Renting out your Denver property can be a lucrative investment. But in order to maintain your yields, you’ll probably need to raise rent every once in a while.
That’s why landlords need to be aware of the local rent increase laws in their state or city. In this article, we’ll explore the sometimes-complicated but all-important world of rent increase laws in Denver, Colorado.
Let’s dive in!
How Much Can You Increase Rent?
The number one thing you need to know: There are no specific rent increase laws in Denver. According to Colorado law, the rent increase amount is not capped so, in theory, you can increase rent as much as you’d like. Keep in mind that Denver landlords cannot increase rents more than once a year, though!
Landlords can raise the rent when a resident moves out, to adjust it for inflation, or to account for property improvements. This might include things like renovations or upgrades that enhance the value and quality of the rental unit. These guidelines are in place to incentivize landlords to invest in their properties and provide better living conditions for their residents in Denver.
While you can technically raise rents as much as you’d like, that doesn’t necessarily mean that you should. In the interest of fairness and affordability, landlords should aim to strike a balance between the rights of residents and the financial interests of landlords. Limiting the frequency and percentage of rent increases helps ensure that residents are not burdened with sudden and exorbitant hikes in their housing costs.
By doing market research, landlords can adjust their rental rates in a way that aligns with the economic realities of the Denver area.
When Can You Increase Rent?
Landlords in Denver cannot just raise rent willy-nilly! It is important to note that you cannot increase the rent while a lease is still active unless there is a specific clause in the lease agreement allowing for rent adjustments. If the lease is on a month-to-month basis, you have more flexibility in adjusting the rent. However, always ensure that you provide the required notice to the resident.
In Denver, landlords are required to provide residents with a 30-day written notice before the new rent rate goes into effect. This notice should clearly state the amount of the increase, the date that the increase goes into effect, and the reason for the increase, if applicable.
How Do You Increase Rent?
Increasing rent is a straightforward process, but it must be done correctly to avoid any legal issues.
Draft a Notice of Rent Increase
To start, draft a written notice stating the new rental amount, the effective date, and any other relevant information.
Deliver the Notice
You can provide this notice to your resident personally or deliver it through certified mail. If you choose to deliver it in person, make sure to have a witness present to verify the delivery.
When delivering the rent increase notice, it is advisable to maintain open lines of communication with your resident. You can discuss the reasons for the increase, such as rising property taxes or maintenance costs, and address any concerns the resident may have.
Ask for Help as Needed
A Denver property management company can help when it comes to setting rent rates, collecting rent, raising rent, negotiating lease terms, and more.
Giving Notice of a Rent Increase
As mentioned earlier, landlords in Denver are required to give a 30-day written notice before implementing a rent increase. This notice should be clear, concise, and comply with all the legal requirements. It is recommended to retain a copy of the notice for your records.
In addition to the notice, it is also a good idea to keep a record of any communication or documentation related to the rent increase. This can include emails, letters, or any other form of communication exchanged between you and the resident.
If the resident does not agree to the rent increase, both parties should attempt to negotiate a mutually acceptable solution. If an agreement cannot be reached, you, as the landlord, may choose to explore other options such as finding a new resident or entering into mediation to resolve the dispute.
Final Thoughts: Rent Increase Laws in Denver, Colorado
Being a landlord in Denver comes with various responsibilities, including complying with laws regulating the landlord-resident relationship. By understanding the limits of this relationship, you can navigate the rent increase process smoothly while maintaining open communication with your residents.
Remember to always provide the required 30-day written notice and keep proper documentation of all communication relating to the rent increase.
By following these guidelines, you can confidently increase rent in accordance with the law and continue to operate a successful rental property business in Denver, Colorado.
Looking for a professional property management company to help with setting and raising rents? Contact our Denver team today!
