Do you own any residential property in the City and County of Denver that you lease on a monthly or annual basis? If so, you must obtain a new municipal license in the coming months, with specific deadlines and requirements depending on the type of your property.
Multi-unit rental properties such as apartment buildings are up first – the City’s new license is required by January 1, 2023. All single-family rentals are next, with licensing starting on January 1, 2024.
In all, the City estimates that 50,000 total rental properties (multi-unit and single-family) must be licensed by early 2024. Given expected delays in scheduling certified on-site inspections and navigating a new licensing structure, our best advice is to begin preparing early.
Please read on for guidance about Denver’s largest-ever licensing expansion that may impact your rental property.
I. Current and Future Licensing Requirements
In May 2021, Denver City Council passed an ordinance requiring property owners to obtain a license to offer, provide, or operate residential rental properties in the City and County of Denver. The Denver Department of Excise and Licenses is responsible for implementing and enforcing the new residential rental license program.
The Denver webpage for residential rental licenses provides resources for property owners and managers. The City’s new rules will be implemented in several phases:
Written Leases and Notice of Tenant Rights
The first phase, which became effective on January 1, 2022, requires written leases for all new residential rentals of more than thirty days. Property owners must provide their tenants with an executed copy of the lease along with a written notice of Denver Tenant Rights and Resources published by the City. Copies of this notice, which contains detailed information about state and local landlord-tenant laws, are available on the City’s residential licensing webpage in both English and Spanish.
January 1, 2023: License Required for Apartments and Multi-Unit Structures
Beginning on January 1, 2023, a residential rental license will be required for any property owners who seek to rent out two or more units at a single location. Examples include duplexes where both units are owned and rented out by the same property owner, along with all apartment buildings, complexes, and other multi-unit structures.
Although this first phase will not apply to property owners who own and rent a single residence or single unit in a multi-unit structure (e.g., an individual condo unit), such landlords can choose to apply for a license early.
January 1, 2024: License Required for Single-Family Units
Beginning on January 1, 2024, a license will be required for any person to offer, provide, or operate a residential rental property consisting of a single unit. This includes single-family homes, single units within a rowhouse, and single units in an apartment building or condominium. Primary residences offered as short-term rentals (less than thirty days) may be exempted from the City’s separate residential licensing requirement.
II. License Application Requirements
Application for Residential Rental License
To obtain a residential license, property owners (or their designated agents or managers) must submit an application via the City’s online portal. The application portal has a complete outline of the steps required, including links to required forms, tools, and checklists. Applicants should also be prepared to provide contact information for both the property owner and on-site property managers, if any; a copy of the property owner’s ID; and information for the person or entity who will hold the residential rental license. Finally, applicants must also pay an application fee and an annual license fee.
| Number of Dwelling Units | Annual License Fee |
|---|---|
| Single | $50 |
| 2-10 | $100 |
| 11-50 | $250 |
| 21-250 | $350 |
| 251 or more | $500 |
Affordable or public housing properties may qualify for waivers of application and licensing fees. Interested property owners can review the City’s Frequently Asked Questions on fee exemptions for more information.
Certified Inspection Requirements
Within 90 days prior to applying, residential property owners seeking a rental license must have their property inspected by a licensed and certified home inspector. Inspections will ensure that the property is in compliance with the new Residential Rental Program (“RPR”) Checklist and Guidebook, which was issued by Denver and available on the online portal here. The items on the RPR Checklist represent a core subset of the most critical residential health and safety rules and regulations issued by Denver.
Applicants will be required to provide verification of this inspection as part of the license application. Properties containing up to ten units must have at least one random unit inspected; properties containing more than ten units must have at least 10% of the units inspected. The City’s rules also provide for certain exemptions related to inspections. If an inspection reveals noncompliant items, property owners can still submit an application, but must correct the deficiencies, obtain a re-inspection (which can be a partial inspection, i.e., limited to those items previously marked as noncompliant) and submit a fully compliant, passing re-inspection form within 90 days of their application date.
Grace Period for Pending Applications
On the above effective dates, licenses will be required as a matter of City law for all applicable rentals, whether new or existing. However, the rules allow a limited grace period for applicants who have completed the required inspection and submitted an application, but have not yet been approved. An applicant who does not yet have a license may continue operating their rental if certain specific conditions are satisfied.
Maintaining Residential Rental Licenses
After a property owner has been issued a license by the City, the license will remain in effect for four years, unless the property covered by the license changes ownership. Existing licenses may be renewed, provided that the property is re-inspected. Landlords must continue to comply with all other existing laws and regulations applicable to rental property.
During the term of an existing license, the City can investigate alleged license violations or complaints by tenants or neighbors, suspend or revoke a license, and issue appropriate sanctions for violations. Importantly, an investigation, suspension, or revocation of a landlord’s license may not affect an existing lease between a landlord and a tenant, but may still prevent the landlord from entering into any new lease agreements until the disciplinary action is resolved.
Given the sheer number of properties in Denver that must obtain a new residential rental license in the near future, we recommend scheduling inspections and submitting license applications well in advance. If you have any questions about navigating Denver’s new licensing rule, contact John “Sean” Jennings at jjennings@irelandstapleton.com or Katherine R. Struthers at kstruthers@irelandstapleton.com.
What is written here is for general information only and should not be taken as legal advice. If legal advice is needed, please consult an attorney.