Ok...I admit...I thought it was a joke. Apparently, it was NOT.

I attended a seminar for landlords and subsidized housing entities and one of the first things brought up is that, as landlords, we can no longer ask how much income an applicant makes.

I'm wondering if any of you have dealt with such restrictions and, if so, what other criteria you use.

Apparently, mortgage companies may still ask about income and use it as a means for denial, but landlords are not.

Your thoughts?

This bill will go into effect in 90 days and prevents landlords from asking about rental history and income and also controls security deposits and hinders evictions.

The intent was *probably* to reduce evictions. The effect will likely be the opposite. And it would appear that this might make evictions quite messy. I rely on income verification to give some assurance that the tenant can afford what they are trying to rent. Without that criteria, I'm really not sure what else would be important to know - especially since rental history also appears to be off-limits.

SB23-184

Protections For Residential Tenants

Concerning protections for residential tenants, and, in connection therewith, prohibiting a landlord from considering certain information relating to a prospective tenant's income or rental history, establishing a maximum amount that a landlord can require as a security deposit, and allowing a tenant to assert as an affirmative defense in an eviction proceeding that a landlord violated anti-discriminatory housing laws.

Oh MY.

You live on CO. Do you read the newspaper, or watch TV?

I, with my little eye, looked on the internet for 60 seconds and immediately found:

SB 23-184 says (in part):

"I F A LANDLORD USES FINANCIAL INFORMATION, INCLUDING

RENTAL HISTORY OR CREDIT HISTORY, AS A CRITERION IN CONSIDERATION OF A RENTAL APPLICATION FROM ANY PROSPECTIVE TENANT WHO IS SEEKING TO RENT WITHOUT THE ASSISTANCE OF A HOUSING SUBSIDY, THE LANDLORD SHALL NOT CONSIDER OR INQUIRE ABOUT THE PROSPECTIVE TENANT 'S AMOUNT OF INCOME , EXCEPT FOR THE PURPOSE OF DETERMINING THAT THE PROSPECTIVE TENANT 'S ANNUAL AMOUNT OF INCOME EQUALS OR EXCEEDS TWO HUNDRED PERCENT OF THE ANNUAL COST OF RENT . A LANDLORD SHALL NOT REQUIRE A PROSPECTIVE TENANT TO HAVE AN ANNUAL AMOUNT OF

INCOME THAT EXCEEDS TWO HUNDRED PERCENT OF THE ANNUAL COST OF RENT ."

That, of course, says that landlord is restricted to inquiring about income EXCEPT FOR THE PURPOSE OF DETERMINING THAT THE PROSPECTIVE TENANT 'S ANNUAL AMOUNT OF INCOME EQUALS OR EXCEEDS TWO HUNDRED PERCENT OF THE ANNUAL COST OF RENT .

Watch and see how many landlords actually will sell out because of this statute. I think that the threats of "no more renting" are idle threats made by landlords who imagine to themselves that they have power.

I wonder if you can ask for bank statements and say highlight or circle income deposits and rent payments. You haven't directly asked for what they make, only for them to point them out. Once you see they are depositing $1200 every two weeks you can do the math to determine their net monthly income and see if that meets your undisclosed threshold for financial viability.

It looks like you can inquire about it, they are just restricting you from using 3x the rent as your baseline.

And I thought the east and left coast were crazy. Sounds like it's time to sell and move to a more friendly state.

Yeah, the person that presented this actually brought that up. They were like "Most landlords are requiring 3x the rent to qualify and people don't make enough, so we need to lower it."

I guess the first version was 1.25 times the rent! Raising it to 2x the rent is the "compromise" amount.

I didn't read through the entire law. Does it allow at all for adjustments for included utilities and such? (Section 8 Housing Voucher situations usually do this, for example.)

There is a big difference between someone who wants to rent an all-utilities-included apartment who makes 2x the rent (they MIGHT be ok because they don't have other bills for utilities) and someone who wants to rent an apartment without any utilities who makes 2x the rent (but will then need to also come up with paying for electric and gas and trash and water and sewer and so on).

HUGE difference between those two situations when it comes to "2x the rent" being enough or not...

