Colorado Late Fee Laws

Colorado enforces some of the strictest regulations nationwide regarding when and how much a landlord can penalize a residential tenant for paying rent late.

Following sweeping changes passed in 2021 (S.B. 173) that remain actively enforced today, landlords must strictly adhere to both minimum grace periods and maximum financial caps.

[!CAUTION] Eviction Warning: In Colorado, landlords are strictly prohibited from terminating a tenancy or filing an eviction lawsuit (unlawful detainer) solely based on a tenant's failure to pay a late fee. Evictions must be based on unpaid rent.

The Mandatory 7-Day Grace Period

In Colorado, a landlord cannot legally assess or charge a late fee until a rent payment is late by at least seven (7) full calendar days.

For example, if rent is uniformly due on the 1st of the month, a tenant has through the 8th to submit payment. If the payment arrives on the 9th, only then can a late fee be legally applied.

The Financial Cap: $50 or 5%

Colorado sets a stringent statutory maximum on the amount of a late fee. A residential late fee cannot exceed:

• A flat fee of $50, OR
• 5% of the past due rent amount. (Whichever of those two sums is greater).

A landlord is prohibited from stacking late fees. The fee cannot be charged more than once for the same late payment unless the combined total still remains underneath the 5% / $50 ceiling.

Illegal Late Fee Practices

The following actions regarding late fees are explicitly illegal in Colorado:

1. Charging Interest: A landlord cannot charge accrued interest on an unpaid late fee.
2. Hidden Fees: Any applied late fee must be explicitly detailed and disclosed within the written lease agreement prior to signing.
3. Application of Payments: A landlord cannot apply a tenant's standard rent payment toward an outstanding late fee balance first. Rent payments must be applied to rent.
4. Subsidy Late Fees: Landlords are strictly prohibited from charging late fees on the portion of rent owed by a government or non-profit housing subsidy provider (like Section 8 components).
5. Notice Requirements: A landlord must provide written notice of a late fee within 180 days after the rent payment initially became due; otherwise, the right to collect that fee is forfeited.

If a Colorado landlord violates these extremely precise late fee rules and fails to cure the violation within 7 days of receiving a notice from the tenant, the landlord can be forced to pay a $50 initial violation penalty, plus up to $1,000 per subsequent violation, plus the tenant's attorney's fees.

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