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The Servicemembers Civil Relief Act
The Eviction Educator
There Are Always More Questions

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Volume 14 • Issue 4 April 2013 Landlord News 3600 South Yosemite Street Suite 828, Denver, Colorado 80237 thsnews@thslawfirm.com www.thslawfirm.com Denver Phone 303.766.8004 FAX Completed Eviction Forms To: 303.766.1181 or 303.766.1819 Colorado Springs Phone 719.550.8004 FAX Completed Eviction Forms To: 719.227.1181 THE SERVICEMEMBERS CIVIL RELIEF ACT Everyone in the rental industry should know that military personnel have special legal protections under the Servicemembers Civil Relief Act, or SCRA for short. SCRA’s purpose is to provide for, strengthen, and expedite the national defense by enabling persons serving in the military service to devote their entire energy to the defense needs of the United States. The law accomplishes this by providing for the temporary suspension of judicial proceedings that may adversely affect the civil rights of servicemembers (SM or SMs) during their military service, and by allowing SMs to terminate certain contractual obligations. SCRA only applies to SMs who are serving. A “SM” is a member of the uniformed services. Uniformed services means “armed forces” (Army, Navy, Air Force, Marines, Coast Guard), but also includes the commissioned corps of the National Oceanic and Atmospheric Administration, and the commissioned corps of the Public Health Service. The law does not apply to nonactive duty or retired SMs. The SM must be “in the military service” of the United States for the law to apply. For traditional armed forces such as army, navy, air force, marines, and coast guard this means the SM must be on active duty. Active duty includes full-time training duty, annual training duty, and attendance, while in the active military service, at a school designated as a service school by law or by the Secretary of the military department concerned. Active duty does not include full-time National Guard duty under normal circumstances. continued on page 2 1. Remember that it is extremely important for you to make and keep a copy of your orig- inal demand. We will always need an exact copy of your original demand in order for THS to file your case. 2. Please note that the filing deadline is 10:30 a.m. on the respective filing date for your county. Not 10:35 a.m. or 10:40 a.m.! Any demands that are received after the drop-dead deadline of 10:30 a.m. will not be processed until the next filing deadline. This could result in a much later court date than you anticipate. The evictions staff will always contact you within 24 hours of receiving your notice. Be aware that if you have not heard from us, then we most likely did not receive your demand. 3. For tenants who are month-to-month, where your lease does not indicate a holdover period the State Statute is now seven days notice to quit, instead of the previous 10 days. PLEASE CALL the Evictions Department if you have questions, or to see if this applies to you. 4. The Courts are becoming tougher on notices and rejecting notices that are not properly completed. If you are not currently using the forms provided by THS, please visit our website (www.thslawfirm.com) and download the most current eviction forms. Remember if the court rejects your notice it will substantially delay your case. You will be required to re-serve the notice which means that you will be effectively starting over from the beginning. JJJJJJJJJJJ THE SERVICEMEMBERS CIVIL RELIEF ACT continued from page 1 However, a National Guard member shall be “in the military service” of the United States for purposes of the law if such the member is serving under a call to active service authorized by the President or the Secretary of Defense for a period of more than 30 consecutive days for purposes of responding to a national emergency declared by the President and supported by federal funds. A landlord cannot evict a SM tenant without court order. If a landlord violates this law, the landlord has committed a crime. Violation of the law is a misdemeanor punishable by up to one year in jail. If a landlord files an eviction against a SM, the court may appoint an attorney for the SM. The court, an appointed attorney, or the SM may request a stay of the eviction. The court may stay an eviction proceeding against a SM for 90 days if it finds that the SM’s ability to pay the rent is materially affected by his military service. A stay means any eviction is on hold until further order of the court. If a court stays any eviction against an SM, the rent continues to accrue during any stay and the SM is liable to the landlord for the payment of the rent. The court may condition a stay upon any terms that are required by justice and equity. The court has wide