What Colorado Landlords Need to Know About Rent Pricing Algorithms

Colorado’s reputation as a landlord-friendly state has been dwindling over the years, partly due to a series of bills that make attracting good tenants and getting rid of bad ones equally difficult. 

One such bill aimed to crack down on landlords’ use of property management software in an effort to reduce alleged price coordination practices in the state. While the governor vetoed it, lawmakers continue legislating on the issue as state and federal agencies have brought lawsuits against property management companies for alleged illegal price-fixing practices. 

So with that, let’s look at what constitutes algorithmic price-fixing and how property owners and managers can protect themselves from liabilities as technology advances and political opinions on the issue evolve. 

As a landlord-tenant law attorney, let me be the first to tell you that regulators simply do not like property management software systems. Although these systems were developed to help real estate professionals make sense of an increasingly complex housing market, Colorado lawmakers believe certain features reduce competition and unfairly drive up rent prices. Namely, the algorithms that property management software services use to suggest rent pricing to landlords. 

The algorithms’ proponents say they provide a practical solution to a complex issue. Federal regulators say the software goes too far. The Federal Trade Commission (FTC) and the Department of Justice (DOJ) filed a joint legal brief accusing a party of using software to fix rent prices. Specifically, the agencies honed in on the algorithms that allow real estate professionals to optimize rental income and occupancy rates for competing property areas. 

The DOJ later sued a prominent property management company for its algorithmic pricing practices. At the beginning of this year, Colorado’s attorney general joined other states in filing an amended complaint that alleges six landlords participated in a scheme to set rents based on each other’s competitive information through pricing algorithms. 

The Colorado Attorney General’s joint filing against property management companies was not the state’s first attempt at regulating algorithms embedded within property management software systems. For two years now, Colorado lawmakers have introduced legislation aimed at making competitive rent pricing a legal landmine for landlords and property managers. 

In 2024, the Colorado legislature introduced a bill to prohibit landlords from using algorithmic devices to determine how much to charge tenants. However, it fell short in the Senate by one vote. 

Before casting his “no” vote, Colorado Senate Minority Leader Paul Lundeen, who called the bill generally “unnecessary, unhelpful, [and] disruptive to basic market economics,” acknowledged the legislature failed to provide landlords a protective exception. Specifically, the exception would have allowed landlords to use private lease data to set prices so long as they made a summarized version available to the public.

Upon further scrutiny, it’s easy to see how the 2024 bill fell apart, paving the way for a more stringent version of the same bill to pass through both chambers in 2025.  

If HB25-1004 had become law, it would have made using a “coordinator” an anti-competitive practice. It would have prohibited a landlord from: 

• Gathering rental market data from two or more landlords, including past and current Colorado rent prices, the number of available units, and lease renewal information. 

• Analyzing the data using a system. The bill’s language is broad enough to consider software, a spreadsheet, or a manual process system as "using a system”. 

• Making price recommendations. The landlord could not receive recommendations about rent pricing, lease terms, and occupancy levels. 

The key difference between the 2024 and 2025 versions is that instead of fixating on the term “algorithm,” HB25-1004 focuses on analytics product “coordinators,” or individuals operating a “software or data analytics service that performs a coordinating function for one or more landlords.”

A coordinator could have been: 

• A company that sells data-collecting software 

• A company that hires an individual or business that tracks rent prices across multiple properties against the average cost of living in Colorado

• A consultant hired by more than one landlord

• A trade association that provides individualized recommendations to landlords based on collected data (beyond exempted periodic reports)

• A landlord who informally shares pricing strategies using interpreted market data with another area landlord 

• Two neighbors who rent out their properties and agree to price rent at the same rate based on their market observations

• A real estate broker who conducts a comparative analysis of surrounding areas regarding rental amounts or how long to list a property

• A property management realtor (which meets the legal definition of a landlord) who analyzes rental amounts or listing durations

Governor Jared Polis vetoed the bill, citing “grave concerns about prohibiting companies [from] using algorithmic pricing software derived from multiple data sources from doing business in Colorado.” He also cited the pending lawsuits from Colorado’s attorney general and the DOJ as a reason to hold off on signing this type of legislation, but he would consider a similar bill that is more limited in scope in the future. 

If either of these bills had become law, a landlord could have been found in violation of the Colorado State Antitrust Act of 2023 and also accused of illegally restraining trade or commerce by price-fixing rental properties. 

We all know the cost of living in Colorado is much higher than the United States average,  but as an attorney practicing landlord-tenant law, each effort I see to try to enact a law of this nature concerns me. Suppose in the coming years a version of this bill actually gets the governor’s approval, and suddenly, your current pricing practices are called into question. You, as a landlord or property manager, could face criminal and civil proceedings. The unforeseen circumstances of such a bill could be that some landlords decided to sell their rental properties, further constraining an already limited rental market, which in turn could drive rental rates even higher. 

Criminal Charges

The state could charge violators of the Colorado State Antitrust Act of 2023 with a class 5 felony, which carries a one- to three-year prison sentence, a two-year mandatory parole period, and a fine of up to $5 million. C.R.S. 6-4-118  

Civil Penalties

C.R.S. 6-4-113 allows the Colorado Attorney General to sue someone who violates the state’s antitrust law. If successful, the court could impose a civil penalty of up to $1 million for each violation. 

Civil Lawsuits

Additionally, a tenant could sue a landlord to recover damages. State law allows individuals injured by antitrust actions to recover three times the actual damages. For instance, if actual damages are $10,000, a court could award $30,000 in damages to a tenant if they prevail, plus their attorney's fee and other costs associated with the lawsuit.

If you are a property manager or landlord who has been accused of violating state antitrust laws, our landlord-tenant attorneys will seek to invalidate your claimant’s allegations by arguing:

• Your actions do not constitute unlawful price fixing or other illegal practices under the relevant statutes based on how state law distinguishes between different types of rental properties. C.R.S. 38-12-220

• You have complied with the statutory requirements for rent increases. C.R.S. 38-12-702

• You have not engaged in any deceptive, unfair, or unconscionable acts, and any rent increases were implemented in good faith and in compliance with Colorado law C.R.S. 6-1-737 

With R&H, you can expect our representation to focus on demonstrating your compliance with Colorado’s landlord-tenant laws while refuting any claims of unlawful price fixing or deceptive practices. 

Our landlord-tenant law attorneys are monitoring lawmakers’ efforts to restrict competitive pricing tools. It’s never too early to hire an attorney who represents some of Colorado’s top property management companies to protect your business interests. Call 303-688-0944 to begin your case assessment.