As a sub-category of frustration, this state is spending a LOT of money trying to get people who are virtually feral into housing (Feral, for this instance I define as those who do not follow rules, do not abide by laws, do not comprehend living aside other law-abiding citizens for any mutual gain - but instead operate entirely for their own pleasure.) The government is trying to get landlords to adjust protocol with subsidies and such in exchange for looking the other way on qualifications for success. This movement is hobbling landlords for the benefit of people who have not learned how to be domesticated.

I'm quite curious about why the State doesn't pay for classes on how to integrate into living in a "neighborhood." How to be a great neighbor. How to manage resources and not blow what resources they have on the next drug fix.

"But they are victims of addiction!" I can hear their lobbyists say. Lobbyists for these hard-to-house groups are financially incentivized to serve them at the expense of the landlord, if possible, by the government jobs they hold. Voting on the officials goes awry because when you have 100s of renters and one landlord housing them all, and we go to a vote, it will ALWAYS side for those who have no skin in the game.

You might ask:

- How much they are paying now.

- Existing existing lease.

- Bank statements to prove lease was payed.

I wish people that post on this board would be more specific. Hyperbole gets people excited but causes misunderstanding. So, the new law says that you CAN ask about income, but sets the max qualification ratio at 2x rent. So, just find another reason to disqualify.

Where and when is this effective.

It's interesting you mention feral people. We used to love to visit Manitou Springs. When my kids were little we used to go camping there and in the evenings wonder through town and stop at each of the fountains to taste the different mineral waters.

Love the 'good neighbor' class idea!

The CO regulation, am I reading that right, if you do *not* use rental history or credit history, then there are not income coverage limitations??

To Mike [PA] it was signed into law on June 6, 2023, but goes into effect in 90 days.

I'm still wrapping myself around this weird limitation. On the one hand, the attorneys said you "cannot ask about income," but on the other, they said it can be 200% (2x rent), so unless I bring out my crystal ball and smoke machine, I believe I will have to broach the subject somehow.

The other portion of this - not being able to reject someone based on past rental experience - probably came from so many people getting behind due to Covid.

My concern is that recently, I had an opening and an attractive, respectful young woman applied. She was a waitress at a local chain and said she made "good money." I believed her on that. I would have probably rented to her, but her prior landlord was a real estate company and one call stopped me in my tracks. "She's $5K behind in rent. She has a very aggressive pitbull that attacks neighbors because she takes it to do laundry and refuses to put it on a leash. The dog has done serious damage to the unit, and she has loud parties regularly resulting in lots of calls to management."

Based on her interview alone, I would NEVER have known this data unless I had checked on it. If you rule out income and prior landlord references, you are really putting the land owners in a compromised position. I've been considering all the various ways (that are NOT regulated) of establishing whether someone is a stand-up person with integrity, responsible, honorable, etc. The shortcut was always to follow the money - as it often shows a volume of info on character, too. Of course, I understand that many good people fell behind during Covid, but checking with prior landlords allows me to know if they kept up with communications, attempted to get help through other venues, and did all they could to remedy the situation instead of just taking the government funds and buying a big television and watching the landowner spin.

It's further interesting to me - the true purpose of government is to protect private property rights. The reason for this is that property taxes are what pay for the bulk of governmental programs. If you fail to protect those rights, tax paying will ultimately be jeopardized and then the whole house of cards hits hard times. We ran into this in our County several years back when a large corporation was unable to pay their property tax bill of $1.5 million. Suddenly, all sorts of governmental programs got cut back - libraries, police departments, teachers and school programs.

It was as if no one had connected the dots. While plying for votes from those who do not own property and not protecting those who pay property taxes, the government creates their own fragility.

I have charged market rate for all of my units, and yes, rates have increased. I just had a massive plumbing repair erupt and the cost was $50K - none of which was paid by insurance. It was solely out of pocket. That particular property earns $140K/year, not including expenses of operating it, taxes, insurance, maintenance, upkeep, tenant losses, etc. The Warrant of Habilitability cost me dearly - and now this government wants to further hobble me with increasing the likelihood that I will have to absorb the cost of taking on people who cannot and will not pay rent as agreed - and who increase my liability - all while forcing me to produce housing for them even when the systems might fail through no fault of my own.

This one guy who works for planning still haunts me. "Our people just need to be paid more!" he said. "Wages are not high enough." Oh my.... It's that acceptance of the erosion of the value of the currency that is also very concerning.

