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What You Need To Know About Collection Agencies

August 6th, 2014|

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What is the most important issue about a collection agreement?

The term of the agreement.  Everyone in this business knows you’re only as good as last month’s performance.  For this reason all vendor contracts can be cancelled, without cause, upon thirty days notice.  Most collection agency agreements contain this provision.  Yet, many collection agreements contain other provisions, which nullify your right to cancel on thirty days notice.  Specifically, collection agency agreements contain buy back or cancellation fee provisions.  For example, over the last ten years you have placed $20M in debt with a collection agency.  The collection agency is not performing, so you give them thirty days notice of cancellation, and you request return of your debt (the collection files placed).  The collection agency then informs you that you must pay them a 10% cancellation fee, or $2,000,000 to get back your own debt.  The debt is yours.  Never sign a collection agreement that requires you to pay for the return of your property if the agency is not performing.

Lease-Related Legal Costs

August 6th, 2014|

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Lease related legal costs are driven by the amount of attorney time involved.  Lease work is not rocket science, but it is time-consuming and tedious work.  Sometimes clients forget the time-consuming nature of lease work.  This can cause unrealistic expectations about lease review and drafting.  For example, clients want a lease review, but don’t want us to spend more than an hour on it.  We cannot comprehensively review a five to ten thousand word document in an hour.  During a one-hour review, an attorney can only read the lease and highlight the most fatal or obvious flaws.  This brings us to a critical point about lease review work and related costs.  It is always less expensive to buy a well-developed lease product, then to try to fix a bad lease.  Reviewing, revising, and fixing most leases can easily exceed five hours of attorney time which is more than the base cost of our most expensive lease product.

You Do Need A Legitimate Non-Discriminatory Reason For Non-Renewing A Tenant

January 3rd, 2013|

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Frequently, landlords and managers have just enough information to be dangerous.  One of the most dangerous statements in the business is the "I heard that under Colorado law I do not need a reason to non-renew a tenant".  Is this a true statement? Yes, under Colorado landlord tenant law, you do not need a reason to non-renew a tenant.  However, under federal and Colorado Fair Housing Laws, you may only non-renew tenants for legitimate non-discriminatory business reasons. While you don't need a reason to non-renew, landlords renew good tenants.

Landlords only non-renew bad tenants for specific reasons.  Thus, while under Colorado Landlord-Tenant Law, you do not need to have a reason to win an eviction case or end the relationship with a tenant, you have reasons for non-renewing.  If the Colorado Civil Rights Division comes knocking on your door with a discrimination complaint, you will have to provide these reasons for non-renewal.  To avoid fair housing liability, your non-renewal reasons must be nondiscriminatory, i.e. based on a legitimate nondiscriminatory business reasons.  Accordingly, every non-renewal decision should be thought through in advance to ensure that it is based upon a legitimate non-discriminatory business reason.  If you fail to think through the situation and just fall back on the old "I don't need a reason" rationale because you just want a tenant out, you may have a difficult time responding to a discrimination complaint.

Companion Animals of Guests

December 19th, 2012|

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You run a no-pet community.  Can the guest of a non-disabled tenant bring a  a companion animal onto your property?  Unfortunately, the law is not clear on this issue.  Under fair housing laws, only disabled residents and prospects are entitled to make requests for reasonable accommodations.  A guest is not a tenant, and therefore not entitled to a reasonable accommodation (an exception) to your no-pet policy. Landlords who do not want to allow the tenant's guest to bring a companion animal onto the property frequently cite this rule.  Yes, this is a correct statement of the law. However, it is a shortsighted analysis. The fair housing act also provides that it is illegal to discriminate in connection with the leasing of a property because of the disability of any person associated with the tenant.

THS Comments on New Marijuana Law

November 9th, 2012|

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With the approval of Amendment 64 by Colorado voters, Colorado has legalized the recreational use and possession of small amounts of marijuana.  We have already received numerous inquiries as to how this will affect individual clients and landlord tenant relationships in Colorado.  We are now comprehensively analyzing how the new law will affect you, leases, and your relationship with residents.  We will publish our analysis to all Firm clients in the next month. Probably, in the Landlord News, the Firm's monthly newsletter.  Remember that this new law is not yet in effect and until it is everything is the same.

If you have specific questions regarding our Crime and Drug Free Addendum and/or Lease that refers to Colorado Law regarding drugs please submit them to THS so that we can include them in our analysis of all of the nuances of the impact of this new law.  The question of whether you can prohibit the smoking of pot on your property will be addressed in our analysis so you do not need to submit questions regarding this particular issue. But we will be happy to review and respond to all other questions you may have regarding the marijuana issue.

