Denver Takes Enforcement Action Against 145 Properties for Failing to Get Rental Licenses

The City of Denver’s residential licensing program is getting serious about scofflaws. The Department of Excise & Licenses just announced its first enforcement efforts for multi-unit residential properties that have not yet gotten their required licenses.

The department sent 145 violation notices to owners of properties operating without a license as of February 22, and plans to issue additional notices as enforcement continues. The notices informed owners that if they don’t apply for a residential rental license within 45 days, they will be cited by the city and fined $150.

“We don’t want to issue anyone citations and fines, so this is basically one last warning and a notification that they have been identified by the city as in violation of city law,” says Eric Escudero, director of communications for Excise & Licenses.

Among the 145 properties that received violation notices is the Cedar Run Apartments, where tenants have joined together to protest conditions, and The Grand, which is being sued by some tenants it kicked out in July 2022. Mint Urban Infinity, the subject of a class-action lawsuit by past and current tenants over poor conditions and management, is also on the list.

The city estimates that about 25,000 multi-unit rental properties in Denver should have gotten licenses by January 1, under a program approved by Denver City Council close to two years ago that's designed to record and register all rentals. Only 2,822 of the multi-unit properties managed to meet the deadline, according to Excise & Licenses.

“We have been doing extensive outreach and lots of education over the last year or so to inform the public and property owners of this need for a license,” says Excise & Licenses Executive Director Molly Duplechian. “It's an important step to take to start doing more targeted communication with these property owners that have still not chosen to come into compliance. Now that it's a requirement to have the license for multi-unit properties, we're starting with these notices of violations, and we're hoping that will be the thing that will press them into action to applying for the license.”

There was a steady increase in license applications toward the end of 2022, she adds, and the department now has more resources to push the program. It recently hired a team to identify addresses with multi-unit rentals that are not licensed.

The city considers citations and fines a last resort because the goal is compliance, not punishment. The recent wave of enforcement efforts primarily targets properties that are the focus of current or previous complaints filed with the Denver Department of Public Health & Environment.

“The Denver Department of Public Health & Environment receives about 1,200 complaints per year, so we'll start with those, and we'll identify if they're still operating, and if they're not licensed, we'll issue notices of violations,” Duplechian says. “But we also will continue, through this wave, to start identifying other properties that we know are unlicensed as well.“

To get a license, properties must pass an inspection showing that they meet the city’s minimum housing standards, including having working heat, running water, fire-safety measures, proper electrical wiring and sufficient egress. The license is a requirement of the Healthy Residential Rentals for All ordinance, passed by Denver City Council in May 2021 as an attempt to level the playing field between renters and landlords.

It is the largest expansion of required licensing in Denver history; the city expects that the program will ultimately equal or surpass the total of all other business licenses issued in the city. “It’s important to note this is just the first batch of administrative notice of violations,” Escudero says. “There will be a lot more to come.”

Along with tracking complaints made to the DDPHE, the department is following the same strategy it uses to find unlicensed short-term rental properties, scraping the internet for advertisements for multi-unit rental properties and comparing that list to those addresses already in the licensing portal. From there, it creates a roster of potential unlicensed rentals, then reaches out to those properties with information on the licensing requirements.

If landlords fail to apply for a license after a first citation and fine, they could receive a second citation with a $500 fine and even a third citation with a $999 fine. Every additional citation will come with another $999 fine and potential criminal court action — but Escudero says the department hopes no landlord will get to that point.

Tenants experiencing problems at their apartments can call 311 to file a report. They can also check their address in the city’s Permitting and Licensing Center to see if the property is licensed or has a pending application. If not, they can contact Excise & Licenses.

“If there is an issue with the property, like it doesn't have hot water, or their heat is not functioning, or they have mold or something like that, I would encourage them to file a complaint with the Denver Department of Public Health & Environment,” Duplechian says. “Then, also, we could be working with the property owner to make sure that they're aware of the requirement to get a license, that they are starting the process of getting an application in and completing an inspection, and that they're on the right path to compliance.”

The cost of licenses is low, Duplechian notes, to ensure that landlords don't use them as an excuse to raise rent.

Landlords must pay $50 for the initial application as well as a license fee based on a property's number of units. Those fees are $50 for a single-dwelling unit, $100 for two to ten units, $250 for eleven to fifty units, $350 for 51 to 250 units, and $500 for 251 or more units. There is a fee exception for affordable- or public-housing properties, and each license lasts four years.

“There are a lot of factors that influence rents and the cost of rent in Denver, but this license definitely should not be one of them,” Duplechian says. “It's a four-year license. When you average that cost over the four years, it's really $5 to $10 a month for the license, and so it is not something that tenants should be hearing from their landlords that is going to be increasing the cost of their rent.”

Landlords of single-unit rental properties are not required to obtain a license until January 1, 2024, but 1,005 properties already have. The city estimates there are about 25,000 single-unit rentals; under this program, the city will soon have a more accurate number.

The Healthy Residential Rentals for All ordinance also requires landlords to provide tenants with a copy of the Tenant Rights and Resources document created by the city.

“This ordinance not only created the license, but it's also just giving the opportunity for tenants to have more education as far as what they are entitled to,” Escudero says. “When you consider how much rents cost these days, it's important that someone is looking out for these tenants.”

And that tenants aren't paying premium prices for unlivable conditions.

“We want properties to come into compliance with this license so that we can utilize this tool to hold absent, neglectful landlords accountable,” Duplechian says. “If we continue to identify properties that remain out of compliance, they will be subject to fines and citations as well.”