistance to families in the private market. Section 8 requires families to pay 30% of their adjusted income toward rent. The program then covers the gap between 30% of their income and the actual rent cost.
This eventually became the standard rent-to-income ratio for the housing market.
Section 8 explains where the 3x rule came from, but why do we still use it? What if an individual can afford to spend 40% of their income on housing? Shouldn’t they be able to qualify for a more expensive rental?
Though it can have drawbacks, the 3x rule is an important part of the prequalification process. It is not one-size-fits-all, but if your income is 3x larger than the rent, you are less likely to miss a rent payment or regularly struggle to afford rent.
Evictions are horrible for everyone involved. Tenants are thrown into temporary turmoil at best, and homelessness at worst. The property owner loses money from missed rent and spends time, energy, and resources pursuing an eviction and back rent.
Pre-qualifying tenants can help minimize the likelihood of an eviction, protecting the tenant and landlord from pain and heartache. The 3x rule benefits both parties by ensuring the tenant doesn’t get locked into a lease agreement that they can’t afford, and that the landlord receives their payments on time.
Ideally, landlords and property managers will use the 3x rule as one part of the prequalification process, but also run a credit check, talk to references and previous landlords, and verify employment.
Meeting the income requirement is only one piece of the puzzle.
Gathering proof of income can be a lot of work for an independent landlord. Tracking down income verification documents, bank statements, and making phone calls eats up a lot of time, but again, the goal is to
prevent evictions. Finding the right tenant upfront will save you time and money down the road.
We have compiled a list of items to check with different types of tenants—employed, self-employed, and retired—to simplify the verification process for you.
Verifying income for employed applicants is the simplest, but you can also find excellent self-employed and retired tenants. Just be prepared to do a bit more legwork
For employed applicants, ask for pay stubs from the past 3 months. This will give you an accurate picture of their current earnings and cover a long enough period to reveal any fluctuation in income.
W2s show total income from the previous year. W2s can indicate how financially stable an applicant is and if their earnings are consistent. If the applicant has changed jobs, however, this may not be particularly useful.
Lastly, a simple phone call to the applicant’s employer will offer insight into their employment status and character. Consider asking what the applicant is like as an employee. Do they show up on time, work hard, and get along with their coworkers?
Self-employed ApplicantsThis group of applicants includes freelancers, gig workers, and entrepreneurs. We value and admire our freelancers and small business owners, until they want to buy or rent a home.
We often perceive small businesses as more susceptible to market changes—they may not have the financial stability to weather dips in the economy. This perception can make it difficult for self-employed individuals to get approved for a rental or home loan. But it doesn’t have to!
Plenty of industries that provide consistent and stable work to freelancers and gig workers. Just because a business is small, doesn’t necessarily mean it’s vulnerable. Even large companies can go through periods of financial struggle and layoffs.
If you are willing to do a bit of initial research, you may find yourself with an amazing, reliable self-employed tenant.
Bank statements from the applicant’s business account will give you the most comprehensive information about their earnings. Look for consistent deposits, and make sure that expenditures don’t exceed their deposits—this could indicate a lack of profit.
Talk to the applicant. Ask them how long they have been in business and what services they offer. You can also ask about industry stability, or research the industry yourself once you have a bit more information.
Research the business. Are they registered with the state government? Do they have a business license (if one is required)? Colorado Springs, for example, only requires licenses for specific industries, like food and liquor. Also, see if they have a professional website.
Checking the applicant’s credit report will reveal any red flags, such as a history of late payments, or any bankruptcies or foreclosures. You’ll also want to pay attention to balances on loans and credit cards.
Previous landlords are a great resource for any potential tenant, not just self-employed ones, since they can answer questions about payment history. Most importantly, ask if they would rent to the tenant again!
Unemployed or Retired Applicants
It can be difficult for retirees and the unemployed to qualify for rentals, since the same pre-qualification standards are used for all applicants. They may not have a consistent income, or may not have the necessary verification documents. Here are a few examples of documents to ask for in this situation.
Social Security statements are a great place to start, as Social Security provides a steady source of income for retirees that can be easily verified.
Ask for annuity statements. Many retirees rely on annuities to replace their paychecks, and this income can also be used during the verification process.
IRA, 401k, or pension distribution statements can also help verify income.
Bank statements will reveal any consistent deposits that are not listed on the previous types of statements. They may have another way to supplement their income that does not fall into any of the previous categories.
If you have an unemployed applicant, ask them to provide unemployment statements. These statements act as proof of income from the government.
We mentioned at the beginning of the article that the 3x rent rule can make finding a place difficult. In many markets, wages do not keep pace with housing costs. Unfortunately, our own lovely Colorado falls into this category.
In 2019, the Denver Business Journal published an article, saying that the average wage earner in Denver cannot afford to buy a median-priced home. For workers making $65,000-$75,000 a year, over 40% of their income would go toward their mortgage.
Home and rental prices are continuing to climb, leaving prospective tenants without many options. Some will seek out roommates, hoping to pool their incomes to meet the 3x rule. This doesn’t always work. Many landlords and good property managers will expect each tenant to meet the rule separately.
This is an understandable precaution since roommates can move out without notice, but where does that leave you? If you are hoping to rent with roommates, a private landlord may be more flexible with income requirements than a property manager or institutional one.
