Colorado Rental Application Fairness Act: Fees, Denials, and Penalties

The Colorado Rental Application Fairness Act limits what a residential landlord can charge to process a rental application, restricts the screening criteria that can be used to accept or deny an applicant, and sets deadlines for written denial notices. It lives at Colorado Revised Statutes sections 38-12-901 through 38-12-905. Applicants enforce it themselves in civil court, and the headline penalty is $2,500 per violation plus attorney fees, with a seven-day cure window that can reduce exposure to $50.

Who Has to Follow the Act

The statute defines “landlord” to include the owner, manager, lessor, or sublessor of a dwelling unit.¹ A single-home landlord, a professional property manager, and a large apartment operator are all covered on the same terms. The protections run to residential dwelling units; the statute does not list exemptions for commercial leases or short-term rentals, and its language is directed at the residential application process.

What You Can Charge for an Application

There is no fixed dollar cap. A fee has to match actual processing costs, calculated either as the real cost of the specific application or as an average cost per applicant across multiple applications.² Profit built into the fee is not allowed.

Every applicant who pays a fee gets a receipt, electronic by default and paper on request. They also get either a disclosure of anticipated expenses or an itemized breakdown of actual costs; if you use the average-cost method, you have to explain how the average was calculated.²

Two more rules on fees catch landlords out. Pricing has to be uniform: you cannot charge one applicant more than another for the same unit, or for any other unit you are renting at the same time. And if you do not spend the whole fee on processing, you have to return the unused portion. The statute gives you twenty calendar days after processing the application to make a good-faith effort to send the refund.²

When You Cannot Charge Anything

If an applicant hands you a portable tenant screening report, you cannot charge an application fee, and you cannot charge a separate fee for accessing or using the report.² To qualify, the report must come from a consumer reporting agency, be prepared at the tenant’s request and expense within the previous thirty days, be made available to you directly by the agency, and cover employment and income verification, rental and credit history, and criminal history.³

Before you take any information from an applicant that would trigger a fee, you have to tell them that you accept portable screening reports and that providing one means no fee will be charged. Failing to give that advisement is itself a violation.³

A narrow exception exists. A landlord who never accepts more than one application fee at a time per unit, and who refunds the full fee within twenty calendar days whenever either side walks away, is not required to accept portable reports.³ Most operations that collect fees from multiple applicants at once will not fit inside it.

What You Can and Cannot Consider

Fee rules are only half of the Act. The other half limits the information that can factor into your accept-or-deny decision.

Credit and Rental History

Rental history and credit history can be screened only going back seven years from the date of the application.⁴ An eviction eight years back or a decade-old collection account cannot be held against the applicant. If a third-party screening product returns older entries, those entries have to be disregarded.

Criminal History

Two hard rules apply. An arrest that did not result in a conviction can never be considered, no matter how old or what the charge was. And convictions older than five years before the application date cannot be factored into the decision.⁴ A blanket “no criminal history” policy will not survive the statute.

Income

For an applicant without a housing subsidy, income can be verified only to confirm that annual income is at least twice the annual rent. Requiring more than that two-to-one ratio is a violation.⁵ If rent is $1,500 a month, the ceiling you can require is $36,000 a year. A three-to-one requirement, common in some markets, is out.

Housing Subsidy Recipients

Applicants using a voucher or other housing subsidy get stronger protection. Income can be verified only against 200% of the tenant’s portion of the annual rent, not the full rent. On top of that, their credit score, adverse credit events, and lack of a credit score cannot be considered or even asked about, unless federal law specifically requires it.⁵ In practice that means a separate screening path for voucher holders.

How You Have to Communicate a Denial

Every denial has to be in writing and has to state the specific reasons for the decision. You must make a good-faith effort to send the notice within twenty calendar days of making the decision. Electronic delivery is fine unless the applicant asks for paper.⁴

If a consumer report fed into the decision — a credit check, background check, or similar screening product — the applicant also gets a copy of the report and an advisement of the right to dispute its accuracy with the reporting agency. If the screening product contains proprietary content, you still have to provide the report, with only the proprietary material redacted.⁴

These state obligations sit on top of the federal Fair Credit Reporting Act, which separately requires an adverse action notice identifying the consumer reporting agency, telling the applicant the agency did not make the decision, and advising of the right to a free copy of the report within sixty days and to dispute inaccurate information. The applicant’s numerical credit score and the key factors affecting it also have to be disclosed.⁶ One well-drafted denial letter can carry both the state reasons and the federal notices.

What a Violation Costs

The Act is enforced by applicants, not by a state agency. Before suing, an aggrieved applicant has to give the landlord at least seven calendar days’ notice of the alleged violation.⁷ That window matters.

Fix the violation inside those seven days and the penalty drops to $50 paid to the applicant, with no further liability. Miss it, and the default penalty is $2,500 per violation, plus court costs and reasonable attorney fees. For violations of the income-verification and housing-subsidy rules in particular, the structure is an initial $50 penalty followed by the $2,500 statutory penalty if the landlord fails to cure, plus any economic damages the applicant can show.⁷

The statute runs in both directions. An applicant who purposely brings a meritless claim in bad faith is liable for the landlord’s court costs and attorney fees. Applicants do not have to exhaust any administrative process before filing, so a claim that is not cured within the seven-day window can reach court quickly.⁷

1
Justia. Colorado Code 38-12-902 – Definitions
2
Justia. Colorado Code 38-12-903 – Rental Application Fee Limitations
3
Colorado General Assembly. HB23-1099 Portable Screening Report for Residential Leases
4
Justia. Colorado Code 38-12-904 – Consideration of Rental Applications
5
FindLaw. Colorado Code 38-12-904 – Consideration of Rental Applications
6
Office of the Law Revision Counsel. 15 USC 1681m – Requirements on Users of Consumer Reports
7
Justia. Colorado Code 38-12-905 – Notice Required