Navigating the Colorado Rental Application Process: A Comprehensive Guide

Navigating Colorado's rental application requirements is essential for landlords to find the right tenant. The Colorado rental application form is a vital step, enabling landlords to gather personal and financial details from applicants.

With laws like the Rental Application Fairness Act and SB23-184, Colorado strongly emphasizes fairness, explicitly prohibiting discrimination and setting clear guidelines for tenant screening.

This article will cover the key aspects of Colorado's rental application process, from the application form's importance to understanding landlord obligations to processing fees and legalities surrounding tenant screening.

Whether you're new to property management or looking to update your practices, this guide offers concise insights into efficiently managing rental applications in Colorado, ensuring compliance with state laws and a smooth tenant selection process.

Understanding Colorado's rental application requirements

The road to securing the perfect tenant in the Centennial State begins with the Colorado rental application. This document is a key tool that enables property owners to select the right tenant by collecting personal and financial information. 

However, it’s not just about filling out forms. The House Bill 19-1106, also known as the Rental Application Fairness Act, and SB23-184 offer added protections for residential tenants. They ensure that landlords adhere to fair housing laws, prohibiting discrimination based on:

• Race
• Religion
• Gender
• Family status
• Disability
• Sexual orientation

Colorado landlords are encouraged to use secure methods for document handling to ensure the security of sensitive documents, such as bank statements and proof of identity.

The essentials of a Colorado rental application form

A Colorado rental application form is more than just a piece of paper; it’s a testament to who the tenant is as a person. It collects vital personal details, including the applicant's full name, social security number, driver’s license number, and phone number.

Beyond the applicant's identity, the rental application form captures a snapshot of their housing history, employment record, financial standing, and credit background.

It also documents details about other individuals who will reside in the rental property and information about their vehicle(s). Lastly, it includes essential references, including emergency contact information.

Landlord obligations during the application process

On the other side of the rental application process, Colorado landlords have obligations to uphold. For instance, they must use the entire rental application fee to cover costs related to processing the rental application. 

This means prospective tenants who have paid the application fee must be provided with a disclosure of anticipated expenses or an actual itemization of expenses. The landlord must also make a good-faith effort to refund any unused portion of an application fee within 20 days.

Furthermore, landlords must provide a receipt for the rental application fee, which can be an electronic or physical document, based on the tenant’s preference.

Processing fees and their limitations

When it comes to processing fees, there’s a cap on the horizon in Colorado. Landlords are not allowed to charge more than their actual processing costs. These fees must reflect the average expense incurred per prospective tenant.

This means that if you and your neighbor are applying for a rental unit in the same dwelling unit simultaneously, you should both be charged the same application fee.

Key legalities surrounding tenant screening in Colorado

Screening potential tenants is an important part of the rental application process. However, in Colorado, this process is governed by specific rules and regulations. Landlords are restricted to only considering the past seven years of a prospective tenant’s rental or credit history. Furthermore, they cannot take into account criminal history that is more than five years old, except for certain serious offenses.

As mentioned, these regulations are in place alongside state and federal fair housing laws, protecting applicants from discriminatory actions.

A look at rental and credit history constraints

Drilling down into the details, landlords in Colorado are not allowed to consider rental or credit history beyond the most recent seven years during their tenant screening process. This means that any rental or credit history older than seven years from the application date should not affect the outcome of your rental application.

The Colorado Rental Application Fairness Act enforces this seven-year look-back limit to ensure that the rental and credit history used in evaluating prospective tenants is relevant and not outdated. This limitation protects tenant rights and maintains an equitable screening process that doesn’t penalize applicants for distant financial difficulties or housing issues.

Criminal background checks: What's allowed?

When it comes to criminal history, Colorado landlords operate under a five-year rule. They are prohibited from considering convictions that are more than five years old. However, there are exceptions to this rule; landlords are allowed to consider convictions relating to serious offenses such as methamphetamine-related crimes, sex offender registration requirements, and certain violent crimes.

Colorado rental application fee regulations

Understanding rental application fees' regulations is vital for landlords and prospective tenants. As mentioned above, The Colorado Rental Application Fairness Act defines a rental application fee as money charged by a landlord from a prospective tenant related to a rental application or any nonrefundable fee before tenancy.

