What Landlords Need to Know About Changes to Colorado's Rent-Related Assistance Programs
Over recent months, there have been changes to the State of Colorado's rent-related assistance programs, affecting both landlords and tenants. In 2020, owners were able to utilize the Property Owner Preservation (POP) fund to provide tenants with help securing the rent they owed. The program allowed users to register their tenants for assistance—requiring very little information from the tenant—thereby enabling a relatively smooth path to enrollment. It required nominal documentation regarding direct effects from COVID-19, hence landlords were able to secure nearly $750,000 in funding.
Unfortunately, the POP program ran out of money in early 2021 and has transitioned to the Emergency Rental Assistance Program (ERAP), which has created more barriers to tenants receiving assistance. Enrollment requirements vary across counties and all require additional work by the tenant. Some require six pages of tenant information plus landlord contributions, while others require that tenants complete the entire process themselves. In all cases, tenants must show evidence that they were directly affected by COVID-19.
What This Means for Landlords
With new requirements in place, some tenants are no longer eligible. Further, landlords are encountering difficulty getting some tenants to complete required portions of their applications and receiving confirmation once they have. On a positive note, the state hired a third-party vendor to assist with processing, which has improved application turnaround after they’ve been submitted, enabling landlords to make educated decisions faster.
Every landlord hopes for tenants who work with them to get assistance, however for tenants who don't communicate or don't qualify, landlords are allowed to serve them Notices to Pay or Quit. All counties now require 30-day Notices to be served. For tenants who do complete assistance paperwork, the Notice will prioritize their application for review. For those who don't, landlords may file in court if the tenant does not turn in a CDC Declaration.
Starting in May, you are again required to share information regarding the CDC Declaration when serving notices for monetary reasons. The Declaration allows tenants to avoid eviction and can stop the process up until the eviction itself. If tenants submit one, landlords are not allowed to charge them for legal fees. Submitting a Declaration does not completely eliminate the possibility of eviction. The order requires that tenants seek government assistance to try to keep up on rent. If tenants don't work with landlords to complete the ERAP application, there is a legal argument to challenge their Declaration.
This also creates a conversation around letting leases expire. The CDC order and Declaration’s center on monetary evictions, not lease expirations. Leases that have expired leave open the option to post Notice to Quit as an alternative to moving out a tenant. So, in some cases, an argument can be made to let a lease expire.
While the program will continue to help many, realistically speaking, landlords can expect to see an uptick in evictions. Since each situation is unique, it behooves landlords to discuss their particular circumstances with knowledgeable industry associates.
To get advice or talk through your current situation email Cory Rasmussen at Cory@realatlas.com.