Renting Out an ADU in Denver, Colorado: Zoning Districts, Permitting, and Rental License Requirements
Introduction
Renting out an Accessory Dwelling Unit (ADU) in Denver, Colorado requires adherence to specific zoning rules and obtaining necessary permits. This guide will help you understand the requirements to ensure your ADU rental is legally compliant.
Permitting & Zoning Standards
ADU Zoning Requirements
In Denver, Colorado, the zoning rules for ADUs are governed by the city’s Zoning Ordinance. To rent out an ADU, you must ensure that your property is located in a zone that allows accessory dwelling units. The city has specific zones where ADUs are permitted, such as R2 (Residential 2-family), R3 (Residential 3-family), and R4 (Residential 4-family) zones.
Citation: Denver Zoning Ordinance, Article XIX, Section 19-204 (Full Title: Denver Zoning Ordinance, Article XIX, Section 19-204. Accessory Dwelling Units).
Owner-Occupancy Requirements
Under Denver’s zoning rules, if you are renting out an ADU, you must ensure that the property is not owner-occupied. This means that if you are renting out an ADU, you cannot live in the main house or any accessory dwelling units on the property.
Citation: Denver Zoning Ordinance, Article XIX, Section 19-204 (Full Title: Denver Zoning Ordinance, Article XIX, Section 19-204. Accessory Dwelling Units).
Parking Minimums
Denver requires that accessory dwelling units have a minimum of one parking space. This requirement ensures that tenants have adequate parking for their vehicles.
Citation: Denver Zoning Ordinance, Article XIX, Section 19-204 (Full Title: Denver Zoning Ordinance, Article XIX, Section 19-204. Accessory Dwelling Units).
Lease Structuring, Utility Metering, and Disclosures
Lease Agreement
When renting out an ADU in Denver, Colorado, it is essential to have a well-drafted lease agreement. The lease should include provisions for rent, security deposit, terms of tenancy, and any other relevant details. Ensure that the lease agreement complies with Colorado’s landlord-tenant laws.
Citation: Colo. Rev. Stat. § 38-12-507 (Full Title: Colo. Rev. Stat. § 38-12-507. Breach of warranty of habitability \u2013 tenant\u2019s remedies).
Utility Metering
It is advisable to have separate utility meters for the ADU and the main house. This ensures that tenants are only responsible for their portion of the utility costs.
Citation: Denver Zoning Ordinance, Article XIX, Section 19-204 (Full Title: Denver Zoning Ordinance, Article XIX, Section 19-204. Accessory Dwelling Units).
Disclosures
Before renting out an ADU, landlords must provide tenants with certain disclosures. These include a notice of eviction, a notice to cure or quit, and any other relevant information.
Citation: Colo. Rev. Stat. § 38-12-507 (Full Title: Colo. Rev. Stat. § 38-12-507. Breach of warranty of habitability \u2013 tenant\u2019s remedies).
State Landlord-Tenant Act Compliance
Notice Periods
Under Colorado’s landlord-tenant laws, landlords must provide tenants with specific notice periods for eviction and other legal proceedings. For example, a landlord must give tenants 3 days’ notice before evicting them for nonpayment of rent.
Citation: Colo. Rev. Stat. § 38-12-507 (Full Title: Colo. Rev. Stat. § 38-12-507. Breach of warranty of habitability \u2013 tenant\u2019s remedies).
Deposit Handling
Landlords must handle security deposits in accordance with Colorado’s laws. This includes depositing the money in a separate interest-bearing account and providing tenants with a written receipt.
Citation: Colo. Rev. Stat. § 38-12-507 (Full Title: Colo. Rev. Stat. § 38-12-507. Breach of warranty of habitability \u2013 tenant\u2019s remedies).
Fee Caps
Landlords are subject to fee caps when charging late fees or other penalties. For example, landlords can charge a maximum of 10% of the monthly rent as late fees.
Citation: Colo. Rev. Stat. § 38-12-507 (Full Title: Colo. Rev. Stat. § 38-12-507. Breach of warranty of habitability \u2013 tenant\u2019s remedies).
Defensible Record-Keeping & Compliance Checklist
To ensure compliance with Denver’s ADU regulations and Colorado’s landlord-tenant laws, landlords should maintain defensible records. This includes:
- Zoning Compliance: Keep copies of your property’s zoning certificate and any permits obtained.
- Lease Agreements: Maintain copies of all lease agreements, including signed contracts and any amendments.
- Utility Bills: Keep records of utility bills for the ADU and main house, including separate meters if applicable.
- Tenant Information: Maintain records of tenant information, including contact details and lease terms.
- Notice Periods: Keep copies of all notices sent to tenants, including eviction notices and notices to cure or quit.
- Security Deposits: Maintain records of all security deposits, including deposit receipts and any returns.
- Fee Payments: Keep records of all late fees and other penalties paid by tenants.
By following these guidelines, landlords can ensure that their ADU rental is legally compliant and protected from potential legal issues.
Conclusion
Renting out an ADU in Denver, Colorado requires adherence to specific zoning rules and obtaining necessary permits. By following the guidelines outlined in this guide, landlords can ensure that their ADU rental is legally compliant and protected from potential legal issues.