Colorado AG Issues Guidance on New Price Transparency Law Affecting Colorado Residential Leases

The Colorado General Assembly earlier this year passed House Bill (HB) 25-1090, which establishes comprehensive requirements for price transparency in consumer transactions, including residential leases. The new law, codified as Colorado Revised Statutes (C.R.S.) § 6-1-737, takes effect on Jan. 1, 2026, and requires all advertised rental prices to include mandatory non-government charges as "a single, clear, and conspicuous 'total price,' displayed more prominently than any other pricing information."

Uncertainty Surrounding Colorado's New Price Transparency Law

C.R.S. § 6-1-737(4)(a) prohibits a landlord from requiring a tenant to pay for utilities above the amount charged by the service provider to the tenant's unit, except for a limited administrative fee that does not exceed $10 per month or 2 percent of the bill, but not both. (See C.R.S. § 38-12-801(3)(a)(VI).) Following passage of the law, uncertainty existed for the multifamily housing industry, as many properties are not individually sub-metered. Instead, these properties use master meters and allocate utility costs among tenants using a ratio utility billing system (commonly known as RUBS). Owners and property managers grew concerned that the law could be improperly interpreted to prohibit master-metered billings using RUBS. Such an interpretation could require owners to undertake impractical and costly retrofits.

Additionally, further uncertainty existed regarding whether the law would apply retroactively to leases signed before Jan. 1, 2026. Such an interpretation would result in an industry-wide scramble to obtain amendments to existing leases that do not expire until after Jan. 1, 2026.

The AG's Guidance: A Safe Harbor for Landlords and Property Managers

Following a request from Holland & Knight on behalf of the Colorado Apartment Association, the Colorado Attorney General's (AG) office issued a memorandum on Nov. 24, 2025, outlining its enforcement priorities. The guidance acknowledged the "significant uncertainty" surrounding the application of the statute to properties that use RUBS and that penalizing properties using master-meters would be "contrary to the intent of H.B. 25-1090" and "could harm renters and property owners by forcing costly retrofits." Moreover, the AG stated that "the provisions of the newly enacted § 6-1-737(4)(a), C.R.S. were neither written nor intended to apply in a manner that penalizes existing multifamily properties that utilize master-meters to apportion utility charges in a fair, transparent manner to renters." The guidance further noted that a legislative fix is expected to be addressed in the 2026 regular session of the Colorado General Assembly.

The AG's office stated that it will exercise its enforcement discretion and not pursue legal actions against landlords who allocate utility costs using RUBS, provided that four key conditions are met:

1. No Overbilling. The aggregate amounts billed to all tenants does not exceed the total amount charged by the utility provider for the property. 
2. Limited Administrative Fees. The landlord does not apply any markup, surcharge or administrative fee in excess of the actual utility charges, except as otherwise permitted under C.R.S. § 38-12-801(3)(a)(VI) (i.e., $10 or 2 percent, but not both).
3. Common Area Exclusion. Utility costs for common areas or shared facilities are excluded from any allocation to tenants.
4. Clear Disclosure. The landlord clearly and conspicuously discloses the reasonable and objectively fair method of allocation in the rental agreement and any other disclosures required by law.

Furthermore, the AG's office confirmed that it will not enforce the statute retroactively. Any enforcement actions will only pertain to leases amended, renewed or entered into on or after the Jan. 1, 2026, effective date.

Comprehensive Compliance Strategy for Property Owners and Managers

Although the AG's guidance provides clarity, property owners must continue to take proactive steps to ensure full compliance with both the safe harbor conditions and the broader requirements of HB 25-1090. Some steps include the following:

• Immediately Conduct Audits of Utility Billing Practices. Owners and managers should conduct a comprehensive audit of their utility billing practices before the law takes effect. This includes: 1) documenting current RUBS methodology to ensure calculations are based on objective factors, 2) keeping records that confirm that common area utility expenses are not charged back to tenants, 3) ensuring that any administrative fees comply with the statutory limit of either 2 percent or $10 monthly, and 4) implementing reconciliation processes to confirm the sum of charges never exceeds the total utility amount from the providers. Additionally, each owner and manager must implement proper record retention protocols for each tenant's records (minimum of three years). All team members must be trained on the new requirements to ensure safe harbors and statutory obligations are satisfied.
• Address Marketing Compliance. Beginning Jan. 1, 2026, all rental advertisements must display the total monthly price prominently by using larger font than other pricing information. This total must include all mandatory non-government fees, but utilities may be shown separately with proper disclosure. Advertisements should clearly indicate when utilities are billed separately and specify that utility costs vary monthly. Copies of updated leases should be made available during the application process.
• Update Existing Lease Agreements. All leases executed, amended or renewed after Jan. 1, 2026, require revisions to comply with the new law. These documents must include comprehensive disclosure of utility allocation formulas, clear identification of all mandatory fees and separation of optional services from required charges. Leases should contain specific language regarding the variable nature of utility costs and establish clear documentation requirements for resolving any utility billing disputes. Consider adding a dedicated utility billing addendum that details RUBS methodology, includes sample calculations and provides tenants a clear understanding of how their portion is determined.
• Adopt Risk Mitigation Strategies. If using third-party billing services, ensure that third parties require compliance with Colorado law and include appropriate indemnification provisions. Establish internal dispute resolution procedures for addressing tenant utility billing concerns before they escalate to formal complaints.

How Holland & Knight Can Help

The intersection of HB 25-1090 with existing utility regulations and Colorado's statutory interpretation principles creates a complex compliance landscape requiring careful navigation. Holland & Knight's successful advocacy resulting in favorable guidance from the AG's office has resulted in substantial savings to multifamily housing owners and managers, and our attorneys are here to help provide further compliance direction and ongoing support. For more information or further guidance on a specific matter, please contact Ed Perlmutter, Anne Beehler, Kendall Kadish or Benjamin Genn.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.