Beginning this year, Denver landlords must hold a license for any property they own with two or more units. But as of Jan. 3, thousands of rental properties still didn’t meet the new licensing requirements that went into effect Jan. 1.

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

Sourced: Bisnow/Joe Fassler

Beginning January 1, all multi-family homes in Denver must be licensed by the city.

The change stems from a measure passed by the Denver City Council in May 2021 that establishes the new rules for all properties offering leases longer than 30 days. The purpose of the requirement was to ensure the safety and livability of Denver’s rental stock, the city said.

The City and County of Denver began accepting license applications in March 2022. The program was phased in to avoid a bottleneck, and single-unit rental properties have one year left to meet the requirements. But now the deadline for apartment buildings is officially in retrospect – and the vast majority have not yet been approved.

As of Dec. 19, only 1,037 multi-family licenses have been issued, BusinessDen reported. According to the Denver Business Journal, that number rose to 1,291 licenses as of Dec. 28, with several hundred more applications pending review. However, the city estimates that there are 25,000 apartment buildings in Denver. This means that the vast majority of buildings are still non-compliant.

Eric Escudero, a spokesman for the Denver Department of Excise and Licenses, told BusinessDen that the city has sent 40,000 postcards to landlords, launched an awareness campaign and met with property management groups. Based on past experience, he said the city doesn’t expect 100 percent compliance on day one.

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

In his comments to BusinessDen, Escudero said the city would be proactive in seeking out landlords who aren’t coming on board. Although compliance is the goal, and fines will be a “last resort,” the city has hired an outside vendor to match rental quotes with license documentation. Landlords who are contacted by the city are initially given the opportunity to comply. Those who fail to do so are subject to a range of escalating fines, from $150 for a first violation to $999.