Several of you have said "Just sell and buy elsewhere," or "Sell and invest in stocks." I have discussed options with a fiduciary, and I've made calls to a REIT and an UPREIT to see if 1031-ing would be advisable. While I would avoid the negligence in these laws, I would also reduce my income to 4% (REIT) - and they admitted that there is no guarantee that they would not be in for some of those same losses. It is NOT a guaranteed ROI. Some investors will have to write checks to be invested in these options. Ack.

Rocky

Is this so called law local to your county or nationwide?

Also, is it saying you can't VERIFY income.?

We are no different than a bank. How can we entrust our property without knowing their ability to afford it?

I know our govt is a force against its own citizens but this seems illegal to me.

Strategies for dealing with dumb Govt-induced rules:

Govt: "You can't ask applicants about their INCOME! Bwhahahahahaha!"

Smarter-than-Gub'mint LL: "ooooookay..."

You don't need to ask the applicant about income, but you do need the following.

1) Applicant's employer name and contact info.

2) 6 months of applicant's most recent bank statements.

Call the employer and ask the supervisor/HR person how much the applicant makes. If they won't tell you, then ask what the applicant's position is and how much time he/she has on the job, then follow up with a question about what is the average pay for any person in that position with that much experience. Now it's no longer a specific person's income: all you're asking for is an average.

Review the bank statements. See if the deposits match up reasonably well with what the employer told you was the average pay.

Btw, be sure to increase your application fee appropriately for having to take the extra time to process the paperwork.

Mike [PA], it is a state-wide law. Senate Bill 23-184 "prohibits a landlord from considering or inquiring about a prospective tenant's income or rental history." (The quote marks are taken from the flyer that the attorney doing the presenting handed out to all who attended.)

Please know - I DID ask for more specifics and even the presenting attorney looked like he had inadvertently grabbed the wrong end of a flaming torch. He didn't know. The law has not gone into effect until 90 days from June 6, 2023. At that time, we will BEGIN to see the effects and the fallout.

Interestingly, you can apparently only inquire to assure that the tenant makes over 2x rent (200% of rent annually, or some such more-difficult way of explaining it).

Interestingly, as I sit back and digest my 30 years of landlording, I consider that I've had, at times, fruitcakes who had money. And I've also seen completely honorable, reliable, conscientious renters who started with a VERY unimpressive application. (Of those, the market may have been slow enough that I gambled on them and won.)

To get ahead of this new wrinkle, I must rely on other senses to get confidence in a tenant. 1) How do they dress for the in-person interview? 2) What is their demeanor? (There is a certain panicked desperation in those who are about to try to swindle...unless they are REALLY good at it. 3) Cars. Condition, age, care, cleanliness. New cars can mean debt exposure, but a cared for vehicle indicates responsibility. 4) I always ask the breed of a dog. Ironically, I do not discriminate against any breed, but if a tenant tells me that their pitbull is a laborador, or a rescue mixed-breed, I get a glimpse of their honesty. 5) career stability - maybe not how much they make, but how long have they been employed in said field.

Certainly, I'd love it if more of you would add to my off-the-cuff list of other ways to assess a tenant without relying on income or past housing references.

And yes, to all who think Colorado is being run by a legislative body that have NO idea how to implement positive change.

I think driving this movement is that ordinary citizens here are sick of homeless camps arising everywhere. Advocates of marijuana deny this has a correlation to legalizing the stuff, but the result remains. There is also the amount of people who were displaced during the Marshall fire on the Front Range. Hitting any suburb with hundreds of burned up houses leaves getting tradesmen to repair places over-booked. This delays the repairs of rentals and displaced more employees, renters and homeowners with unreasonable repair times.

Regarding the unreasonable repair times, I felt this 250 miles away. When you have any area that has, let's say, 100 plumbers, and 1,000 places needing immediate plumbing, you've got a big problem. Same with framers, flooring, electricians, etc.

The litigiousness of society has grown unchecked to the point that truly, when something unfortunate happens, many are just not comfortable until they find someone to sue over it, and then legislate it into illegality. Therefore, fires are illegal. Landlords not repairing things quickly enough is also being legislated, i.e., due to the Warrant of Habitability, we as landlords have to house people SOMEWHERE until the repair is complete. For the landlords who were fire victims, there was such a crush on the rental market, including hotels and motels, that they were shipping people 200 miles away! And THAT is legal...as long as the landlord paid for it.