discretion to “balance the equities” between the landlord and the SM, and to order appropriate relief. For example, if the rent has not been paid and there are severe non-compliance issues, the court could deny the stay and allow the eviction to continue. Similarly, if the amount of unpaid rent was significant (say three months for example), the court could order a shorter stay. SMs may terminate leases under certain circumstances. If not in military service at lease execution, a tenant may terminate a lease upon becoming an active duty service member (joining the army). If a SM at the time of lease execution, a SM may terminate a lease upon receiving orders for a permanent change of station (“PCS” orders), or upon receiving orders to deploy for a period of not less than 90 days. Because SCRA does not define “permanent change of station”, the term PCS has become subject to dispute. Many leases use the the 50-mile test. If the SM continued on page 3 THERE ARE ALWAYS MORE QUESTONS ?? 1. Question: I took a $300.00 deposit from a tenant to hold an apartment pending a credit check. The credit check came in and I declined the application. How long do I have to return the money? Answer: There is no statutory requirement regarding “holding deposits.” If the agreement did not state a time frame, the court would impose a reasonable period of time considering the tenant’s need for the money to rent another premise, so the sooner it is returned, the better. 2. Question: We do not have any HUD housing. When a Section 8 applicant asks us if we accept HUD housing, what is the best answer? Answer: Indicate to the applicant that the property does not participate in any governmental assistance program at this time, but they are welcome to apply if they are willing to forego their subsidy. 3. Question: One of our tenants paid us $50.00 per month rent less than what his lease required. We did not catch the mistake until after his third month. He says he does not owe it because we waived our right to collect it when he paid his rent. Is he right? Answer: Maybe. If your lease contained a non-waiver provision, it may be upheld in court. If your lease were silent on this issue, he would have to prove that you knowingly waived your right to receive full payment by accepting a lesser amount. This could go either way. 4. Question: I am evicting a tenant and gave her a thirtyday notice. When I handed her the notice she didn’t read it, she just dropped it on the ground, so I read it to her. I then gave it back to her but she wouldn’t take it, so I dropped it on the ground. Is this considered a valid notice? Answer: So long as she was notified that you were giving her the notice and you didn’t take it back most judges would consider this adequate personal service. If she doesn’t vacate in 30 days, an unlawful detainer (eviction) action may be filed in court. 5. Question: One of our tenant’s dogs is constantly barking and growling at anyone who passes by their apartment. It has scared many of the other residents and they have complained numerous times. I have explained that the lease allows pets. What can I do? continued on page 4 Landlord News April 2013 Page 2 THE SERVICEMEMBERS CIVIL RELIEF ACT continued from page 2 moves less than 50 miles, the SM’s move is not a PCS, and therefore the SM is not entitled to terminate the lease. The 50-mile test is not in the SCRA statute. The test was adopted from the IRS code. The IRS code allows SMs to deduct moving expenses if the SM moved more then 50 miles. However, cases interpreting the tax code have held that a SM “permanently changes station” when the SM moves from one permanent post of duty to another permanent post of duty at a different duty station regardless of distance. To terminate a lease, the SM must deliver written notice of termination along with a copy of the PCS or deployment orders. Thus, a landlord’s lease may require that a SM provide a copy of applicable orders. A landlord may also verify the authenticity of the orders. Since we have seen more and more cases of fake orders, we recommend that all orders be verified. A landlord may verify a SM’s orders by contacting the base or commander that issued the orders. The SM may deliver the written termination notice and orders in person, by business courier, or by U.S. First Class Mail Return Receipt Requested. Notice is given the date mailed or delivered. The SM’s termination is effective on the last day of the month after the month in which the SM gave notice. For example, if the SM gives notice of termination on July 20, the effective date of termination is August 31. Termination of monthto-month terms is 30 days after the first date on which the next rental payment is due. For example, if the notice is mailed April 15, then the next rent payment would be due on May 1. The termination date is