Colorado For-Cause Eviction Law: What It Means for Apartment Buyers
Colorado's HB24-1098, signed on April 19, 2024, requires landlords to have cause before evicting most residential tenants or refusing to renew their leases. The law does not apply to tenancies shorter than 12 months, and it exempts certain small owner-occupied properties, employer-provided housing and short-term rentals, but for a typical apartment building it covers every tenant who has been in place for a year or more. If your business plan depends on turning over tenants, the law sets the pace.
Cause covers the familiar grounds, including nonpayment of rent, lease violations, creating a nuisance and damaging the property, all of which were available long before 2024 and remain available now. What the law changes is the ability to simply let a lease expire because you would prefer a different tenant or a higher rent from someone new.
The law also lists no-fault grounds, which allow a landlord to end a tenancy without blaming the tenant. They include demolishing or converting the property, making substantial repairs that require the unit to be vacant for at least 30 days, the landlord or a family member moving in, repeated late payments, and a tenant's refusal to sign a new lease on reasonable terms, and any termination on one of these grounds requires 90 days' written notice to the tenant. Withdrawing a unit from the rental market to sell it is also a no-fault ground, but only for single-family homes, townhomes, duplexes, triplexes and individual condominium units, so it does not help the owner of an apartment building.
The refusal ground matters most to buyers, because you can offer a renewal at a higher rent, and if the terms are reasonable and the tenant declines, the tenancy can end, which preserves some room to move rents toward market. The law does not define reasonable with a fixed percentage, so an aggressive increase invites a dispute in which the tenant can raise the landlord's violation as a defense in eviction court.
Value-add plans need the most adjustment under the new rules, since a renovation that requires a vacant unit can qualify under the substantial repairs ground, but only with 90 days' notice and a scope of work that genuinely needs the tenant out, and when the work will take less than 180 days, the tenant can claim the first right to sign a new lease once it is finished. A plan built on non-renewing a third of the building in the first year to renovate faster now runs on a longer and more documented timeline, and the pro forma should reflect that.
Tenant quality is also harder to change after closing, because if the seller has tolerated problem tenants, you inherit them with the same leases and the same protections, and removing them requires documented cause. Read the lease files, payment histories and any notices served before you buy, because those records determine what you can do after closing.
Lenders and buyers have begun to price in the slower path, and turnover assumptions, renovation schedules and rent growth projections built before 2024 may overstate how quickly a new owner can reposition a building, and an appraisal or bridge loan sized on that faster plan can leave you short of the income you expected.
Sellers sometimes try to deliver a building with fewer tenants by sending non-renewal notices before closing, and those notices carry the same legal requirements whoever sends them. Ask to see every notice served in the past year, because a defective notice can leave you with a dispute and a tenant you expected to be gone.
Before you make an offer, rebuild the business plan around the law's timelines rather than around market rent alone. Identify which units can turn through natural move-outs, which renovations genuinely require vacancy, and which tenants have payment or lease issues already documented. Then add the 90-day notice period to every unit you plan to renovate and see whether the deal still works on that schedule.
Running the business plan on that slower schedule usually changes the renovation budget, the rent growth and the return on cost, and sometimes the price the deal can support. I help apartment buyers build CRE models that phase renovations around natural turnover and notice periods, so the projections a lender or investor sees reflect the pace the law actually allows. If you are underwriting a value-add deal here, send it to amer@awadcapitaladvisors.com, and I can help you see whether the returns still hold on a realistic timeline.