Colorado House Bill 23-1161 updates energy efficiency and emissions standards for new appliances sold or installed in the state, including furnaces, water heaters, plumbing fixtures, and other equipment, and while it does not require
rental property owners to replace existing systems, it changes what happens when those systems fail and must be replaced.
For rental owners in Fort Collins and across Northern Colorado, including Loveland, Windsor, Wellington, and Johnstown, the impact is practical rather than theoretical. Because rental properties must maintain heat and hot water to meet habitability requirements, owners often encounter these new standards during emergency replacements, where costs, availability, and compliance leave little room for delay.
Because HB23-1161 has been widely discussed in fragments, many rental property owners have heard about it in pieces rather than as a complete law. Some have been told it only affects furnaces, others that it applies to every rental home, and still others that it forces immediate upgrades. The reality is more nuanced. In the sections below, we break down what the law actually says, which appliances it covers, and when it applies, so property owners can understand the details, plan ahead with confidence, and avoid unnecessary costs or rushed decisions.
What Is HB23-1161?
HB23-1161 is a Colorado law passed during the 2023 legislative session that expands the state’s
water efficiency, energy efficiency, and emissions standards for certain appliances and fixtures.
Rather than regulating buildings or rental properties directly, the law regulates
new products entering the Colorado market. This includes appliances and fixtures that are manufactured, sold, leased, rented, or offered for sale or lease in Colorado after specific effective dates.
According to the legislative declaration in the signed bill, the intent is to reduce air pollution, improve public health, and limit emissions from appliances that contribute to nitrogen oxide (NOx) pollution, particularly along the Front Range.
Source: Colorado General Assembly, HB23-1161 Signed Act
https://leg.colorado.gov/bill_files/92105/download
Which Appliances Are Covered Under HB23-1161?
One of the most important things for rental owners to understand is that HB23-1161 extends well beyond furnaces and water heaters, even though those are the systems that tend to create the biggest financial impact.
Heating and Water-Heating Equipment
The law applies to certain newly sold or installed heating and water-heating equipment, including:
- Fan-type central furnaces below specified BTU thresholds
- Gas and electric water heaters within defined capacity ranges
These appliances are subject to updated efficiency and emissions standards once compliance dates take effect, as outlined in the signed legislation.
Source: HB23-1161 Signed Act
https://leg.colorado.gov/bill_files/92105/download
Plumbing Fixtures
HB23-1161 also updates water efficiency standards for common plumbing fixtures, including:
- Toilets and water closets
- Showerheads and tub spout diverters
- Bathroom and kitchen faucets
- Urinals
Fixtures sold as new in Colorado must meet EPA WaterSense standards, reinforcing existing conservation requirements.
Source: HB23-1161 Signed Act
https://leg.colorado.gov/bill_files/92105/download
Additional Appliances and Building Components
The scope of the bill also includes a wide range of other products, such as:
- Gas fireplaces
- Air purifiers
- Irrigation controllers
- Residential windows, doors, and skylights
- Certain lighting products, including fluorescent lamps
The law authorizes the Colorado Department of Public Health and Environment to update and expand this list through future rulemaking.
Source: HB23-1161 Signed Act
https://leg.colorado.gov/bill_files/92105/download
Does HB23-1161 Apply to Existing Appliances in Rental Homes?
No. HB23-1161 does
not require rental property owners to replace appliances that are already installed and operating.
The law applies only to
new products that are sold, leased, rented, or offered for sale or lease in Colorado after the applicable effective dates. In this context, the terms “leased” or “rented” refer to the
appliance itself as a product, not to a residential lease agreement.
The signed bill explicitly exempts:
- Appliances already installed prior to the effective date
- Products held in inventory before compliance dates take effect
This confirms that an older furnace inside a Fort Collins rental home does not become regulated simply because the property is rented to a tenant.
Source: HB23-1161 Signed Act
https://leg.colorado.gov/bill_files/92105/download
Why Furnaces and Water Heaters Matter Most for Rental Owners
Although HB23-1161 covers many appliance categories,
furnaces and water heaters create the greatest exposure for rental properties.
These systems:
- Are required for habitability under
Colorado law
- Tend to fail without warning
- Must be replaced immediately when they stop working
At
Stegner Property Management in Fort Collins, this issue has already surfaced. Jim Stegner has shared that replacement costs for furnaces and water heaters meeting newer standards can be significantly higher than owners expect.
For rental owners, the challenge is not whether compliance applies. The challenge is
being forced into compliance during an emergency replacement.
Emissions Standards Begin in 2026
A key component of HB23-1161 is the introduction of emissions limits for certain appliances beginning January 1, 2026.
Under the law:
- New water heaters and certain furnaces must meet specific NOx emissions thresholds
- Appliances certified under current Energy Star standards are considered compliant
Manufacturers are responsible for testing and labeling, but property owners feel the impact when selecting replacement equipment.
Source: HB23-1161 Signed Act
https://leg.colorado.gov/bill_files/92105/download
What the Fiscal Note Confirms About Enforcement
The official fiscal note for HB23-1161 provides important clarity for rental owners.
According to the fiscal analysis:
- Enforcement authority rests with the Colorado Department of Public Health and Environment
- Civil penalties apply per noncompliant product sale, lease, or listing
- Enforcement is tied to product transactions, not to rental agreements or tenant occupancy
The fiscal note also confirms that rulemaking updates occur every five years, with compliance grace periods built in.
Source: Colorado General Assembly Fiscal Note for HB23-1161
https://leg.colorado.gov/bill_files/92206/download
What Rental Property Owners Should Do Now
For rental property owners in Northern Colorado, the smartest response to HB23-1161 is preparation.
Recommended steps include:
- Identifying the age and condition of furnaces and water heaters
- Budgeting proactively for replacements before emergency failures
- Understanding that replacement equipment may differ from older systems
- Avoiding assumptions that systems can always be replaced “like for like”
Property managers like Stegner PM serving Fort Collins, Loveland, Windsor, Wellington, and Johnstown are already helping owners plan around these changes to reduce risk.
Why This Law Hits Self-Managing Landlords Harder
Self-managing landlords
are often caught off guard by HB23-1161 because the impact typically appears during an emergency.
Professional property management teams monitor legislative changes, communicate early with owners, and plan capital improvements strategically. As Colorado’s regulatory environment continues to evolve, this proactive approach becomes increasingly valuable.
Final Takeaway
HB23-1161 does not force rental property owners to replace existing appliances. However, it permanently changes the rules governing
how appliances can be replaced in the future.
For rental owners, the biggest risk is not enforcement. It is being unprepared when a critical system fails under new standards.
Frequently Asked Questions About HB23-1161
Does HB23-1161 require me to replace my existing furnace or water heater?
No. The law applies only to new appliances sold or installed after the effective dates. Existing systems may continue operating.
Does the law apply every time I rent my property to a new tenant?
No. Renting a home does not count as leasing or renting the appliance under the statute.
When does HB23-1161 start affecting replacement appliances?
Some efficiency standards are already in effect, and emissions standards for certain heating and water-heating equipment begin January 1, 2026.
Which appliances are most likely to affect rental owners financially?
Furnaces and water heaters pose the greatest risk due to habitability requirements and emergency replacement timing.
Who enforces HB23-1161?
The Colorado Department of Public Health and Environment oversees compliance related to product sales and listings.
Source: Fiscal Note for HB23-1161
https://leg.colorado.gov/bill_files/92206/download
How can rental owners prepare?
By inventorying appliance age, planning replacement budgets, and working with experienced property managers who track regulatory changes.
Have Questions About How HB23-1161 Affects Your Rental Property?
