Are lease agreements in your state subject to any formal requirements?
Any lease for a period longer than one year is void unless the lease or a note or memorandum thereof expressing the consideration is in writing and subscribed by the party by which the lease is to be made. Residential leases in Colorado are subject to various statutes; however, leases for commercial property are generally not subject to such statutes. Leases do not require witnesses or acknowledgements in order to be effective. Counterpart signatures are enforceable. Executed leases can be delivered electronically, although if a residential tenant requests a paper copy, the landlord must provide it.
Do state or local laws set out any mandatory or prohibited provisions in lease agreements?
Commercial leases have no mandatory or prohibited provisions. Residential leases are subject to the warranty of habitability, and there are limitations on how a landlord can handle security deposits.
What are the standard forms of lease agreement used in your state?
There are no standard forms of lease agreement in Colorado, although some companies and trade associations generate lease forms.Length of term
Are there any state or local laws regulating the terms of leases? Are long-term tenants accorded any special rights as to extension or renewal of leases?
There are no known state laws regulating the terms of leases or providing any special rights as to extension or renewal. Some local laws will view leases of a certain length as a sale for the purposes of local transfer taxes.Rent and security deposits
Are there any state or local laws regulating rent increases?
For commercial leases, there are no restrictions on rent charged or increases in rent. Counties and municipalities are prohibited from imposing rent control on residential property by statute. However, government-backed housing programs may impose limits on rents charged. Rent increases of unwritten residential leases that are longer than one month but less than six months require 21 days’ notice.
Are there any state or local laws governing rent security deposits?
There are Colorado statutes regulating how security deposits are held and released in the context of residential, but not commercial, leases. Landlords may be subject to treble damages for improperly withholding security deposits.
Can the tenant withhold rent payments on any legal grounds?
A residential tenant can, in certain circumstances, withhold rent if the warranty of habitability has been violated. Commercial tenants can terminate a lease (and therefore withhold rent) in case of constructive eviction, but the tenant may have to vacate the premises to enforce that remedy. Commercial leases routinely permit the abatement of rent in case of casualty and condemnation. Commercial tenants will sometimes negotiate the right to withhold rent based on certain circumstances (e.g., interruption of services caused by the landlord or casualty).Sub-letting
Under what circumstances is sub-letting allowed?
The general rule is that tenants are permitted to sublease their premises, but many leases will restrict that right. If a landlord has a right to withhold consent, they may need to be reasonable in withholding that consent.Obligations and liabilities
What are the general obligations and liabilities of the landlord in respect of the property and what are the consequences of breach?
In residential leases, landlords are deemed to warrant that the residential premises are fit for human habitation (the warranty of habitability), which has a statutory definition. Violation of this warranty may allow a tenant to withhold rent or terminate the lease. In addition, victims of sexual assault or stalking may be permitted to terminate a lease.
In commercial leases, landlords must comply with the terms of the lease agreement, and all parties to a contract in Colorado are subject to the covenant of good faith and fair dealing. Upon a breach by a landlord, tenants have the right to sue for damages, and may have the right to seek certain injunctive remedies. Commercial leases with sophisticated tenants may set forth remedies for a tenant, including the right to:
- abate rent;
- exercise self-help; and
- in more limited circumstances, terminate the lease.
Absent an express right in the lease, a commercial tenant can terminate a lease in only limited circumstances involving constructive eviction.
What are the general obligations and liabilities of the tenant in respect of the property and what are the consequences of breach?
In both the residential and commercial context, the following rules apply:
- Tenants must comply with the terms of their lease.
- All parties to a contract in Colorado are subject to the covenant of good faith and fair dealing.
- Upon a breach by a tenant, landlords have the right to evict a tenant, sue for damages, and seek injunctive relief.
- Landlords can also reserve the right to sue for contractual damages if they terminate the lease as a result of a tenant’s default. However, they must expressly reserve that right in the lease.
Some leases grant landlords the right to exercise certain self-help remedies, such as the right to make repairs that are a tenant’s responsibility. Landlords may want to state in their lease that the tenant’s relinquishment of the premises or the keys to the premises terminates the lease unless the landlord consents to such termination in writing. Landlords have a duty to mitigate the damages caused by a tenant default.
In residential leases, tenants are obligated by statute to use their premises in a reasonably clean and safe manner. Residential landlords also have a lien on certain personal property of the tenant located in the premises.Insurance
Are the landlord and tenant bound by any insurance requirements?
There are no known statutory insurance requirements for landlords or tenants. However, loans to landlords routinely impose insurance requirements on those landlords, and leases routinely impose insurance requirements on tenants.Termination and eviction
What rules and procedures govern termination of the lease by the landlord and the tenant’s eviction from the property?
In both the commercial and residential context, Colorado has an eviction process that is distinct from standard litigation. Commencement of an eviction action requires specific service of a notice to the tenant, after which the tenant has three days to cure. This notice is often separate and in addition to a notice of default under the lease (if such a notice is required by the lease).
Waivers of jury trials are enforceable in Colorado and are routinely included in commercial leases. If not waived by the lease, a jury trial could slow the eviction process significantly.
The eviction process is bifurcated, with the initial activity involving the landlord’s recovery of the premises, followed by its pursuit of monetary claims against the tenant. This has the general effect of speeding up a landlord’s ability to repossess its premises.
Landlords are generally advised against exercising self-help rights, such as changing locks or moving a tenant’s personal property, in connection with an eviction. This type of action may expose the landlord to liability to the tenant. In an eviction proceeding, once a court has granted an order for possession of a tenant’s premises, it is advisable for the landlord to involve the local sheriff in the process of moving out the tenant.
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