Denver Now Requires Licenses For Multifamily Dwellings. Over 20,000 Landlords Still Haven't Complied

Starting this year, Denver landlords must hold a license for every property they own with two or more units. But as of Jan. 3, thousands of rental properties were still out of compliance with the new licensure requirement, which took effect Jan. 1. 

To obtain a license, property owners must pass an inspection with an approved inspector and pay a fee to the city. The licenses expire and must be renewed every four years, ensuring that no building goes uninspected for too long.

The change results from a measure passed by the Denver City Council in May 2021 that stipulated the new rules for all properties offering leases longer than 30 days. The goal of the requirement was to ensure the safety and habitability of Denver's rental stock, according to the city.

The city and county of Denver started accepting applications for licensure in March 2022. The program was phased in gradually to avoid a bottleneck, and rental properties with only one unit still have another year to reach compliance. But now the deadline for multifamily buildings is officially in the rearview — and the vast majority still haven’t been licensed. 

As of Dec. 19, only 1,037 licenses had been issued to multifamily properties, BusinessDen reported. That number grew to 1,291 licenses by Dec. 28, according to the Denver Business Journal, with several hundred additional applications still pending review. But there are 25,000 multi-unit dwellings in Denver, according to city estimates. This means the vast majority of buildings are still noncompliant. 

Eric Escudero, a spokesperson for the Denver Department of Excise and Licenses, told BusinessDen that the city had sent out 40,000 postcards to landlords, mounted an awareness campaign and met with property management groups. Based on past experience, he said the city wasn’t expecting 100% compliance on day one. 

“When the city first required a license for short-term rental hosts in 2016, we only had an estimated compliance rate of 30% after the first year,” he said. “Denver is now up to 80% about seven years later, so we know this will take time. But in the meantime, we expect to see minimal living standards improve across Denver.”

In his comments to BusinessDen, Escudero said that the city would proactively seek out landlords that don’t get on board. Though compliance is the goal and fines will be a “last resort,” the city has hired an outside vendor that will check rental listings against licensure records. Landlords contacted by the city will first be given a chance to comply. Those who don’t will receive a series of escalating fines, from $150 for a first offense up to $999.