For the past year, Colorado multifamily operators have been sitting on a question: is RUBS billing still viable here?
That question now has a clear answer.
Governor Polis signed House Bill 26-1013 on March 26, 2026, and it does something the industry has needed for a while. It formally confirms that Ratio Utility Billing Systems are legal in Colorado, lays out straightforward rules for how to use them correctly, and removes the uncertainty that has been keeping some property managers on the sidelines.
If you have been absorbing utility costs because the legal picture felt murky, that picture just got a lot clearer.
The confusion started in 2025, when Colorado passed HB 25-1090, a broad price transparency law aimed at eliminating hidden fees in residential leasing. The language was wide enough that it created real questions about whether RUBS allocations counted as a prohibited charge, since the amount a tenant pays under RUBS is not a direct bill from the utility provider.
The Colorado Attorney General's office issued a memo in November 2025 saying it would not pursue enforcement against landlords using RUBS under certain conditions. That helped, but a memo is not a law.
HB 26-1013 is a law. It amends Section 6-1-737 of the Colorado Revised Statutes directly and makes clear that allocating utility costs among tenants using RUBS is explicitly permitted.
How to Set Expectations Clearly From Day OneThe Rules You Need to Follow
The legislation is not a blank check. It comes with four requirements that define what compliant RUBS billing looks like in Colorado.
No overbilling. The total amount billed to all tenants combined cannot exceed what the utility company charged for the entire property. You are allocating real costs, not creating new ones.
No unpermitted markups. You cannot add surcharges or administrative fees beyond what existing law already allows. Colorado law permits a markup of no more than 2 percent or $10, but not both.
Exclude common area costs. Utility costs for shared spaces and common areas must be kept out of tenant allocations entirely.
Disclose the method in the lease. Your rental agreement or a written addendum must clearly explain how utility costs are being allocated. This is not optional language buried in the fine print. It needs to be clear and conspicuous.
If your current billing setup checks all four of those boxes, you are in good shape. If it does not, now is the time to get it right.
HB 26-1013 also includes a forward-looking requirement that will matter if you have development projects in the pipeline.
Any new residential property applying for permits on or after July 1, 2027 must have gas, electric, and water service metered directly, either by the utility provider or through a submeter. RUBS remains fully available for existing properties, but new builds will be expected to have individual metering infrastructure in place.
If you are planning new construction, this is worth factoring into your design and budget conversations now rather than later.
The legal clarification matters, but let's talk about what it actually unlocks.
Property managers who are not currently billing back utilities are absorbing costs that, at scale, represent significant money. Utility expenses across a portfolio add up fast, and every dollar you recover through compliant RUBS billing shows up directly in your net operating income. Higher NOI means higher property value. It is one of the more straightforward ways to improve the financial performance of a portfolio without raising rent.
The hesitation has always been a mix of complexity and legal uncertainty. HB 26-1013 removes the second part. And the first part is a solved problem.
Livable is a utility billing platform built for multifamily operators. We handle the RUBS calculations, generate tenant statements, and make sure everything stays within what the law requires. You review every bill before it goes out and can edit it if something needs to change.
With Colorado's new requirements in place, we also make sure your billing practices align with the four guardrails in HB 26-1013, including the lease disclosure language.
No unit minimums. No long-term commitments. Setup is straightforward.
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If you want to see what cost recovery could look like for your portfolio, start with our RUBS Savings Calculator.
Or if you would rather just talk through how it works, we are easy to reach: Schedule a Discovery Call
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