On Friday April 19, 2024, Governor Polis signed HB24-1098, titled “Cause Required for Eviction of Residential Tenant.” This law concerns what happens at the end of a residential lease. Under prior law, not renewing the lease is a reliable way for landlords to end the relationship and evict a tenant if necessary. “Breaking up” is a good way to describe such event. Both sides have the right to “break up” when the lease ends. They can break up for any reason or no reason at all, except that landlords cannot do it for an illegal reason such as race discrimination.
You can see the law’s text here.
HB24-1098 drastically curtails a landlord’s ability to “break up” at the end of the lease. Now, a landlord can elect not to renew the lease for a short list of reasons (like selling the property, doing renovations, or if the tenant creates a “nuisance or disturbance”). In the very likely event that none of these reasons apply, the landlord can only proceed with an eviction if the tenant has refused to sign a new lease with “reasonable” terms. In other words, landlords are forced to offer potentially unlimited lease extensions.
There are multiple issues with the substance of this law, however, today I am focusing on the law’s assumptions about landlords. The law says it seeks to prevent “arbitrary displacement of individuals.” The supporters believe that landlords refuse to offer leases for discriminatory reasons, or no reason at all. Is this really true?
We don’t need a law concerning “discrimination.” Laws already prohibit landlords from refusing to renew a lease for what most people would view as unlawful “discriminatory” reasons, such as race, religion, and sex. It also seems unlikely that a landlord who leased to a member of a protected class in the first place would later refuse to renew because of that status. I don’t know how many landlords would do this, but if they’re out there we don’t need another law to deter them.
I don’t buy the “arbitrary reasons” idea. In my experience representing landlords over the years, I’ve never seen landlords refuse to renew a lease for no reason whatsoever. All landlords strive to keep good tenants – the ones that pay rent and generally comply with the lease. Most landlords get rid of bad tenants in the middle of the lease – the ones that don’t pay rent or commit other serious breaches of the lease.
Then there are the “marginal” tenants – the ones that pay rent, but also do things like chronically pay late, be high-maintenance, cause unnecessary drama, commit minor breaches of the lease, or generally be difficult to work with. Many landlords will put up with a marginal tenant, even if there may be a basis to evict them, at least until the lease ends. Then the landlord considers breaking up with that marginal tenant in search of a good tenant by not renewing the lease. Breaking up with a marginal tenant is not a foregone conclusion – the landlord faces costs to prepare the unit for new tenants and will lose some rent, with no guarantee of landing a “better” tenant. Thus, this “for cause” eviction law seems to prohibit something that no rational landlord would actually do, and greatly curtails private property rights.