Colorado-Real-Estate-Journal_518661

April 2026 — Property Management Quarterly — Page 9 www.crej.com C olorado’s Ultra Low NOx emissions law (HB 23-1161) took effect Jan. 1 and is gaining attention across real estate sectors. While much of the early conversation has focused on housing, certain commercial properties may also be affected. The reason is simple: Enforcement is based on the type of equipment being installed, not how a building is classified. This is a statewide product stan- dards law, not a building code. It regulates what new equipment can be sold, leased or installed, rather than imposing direct requirements on buildings themselves. Existing equipment does not need to be removed simply because of emis- sions standards. The trigger occurs only when systems are replaced, meaning the impact will emerge gradually through normal mainte- nance cycles. Across Colorado, many smaller commercial properties, like medi- cal offices, retail suites, mixed-use buildings and professional condos, rely on residential-style gas fur- naces and water heaters. Because of that overlap, property managers may be the first to encounter how changing product standards influ- ence maintenance planning, tenant coordination and capital budgeting. n What the regulation actually changes. The new Colorado regula- tion limits nitrogen oxide emissions from certain new gas-fired furnaces and water heaters. The law estab- lishes emissions thresholds tied to equipment categories, including: • Forced-air central furnaces generally below approximately 175,000 British ther- mal unit input; • Gas-fired water heaters up to roughly 2 million BTU input; and • More restrictive limits are applied to smaller sys- tems, particularly those under 75,000 BTU input. The law does not regulate build- ings directly. Instead, it restricts the sale and installation of new prod- ucts that do not meet performance standards. For managers accus- tomed to replacing like-for-like equipment, that shift may introduce more decision points at the time of failure, depending on inventory and compliance options available. Alternative compliance options may include installing equipment that meets the most recent Energy Star standards or transitioning to electric heat pump systems where feasible. Supply houses are also permitted to sell through existing inventory manufactured prior to the effective date, which means some properties may not experience noticeable changes until later in 2026, as older stock is depleted. n Why smaller commercial properties require closer attention. Large engi- neered mechanical systems, such as boilers or certain rooftop units, may fall outside the scope of this specific regulation. However, small- er commercial buildings often use equipment that mirrors residential installations. Many neighborhood retail spaces and professional office condos rely on standard forced-air furnaces and tank-style water heat- ers. When these systems reach the end of their service life, managers may encounter longer lead times, different venting requirements or shifts in installation approach com- pared to past replacements. Under- standing which properties rely on residential-grade HVAC or water- heating systems allows managers to prepare well before an emergency occurs. n Maintenance planning and life- cycle awareness. From a property management perspective, the most practical takeaway is maintaining clear visibility into mechanical sys- tems. Tracking installation dates, service history and expected lifes- pan helps shift decision-making from reactive replacement to proac- tive planning. Pro Tip: Start documenting equip- ment age and planning for compli- ant replacements in upcoming bud- gets. For portfolios with aging resi- dential-grade HVAC equipment, this law may increase capital expendi- ture expectations due to evolving product standards and installation requirements. During routine walks or inspec- tion reviews, consider documenting: • Equipment type, size and fuel source; • Approximate age and remaining service life; • Venting configurations and mechanical room access; and • Any tenant improvements that may have altered the original lay- outs. This information supports more predictable reserve planning and reduces last-minute decisions during peak heating or hot water demand. n Budgeting, tenant coordination and operational planning. Mechanical failures rarely occur at convenient times, and property managers often balance regulatory awareness with operational continuity. If a system fails midlease, replacement plan- ning may involve temporary heat- ing or hot water solutions, tenant coordination and revised project timelines. Proactive conversations with own- ership groups can help align expec- tations before an emergency arises. Reviewing potential replacement pathways with licensed mechani- cal contractors in advance may clarify whether future installations will remain gas-based, transition to Energy Star-compliant equipment, or shift to electric heat pump solu- tions. Clear communication with ten- ants becomes even more important when equipment standards evolve. Managers who understand how regulations influence equipment availability are better positioned to reduce uncertainty and maintain trust during maintenance projects. Commercial bldgs.: Colorado’s Ultra Low NOx law Andrew Sams Founder, Alpine Building Performance Please see Sams, Page 31