By Kelcey Nichols Garfield & Hecht, P.C.
The lack of attainable housing in Colorado’s mountain towns has generated a plethora of news, litigation and controversy. In June 2021, the Town of Crested Butte declared a local disaster emergency over the lack of affordable housing. In the fall of 2021, in Telluride, a citizens’ initiative imposed a cap on short-term rentals. In December 2021, the Aspen City Council adopted an emergency moratorium on issuing new building permits and short-term rental units. Even with clear regulations in place, it can be difficult for employees to obtain a housing unit due to high demand and future housing units can take years to build.
For some employers, purchasing a property to provide housing for a valuable employee may be preferable to losing the employee due a lack of housing. Colorado statute specifically recognizes employer provided housing as exempt from Colorado’s standard eviction process. See C.R.S. § 13-40-104(5)(a). This can be particularly helpful to employers in light of new laws and regulations that are favorable to tenants. See Colorado’s New COVID-19 Moratorium and Evictions By Macklin Henderson, Garfield & Hecht, (available at: https://www.garfieldhecht.com/colorados-new-covid-19-moratorium-and-evictions-by-macklin-henderson-garfield-hecht/).
An employer providing housing for an employee should document the employment relationship clearly and specify that the employee is occupying the property as an employee, and with the owner’s permission, rather than as a tenant.
Employers considering providing housing for an employee should also consider the following:
- If the housing will need to be purchased, do the subdivision covenants or condominium association rules allow for the type of housing the employer needs? For example, many neighborhoods prohibit an owner from renting rooms in a larger house individually and establishing a “boarding house” situation.
- Will the employee’s compensation be adjusted in consideration of the housing provided by the employer?
- What will the employee’s responsibilities be with respect to maintaining the housing? What aspects of the housing will the employer maintain?
- How will the end of the license be handled upon termination of employment?
- An employer can only qualify for an “exempt residential agreement” if the employer owns five or less single-family homes.
- The agreement must give notice that the ten-day notice period normally required to terminate a residential tenancy under C.R.S. § 13-40-104 does not apply.
The law involving licenses to occupy is still evolving, and a license to occupy may not be appropriate in all situations.
If you have questions about or need assistance regarding a license to occupy or another property-related matter, please contact Garfield & Hecht, as follows:
- In Aspen and Snowmass Chris LaCroix, (970) 920-5804, clacroix@garfieldhecht.com, or Chad Schmit, (970) 920-5817, cschmit@garfieldhecht.com.
- In Basalt and Carbondale, Kelcey Nichols (970) 925-1703, knichols@garfieldhecht.com.
- In Glenwood Springs through Rifle, David McConaughy (970) 925-1936, ext. 810, dmcconaughy@garfieldhecht.com.
- In the Vail Valley and Denver, Kursten Canada (970) 949-1566, kcanada@garfieldhecht.com, and Tracy Kinsella, (970) 949-1496, tkinsella@garfieldhecht.com.
- In Crested Butte, John Belkin (970) 349-6698, jbelkin@garfieldhecht.com.