While there is no explicit cap on these fees statewide, landlords are required only to charge fees that cover the actual costs of application processing, typically ranging between $30-40, and are not permitted to profit from the rental application fee charged.

Thanks to the recently passed HB23-1099, tenants can now use a single background check report, valid for up to 30 days, across multiple rental applications, reducing the need to pay separate application fees for each application.

Fair pricing for application fees

In the spirit of fairness, the Colorado rental application fee must be consistent across prospective tenants applying for the same or similar units. This means that landlords cannot charge different amounts for application fees to different prospective tenants for the same or any other unit offered at the same time. These fees must cover the costs incurred in processing the rental application and cannot be used for any other purpose.

Dont forget--landlords must provide either a disclosure of landlord’s anticipated expenses or an itemization of the landlord’s actual expenses incurred from the application fee to any prospective tenant who has paid it.

Refunds and receipts: Ensuring fair play

To clarify our previous conversation, Colorado landlords must provide a receipt when they receive an application fee from a prospective tenant as part of the rental application process. This receipt should detail the expenses related to the rental application process, and landlords must provide an electronic receipt unless a paper one is requested by the tenant.

If not all of the rental application fee is used for processing costs, landlords are legally required to make a good-faith effort to refund the remainder. There is also a 20-day timeframe for landlords to refund any unused portion of the application fee to the prospective tenant.

Responding to tenant applications: Protocols and timeframes

Once the rental application has been submitted, it’s time for the landlord to respond. In Colorado, landlords must give rejected applicants a written notice of the denial, including the reasons, within 20 days. 

If the landlord uses a proprietary screening system, they must provide a copy of the report instead of a reason for the denial. Electronic notices are allowed, but the tenant must provide a paper copy upon request.

The rental application rejection letter should be courteous and formally communicate the reasons for the application denial. Under the Fair Credit Reporting Act, landlords who deny a rental application based on tenant screening reports must provide an “adverse action” notice, which can be in writing, orally, or electronically.

Communicating denial: Timely and clear explanations

If a landlord refuses a rental application, they are required to give the applicant a written notice. This notice must state the reasons for the denial. If the denial was based on criminal history, the written notice should provide specific reasons or contain a copy of the screening company’s report if a proprietary system was used. 

The written notice of denial must be dated within a 20-calendar-day period after the landlord decides to deny the rental application.

For denials based on a proprietary screening system, tenants have the right to receive written notice and a copy of the report used to make the decision. Colorado landlords must explain how they determined the average rental application fee if they charge based on the average cost of processing rental applications.

A rental application rejection letter should include the landlord or property manager’s contact information for any follow-up questions the applicant may have. The reasons for denial should be clearly stated in the rejection letter, such as inadequate gross income, inaccurate or incomplete application, poor credit history, or any other lawful and relevant miscellaneous reasons.

If the denial is based on a credit report, the landlord should include a copy of the credit report with the rejection letter, as mandated by federal law. An “adverse action” notice should include the company's name, address, and phone number that provided the tenant screening report.

Appealing a rejection: Tenant rights and next steps

Being denied a rental application doesn’t mean it’s the end of the road. Prospective tenants who believe their application was unjustly denied can consult an attorney to explore legal recourse. They can engage in conversation with the landlord or property management to request a review of the decision when the landlord denies their application.

If the denial was based on credit history, tenants can review their credit reports for errors, pay off small debts, or explain any issues to the landlord.

While formal appeals are not part of the Colorado landlord’s process, rejected applicants can provide additional information that may cause the landlord to reconsider the decision. A written denial notice is available upon request by the tenant and must be provided by the landlord, irrespective of their general practice of issuing electronic notifications.

Colorado landlords cannot retaliate against tenants for alleging that the landlord breached the warrant of habitability or having made a complaint alleging the breach of the warrant of habitability.