You can also work to strengthen your rental application in other ways to compensate for your financial situation. Having a good credit score is especially important in these situations since it demonstrates that you pay your bills on time and take your financial commitments seriously. Adding a cosigner or making a larger security deposit can convince a landlord that you are less of a financial risk.
Some rentals don’t require an income check. If you know you can afford a house or apartment, but don’t meet the 3x rule, this may be an ideal situation for you. Just be careful not to overextend yourself financially.
Rely on word of mouth to locate a private landlord that will consider your application. Think about the Kevin Bacon effect. If every actor can be linked to Kevin Bacon in 3 steps or less, someone in your network can put you in touch with a suitable landlord or point you toward an apartment in your price range.
Find a roommate already in a lease, which will eliminate the need for you to pre-qualify. Make sure that you have a written rental agreement with your roommate, laying out terms and financial responsibilities.
Also, if you can’t afford rent in your home city, Section 8 was made for you! In general, your household income cannot exceed 50% of the median income in your area to be eligible. You can check out our blog post, “What is Section 8?” for more information.
The 3x rule is a good general rule of thumb for landlords to protect themselves from missed rent and the messy process of evicting a tenant, but it is not a perfect solution. A tenant may miss payments for reasons other than an inadequate income, or a tenant that wouldn’t normally qualify, may be perfect for your situation.
If you are a private landlord, think about rental costs in your area vs average wages. If it is not a favorable ratio, consider how you might compromise with potential tenants without putting yourself at risk. Maybe you’re okay with roommates pooling their incomes, or would accept someone with a lower income level if they paid a higher deposit?
If you are a prospective tenant with a lower income, focus on strengthening other key parts of your application, such as your credit score. You can also brainstorm people who might be willing to cosign for you, such as a trusted family member.
And, of course, ask around! There are private landlords that are willing to work with a good tenant, even if they don’t meet the 3x rule.
There are a lot of misconceptions and misunderstandings about the Colorado Eviction Process. Because the process is very specific, failure to understand the appropriate steps can add significant time to the eviction.
The pandemic of 2020 and subsequent eviction moratorium has also made the colorado eviction process even more confusing.
If you are involved in residential leasing as a Property Manager, Landlord, Property Owner, or Tenant, you should understand your rights and responsibilities in the State of Colorado.
We will provide a comprehensive overview of what the eviction process within Colorado entails. As an aside, you'll often see eviction referred to as "forcible entry and detainer" (FED) when it comes to Colorado statutes, so keep that in mind.
The statewide moratorium on eviction cases is set to end on June 30th. 2021. The formal legal process should return to normal after this moratorium is lifted.
First of all, if you're going to go through with evicting a tenant via termination of their lease before the end of their lease term, you'll need to have a sound legal reason.
The most obvious and most common reasons for eviction will be for non-payment of rent. Colorado law also allows for the violation of a condition of the lease or rental agreement as a reason for eviction.
Eviction filings based on a lease violation happen when a tenant refuses to follow the guidelines of the lease. For example, they are failing to adhere to the covenants in a community with an HOA. Other situations that can result in eviction are violations related to issues like an unauthorized pet violation or undisclosed roommates. Colorado landlords and property managers do see a lot of lease violations around growing marijuana in a rental property.
In Colorado, the tenant can also be evicted in the case of a public trustee sale. If the tenant commits a violent criminal act or is involved in a drug-related activity (referred to as a substantial violation), this also provides a legal basis for eviction.
Of course, there are also protections for the tenant against unfair eviction.
For example, a landlord or property management company cannot attempt an eviction in response to the tenant filing a complaint about a violation of what's called the implied warranty of habitability. This is laid out in the Colorado Revised Statutes in Section 38-12-509.
What is the implied warranty of habitability? It's simply a fancy term for how livable or unlivable the apartment is. If a tenant complains living conditions are poor, they can't be evicted for this reason, though in this case, the burden of proof is on them.
A federal law, the Federal Fair Housing Act prevents eviction of a tenant on the basis of race or color, religion, national origin, familial status, or sex. When you get into issues involving the Federal Fair Housing Act, it’s a good idea to seek legal advice.
It also covers disabilities: if the person requires a service dog, this need overrides any pet restrictions present in the lease. Colorado state law also provides protection against discrimination on the basis of ancestry or belief systems, marital status, and sexual orientation.
Depending on what city in Colorado the property is in, there may be additional protection.
Colorado eviction laws mandate that you must provide your tenant with 10 days' notice. Previously, the requirement a 3-day notice, but this was changed in May of 2019. Obviously, it's important to take note of this recent change, especially if you have been a landlord for years and are used to the notice requirement being only 3 days.
In the case of a failure to pay rent, you must provide a 10-day notice - a period of 10 days in which the tenant is permitted to pay rent - before you can go forward with the formal eviction procedure.
If the eviction is due to unpaid rent, the first step in the eviction process is to post a 10 Day Notice, usually on the front door of the property. While most leases have language that talks about when rent is due and when it’s late, the notice can be posted as soon as the rent is late. You will deliver or post in a visible location, usually on the entry door, either a Demand of Compliance or Possession Notice (JDF 101) or the Notice to Quit (JDF 97).
These notices should also provide the reason for eviction to the tenant. Both forms can be downloaded at this link: https://www.courts.state.co.us.
Once notice has been served, the ten-day period must elapse. However, if the last day of this ten-day period is either a Saturday or Sunday or a legal holiday, the period will be extended an additional day. This means ten full days are required, not including weekends or holidays, after issuance of either a Demand of Compliance or a Notice to Quit before pursuing an eviction.
