Update on the Upcoming HB 1090 Compliance Law

With the effective date for HB 25-1090 approaching on January 1, 2026 and inconsistent legal opinions advising rental housing providers how to comply with prohibitions on billing for common area utilities, many members have contacted the Association about its advocacy plans regarding the issue. The Association is pursuing both legislative modifications to address the issue and formal guidance from the Attorney General’s office on complying with the existing statutory language.

THE 1090 ISSUE

HB 25-1090 modifies Colorado’s statutory law requiring that rental housing providers disclose all mandatory fees (in addition to base rent) and publish a “Total Price” any time the base rent is advertised. The concept behind this requirement is to allow consumers to be able to make apples to apples comparisons of advertised rental housing prices.

The bill also prohibits several items from being charged as separate fees (requiring that compensation for these items be included in the base rent). The restriction causing the greatest concern is the prohibition on CAM charges, which includes a ban on charging a separate fee for utilities for the common areas (compensation for common area utilities now must be included in the base rent).

In interpreting the ban on fees for common area utilities, there have been differing legal opinions on how to bill utilities for the rental units when those utilities are delivered through a shared tap or meter and then mathematically apportioned. These situations are common when water is delivered through a shared water tap (and not sub-metered) or units are heated by a shared boiler using natural gas delivered through a single meter.

The most “conservative” of these differing legal opinions has been that mathematical apportionments of utilities for the units are prohibited and that only utilities delivered directly to the unit can be billed separately and not included as rent. The most “lenient” of these legal opinions advises that mathematical apportionment of utilities delivered through a shared tap or meter are not prohibited, provided:

• The total utilities billed do not exceed the amount billed by the utility provider.
• The amount billed to the residents is reduced by an adequate allowance for utilities used in the common areas.
• The formula for the apportionment of the utilities is fully disclosed and agreed to by the resident.
• The accounting\administrative charge for these calculations does not exceed $10.00.

While everyone agrees that charges for common area utilities cannot be billed as a separate fee and must be included in base rent, advice on the issue of mathematically allocating utilities for the unit’s consumption is contradictory. The Association is working to get clarification that mathematically allocating utilities delivered through shared taps and meters is permissible.

LEGISLATIVE FIX

The Association has met with the primary sponsors of HB 25-1090 (Representative Mabrey, Representative Sirota and Senator Wiseman) and they have each expressed surprise that the bill has been read by some to prohibit mathematical apportionment of utilities for rental units, indicated it was not the intent of the legislation, and committed to sponsor “cleanup” legislation during the next session to address this problem. They have agreed to our offered provision for a statutory correction. We are optimistic about the adoption of this or similar language.

The problem with a legislative fix is timing. The next Legislative Session will not begin until January 14, 2026. The fastest possible adoption of this more specific language would not take place until March 2026. With the January 1, 2026 implementation date, Members will be making their decisions on how to deal with utilities prior to the adoption of the new language.

AG GUIDANCE

Because of the delay in a legislative solution to the apportioned utility issue, the Association has also asked the Colorado Attorney General’s office to interpret the statute and issue its commitment regarding its enforcement of the HB 25-1090 language. In response to the Association’s request, the Office of the Attorney General issued the November 24, 2025 Memorandum (reprinted in its entirety on the next two pages). The Memorandum indicates that the provisions of HB 25-1090 will not be applied to leases entered into before January 1, 2026 and when the provisions are applied to new leases it will not pursue legal actions against landlords that allocate utility costs among tenants using a ratio utility billing system that:

1. The aggregate amounts billed to all tenants do not exceed the total amount charged by the utility provider for the specific property;
2. The landlord does not apply a markup, surcharge, administrative fee, or other amount in excess of the actual charges from the utility provider, except as otherwise permitted under § 38-12-801(3)(a)(VI), C.R.S.;
3. Utility costs for common areas or shared facilities are excluded from any tenant allocation; 
4. The landlord clearly and conspicuously discloses the reasonable and objectively fair method of allocation in the rental agreement and any disclosures otherwise required by law.

Guidance on Enforcement Priorities Related to Utility Billing Under House Bill 25-1090