The rental application rejection letter should include the following information:

• Inform the applicant of their right to dispute inaccuracies in their credit report if the denial is based on that report.
• Include references to the Federal Trade Commission (FTC) for further information on the reasons behind the denial of the application.
• Inform the tenant of their right to dispute any errors on their tenant screening report and have them corrected.
• Mention that the screening or credit reporting company generally has 30 days to investigate or 45 days in certain cases.

If a rental application is denied, tenants can request a copy of the tenant screening report from the landlord to review and dispute any inaccuracies.

When landlords overstep: Remedies for violations

Just as tenants have responsibilities, so do landlords. And when landlords overstep their boundaries, they may face serious repercussions. If landlords in Colorado violate rental application laws, they may be held liable to the tenant for three times the rental application fee and court costs.

However, before any legal action is taken, the tenant must notify the landlord at least seven days before filing the action. While reviewing the application, the landlord shall follow all the necessary legal requirements.

How Azibo can help with rental applications and tenant screening

Azibo offers a suite of services designed to simplify the tenant application and screening process, making it easier for landlords to comply with Colorado's regulatory framework while finding the right tenant for their property. Here's how:

• Digital application process: Azibo provides an online platform where landlords can customize and distribute rental applications, ensuring a secure and efficient way to collect personal and financial information from applicants. This digital approach aligns with Colorado's emphasis on secure document handling and streamlines the application process for both parties.
• Comprehensive tenant screening: Azibo offers thorough tenant screening services that include credit checks, criminal background investigations, and eviction history.  
• Transparent fee management: Azibo helps landlords navigate Colorado's regulations regarding application fees, ensuring they only charge fees that cover actual processing costs. With Azibo, landlords can easily manage and account for application fees, providing the required disclosures and itemizations to applicants, and ensuring compliance with the state's cap on processing fees.
• Efficient communication with applicants: Azibo's platform facilitates timely communication between landlords and applicants, including the provision of electronic receipts for application fees and notifications of application status. This ensures a transparent and respectful application process, reducing misunderstandings and disputes.

By leveraging Azibo's comprehensive services, landlords can streamline their operations, ensuring a fair, transparent, and efficient process for finding the right tenant for their Colorado properties.

It is important to note that Azibo provides comprehensive tools designed to facilitate the collection of rental applications and the screening of renters, streamlining the process for property owners. However, each property owner is responsible for ensuring that they fully comply with Colorado's specific laws and regulations regarding tenant screening and rental applications. While Azibo aims to support property owners in managing their rental properties more efficiently, adherence to state and federal laws, including those unique to Colorado, remains the sole responsibility of the property owner. We encourage all users of Azibo's services to familiarize themselves with and adhere to the legal requirements applicable to their rental properties to ensure a fair, legal, and efficient rental process.

Colorado tenant screening laws--screening with confidence

As we wrap up this comprehensive guide, we hope you have gained a clear understanding of the Colorado rental application process.

From the essentials of a rental application form to the legalities surrounding tenant screening, the rules governing application fees, the protocols for responding to tenant applications, and the remedies available when landlords overstep, it’s clear that Colorado has a well-defined process that seeks to ensure fairness and transparency for all parties involved.

Armed with this knowledge, you can now navigate the rental application process confidently and securely.

Colorado rental application FAQS

What are considered as red flags in screening a right tenant?

Red flags in screening a potential tenant include a history of eviction, insufficient income, unfavorable residence history, and inconsistent employment history. It's important to thoroughly review these factors before making a decision.

What is the new renters law in Colorado?

In Colorado, the new renters law HB 23-1099, effective August 6, 2023, prohibits landlords from charging application fees if a tenant provides a portable tenant screening report valid for multiple applications within 30 days.

What are the essentials of a Colorado rental application form?

The essentials of a Colorado rental application form include personal details of the prospective tenant, housing history, employment record, financial standing, credit background, details about other individuals who will reside in the rental property, information about the tenant's vehicle(s), and references with emergency contact information.

Disclaimer: The information provided in this post does not, and is not intended to, constitute legal advice; instead, all information, content, and materials are for general informational purposes only. This content may not constitute the most up-to-date legal information. No reader, user, or browser of this article should act or refrain from acting on the basis of information herein without first seeking the advice of a legal professional.