If the 10-day period elapses without a resolution, you'll continue the eviction process by filling out the Complaint in Forcible Entry and Detainer (JDF-99) form.
You'll also have to fill out the Summons in Forcible Entry and Unlawful Detainer form (CRCCP Form 1A) and the Answer Under Simplified Civil Procedure form (CRCCP Form 3). Of course, you'll have to pay filing fees of around $97, plus the cost of producing copies for the defendant or defendants along with the court.
Delivering these forms to the court requires some precise timing: make sure the Summons Complaint and Answer to the Defendant(s) are both submitted within one day of when the JDF-99 has been filed. These need to be sent with first-class mail and prepaid postage. Finally, a court date can be scheduled by a court clerk within 1 to 2 weeks.
A summons will be issued to the tenant by a sheriff or private process server or any qualified adult who has no ties to the eviction process. You will have to pay a service fee in the case of a sheriff or private process server, though the amount can vary.
Finally, we get to the actual court hearing. If the tenant fails to respond to the summons, a summary judgment, default judgment, or court order may be issued to the landlord. Expect a bit of a legal battle as the tenant might file a counterclaim (a response to the landlords’ allegations) or even request a trial by jury. Colorado also may require meditation with the tenant and landlord before the hearing.
Should the landlords' case win in court, they must then file for possession of property with a Motion for Entry of Judgement (JDF 104). You'll receive the Order for Entry of Judgement (JDF 107). The tenant must vacate the rental within 48 hours - if they don't, the landlord will need to fill out the caption on the Writ of Restitution (JDF 103) and deliver it to the court. Upon approval, the sheriff's office will forcibly remove the former tenant from the premises.
Should the eviction proceedings go in the landlord’s favor, they'll need to remove all of the belongings with a crew while being supervised by the sheriff’s department. If you don't expect your tenant to comply with an eviction order, it's best to make preparations to have a team ready to move everything out with boxes, tarps, trash bags, etc.
Colorado is unique when it comes to removing a former tenant's belongings when they have to be removed by force: you are not required to store the items. The former tenant has 15 days to retrieve the items and, if they don't, you are legally free to sell or discard them.
The Demand for Compliance is to be issued in cases where you want to give the tenant a chance to rectify the issue. They'll have 10 days in which to, for example, pay outstanding rent or reverse any violation of the lease agreement. Should they fail to make amends, you are then able to proceed with filing the forms necessary for eviction.
The Notice to Quit, on the other hand, can be used if you want the tenant removed as early as possible and don't want to give them the opportunity to rectify. The Notice to Quit is best used, for example, in the case of a tenant violating the law and can get them out in as little as 3 days.
You can expect to wait no longer than 2 weeks for a hearing after the filing process is completed. Of course, the length of it takes for the hearing to occur can be drawn out by appeals or continuances. Usually around one month is enough time for a completed eviction to occur, though it depends on so many factors.
The state of Colorado is a loser pays state: this means that, should you have a solid case and valid reason for evicting your tenant you can expect to pay reasonable court and attorney fees. However. you have to specify this in your lease in order to qualify for recovery.
The Colorado Eviction Process (or in any state for that matter) can be difficult, but they aren't always. We hope we've shed some light on how it all works and what you need to know if you're considering evicting a tenant. If you file forms correctly and have a valid complaint against the tenant, the law should be on your side and the rental vacated as expediently as possible.
Peyton, Colorado is located in the eastern portion of El Paso County just northeast of the Falcon area and west of Calhan, Colorado. Peyton property management is a unique challenge because of the way the eastern plains have developed. While Peyton is for the most part a rural community, there are newer subdivisions in the Falcon area that have a Peyton address. This is because the U.S. Post Office in Peyton provides mail service to homes located in the Falcon area for the entire 80831 zip code. This includes newer suburban neighborhoods like Woodmen Hills, Meridian Ranch, and Paint Brush Hills.
Managing this diverse range of rental property types requires both skill and experience. Since Peyton has everything from custom golf course homes to horse properties on large acreage property managers in this area need an extensive skill set. An effective property management company will need to have years of experience and knowledge of everything from working with an HOA to understanding how to maintain a well and septic system.
Finding great tenants is the key to effectively managing properties, and the first step in finding them is to sell the area. At first glance, Peyton doesn't appear to have a lot to offer prospective tenants, but if you are familiar with the area, this couldn’t be further from the truth. Peyton is home to some great amenities and activities like Homestead Ranch Regional Park, The Rock Island Trail, and a wide range of shopping and restaurants
Schools are another important consideration for many tenants and while the Peyton School District 23jt is a small school district it consistently scores above the state averages on standardized testing scores. The class size and quality of education in the Peyton school district is another advantage when seeking great tenants.
Our area's military bases also provide a great source of quality tenants. While the Peyton area is not close to Fort Carson, it is close to both Peterson Air Force Base as well as Schriever Air Force Base. When it comes to finding great tenants for the rental properties we manage, we have an aggressive marketing campaign for each property we manage. We start with professional photography in order to capture the most desirable qualities of the property and showcase the home in the best possible light. These photos become the basis for our marketing efforts. In our experience, great photos in the right places, generate interest in a property faster than any other marketing tool.