then 30 days from May 1, or May 31. The SM is always liable to pay rent through the effective termination date. If the effective termination date does not end exactly on the last day of the month, rent for any odd amount of days is pro-rated on a daily basis. A SM’s valid termination also terminates a dependent’s liability on the lease. Usually, a dependent is a spouse, but can be other individuals. Under SCRA, a dependent means spouse, child, or an individual for whom the SM provided more than one-half of the individual’s support for 180 days immediately preceding the termination. If a dependent individual signed the lease, but the SM did not, then neither the dependent nor the SM can terminate the lease under SCRA. For example, if the wife of a SM signs the lease, but the SM does not, the lease cannot be terminated under SCRA. If a SM exercises their right to terminate a lease, can the landlord charge lease break fees or charge back concessions? No. The clear intent of SCRA is to cut off a SM’s liability for rent on the termination date without penalty or consequence. Absent a waiver, charging a lease break fee or charging back concessions clearly penalizes the the SM for exercising their rights under the law. Similarly, can a landlord apply the SM’s security deposit for unpaid rent and physical damages to the unit? Yes, a landlord may apply a SM’s security deposit, subject to qualification, to unpaid rent. When applying a deposit, the landlord must qualify amounts owed. A landlord can apply a security deposit to any amounts which accrued prior to the effective date of termination, and for physical damages to the unit. A landlord may not apply the security deposit to any rent which did not accrue prior to the effective date of termination. A landlord may not interfere with a SM’s right to remove his property from the premises, or withhold his security deposit to satisfy rent, or other obligations accruing under the lease after the effective termination date. These rights extend to the SM’s dependents. If a landlord wrongfully seizes a SM’s property, including the SM’s security deposit, to satisfy unpaid rent or other obligations in violation of the Act, the landlord subjects themselves to fines and potential imprisonment. Based on this specific provision, and the clear intent of the law, applying a SM’s security deposit for lease break fees is a risky proposition. Many leases attempt to contract around a SM’s SCRA rights. Lease clauses that waive or alter SCRA rights are unenforceable because they do not comply with SCRA provisions. These lease provisions fail, primarily for two reasons. First, only a SM who is already in the military can waive rights under SCRA. Thus, it is impossible for a tenant who is not in the military but subsequently enlists to waive SCRA rights. Any lease clause that waives SCRA rights is also unenforceable because any waiver of of a SM’s rights under SCRA must be contained in a conspicuous waiver agreement. Conspicuous means in a separate agreement which is apart from the SM’s lease, and in at least 12-point font. Landlords should consider having SM’s sign a complying SCRA waiver for many reasons. Pocket orders are a primary reason. A SM has pocket orders when an SM signs a lease, and already has PCS or deployment orders, but fail to disclose them to the landlord (the SM continued on page 4 Landlord News April 2013 Page 3 THE SERVICEMEMBERS CIVIL RELIEF ACT continued from page 3 keeps them in his pocket). Similarly, an SM could know that they are retiring or being discharged during the lease term. Absent PCS orders, retirement and discharge issues under SCRA are muddy. Some lease clauses state that the SM affirmatively represents that they don’t have pocket orders, don’t plan to retire, or won’t be discharged during the lease term, and if these representations are false, then the SM owes liquidated damages or future rent. On the one hand, an SM with pocket orders who signs a lease with such a clause has committed misrepresentation. On the other hand, these clauses run squarely against SCRA’s requirements for waivers to be contained in a separate written document. Because no landlord should voluntarily enlist to be the test case, a separate waiver should address these issues. A SCRA waiver could and should also address the non-appearance issue. SCRA was primarily designed to protect deployed military personnel from default judgments. Under SCRA, a non-appearing SM cannot be defaulted in a civil action, until after certain procedural requirements are met. One of these procedural requirements is that no default judgment can enter until the court appoints an attorney to represent the non-appearing SM. A SM not appearing because the SM is in a fire fight in Afghanistan is one thing. An SM not appearing when the SM is stationed at a base five miles