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Proposed “Right to Cure” Bill Will Change The Eviction Process
Matt Evans Receives The AAMD Person of the Month Honor
Volume 19 â€¢ Issue 2
3600 South Yosemite Street Suite 828, Denver, Colorado 80237
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
PROPOSED â€œRIGHT TO CUREâ€ BILL WILL CHANGE THE EVICTION PROCESS
As discussed last month, tenant rights groups may have achieved critical mass in convincing elected officials that evictions can and should be reduced. To this end, Senate Bill 120 (the â€œBillâ€ â€œSB-120â€) which is aimed at reducing evictions has been introduced. Normally, we wouldnâ€™t discuss a Bill until it has passed. However, all indications are that the Bill is going to pass. Assuming the Bill passes, this new law will require the service of a new type of rent demand, thus fundamentally altering the initial step in the eviction process. For these reasons, we want to make our clients aware of the potential changes, as soon as possible, even though the law, if passed, wonâ€™t go into effect until August of 2018.
The premise of the Bill is that evictions will be reduced if tenants are given more time to pay. This premise is flawed. Unless thereâ€™s some other issue going on with the tenant, ninety-nine percent of landlords already accept tenant payments well beyond the expiration of the three-day notice (the time landlords are legally required to accept payments). For this reason, some have gone as far to argue that this is a reason either to support or not oppose SB-120. The reasoning is that the Bill does not alter the status quo. The status quo is that landlords already accept tenant payments beyond the expiration of the three-day rent demand and during eviction.
Landlords accept money because they donâ€™t want to evict tenants. Unbelievably, some tenant rights supporters think that landlords want to evict tenants. Regardless of whether you are for, against, or indifferent to SB-120, it is important for the rental industry to collectively push back and dispel this false narrative being
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MATT EVANS RECEIVES THE AAMD PERSON OF THE MONTH HONOR
Matt Evans, THS Client and Public Relations Assistant was honored as the AAMD Person of the Month at the January AAMD Power Lunch. In recognizing Matt for this honor, Michelle Peterson pointed out that he had a key role in the planning and the execution of the Associationâ€™s successful 2017 Charity Auction. She noted that his strong presence and willingness to help in whatever capacity was needed on the Charity Auction Committee for the past several years have been major factors that contributed to the successful execution of this event. Michelle also commented on the fact that in addition to his work on the Charity Auction, Matt has been a major participant in the Trade Show & Education Committee and is actively involved in the planning of the education programs for the Tradeshow. The consensus of the AAMD members and staff who have had the opportunity to work with Matt on AAMD Committees is that his passion and commitment to excellence are the things that make him a great asset for the Association.
The Firm agrees with the fact that he always exhibits an unwavering commitment to excellence in whatever he undertakes and we believe it is one of the best characteristics that Matt brings to all of his work. Although Matt has only been at THS for a little over two years, he has already established a great working relationship with many of our clients and other key individuals in the multi-family housing industry. Matt balances his many volunteer activities within industry associations with a demanding set of responsibilities at the Firm.
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PROPOSED â€œRIGHT TO CUREâ€ BILL
WILL CHANGE THE EVICTION PROCESS
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advanced by tenant rights groups. This false narrative led to this Bill and other landlord-tenant bills being introduced at the State Capitol. Everyone needs to know that landlords do not enjoy or want to evict tenants, and that landlords prefer rent payments over evictions. The simple fact of the matter is that there are only two options when a tenant does not pay rent. One, do nothing. Two, evict.
A refresher of the current eviction process is necessary to understand how SB-120 will affect the current eviction process. Right now, to start an eviction for non-payment of rent, the landlord must serve a three-day Demand for Rent or Possession. The rent demand must demand, in the alternative, payment of the rent within three days, or possession of the property. Upon service of the rent demand, the tenant must either pay the rent within three days (not counting the day of service) or vacate the premises within three days.
If a tenant fails to pay or vacate within three days, the tenant is deemed to be unlawfully detaining the property. In laymanâ€˜s terms, this means the tenant is occupying the property, but not paying for the privilege of occupancy. When a tenant is unlawfully detained in the property, a landlord is entitled to a court order restoring landlords right to possession or a judgment for possession.
Under current law, if the tenant fails to pay within three days, the tenant forfeits the tenantâ€™s right to possession, unless the landlord chooses to accept the rent after the three-day demand has expired. Thus, once a tenant is unlawfully detaining the property (once the three-day rent demand expires), the landlord has no obligation to accept the tenantâ€™s rent and can refuse any offer by the tenant to pay the rent. By refusing to accept rent after expiration of the three-day demand, the landlord is saying â€œIâ€™m choosing to be restored to possession of the premises instead of accepting the rent.â€
Under the new law, the tenant gets extra time (beyond the expiration of the three-day rent demand) to cure a lease default by paying the rent. Specifically, the
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MATT EVANS RECEIVES THE AAMD PERSON OF THE MONTH HONOR continued from page 1
In addition to managing the Firm Website and Blawgs, he schedules and coordinates all THS Educational Workshops and Luncheons; manages all industry-related tradeshows and educational expos and assists in the production of Firm publications, newsletters and Webinars.