The internet has replaced print media as the best way to find rental properties. We send our rental listings to a wide range of property rental websites in order to generate as much interest as possible. We feel like the deeper the pool of applicants, the more success we have in finding a great tenant.
Once we have our applicants, we begin the screening process. Proper tenant screening is one of the basic aspects of our Peyton property management services. Screening involves processing the application, pulling a credit report, credit reports show us if the applicants have a strong enough positive credit history. We also perform criminal background checks as well as contact employers and former landlords in order to check the applicant's work and rental references
We can’t overstate the importance of great tenants, and screening is the most effective way to stack the odds in our favor when it comes to finding them. This process requires a lot of work but we do this to provide our clients with the highest level of service, it also makes our job easier throughout the term of the lease.
The lease agreement is the next level of protection a good property manager should provide for the property owners. A well-written lease eliminates questions and clearly outlines what is expected from everyone involved with the property. The lease should explain expectations around rent payments when they are due and what the penalties are for late or missing rent.
The signed lease should be accompanied by the security deposit and explain how maintenance requests are handled and which if any maintenance items are the tenant’s responsibility. This becomes especially important when leasing rural Peyton properties with valuable livestock equipment and facilities.
When it comes to maintaining your property, professional property managers should use professional contractors. These vendors also require screening and management but at the end of the day, they reduce the potential of problems due to incompetence.
The lease will also outline the expectations as far as living within an HOA community. This is important in those newer neighborhoods in the nearby unincorporated area of Falcon. These newer subdivisions have homeowners associations as well as restrictive covenants. Failure to adhere to these covenants can cost the homeowners in fines and levies. The lease should make clear that abiding by the neighborhood covenants is the responsibility of the tenant and failure to do so will result in penalties and in some rare cases eviction.
The lease should also outline what the eviction process will look like in the event we need to remove the tenant. The eviction process is difficult and can be messy, the eviction process alone can be worth the price of a good property manager's management fee.
Beyond finding qualified tenants, screening them, executing the lease, and collecting rents there are a number of other services a good management company should provide.
Pricing the property is an essential skill in professional property management. Price the rental rate too low and the owner leaves money on the table every month for the term of the lease. Price the rent too high and the rental could take months to lease, also costing the owner thousands of dollars. We provide a rental market analysis at the end of every lease term. This ensures that we remain relevant with our rental rates.
Financial reporting is an important part of property management. The property owner should receive monthly statements showing where the money is going. The statements should show any fees or expenses associated with the day-to-day management of the property. The manager should also provide year end statements, these are essential when it’s time to prepare your taxes.
Property inspections are another important aspect of good property management. The property manager should perform regular inspections of the property to make sure the tenants are taking care of the property. The manager should also be checking for the appropriate number of tenants, we don’t want anyone living in the property that hasn’t been screened. They should also be on the lookout for any pets that are not supposed to be on the property.
Deposit disputes are a major part of dealing with rental property. A good Peyton property management company will do thorough documentation of the property before and after each occupancy. Our property management company takes hundreds of before and after photos of the property. We also do a 360-degree inspection of the property using a Matterport camera. This allows us to view the entire property on a very detailed level. As an added bonus we can share this tour with the property owner as well as the tenant. Having this level of documentation helps us eliminate a good deal of the drama around deposit disputes. These are also great tools for marketing the property.
Here is an example of our 360 scans of a rental property.
Property Management service should extend to the tenant side of the lease as well. We make every effort to keep our tenants happy. This involves offering flexible payment options like online payment options through our online tenant portal or with a credit card. This is also where the tenants can make us aware of any repairs or maintenance requests they have.
We also provide an online owner portal, this allows you to get any important information you might need regarding the property or your account 24/7.
Residential property management is a serious business with a constantly changing landscape. This is why we are also members of NARPM, the national association of residential property managers. This organization is the gold standard in the real estate industry for property managers. NARPM provides up-to-date information and education for real estate professionals that manage single-family homes and small residential properties.
If you are considering a Peyton property management company to manage your home or investment property, you should look for a professional that offers a wide range of services that will protect your property as well as your investment in your property. If you want to talk to this type of company, please give us a call, we would love to talk to you about your rental property.
The end of a lease is an important event for landlords and tenants alike. It can also be a time of conflicting
expectations. Both tenant and landlord need to understand the difference between normal wear and tear versus damage.
The landlord will usually expect their property to be returned to them in the exact condition that it was in when the tenants moved in –and if this doesn’t happen, are often happy to use the tenant’s security deposit to make it this way. Tenants, on the other hand, more often than not will expect their full security deposit back, even if there has been some damage to the rental.
In order to help manage expectations, and make the move-out process as simple and straightforward as possible, it’s important for both landlords and tenants to be on the same page. This includes having a good understanding of security deposits, and what they can and cannot be used for.
At the time of move-out, the landlord or property manager is responsible for repairing any damages to the property, as well as assessing and documenting normal wear and tear. A good Property Manager will have a move-out routine that includes items like:
They’re also responsible for deciding who will pay for any repairs, maintenance, and cleaning that’s required to bring the property back into rentable condition.
This is the part of the process that’s often full of contention. When it comes to assessing damages, the landlord’s job is to assess the property and determine what falls under the category of damages, and what should be considered simply normal wear and tear. While damages are the tenant’s responsibility, things that fall under the category of normal wear, should not be taken out of the security deposit.