from the court house is another. Some SMs who are not deployed overseas or on active training exercises know their non-appearance rights and use these rights to delay and otherwise prevent the enforcement of a landlord’s rights. For example, a SM who owes money to a landlord can make it nearly impossible to collect by simply not showing up at court. A SCRA waiver should require non-deployed SM to waive non-appearance rights. A SCRA waiver could also address the 50mile issue. If a SM takes advantage of any of SCRA’s rights, a landlord may not use this against the SM. For example, if a SM rightfully terminates a lease under the act, the landlord may not report this to any credit reporting agency or credit bureau as an adverse or negative event. Finally, a landlord may not deny a SM’s rental application based upon credit worthiness if the SM has exercised any right under the SCRA in the past. JJJJJJJJJJJ THERE ARE ALWAYS MORE QUESTONS ? continued from page 3 Answer: If the dog is disturbing other residents and is not being properly restrained, it probably is a violation of your lease if it contains a clause requiring tenants to refrain from unreasonable annoyances or disturbances. If this is the case, you could enforce the lease through a demand for compliance. It is also useful to have pet rules that spell out acceptable and unacceptable behaviors for pets on your property. 6. Question: Must three-day notices to pay rent or quit be served to all delinquent tenants at the same time? We manage a large apartment community and sometimes have a multitude of notices to serve. Answer: Colorado law does not require that you serve three-day notices to all delinquent residents at the same time. It is a good idea to do so, however, in order to avoid the appearance of favoritism or discriminatory conduct. 7. Question: I have a tenant who always “races” his car in the parking area. We have families with small children and a posted five miles-per-hour speed limit. What can I do to make him stop? Answer: Creating safety hazards on the premises in a continuous manner can be good grounds for eviction based upon the nuisance activity. If the reckless manner in which he operates his vehicle continues after warnings a demand for compliance should be served and if it still continues after the demand for compliance expires, a three-day notice to quit may be served. Landlord News April 2013 Page 4 IMPORTANT APRIL THS DATES April 10th Subsidized Evictions Bootcamp THS Lower Conference Center 3600 S. Yosemite Street Denver, CO 8:30 a.m. – Noon April 16th NoCoRHA Tradeshow The Drake Centre Fort Collins, CO 8:00 a.m. – 3:00 p.m. April 18th Colorado Springs Client Lunch Ritz Grill – Elbo Room 15 S. Tejon Street Colorado Springs, CO 11:30 a.m – 1:00 p.m. April 19th South Client Lunch Dave & Busters South Colorado Blvd, Denver 11:15 a.m. – 1:00 p.m. April 23rd Bedbugs Workshop THS Lower Conference Center 3600 S. Yosemite Street Denver, CO 8:00 a.m. – 11:00 a.m. Landlord News April 2013 Page 5 Don’t Miss The 2013 NoCoRHA Tradeshow Be A Property Manager SUPERHERO Discover Your SuperPowers! Tuesday, April 16th, 2013 7:45 a.m.-3:00 p.m. The Drake Centre 802 West Drake Road Fort Collins, CO Drop By The THS Booth And Say Hello A penny saved is a government oversight. Did you ever notice: When you put the 2 words “The” and “IRS” together it spells “THEIRS”? Taxgiving Day = April 15th I’m a little worried about this year’s income tax. I think I made it out wrong. I’ve got thirty-five cents left. I don’t know if we’ll ever get a cure for poverty, but the way taxes and prices are going up, we’ve got a sure cure for wealth! You should file your income tax, not chisel it. Why does a slight tax increase cost you two hundred dollars and a substantial tax cut saves you thirty cents? America is the land of opportunity. Everybody can become a taxpayer. It’s hard to believe America was founded to avoid high taxation. Everything we have is taxed — even our patience. Drive carefully. Uncle Sam needs every taxpayer he can get. A fool and his money are soon parted. The rest of us wait until income tax time. When making out your income-tax report, be sure you don’t overlook your most expensive dependent — the government. Making out your own income tax return is something like a do-it-yourself mugging. Death and taxes are inevitable, but death doesn’t repeat itself. April is always a difficult month for Americans — even if your ship comes in, the IRS is right there to help you unload it. IRS: We’ve got what it takes to take what you’ve got. Ever wonder why the IRS calls it Form 1040? Because for every $50 that you earn, you get 10 and they get 40. Isn’t it appropriate that the month of the tax begins with April Fool’s Day and ends with cries of “May Day!”? Landlord News April 2013 Page 6 Income Tax Day One Liners Happy Tax Day ??