Colorado Ratio Utility Billing (RUBS) Rules 2026

HB26-1013 sets a hard ceiling on ratio utility billing: the total amount billed to all tenants at a residential property can't exceed the total amount the utility provider charged for that property. This closes off a landlord effectively profiting from utility allocation by billing tenants more in total than what the actual utility bill came to.

[Cite: HB26-1013, Chapter 11, Session Laws of 2026, amending Colorado Revised Statutes section 6-1-737]

Beyond the aggregate cap, the law separately prohibits applying any markup, surcharge, administrative fee, or other amount in excess of the actual charges from the utility. This targets a different, narrower practice than the aggregate cap: even if a landlord's total billing stayed under the property's actual utility bill overall, adding a flat administrative fee on top of a tenant's individual allocation would still run afoul of this provision.

[Cite: HB26-1013, Chapter 11, Session Laws of 2026, amending Colorado Revised Statutes section 6-1-737]

Utility costs associated with shared common areas, hallways, shared laundry facilities, common outdoor lighting, and similar spaces, have to be excluded from what gets allocated to individual tenants under a ratio billing system. A landlord's allocation formula needs to separate out common-area usage before dividing the remainder among tenants, rather than folding common-area costs into each tenant's proportional share.

[Cite: HB26-1013, Chapter 11, Session Laws of 2026, amending Colorado Revised Statutes section 6-1-737]

Landlords must clearly and conspicuously disclose the method of allocation for a dwelling unit in the tenant's rental agreement or an addendum to it. This is a lease-document requirement, not just a general practice expectation; the allocation formula itself, whatever method a landlord is actually using to divide utility costs among tenants, needs to be written into the lease paperwork the tenant signs.

[Cite: HB26-1013, Chapter 11, Session Laws of 2026, amending Colorado Revised Statutes section 6-1-737]

Most Colorado legislation without a specific delayed effective date takes effect on the standard schedule tied to the legislative session's end. HB26-1013 is an exception because it carried a safety clause: the General Assembly declared the act necessary for the immediate preservation of public peace, health, or safety. That declaration is what made the law effective the moment the Governor signed it, March 26, 2026, rather than months later.

[Cite: HB26-1013, Chapter 11, Session Laws of 2026]

For a property manager, this means there was no lead time between the law passing and it applying. Any RUBS allocation practice inconsistent with the aggregate cap, the no-markup rule, or the common-area exclusion was out of compliance from that signing date forward.

HB26-1013 amends Colorado Revised Statutes section 6-1-737, clarifying that the state's existing price transparency law doesn't prohibit ratio utility billing as a practice. Rather than banning RUBS outright or leaving its legality ambiguous under the broader transparency statute, the amendment confirms RUBS remains a permitted billing method, so long as it follows the specific guardrails this law adds: the aggregate cap, the no-markup rule, the common-area exclusion, and the lease disclosure requirement.

[Cite: HB26-1013, Chapter 11, Session Laws of 2026, amending Colorado Revised Statutes section 6-1-737]

Distinct from the RUBS rules governing existing billing practices, HB26-1013 also includes a forward-looking metering requirement. Starting July 1, 2027, new residential construction must have gas, electric, and water service metered directly by the utility provider, or by a submeter, rather than relying on ratio allocation for units built after that date.

[Cite: HB26-1013, Chapter 11, Session Laws of 2026]

This doesn't retroactively require existing buildings to install direct metering. It's specifically about new construction going forward, on a separate timeline from the RUBS compliance rules that are already in force.

HB26-1013 doesn't require landlords to use one particular formula for dividing utility costs among tenants. Properties commonly allocate ratio utility billing by square footage, by number of occupants, by bedroom count, or by some combination of those factors. The law is agnostic about which of these a landlord chooses. What it requires is that whatever method is actually used stays within the aggregate cap, excludes common areas, carries no added markup, and is clearly disclosed in the lease or an addendum.

[Cite: HB26-1013, Chapter 11, Session Laws of 2026, amending Colorado Revised Statutes section 6-1-737]

A landlord switching allocation methods, for example moving from a flat per-unit split to a square-footage-based formula, needs to update the lease disclosure to reflect the new method rather than leaving outdated language in place from a prior approach.

Because the aggregate billing cap compares what tenants were charged in total against what the utility provider actually billed the property, a landlord's strongest evidence of compliance is straightforward recordkeeping: retaining the actual utility bills for the property alongside the records of what was billed to each tenant under the ratio allocation. Without that paired documentation, it becomes harder to demonstrate that the aggregate cap wasn't exceeded if a dispute or inquiry comes up.

This kind of recordkeeping isn't spelled out as a separate legal requirement in the statute itself, but it's a practical necessity for being able to show compliance with the requirements that are legally mandated.

For any property currently using ratio utility billing, the practical audit is straightforward: confirm the total billed to tenants doesn't exceed the property's actual utility bill, confirm no markup or administrative fee is layered on top of the allocated amount, confirm common-area usage is excluded from the tenant allocation calculation, and confirm the lease or an addendum actually discloses the allocation method in clear terms. Since this law has already been in force since March 26, 2026, any gap between current practice and these four requirements is a compliance issue happening now, not a future deadline to plan around.

Property managers involved in new construction should separately track the July 1, 2027 direct-metering requirement, since it applies on its own timeline and doesn't depend on whether a property is currently using ratio billing.