It's important that landlords not use the security deposit to pay for things that go above and beyond the scope of normal wear. They may attempt to use it for things like worn carpeting or faded paint on the walls, things that aren’t damages, but instead are just the result of normal usage. In most cases, landlords know to use the security deposit as intended, to repair damages to the property, only for the tenant to contest this, and seek to get it back. One important exception to this rule pertains to items spelled out in the lease. Examples might be cleaning or carpet cleaning. If these items are stipulated as tenant responsibility in the lease, the landlord is within their rights to use security deposit funds to pay for them, if the tenant left these items undone.
When it comes to repairs, though, the law stipulates that the security deposit should only be used for repairs to damage that goes beyond what’s considered to be ordinary wear and tear.
Colorado Law (C.R.S. 38-12-102) defines “normal wear and tear as “Deterioration which occurs, based upon the use for which the rental unit is intended, without negligence, carelessness, accident, or abuse of the premises or equipment or chattels by the tenant or members of his household, or their invitees or guests.”
That’s a bit confusing for landlords and tenants alike. To help clear things up, here’s a list of examples of both normal wear and tear and damage.
| Normal Wear and Tear | Damage |
|---|---|
| Worn out Carpet | Torn, Stained or Burned Carpet |
| Faded Window Coverings | Torn, Mutilated or Missing Window Coverings |
| Worn out Keys | Lost or Missing Keys |
| Dirty Walls | Holes in Walls |
| Dirty Windows | Broken Windows |
When determining costs, the landlord will also make decisions about repairing versus actual replacement. In some cases, repair is the best choice. A good example of this would be a recent experience we had. A tenant had backed a car into the side of a home damaging a section of masonite siding. The siding was already in rough shape and the product was failing and the particular pattern was no longer available. The owner was planning to reclad the home in stucco in a couple of years anyway, so we just applied a patch using every the favorite body putty of every motorhead, "Bondo".
This repair worked out well because the owner already had a plan in place for new exterior stucco and was willing to kick the can down the road. Had this not been the case, the repair could have cost the tenant a lot more money. It’s important to note that in some cases, a landlord may charge replacement cost for an item that could be repaired with a short-term fix. So, for example, suppose a tenant punches a large hole in a wall. The landlord may choose to repair it in the short-term by simply patching it. While this temporary fix is fine for the short-term, the underlying fact is the wallboard is not the same, and the owner may choose to go back at some point and replace the entire wallboard so they are within their rights to charge for replacement.
If the item can be repaired, though, in most cases the landlord will choose to go that route. In this case, the landlord will deduct for labor, materials, and travel.
For example: if a five-year-old carpet is destroyed and that particular type of carpeting had a 10-year life expectancy, the landlord may only charge the tenant 50% of the replacement cost. This is a good practice, and extremely important as it helps to prevent landlords from using deposit funds in order to upgrade their properties.
| Water Heater | 10 Years |
| Carpeting (builder grade) | 5 Years |
| Air Conditioning Units | 7 Years |
| Ranges | 20 Years |
| Refrigerators | 10 Years |
| Interior Paint-Enamel | 5 Years |
| Interior Paint-Flat | 3 Years |
| Linoleum Tile | 5 Years |
| Window Coverings (shades, screens & blinds) | 3 Years |
These are estimates are produced by HUD. Manufacturer estimates will vary.
Assessing the condition of the property is the responsibility of the landlord or property manager.
This will allow the landlord to determine whether there are any damages that are the tenant’s responsibility, and therefore should be paid for out of the security deposit. It also allows them to set the condition baseline before a new tenant moves in.
The challenge is determining and documenting the condition of the property before the damage occurred. This is important in the event that the tenant disputes the damages, or if the case goes to court, as having proof that the affected or damaged area was in good condition before will generally resolve the issue.
Of course, there’s a lot that tenants can do to help ensure that they’ll get their deposit back at the end of their lease.
First, of course, tenants should ensure that they keep the property in good condition while they live there, and avoid anything that might cause damage to it.
Secondly, if a tenant would like to contest the landlord’s decision to apply the security deposit to damage, they can do so. The best way to do this is by being able to furnish proof of the condition of the property. In most cases, tenants should consider taking their own photos. Generally speaking, the more documentation, the better. Photos that are taken at the time of move-in could provide proof of the condition of the property, and images that are obtained, say; a month into the lease could be used as proof of damage caused by movers. It’s also a good idea to use a camera with a time and date stamp feature and to show any pictures of post-move-in damage to the landlord.
It’s also worth noting that if a landlord fails to follow Colorado security deposit laws, the tenant could be awarded up to three times the amount that was wrongfully withheld, plus attorney’s fees and court costs, so it’s important for landlords to ensure that they remain in compliance with the law, and handle the security deposit properly.
For tenants, it’s important to remember that normal wear and tear versus damage are broad definitions, and much of the detail about the condition that you’re required to leave the property in at move-out will be specified out in your lease.
It’s important to read the lease before signing it and to make sure you ask questions to ensure that you’re clear on what’s expected of you. For instance, in some cases a landlord may state that the carpets are to be professionally cleaned at the time of move-out, others will require you to perform regular, outdoor grounds keeping maintenance, so make sure you fully understand your responsibilities and requirements before you move in.
Successful and straightforward move-outs are always the result of good documentation and communication, from both parties. It’s important for landlords to spell out their expectations in the lease document, and for tenants to ensure that they’ve read the lease –and are clear on their responsibilities both in terms of maintenance, and the condition that they’re expected to leave the property in at the time of move-out.