I do believe that many Colorado landlords will say, "Screw it!" and will buy elsewhere, or invest in something that is less legislated, like commercial rentals. However, I personally, am leery of commercial rentals. Yes, the leases are longer, but the vacancies are, too.

I do not envy your position at all.

Adding to your list would be the in home visit. Everybody seems to be pounding that into my pea brain of late. With good reason as it seems to be a fast and easy way to see how your place will be cared for in a short time. I have yet to do it but have three empties and once rehabbed I WILL make sure there is an in home visit.

Nobody in the hood could survive paying HALF their income for rent. Utilities are too expensive.

Heck even S8 has their clients pay 1/3 of their income for rent.

Jeffrey, who runs this awesome site, noted that cooperation is important. You could do a search on "criteria" to study what others require as a basis for potential tenants.

As you mentioned about your landlording history, part of your successes were owed to your gambles on applicants. You've developed a good sense and possibly instinct too to have survived in this business. Please use this forum for feedback on applicants to help make your decision on incoming tenants if you need help. Hope to see your posts in the future, and may everything work out.

I guess the short answer will be doubling the advertisedrent price will reduce the tenants that can perform - the bank statements mentioned by Plenty would hopefully not be forged too badly.

It sounds like you CAN verify income, you just can't require them to make more than 2x the rent.

Years back, as a full licensed building contractor with 6 trade licenses and a hand full of accreditation's, I was asked to do a repair/upgrade job in a newly rented apartment unit for another landlord.

Because there are hundreds of laws a contractor must abide by and every day more laws are created to protect tenants at the cost of the landlord and contractor, I HAVE TO ASK the tenant a few key questions to decide with direction and rules I have to follow!

So I asked this question to the tenant, landlord and resident manager:

(THE QUESTION IS ALONG THE LINES OF YOUR SUBJECT MATTER, INCOME).

I ASKED, "DO YOU RECEIVE ANY KIND OF FINANCIAL SUPPORT FROM ANY OFFICIAL GOVERNMENTAL AGENCY"? If the answer was "YES", then I had to follow the rules set down by that agency. If "NO" was the answer, then I didn't have to worry about things.

So the Tenant, Manager and Owner said the tenant pays their own rent without any help from anyone! A LIE!

SO I proceeded to do the job as if the answer was "YES" and handed the tenant and owner pamphlets on the dangers of construction. Then someone reported that I wasn't doing the job correctly and endangering the tenants. A tenants word if GOLD and a contractors word means nothing.

I was arrested, fined and my contracting license was cancelled, without a trial of proof. I still had other licenses in other trades so this didn't shut me down. And my arrest was on paper only, having a black belt in karate meant I would break anyone neck who tried to falsely arrest me.

At my trial, the jury was amazed that the City inspectors, enforcers and judges didn't have a clue on contracting law and the issues we have to deal with even before we start a job. I did what was required of me and the tenant, manager and owner all lied. They got no fine.

SO asking about income may be an issue. SO IN MY CASE I SAY WHAT THE RENT IS AND THAT THE TENANT HAS TO MAKE 3 TIMES THE RENT. BUT IF THEY HAVE DEBT, WHAT EVER THE MINIMUM SERVICING COST IS, THEN THEY NEED TO MAKE THAT AMOUNT ABOUT THE 3 X RULE.

don: There is more to it than that. It does NOT appear to say that you can ask their income and then just not deny if it is more than 2x like you've suggested. It is worded poorly, like most laws, and says this:

"... THE LANDLORD SHALL NOT CONSIDER OR INQUIRE ABOUT THE PROSPECTIVE TENANT'S:

(I) AMOUNT OF INCOME, EXCEPT FOR THE PURPOSE OF DETERMINING

THAT THE PROSPECTIVE TENANT'S ANNUAL AMOUNT OF INCOME EQUALS OR EXCEEDS TWO HUNDRED PERCENT OF THE PORTION OF THE ANNUAL COST OF RENT THAT IS TO BE PAID BY THE PROSPECTIVE TENANT"

So, again, it is a bit odd. It says that you can't inquire about their income except to determine if it is 200% of the rent. People are ALREADY questioning exactly what can be asked here. In interviews, the person who wrote the law said that they CANNOT ask their income. They can only ask if it exceeds the 200% threshold.