Know Your Landscape

October 17th, 2012|

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What? An attorney writing about landscaping?  Not so fast.  The landscape to which we refer is that of your relationship with your residents. It is not uncommon for clients to promote new managers and/or hire new personnel.  This “changing of the guard” usually prompts questions from these new employees regarding their rights and obligations to their residents.  And, we will invariably refer them to their lease as a perfect starting point to understand these rights and obligations.

One of the most common questions asked relate to the laws regarding the landlord-tenant relationship.  And while the laws may exist, they are limited in scope and leave much (if not most) of the landlord-tenant relationship to the individual parties.  This then leaves you, as the landlord, free to define that relationship with an effective, comprehensive lease.

Effective Documentation Means 
Victory For The Landlord

October 3rd, 2012|

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All landlords can describe situations where they just knew a problem tenant situation was brewing, as the hours and days of effort to address the matter accumulated.  Yet, when they look back at the tenant file, they see little (if any) documentation of their efforts to address the problem – a situation that may very well hamper their ability to obtain a positive resolution.

We realize that documentation takes time and energy, which can be in short supply for property managers tasked with handling all the issues that can arise in a multi-unit complex.  Nonetheless, effective documentation means victory when a landlord is faced with the need to take legal action against a problem tenant.

Attorneys Fees Frequently Factor the Most in Landlord Tenant Litigation

September 19th, 2012|

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Landlord tenant litigation often involves small sums of money.  We are not saying $500 is chump change, but in litigation world it is not a significant amount.  One of the reasons $500 is not considered to be a significant amount is because of attorney’s fees.  Attorneys charge by the hour, and at today’s rates, $500 is less than three hours of an associate attorneys’ time.  When you consider an attorneys’ hourly rate, and the amount of time it takes to litigate a landlord tenant matter, attorneys’ fees almost always exceed the amount in controversy.  The type of landlord tenant case has no bearing on this issue.  Whether it is a security deposit dispute, a warranty of habitability claim, or an eviction case, attorneys’ fees almost always exceed the amount in controversy.

Attorneys’ fees have an even bigger impact in landlord tenant litigation because frequently the loser has to pay the other sides costs.  So before you go all in the next time over that $500 your tenant owes, stop and ask yourself some questions.  One, what are my fees going to be? Two, what are the risks that I’m going to have to both my attorney and the tenant’s?  Obviously, if there is a substantial risk you might pay $5000 in attorneys fees over $500, you will need to adjust your strategy and settlement posture accordingly.

Hoarding Tenants

September 19th, 2012|

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Resident hoarding can cause significant health and safety problems, both in the hoarder’s unit and in neighboring units. Hoarding can create pest infestations, mold problems, increased fire risk, interfere with entrance or exit of the unit, or exceed maximum load bearing floor capacity. Hoarding is rarely self-reported by the hoarder. Instead, it is often discovered by maintenance staff making a repair in the hoarder’s unit, or in a neighboring unit. Hoarding can create a problem for surrounding units, such as water intrusion, mold, or a pest invasion in a neighboring unit.

Hoarding is not just a matter of poor housekeeping. Hoarding is believed to be a form of anxiety disorder and/or obsessive/compulsive disorder (OCD). Depression can also be a component. When dealing with a hoarding situation, the focus should be only on solving legitimate health and safety issues rather than attempting to achieve ideal housekeeping habits. Even if health and safety issues are initially resolved, a hoarding resident may “slip” and re-hoard again the future.

Assessing Whether Tenant Threats Qualify For Eviction

September 6th, 2012|

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One reason a landlord can serve a Notice to Quit for Substantial Violation is when a tenant’s conduct “endangers the person of another”.  The short definition of a substantial violation is any act that occurs on or near the property and endangers either a person or property.  Endangerment does not necessarily require actual physical harm.  The threat of physical harm (whether it be verbal or by gesture) can sometimes be enough.  For example, a tenant that genuinely makes a manager or other resident afraid for their safety has committed a statutory substantial violation and can be served with a 3-day Notice to Quit.  If a tenant doesn’t cause physical harm and the manager, staff, or resident is not actually threatened; you can serve a notice to quit for a substantial violation but may not (probably will not) prevail in court if the tenant contests the eviction.  Even if a tenant’s behavior is not sufficiently serious to satisfy the statutory requirement for a “substantial violation”, the behavior may meet your lease requirements if you have crime free language (addendum in most cases), and almost always will support serving a three-day demand for compliance or possession.  Any unlawful behavior is a violation of most leases and most unlawful behavior (and police response to it) represents an unreasonable disturbance of neighbors.