Rental Security Deposit disputes usually occur because of a misunderstanding between a landlord and a tenant. At the end of a lease term, the tenant is usually required to leave the property in “move-in ready” condition. This means the same condition in which they received the property, minus any normal wear and tear.
Since normal wear and tear are well defined, most landlords or property managers should have a strong grasp on what constitutes damage vs normal wear and tear.
At the end of the lease term, usually, after one to three years, the landlord inspects the property. This move-out inspection determines if the property is "Move-in ready" for the next tenant.
If the property needs cleaning or repairs to be move-in ready, those costs are paid from the previous tenant's security deposit.
Each individual state regulates its own landlord, tenant laws. In spite of this, most state laws are very similar. Most states allow deductions from security deposit funds for the following:
When using security deposit funds, the landlord is responsible for:
Inappropriate use of security deposit funds can cause problems for the landlord. When security deposit disputes go to small claims court the guidelines are clear. The landlord can incur penalties for failing to adhere to the appropriate guidelines.
Because of the dollar amounts involved, security deposit disputes that cannot be resolved without the help of a judge end up in small claims court.
The small claims process is very straight forward, the Judge looks at the following:
The rules about security deposits are clear so disputes are usually about what "move-in" condition is. The responsibility falls to the landlord to document the condition of the property prior to any new tenant moving in.
Problems occur for the landlord if they fail to adequately document the condition of the property. In these cases, it becomes about the landlord's word against the tenant's word and the courts can be more sympathetic to the public.
When a landlord fails to appropriately document the condition of a property, it speaks volumes about how they do business. There are instances when the damage to a property occurs someplace so obscure the landlord could not have been expected to document that area. This is, of course, the exception, not the rule.
Proper documentation of the property and open communication with the tenant are the best way to avoid small claims court.
There are a number of methods available to facilitate the effective documentation of a property. Digital imaging and cloud storage have made it very simple to record and share any media or reports.
Photos are a great way to document property condition. Digital storage is cheap and photo-documenting a property is easy. Sharing photos with the tenants enables them to check out the original property condition. Just being able to see move-in photos goes a long way to heading off any potential condition disputes.
Another advantage to photographs is that in the event you end up in court, you can print before and after pictures. This saves time in court and shows that you've done the proper documentation.
Video has become another popular method of documenting the condition of a rental property. Lightweight high-quality cameras make this an attractive option for landlords and property managers. One advantage of video is that the person shooting the video can also comment about what they are seeing. This avoids having to make notes or guess about what the photo is about.
Like photographs, videos are easy to store and share. Videos can be more difficult to deal with in a courtroom setting. Patience can run thin while fast-forwarding or rewinding as you look for something specific. Higher quality cameras allow you to take good quality still photos from video clips. We recommend this if you need to go to court.
Virtual tours have become very sophisticated over the last five years. Matterport is a 360-degree camera that produces so pretty awesome virtual walkthroughs. This is a great way to share the current condition with the owner as well as creating a record for the tenant time of move out.
In the event we need to go to court, these virtual tours allow us to zoom into an area and take a very high-quality still photo. Our Colorado Springs Property Management company uses this method and it's working great.
Reports are another effective way of documenting the condition of a property. Popular property management software usually comes with some type of reporting module. These modules usually come in the form of an app for a mobile device. The landlord walks through the property and takes photos of any issues. These apps have a place to write comments as well.
We have used these apps in the past and they produce a really attractive report. The only problem we have found is that they only capture current problems. We have found that it's best to have a comprehensive snapshot of the entire property. This way if a problem arises, we have documentation of how the area looked.
A little transparency, communication, and participation can also go a long way in reducing security deposit disputes. Move outs are easier when both tenant and landlord are on the same page. One way to accomplish this is to get participation from the tenants right at the beginning of the lease period.
It's a good idea to get the tenants involved in documenting the condition of the property right from the beginning. We like to give out tenants the opportunity to take pictures of any damage or dirt they find prior to any big furniture or appliances being moved in. If you have set up a file for move-in documentation, these tenant photos can be incorporated.
Obviously, there needs to be a reasonable deadline for these types of discoveries. But, we have found that this one simple action has really helped reduce our security deposit disputes.
Another effective action is to perform a pre move out inspection walkthrough. This is an informal walkthrough where the landlord can point out or make a list of any items that might be an issue.
This gives the tenant heads up and allows them the opportunity to make the item right before they move out. If they choose not to repair or clean something found on this walkthrough we always interpret that it's something they're willing to have taken out of their deposit. This pre-inspection walkthrough gives them a clear picture of what's going to happen so they don't feel blindsided.
Another good way to avoid any misunderstanding about expectations at move out time is to provide the tenant with a cleaning checklist. In most cases, a general checklist works well. If the property is really unique the landlord may need to provide more detailed instructions for the tenants.
Unexpected surprises are the primary cause of disputes over security deposits. Transparency and communication help eliminate surprises. While the tenant may not appreciate the deduction, knowing that it’s coming and why it’s coming goes a long in avoiding a trip to small claims court.
Landlords who have a rule banning applicants who were convicted of a crime-may want to rethink that policy. Recent guidelines issued by the US Department of Housing and Urban Development (HUD) on April 4, 2016 call for landlords to do away with blanket bans, that disqualify applicants based on prior convictions or arrests. Having a general ban on renting to tenants with a criminal record, precludes applicants from housing solely on the basis a criminal record, could be considered a violation the Fair Housing Act.