Prior to joining Tschetter Hamrick Sulzer, Matt served as Chief Communication Officer for New Paradigm Marketing as well as having previously been employed as the Communications Specialist for the City of Evans, Colorado.
Please join with us in congratulating Matt on receiving the honor of being selected as AAMD Person of the Month.
IMPORTANT THS FEBRUARY DATES
FEBRUARY 8th Basic Fair Housing THS Lower Conference Center 3600 S. Yosemite Street Denver, CO 9:00 a.m. -Noon
FEBRUARY 19th ALL COURTS CLOSED
PRESIDENTS DAY HOLIDAY
FEBRUARY 20th AASC Basic Fair Housing
545 E. Pikes Peak., Ste 105
Colorado Springs, CO
1:00 p.m. – 4:00 p.m.
FEBRUARY 21st WEBINAR WEDNESDAY
Topic Smoking Policy
9:00 a.m. Online
FEBRUARY 23rd South Client Lunch
Dave & Busters
2000 S. Colorado Blvd, Denver 11:15 a.m. – 1:00 p.m.
PROPOSED â€œRIGHT TO CUREâ€ BILL
WILL CHANGE THE EVICTION PROCESS
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Bill expands the cure period to the day before the eviction court date. In other words, once a three-day is served for non-payment of rent, a tenant can pay (cure the rent default) at any time up to and including the day before the first eviction court date. If a tenant offers to pay at any time up to the day before court, the landlord must accept the tenantâ€™s payment. Obviously, one of the downsides of the SB-120 is that if the tenantâ€™s first eviction court date is on the 29th of the month, the landlord cannot insist that the tenant also pay next monthâ€™s rent. However, payment means payment of all outstanding amounts due at the time of payment pursuant to the tenantâ€™s lease.
The Bill creates a one strike and you are out system. Thus, tenants get the extra time to cure (pay) one time every six months. If a landlord must serve a second demand for rent within six months because a tenant failed to pay the rent, the landlord could serve a traditional or standard three-day rent demand. If a landlord serves a standard three-day, the landlord only has to accept the tenantâ€™s payment if made within three days (not counting the day of service).
Altering the status quo from a one-notice system to a two-notice system has probably been the most discussed aspect of the proposed Bill. THS attorneys unanimously thought the two-notice system might confuse landlords and create issues with SOPs. For example, Community X is a 400-unit property and serves their rent demands on the 4th of the month. Community X can serve anywhere from 30 to 40 rent demands a month. The rent demands are programmed in YARDI, and generated electronically. If five tenants were served with rent demands last month and the landlord now wants to serve these five tenants with a traditional three-day, the system will either have to be re-programmed or Community X will have to manually generate these three-days.
The majority of clients at the THS North Lunch thought the law would be simpler without the two-notice system as well. However, other attorneys and landlords argue that landlords need to retain the shorter cure period as a vital tool to evict non-complying tenants.
Specifically, sometimes it is very difficult for a landlord to prove a non-compliance case. For example, a tenant can be dealing drugs, and no one wants to testify out of fear. If the non-complying tenant doesnâ€™t pay the rent, evicting the non-complying tenant for non-payment may be the landlords best option. If the non-complying tenant, who didnâ€™t pay rent, has until the day before court to pay, the ability to evict the non-complying tenant over non-payment would be greatly diminished.
We agree that the Bill does take away some options. However, overall this is a small number of cases. In our experience non-complying tenants who do not pay rent within three days, donâ€™t suddenly offer to pay rent before court. For this reason, the potential for confusion and hassle (which notice do I need to serve or can I serve, having to keep track of which tenants have been served with which notices, and having to produce two sets of notices) outweigh the benefit of retaining the status quo (the ability to serve a standard three-day rent demand). In the end, it probably doesnâ€™t matter. Those who want to retain the ability to serve a standard three-day on the tenantâ€™s failure to pay rent a second time are happy because the Bill retains this right. If the landlord wants to avoid confusion, hassle, and potential issues caused by serving the wrong notice or having to produce two sets of notice, the landlord can by simply always serve the rent demand that gives the tenants the right to cure right up to the court date.
Initially, this Bill seemed like a huge sea change to the status quo. However, upon further analysis, the Bill does not significantly alter the current landlord-tenant landscape. The reality is that landlords are already taking rent payments after the expiration of three-day notices about 99% of the time because landlords want the rent and donâ€™t want to evict tenants. Landlords donâ€™t refuse rent unless there is some other issue going on, e.g. the tenant is disturbing their neighbors. The Bill does eliminate the use of a rent demand as a compliance tool, at least on the first go-round, and if the second rent default is not within six months. Because landlords can choose to serve two different notices on the second strike, the Bill has fair housing implications. We will address those issues and answer other questions regarding the Bill on an upcoming Webinar Wednesday. The one thing we do know about SB-120 is that it is not likely to reduce evictions or increase the number of tenants that pay and stay.
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