Minimize Your Risk In Turning Units: Make Sure All the Staff Are Proficient On Abandonment Issues

Abandonment is a timeless issue.  Clients never stop asking about it since abandonment scenarios happen regularly.  Because failure to follow abandonment best practices can cost you thousands, or even tens of thousands of dollars, this month we want to reinforce everything you need to know about abandonment.

In layman’s terms, abandonment means that the tenant has left, and is not coming back.  Abandonment turns on the answer to two questions.  Has the tenant left?  Does the tenant intend to give up his right to possess or occupy the unit?  While there are common signs of abandonment, such as removal of personal property, there is no black and white test.  Courts determine the answers to abandonment questions on a case-by-case basis.  However, Colorado law is clear on the effect of abandonment.  If a tenant has abandoned a rental unit, you may take possession of the unit without having to evict.

The 2008 Colorado Warranty of Habitability Act (WHA) made it illegal to retake possession of a unit without a court order (evicting) unless the tenant abandoned, and reinforced common law abandonment indicators.  The WHA provides that “it shall be unlawful for a landlord to remove or exclude a tenant from a dwelling unit without resorting to court process”¦unless the dwelling unit has been abandoned by the tenant as evidenced by the return of keys, the substantial removal of the tenant’s personal property, notice by the tenant, or the extended absence of the tenant while rent remains unpaid, any of which would cause a reasonable person to believe the tenant had permanently surrendered possession of the dwelling unit.”

If the tenant abandons (voluntarily gives up possession of the unit), any reentry by you is not wrongful.  If your tenant challenges in court, you bear the burden of proof on the two abandonment elements (tenant was gone and tenant’s intent was not to come back).  Establishing the tenant’s intent can be problematic due to lack of direct evidence.  Direct evidence of abandonment includes turnover of keys, and written notice of intent to vacate.  Verbal statements (I’m moving out) are also direct evidence of abandonment, but lead to “he said, she said” scenarios, which should be avoided.  Always proceed with caution when relying on a verbal statement of intent to vacate, especially when you walk the unit and it doesn’t appear that the tenant has moved out.  Frequently, proof of the tenant’s intent not to return can only be established through circumstantial (indirect evidence).

What constitutes circumstantial evidence that a tenant has abandoned a unit?  While not a complete list, the following facts, coupled with the tenant being gone, are circumstantial evidence of a tenant’s intent to abandon: rent is unpaid; can’t contact tenant after repeated attempts over time; no one has seen the tenant; the tenant’s vehicle is gone; utilities and/or phone is disconnected, or has been transferred back to the landlord or community; all food has been removed, or remaining food is spoiling; toiletries removed; most furniture has been removed, especially beds; mail is stacking up, or is forwarded; children have not been seen, or are not in school; storage locker emptied; clothing removed.  You don’t absolutely have to have keys to retake possession, but if you don’t have keys, you should be very confident that the totality of circumstances (facts) supports your abandonment assessment (decision to retake possession without evicting).  For your reference, we have posted, on our website in the resource library (available to clients only), an abandonment checklist (lists of factual circumstances that support an abandonment conclusion).

If the tenant is gone and rent is unpaid, this is not enough to prove the tenant has abandoned.  Additional circumstances (facts) must also be present to support a conclusion that the tenant has abandoned.  A Colorado court found that a tenant had not abandoned the unit, even though the rent was unpaid for several months and the tenant had been gone for a substantial period.  The court based its finding on several facts.  First, all of the tenant’s property was still in the unit.  Second, and most importantly, the tenant had a history of paying rent late with the landlord’s consent.  Because the landlord wrongfully took possession of both the unit and the tenant’s property, the court found that the landlord had wrongfully evicted the tenant, and awarded the tenant $13,000 in damages, plus another $13,000 in punitive damages.

Abandonment scenarios vary widely from very clear (tenant is gone) to very murky (don’t know if tenant is coming back).  All onsite team members and any person responsible for making the decision to evict or to retake possession without an eviction (determine that the tenant has abandoned) should always follow best practices.  Abandonment evaluation means following three key steps.  One, carefully evaluate the surrounding factual circumstances even when rent is unpaid for abandonment indicators.  Two, if you’re uncertain whether the tenant has abandoned you should always evict.  Three, if after evaluating the situation, you determine, based on the type and quality of remaining property, that the tenant has abandoned, you should still follow best practices and carefully document the property to insulate against future claims.  Always keeping in mind that one man’s trash is another man’s treasure.