The Fair Housing Act signed in 1968, prohibits landlords from discriminating on the basis of race, color, religion, sex, or national origin. While criminal history is not a protected class, under the new HUD guidelines, turning down applicants on the basis of a criminal record, without considering the nature of the crime or facts surrounding the conviction, can’t be legally justified –and could, indirectly, be a violation of the Act.
As many as 100 million U.S. adults, or nearly one-third of the population, have a criminal record of some sort. Additionally, the United States prison population, with 2.2 million adults, is the largest in the world. Since 2004, an average of over 650,000 people have been released every year from both federal and state prisons –and 95 percent of those currently incarcerated, will be released at some point in the future.
For individuals who are released, the ability to secure safe and affordable housing is a crucial part of their successful reentry into society. Yet many individuals who were formerly incarcerated are finding it extremely difficult to secure housing –because of their criminal history.
Michael Bowers, a single father, has had his share of trouble finding housing in Austin, Texas.
This is due to the fact that Bowers has a criminal record. As a teenager, he was arrested for stealing a debit card and going on a $340 shopping spree.
“I was young,” says Bowers, speaking of his crime. “We were drinking. There was a card. I was like, ‘I’m going to use that to buy stuff that I want.’ It was a dumb mistake.”
This crime led to Bowers spending a few days in jail and being put on probation. Today, however, nearly ten years later –one consequence of this mistake continues to plague him –most landlords still refuse to rent to him.
“The most frustrating thing is I’m just a single dad,” says Bowers, who lives in Austin with his daughter. “I work hard, and I just want to give my child a place to live.”
The fact remains that many landlords are rejecting tenants on the basis of their criminal history –or even an arrest that never even led to a conviction, without taking into account the nature of the crime, how long ago it occurred, or rehabilitation.
For people like Bowers who are trying to get their life back together, finding housing remains one of the most difficult hurdles.
While many landlords refuse to rent to tenants with a criminal record, doing so may be a violation of the Fair Housing Act.
A landlord violates the Fair Housing Act when their policy or practice has an unjustified discriminatory effect, even if the landlord had no intent to discriminate. This is known as “disparate impact” –which occurs when policies or practices that appear on the surface to be neutral, result in a disproportionate impact on a protected group.
“Criminal records-based barriers to housing are likely to have a disproportionate impact on minority home seekers,” the guidelines note. Black and Latino Americans are disproportionately affected, the memo notes since they are incarcerated at rates disproportionate to their share of the general population. Black and Latino individuals comprise an estimated 58 percent of the U.S. prison population, despite accounting for only 29 percent of the total U.S. population.
Under this standard, even a policy that may seem neutral on the surface –could have a discriminatory effect against protected classes, and thus could be a violation of the Act, if it’s not supported by a legally sufficient justification.
It’s important to note that while HUD doesn’t recognize having a criminal record as a protected characteristic under the Fair Housing Act; proponents argue that criminal history-based restrictions on housing opportunities could, indirectly, violate the Act.
Additionally, proponents state, that by making it easier for people with an arrest record or criminal history to find a home, housing providers will help to increase the chance of an individual’s successful reentry to society.
“The fact that you were arrested shouldn’t keep you from getting a job and it shouldn’t keep you from renting a home,” says HUD Secretary Julian Castro. “The ability to find housing is an indispensable second chance in life.”
JoAnne Page, President, and CEO of the Fortune Society, which works with formerly incarcerated individuals, also highlight the importance of housing for individuals with a criminal background. “We know that if a person does not have a stable, affordable place to live, being a contributing member of society is extremely difficult,” she says.
While the HUD guidelines outline what landlords should not do when weighing up a potential tenant’s application, they’re less clear on what type of criminal convictions can be used when assessing an applicant.
As there are no guidelines on which crimes should be considered acceptable, and which are not, aside from certain drug-related charges. In most cases, landlords are advised to use their discretion, with the HUD guidelines stating that they should consider circumstances on a case-by-case basis.
Case-by-case, means that imposing a blanket ban on individuals with a criminal history, is no longer an option. Instead, landlords and property managers will have to put a bit more care into evaluating applications on an individual basis.
Industry groups, such as the National Apartment Association, are weighing in on the new guidelines. The NAA released a white paper on best practices to members, which advised taking measures such as adjusting screening policies to include only certain types of offenses –rather than a blanket ban, outlining clear justifications for those policies, and giving applicants a chance to explain mitigating circumstances.
While the HUD guidelines are just that, guidelines –and landlords are not bound by law to follow them, the best practice is for landlords to take the HUD guidance seriously, and change any current policies that automatically exclude applicants with a prior conviction; as well as any policies that have not been thoughtfully developed and justified.
While these guidelines may sound daunting –the good news is that for most landlords, they may not be as formidable as they sound.
“Employers have been taking most of these steps for years,” explains attorney Denny Dobbins, “It will not be difficult for good Landlords to comply.”
In order uphold these guidelines, though, landlords will need to need to be a bit more thorough when it comes to documenting their reasons for denying an applicant. They’ll also want to ensure that their policy’s approval criteria, as it pertains to a person’s criminal history, are supported by a legally sufficient justification. For example –if a landlord has an apartment complex, they must also take the safety of the other residents into consideration; therefore they may be able to prove that banning individuals who have committed violent crimes is a justifiable decision. Additionally, landlords who house families with children may not be able to rent to anyone on the Sex Offender Registry. Thus, denying a registered sex offender would not constitute a violation of the Fair Housing Act.
