Colorado late fee rules for landlords

The two numbers

Almost every Colorado late fee question comes down to two figures, and most pre-2021 leases get at least one of them wrong.

Seven calendar days. You may not charge a late fee at all unless the rent payment is late by at least seven calendar days. Not business days, and not a grace period you chose — a floor the statute sets. 38-12-105(1)(a)

The greater of $50 or 5%. The fee may not exceed whichever is larger: fifty dollars, or five percent of the past-due rent payment. Note which way round that is. It is a floor of $50 as much as a ceiling of 5%, so on a $1,850 rent the binding number is $92.50, while on a $600 past-due balance it is $50 rather than $30. 38-12-105(1)(b)

Note also that the 5% is measured against the past-due rent payment, not the monthly rent. A tenant who pays most of the rent and owes the remainder has shrunk the base the percentage applies to.

The eight other things you cannot do

The cap is the rule everyone knows. The rest of subsection (1) is where a lease written before 2021 — or a billing habit carried over from one — tends to come apart.

The fee has to be in the lease. You cannot require a tenant to pay a late fee unless it is disclosed in the rental agreement. An unwritten late fee is not a late fee. 38-12-105(1)(c)

You cannot evict over one. You may not remove or exclude a tenant, or start a court process to do so, because the tenant failed to pay a late fee. Nor may you terminate the tenancy for it. 38-12-105(1)(d), (1)(e)

You cannot take it out of the rent. You may not recoup any amount of a late fee from a rent payment the tenant makes. Applying an incoming payment to the fee first and then declaring the rent short is precisely what this forbids — and it is how an unlawful fee turns into an eviction filing that fails. 38-12-105(1)(i)

Once per late payment. You may not impose a late fee more than once for the same late payment. You may split it across more than one charge, but only if the total stays within the cap. A fee that accrues daily or monthly until the balance clears is not available here. 38-12-105(1)(g)

No interest. You may not require a tenant to pay any interest on a late fee. 38-12-105(1)(h)

Not on the subsidised portion. Where a rent subsidy provider rather than the tenant is responsible for part of the rent, you may not impose a late fee on the tenant for that portion being late or unpaid. 38-12-105(1)(f)

One hundred and eighty days. You may not charge a late fee unless you gave the tenant written notice of it within 180 days of the date the rent payment was due. A fee discovered during a move-out reconciliation a year later cannot be charged at all. 38-12-105(1)(j)

A non-compliant lease term is void, not trimmed

This is the part worth reading twice. A lease provision that does not comply with subsection (1) is void and unenforceable. It is not read down to the lawful maximum. 38-12-105(2)

So a lease saying "$100 late fee after three days" does not quietly become a lawful $92.50 fee on day seven. The provision fails, and with it the contractual basis for charging anything — because subsection (1)(c) independently requires that the fee be disclosed in the rental agreement, and a void provision discloses nothing.

What it costs

A landlord who violates subsection (1) owes the aggrieved tenant a penalty of fifty dollars for each violation. 38-12-105(3)

Beyond that there is a cure window. Except as to that $50 penalty, a landlord has seven days to cure, running from receipt of written or electronic notice of the violation. 38-12-105(4)

Fail to cure in time and the tenant may bring a civil action for compensatory damages, a penalty of between $150 and $1,000 per violation, costs including reasonable attorney fees to the prevailing party, and other equitable relief the court finds appropriate. 38-12-105(5)

As with the deposit statute, the structure rewards fixing it quickly. A notice of violation is not the end of the matter; ignoring one for eight days is where the number stops being $50.

Late fees are not rent

A late fee is distinct from rent, and a rental agreement may not classify it as rent for the purposes of the eviction statute's demand for payment. 38-12-105(7), C.R.S. 13-40-104(1)(d)

That is the practical teeth behind the no-eviction rule. A notice to pay rent or quit that bundles unpaid late fees into the rent demanded is demanding something that is not rent, and a tenant may raise a violation of this section as an affirmative defence in the eviction proceeding itself. 38-12-105(6)

Where this comes from

C.R.S. § 38-12-105, enacted by SB21-173 (2021 session laws, ch. 349, p. 2266, § 8), effective 1 October 2021. It sits in part 1 of article 12 — the same part as the security deposit rules — and is current as published through the 2025 revision.

This is the statute, read carefully, with the citation attached. It is not legal advice, and a lease you are unsure about is worth twenty minutes of someone who can give you some.