Liability and damages must be proven in every lawsuit.  If you made the wrong call and the tenant didn’t abandon, you can substantially limit tenant damage claims (your liability) if you followed best practices.  Even if the remaining property is junk, you should always have at least two team members walk the unit, take photographs of all property, and prepare an accompanying inventory list, and have the two team members who walked the unit sign the list.  When taking the photos, be sure to include pictures of the entire unit and each room in unit, not just the remaining property.  Even if the tenant turned in keys, taking photos is still a good idea.   While you may think it is a waste of time to photograph and inventory property that you couldn’t give away, this practice is critical to reduce and eliminate claims stemming from abandonment disputes, particularly fraudulent claims.

Tenants frequently assert these claims months, or even years later.  By the time a tenant makes a claim, the onsite team may have completely changed.  Even if the onsite team hasn’t changed, the onsite team will have dealt with dozens, if not hundreds, of trash-outs or make-readies.  It is unrealistic and bad practice to count on somebody’s memory.  Without photos and an inventory, the tenant now turns the situation into the classic “he said, she said” scenario.  The tenant’s abandoned property now becomes a 400 CD collection, 2 TVs, an Xbox, heirloom jewelry, and a $5,000 wardrobe.  Photos and an inventory shut down false claims fast.  The tenant may not even try and go to court once he knows you have photos.

Other key abandonment rules.  Even if multiple facts support abandonment, never clear an entire unit full of property without a court order for possession.  Similarly with respect to garages or storage areas, even if you don’t know whose garage or locker it is, or you do know which tenant the garage or locker belongs to and that tenant hasn’t been seen in years, you should proceed cautiously before emptying (trashing) an entire storage locker or garage unit full of property.  You should never discard important documents (visas, passports, birth certificates, or other official documents), or obviously sentimental items (photo albums) without carefully evaluating the situation.  Even if the tenant has abandoned, discarding these items will likely lead to time-wasting disputes or lawsuits.  Don’t assume plastic trash bags are being used for trash.  Many tenants use them to move their belongings.  Always examine the contents.  We have dealt with numerous disputes involving trash bags being tossed, only to have the tenant claim some valuable property was inside, and that they were still in the process of moving out.

Regardless of what your lease says, abandonment issues in any lawsuit will be determined based on the law.  However, lease language can and should add an extra layer of protection against potential damage claims.  Such language should state that if the tenant abandons, the tenant irrevocably waives all title and interest tenant has to such property and grants you the full authority to immediately dispose of same without notice, court order, or accountability.  Your lease should also address the death of a sole tenant by stating that a sole tenant abandons ten days after death.

In most circumstances it is not advisable to store tenant property after abandonment.  However, it may be advisable in some circumstances.  For example, if a tenant has abandoned but left a box full of photo albums, you should carefully evaluate the situation before discarding the box.  Even if the tenant is long gone, even if the evidence of the tenant’s intent to abandon is undisputed, and even if your lease gives you the right to dispose, the tenant is likely to sue you if you throw out his family photos.  Even if you win, you will still incur significant costs to defend it, and your time will be wasted dealing with the lawsuit.  If you store property after a tenant abandons, the law imposes duties on you.  You must use reasonable care (regardless of what your lease says) in storing and preserving the property.  You should contact us for proper advice in dealing with abandoned personal property to eliminate future liability.  Most problems in dealing with abandoned personal property can be addressed by proper lease language.  Your lease should require the tenant to provide both you and the United States Postal Service with a forwarding address.  Not all tenants will do this, but this lease requirement will make it much easier to eliminate liability associated with abandoned personal property.

We have a simple rule regarding abandonment scenarios.  You should always evict if it is a murky situation, a close call, or if there is any doubt regarding the tenant’s intent to abandon.  As one of the firm’s founding partners, Phil Hopkins was fond of saying, a lawful court order granting you possession of the unit (an eviction) is an inexpensive insurance policy against a tenant’s potential future claims that the tenant had not abandoned, and you wrongfully threw out the tenant’s property.  Because an eviction provides due process and an opportunity to be heard, a tenant’s failure to respond and an accompanying court order for possession insulates you against tenant claims.  You should always err on the side of caution. In unclear cases, it makes no sense to risk thousands or tens of thousands of dollars of future liability to save the small cost of an eviction.

View Resource »