But under these guidelines, landlords cannot institute a sweeping ban on all applicants with a criminal history, and cannot reject applicants for arrests that did not lead to a conviction. Additionally, landlords must take care to ensure that all potential applicants are treated the same; and that comparable criminal histories are assessed similarly; without considering race, national origin, or any protected class.
HUD states that a housing provider must show that its policy accurately distinguishes between criminal conduct that indicates a demonstrable risk to resident safety or the property and criminal conduct that does not.
Landlords are advised to take into consideration the nature of an individual’s conviction as well as time elapsed since the conviction. The only clear exception that the guidelines make is for convictions for manufacturing or distributing drugs.
Landlords that oversee multi-unit residences must balance out their nondiscriminatory screening policies, with their duty to ensure resident and property safety. This means assessing the nature of the crime to see if there is legally sufficient justification to ban an applicant from the housing. Unfortunately, this is a gray area –and one where landlords and property managers alike much exercise diligence and discretion.
While the HUD guidelines aren’t clear, HUD indicates on their website that for public housing authorities, a criminal background investigation must be performed to determine lifetime registered sex offenders –which then may be precluded from housing. It would seem to follow, that if public housing authorities can draw the line at registered sex offenders that non-public housing landlords could do so as well. But when it comes to offenders who are not on the registry, the guidelines are less clear.
“The nature and gravity of a sex crime may be so serious that even the slightest amount of risk may be too much when contemplating the protection of your substantial and legitimate interest(s),” says Denny Dobbins, attorney. “A case-by-case evaluation based on the facts is necessary for how long to prohibit residency for those with a sex crime who do not have a lifetime sex offender registration status.”
Landlords who are uncertain should consult with an attorney.
Landlords are advised to assess the circumstances surrounding the criminal conduct. This means that they should consider the age of the applicant at the time of the crime, as well as any other mitigating details. Landlords should also take care not to exclude applicants based on arrests alone since an arrest doesn’t always lead to a conviction.
The amount of time that’s passed since the conviction occurred should also be taken into account. Although the HUD hasn’t given a specific timeline that’s reasonable for felonies or misdemeanors, some have suggested a period of six or seven years for some felonies or high-risk crimes.
If an applicant presents evidence of rehabilitation, this should be taken into consideration as well.
There are practical ways that landlords can maintain compliance with the HUD guidelines regarding renting to tenants with a criminal background. Here’s a look at a few things landlords should consider doing:
When it comes to the application process, landlords and property managers may want to consider running criminal background checks last; until after an applicant has already passed employment and income verification, credit checks, and previous rental history. Not only will this help to keep housing providers from having to make many potentially difficult decisions, it will also save time when processing applications.
One key area where landlords should tread especially carefully is when screening tenants. Asking potentially problem questions such as, “Have you ever been convicted of a crime?” and instead, looking to ask more relevant questions, such as “Have you been convicted of a crime in the last seven years?” is a better option; one that shows that the landlord isn’t imposing an outright ban on applicants with a criminal history; and instead is asking relevant questions and assessing applicants on a case-by-case basis.
Landlords and property managers should consider informing applicants that, if they have a criminal background, they are welcome to submit proof of mitigating circumstances at the time of the crime as well as proof of any rehabilitation efforts. Requesting this information is a step in the right direction, and also shows that the landlord isn’t implementing a sweeping ban on applicants who have a criminal background.
Finally, landlords and property managers should review their existing rental policies and tenant screening procedures. Landlords should pay special attention to ensure that there are no qualifying questions that could be considered discriminatory against potential tenants. Doing away with sweeping statements, such as disqualifying all applicants who have a criminal background; and instead implementing policies that allow for a case-by-case analysis is an important step that housing providers should take to protect themselves.
Landlords should inquire with the current and previous landlord to assess an applicant’s qualification. Questions to ask include:
Landlords should also obtain a consumer credit report and carefully check the information therein. Landlords should:
Every landlord should have a written list of rental criteria, and ensure that they uphold it consistently with each rental application. Examples of rental criteria include:
If an applicant fails to meet the above criterion, the fact that they may have a criminal record becomes irrelevant. In the end, the best way for a housing provider to avoid claims of discrimination and ensure equality for all applicants –is to ensure that decisions are not based on one single factor; a criminal record, and instead seek to use other qualifying questions when making a decision.
In addition to helping to prevent claims of discrimination, this method will also help to alleviate fears of landlords, who may be concerned about safety implications that come from not having a blanket ban in place. As Chris with Tenant Verification Services writes, “In most instances…individuals who have a criminal record and continue to lead that type of lifestyle, will not meet your criteria anyways.”
Finally, landlords should make sure they have a look at the HUD Guidelines for themselves, as well as this helpful white paper from the NAA. They should also consider consulting with an attorney, to ensure that they are screening applicants, qualifying questions, and applications –before refusing to rent to a tenant with a criminal record.
Tenants: do the HUD guidelines affect your home search?
Disclaimer: The information provided is for and advisory purposes only. Springs Homes for Rent accepts no responsibility for its accuracy. We recommend that you consult with an attorney familiar with current federal, state, and local laws.
