Rental question for splitting a home into multiple units

[Tyler Thomas]

Hi all! I own one side of a duplex in Denver and it's a bit of a unique setup.

My entire unit is a 3 bedroom, 2 bath with 1,900 square feet split between a main floor and a basement. The main floor has 950 square feet, 2 bedrooms, 1 bath, a living room and a kitchen. The basement has 950 square feet, 1 bedroom, 1 bath and a walk in closet (it also has 2 large egress windows and it's own door separating it from the upstairs).

Instead of renting the unit as a 3br/2ba, I want to install a legal kitchen in the basement (which is possible) and then rent the upstairs to tenants and then the basement to separate tenants that will likely not know each other. I don't want to hide anything from the tenants or the city.

I have 2 ideas:

1. Rent the upstairs bedrooms to 2 people stating they have use of all the upstairs but no access to the basement bedroom or facilities. Rent the basement to 1 person or a couple stating that they have full use of the basement but no access to the main floor or facilities. Both units will have access to the laundry, back yard and have separate entrances (the main floor can be accessed from the front or back door, the basement unit has access through the back door only).

2. Do not install a kitchen in the basement but still rent to separate tenants on each floor and have them share the kitchen on the main floor. All other details would remain the same.

It seems to me that this is possible, and legal, if I rent the "rooms" separately on a lease or sub-lease. Does anyone have experience with this?