You make it sound like you can still ask their income level. Again, the law is poorly written in that regard but, so far, it appears that you CANNOT. At least, that is what was INTENDED by the person who actually wrote it.

-John...

Now, all this being said, doesn't this new law about income only apply if they are getting rental assistance of a housing subsidy?

From my reading of it, the 200% limit DOES NOT APPLY to people renting to people that you aren't considering accepting a housing voucher from.

In other words, we're really talking about people where all or most of their housing will be paid by the state. For THOSE people, you can't require more than 2x the rent in income.

That actually seems much more reasonable to me.

Is source of income a protected class in CO? If it isn't, then it seems landlords can still just say "I don't accept housing vouchers" and not have to worry about this.

This seems more aimed at people who take housing vouchers, but were still requiring more than 2x the rent in income. If they are getting a voucher to pay their rent -- PLUS they make 2x the rent in income -- then that is like they have 3x the rent coming in. In which case, again, that seems reasonable to me...

Does this apply to everyone or just people with vouchers? Again, my reading of the law says it applies to situations where "IN CONSIDERATION OF A RENTAL APPLICATION FROM A PROSPECTIVE TENANT WHO IS SEEKING TO RENT WITH THE ASSISTANCE OF A HOUSING SUBSIDY, THE LANDLORD SHALL

NOT CONSIDER OR INQUIRE ABOUT THE PROSPECTIVE TENANT'S [...] AMOUNT OF INCOME [...]"

If that is the case, then I think people are getting more riled up about this than they should...

I was incorrect.

Found the full law as signed and it DOES apply also to people who are NOT receiving a housing subsidy. A different section states:

"IF A LANDLORD USES FINANCIAL INFORMATION, INCLUDING RENTAL HISTORY OR CREDIT HISTORY, AS A CRITERION IN CONSIDERATION OF A RENTAL APPLICATION FROM ANY PROSPECTIVE TENANT WHO IS SEEKING TO RENT WITHOUT THE ASSISTANCE OF A HOUSING SUBSIDY, THE LANDLORD SHALL NOT CONSIDER OR INQUIRE ABOUT THE PROSPECTIVE TENANT'S AMOUNT OF INCOME, EXCEPT FOR THE PURPOSE OF DETERMINING THAT THE PROSPECTIVE TENANT'S ANNUAL AMOUNT OF INCOME EQUALS OR EXCEEDS TWO HUNDRED PERCENT OF THE ANNUAL COST OF RENT. A LANDLORD SHALL NOT REQUIRE A PROSPECTIVE TENANT TO HAVE AN ANNUAL AMOUNT OF INCOME THAT EXCEEDS TWO HUNDRED PERCENT OF THE ANNUAL COST OF RENT."

Basically, if they have a housing voucher, you may not require more than 2x the rent and you may not consider their credit score or lack of credit. If they don't have a housing voucher, then you may not require more than 2x the rent, but CAN use their credit score and rental history (up to 7 years worth).

So, yeah, it is still crazy. If they only did this for people accepting government subsidies, I might be ok with it. But doing it for everyone is crazy to me.

Being able to check the credit score might help CO landlords here though. If they don't have a voucher, then it looks like you can run credit and deny based on that still. You can also deny based on rental history. (You just can't consider any credit-related stuff or rental history stuff older than 7 years.)

If I was in CO, I'd REALLY be concentrating on credit reports...

Hi John [MI]. You corrected your post before I could respond. Yes, it does apply to everyone, which is part of the concern of over-reaching on the part of the state.

There is another law HB23-1099 which addresses requirements on landlords concerning tenant screening. I'm not ready to address that yet, but I suspect it also complicates matters rather than eases them.

I think most of these laws are drawn up by people who are offended by homeless people and are hoping to get them out of sight by putting them in rental properties and forcing landlords to keep them. That explains the additional protections to prevent evictions, too.

