Colorado Tenant Screening Laws: Application Fees, Portable Screening Reports and the 2x-Rent Income Cap

The four laws that shape Colorado screening

Portable tenant screening reports

A portable tenant screening report is a report the applicant pays for once and reuses with multiple landlords. It typically includes the applicant’s name and address, employment and income verification, criminal background, rental and eviction history, and credit history.

The rules for landlords:

• You must accept it. If a complete report is provided, you can’t charge the applicant an application fee or a fee to access the report.
• You can set an age limit. Landlords may require that the report was completed within the previous 30 days.
• You can still run your own checks, but you can’t pass that cost to an applicant who supplied a valid PTSR.
• No mandatory portals: HB25-1236 repealed language that let landlords require the report be delivered directly through a particular consumer reporting agency or third-party website.
• Subsidy holders: under HB25-1236, a report for an applicant using a housing subsidy does not need to include a credit history report, credit score or adverse credit events.

Colorado law firms note one narrow exemption: a landlord who processes only one application fee at a time, and refunds a denied applicant within 20 calendar days of the written denial, may operate outside the PTSR rule. Miss the refund window and the exemption is lost.

Application fees

Under the Rental Application Fairness Act (HB19-1106, C.R.S. 38-12-901 to 905), an application fee can’t exceed your actual cost of processing applications, though you may use an average per-applicant cost. Charge the same fee to everyone applying for the same unit, give each applicant a disclosure of anticipated expenses or an itemization of actual expenses, and refund any unused portion. If you deny an applicant, make a good-faith effort to give written notice with the reasons within 20 calendar days. Applicants can recover three times the fee plus costs and attorney fees for violations. Under HB25-1090, application fees and every other charge must also be disclosed accurately in advertising. Confirm current figures and form requirements with the Colorado Division of Real Estate or an attorney.

The 2x-rent income cap

SB23-184 caps the income requirement at 200% of the rent. On a $2,400/month home, you can require no more than $4,800 per month in income. The older 3x-rent rule many owners learned is no longer legal in Colorado.

For applicants with a housing voucher, the 2x test applies only to the portion of rent the tenant pays. If a voucher covers $1,600 of that $2,400 rent, the tenant’s share is $800 and the maximum income requirement is $1,600 per month. You may ask about income only to confirm the applicant meets your requirement.

Other SB23-184 limits

• Rental or credit history older than seven years can’t be considered.
• For subsidized applicants, credit score, adverse credit events or lack of credit can’t be considered unless federal law requires it.
• Security deposits can’t exceed two months’ rent.
• Violations carry a $50 penalty payable to the applicant, and an uncured violation can bring a $2,500 penalty. Confirm current penalty amounts with an attorney.

Fair housing and source of income

Colorado prohibits discrimination based on source of income, so you can’t refuse housing vouchers or other lawful income. Federal and Colorado fair housing laws also protect race, color, religion, sex, sexual orientation, gender identity, national origin, ancestry, disability, familial status, marital status and more. Assistance animals are not pets and can’t be charged pet fees.

A compliant screening process

1. Publish written criteria before you accept applications: income at or below 2x rent, credit, rental history, criminal history policy.
2. Accept PTSRs no older than 30 days without an application fee.
3. If you charge a fee, keep it at actual cost and process applications in the order received.
4. Evaluate every applicant against the same criteria and save your notes.
5. Send written adverse-action notices with specific reasons.

Handling multiple applicants

When several qualified applicants apply at once, process them in a consistent order, usually first complete application received, and say so in your written criteria. Approving a later applicant over an earlier qualified one invites a fair housing complaint. If you charge application fees, remember that collecting fees from many applicants for one home makes the actual-cost limit hard to defend.

Records to keep

Keep each application, the criteria in effect when it arrived, the screening results, your decision and the date, and a copy of any denial notice for at least the period in which a claim could be brought. Consistent records are the best defense if a screening decision is ever challenged.

How Denver Rental Managers handles this

Our written screening criteria are published with every listing, we accept portable screening reports, and we apply the same standard to every applicant, which is what protects owners when a decision is questioned. Screening is included in both our tenant placement and full property management plans.

This guide is general information, not legal advice. Confirm current rules with the Colorado Division of Real Estate or an attorney.