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STATEMENT OF ENFORCEMENT DISCRETION
The Department has received notice of significant uncertainty regarding the enforcement of § 6-1-737( 4)( a), C. R. S. as it relates to residential multifamily properties that use a ratio utility billing system to apportion utility charges among a property’ s tenants. It is the Department’ s understanding that the use of ratio utility billing systems is common in older residential multifamily properties, part of essential housing in the market in Colorado.
In response to written communications and inquiries, it is the determination of the Attorney General that the Department will exercise its discretion to enforce the new § 6-1-737( 4)( a), C. R. S. in a manner that does not pursue legal actions against landlords that allocate utility costs among tenants using a ratio utility billing system, provided that:
1) The aggregate amounts billed to all tenants do not exceed the total amount charged by the utility provider for the specific property;
2) The landlord does not apply a markup, surcharge, administrative fee, or other amount in excess of the actual charges from the utility provider, except as otherwise permitted under § 38-12-801( 3)( a)( VI), C. R. S.;
3) Utility costs for common areas or shared facilities are excluded from any tenant allocation; and
4) The landlord clearly and conspicuously discloses the reasonable and objectively fair method of allocation in the rental agreement and any disclosures otherwise required by law.
Furthermore, the Department will not enforce § 6-1-737( 4)( a), C. R. S. retroactively, pursuant to Section 5( applicability clause) of House Bill 25-1090. Therefore, any enforcement actions taken by the Department will be pertaining to leases amended, renewed, or entered into on or after the January 1, 2026, Effective Date.
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