The problem, as I see it, is that homelessness has become popular. It's suburban camping and it has fewer rules than living in a multiplex. In a park, you can have your dog, do your drugs/alcohol, leave your needles all over the place and within a few days you are only sharing the park with other like-minded individuals, none of whom are bothered by time clocks to get to work. The folks I see that are homeless are a very social bunch, sharing whatever they have with each other. Imagine them moving from that environment to a multi-plex with law-abiding neighbors who don't want to listen to loud music all night, turn them in when they cause disturbances, and aren't drunk and expect others to behave similarly responsibly. It creates a culture shock to the newly placed homeless person.

The homeless people also know that if they play up their stories, money flows in from sympathetic people. They have few skills in budgeting, and to keep their social circle in tact, they share income, too. When the state helps them into new housing, they soon share that, too.

My most recent incoming tenant was moving from her current lease because she had become scared to get to her car. The homeless were harassing her as she went to and from her vehicle. They leaned on her car in the parking lot while getting high. And before you ask if she called the police - she DID! According to her, the police did not respond. Too much demand on them right now to deal with this sort of thing. They told her to phone when a crime had actually been committed. She works at a bank. Respectable young woman. Their rights trump hers...and her landlord's. I can only imagine that the landlord would like to be rid of this element, too. The initial subsidy is used and often further income does not continue and you are left with a mess, having cleaned out the entire complex of the respectable types.

I just had a guy phone for one of my upcoming vacancies. He moved out of his home because it burned down. He moved in with a friend who was dealing fentanyl and ended up killing several people with a bad batch. His current home is being sold to pay the restitution of his landlord. Oh boy...And he has a pitbull. When asked if he smoked, he said no. He vapes.

Speaking of pets...I just had an upstanding nurse with a dog that she did not kennel ruin an entire carpet with dog urine that soaked the carpet, pad and floors. $2,500 to replace, and I cannot bill for it because the carpet, while in fine condition prior, was not new. It was a few years old, which means if contested, it will be thrown out as "normal wear and tear." The life of a carpet is ordinarily 5-7 years. Keep the rents low? Accommodate pet owners because "pets are family" and give the homeless a chance. Right... Or legislation will follow - and who pays for that? Right.

Sorry for the rant. I'm understandably frustrated right now. I depend on the rental income and I depend on people being able to pay for the damage that they might cause. I try to minimize my own risk factors by choosing tenants from criteria that, over time, has proven to be a reliable success overall. To be told by people without skin in the game that I must shelve the greatest risk factors is discrimination...to me! Insurance companies, mortgage companies, banks all do this, too. If you have above a certain amount of claims, delinquent payments, or NSF's, you are uninsurable, unqualified to own a home, or hold a bank account. Why should housing be different?

I actually disagree a bit with who is writing this up. Sometimes that may be the case. But, in this case, it was written by someone who worked in homeless shelters before their time as a politician. I don't think they are offended by them and trying to get them out of sight. I think they actually worry about them and want to get them homes. That being said, they clearly take it way too far. (Again, the original proposal was that you only needed 1.25x the rent for those with vouchers.)

And, we don't need to get into it, but I honestly don't believe that the real problem with homelessness is people doing it mostly by choice or think of it as "suburban camping" or are doing it because it is "popular." But, again, I don't think it is worth a long drawn-out discussion as I don't think we're likely to come to any agreement on that. I think it is a very complex situation -- that has a range of people who are down on their luck and stuck -- to people who are clearly mentally ill. Again, it is very complex with a bit of everything in there. Trying to generalize them all just doesn't work.

In any case, in your state, I think you have every right to be frustrated. This new law seems just crazy to me when it comes to people who are NOT on a housing voucher. It's clearly overreach, IMO.

One way or the other:

Be Creative.

Protect your income and your property.

Just some brainstorming:

~Make it a requirement that you get to meet their boss in person. Wierd? Who cares, if it's legal and increases chance you don't get a deadbeat.

~Make it a requirement they provide you with their household monthly budget. They don't have one? Offer to help them write one up for $35.00

~Make it a requirement that they have XXXX amount in savings. Make 'em prove it.

~Tell 'em the truth: The government doesn't want me to ask you for your income. But if you want to tell me, you can. If you want to provide proof of income you can, but I'm NOT asking you.

Whatever you gotta do. Be creative.

Gotta stay a step ahead of a government that is "here to help".