How Special Rules Apply to Corporate Landlords
“Institutional investors are moving from Wall Street to Main Street, buying up single-family homes across the United States. Are they any better than traditional landlords managing one or two houses?”
The Colorado Consumer Protection Act (the “Act”) ensures that companies doing business in Colorado employ fair and honest practices as part of their business model. A business model that is unfair to consumers or deceives consumers is prohibited by the Act.
What does this have to do with landlords? Traditional landlords — the mom and pop landlords that rent out a couple apartments or single-family houses typically do not have complex enough businesses to be regulated by the Act. Institutional investors, however, are moving from Wall Street to Main Street, buying up single-family homes across the United States. Are they better than traditional landlords?
That depends. The Act holds corporate landlords to a higher standard. Since institutional investors rely more heavily on systematized business rules to manage their rental properties, individual failures and neglect become less common. At the same time, systemic issues of mismanagement become more common. Where tenants have limited rights under other Colorado statutes, some systemic issues of mismanagement are actionable under the Act.
For example, if a landlord routinely fails to disclose to potential tenants certain aspects of a property that any reasonable tenant would like to know about (for example, the presence of bed bugs), the tenant may have a claim that the landlord violated the Act.
This exposes the corporate landlord to much more liability than a single failure to disclose would.
Although a corporate landlord might have a war chest of money to defend against claims from tenants, the Act exposes them to much more liability than ordinary habitability claims. This unique feature of Colorado law evens the playing field and makes effective representation available to tenants.
DISCLAIMER: This information is intended to be for general purposes only and does not constitute legal advice. This information is not intended to be fully comprehensive and laws change frequently. The facts and circumstances of your case may significantly alter the application of the law and this information to your case. For legal advice on your case specifically, please contact a licensed attorney.