That’s A Substantial Violation! Or Is It!

Tenants do outrageous things.  Tenants can make you mad, upset, and drive out other good tenants.  Tough problems call for tough solutions.  The nuclear option is to terminate the problem tenant’s lease.  Landlords sometimes try to terminate problem leases by serving a Notice to Quit for a Substantial Violation.  Given the problems the tenant is causing, the landlord just wants the tenant out.  Even if the facts, from a civilized society perspective, justify getting rid of the tenant with no right to cure, it doesn’t mean you always have the right to terminate a tenant’s lease without giving the tenant an opportunity to correct their behavior.  The statutory substantial violation’s 20th anniversary is a good time to revisit when a tenant does and does not get a second chance under Colorado law.

When and why was the statutory substantial violation (“SSV”) created?  The Colorado General Assembly created the SSV in 1994 to address violent and antisocial criminal acts committed by tenants in rental properties.  Because landlords cannot always be aware of the dangerous nature of certain tenants, until after they take possession of a property as a tenant, the Colorado General Assembly gave landlords the ability to immediately terminate a tenant’s right of possession with no right to cure if the tenant engaged in dangerous criminal behavior.  The General Assembly wanted landlords to have a strong hand to evict criminals who often resisted eviction for as long as possible on technicalities, while infringing on or otherwise violating the rights of neighbors or co-tenants.  For all of these reasons, every tenant lease now prohibits (it is an implied covenant of every lease) a tenant from committing a statutory substantial violation as defined by Colorado Revised Statute § 13-40-107.5.

What is a SSV?  A landlord’s remedy for a SSV is easier to define than the violation itself.  If a tenant commits a SSV, you have the right to terminate the tenant’s lease upon three days notice to quit, and the tenant has no right to cure the violation.  The Substantial Violation Statute classifies several acts or classes of behavior as substantial violations.  Violent or drug related felonies are the clearest conduct that constitute statutory substantial violations.  A SSV is also any act or series of acts by the tenant or any guest or invitee of the tenant that occurs on or near the property that endangers a person, or willfully and substantially endangers the property of the landlord or anyone living on or near the premises.  Finally, a SSV is a criminal act that carries a potential jail sentence of 180 days or more and has been declared a public nuisance under state or local ordinance.

The Substantial Violation Statute is helpful in many cases involving tenant criminal behavior.  However, the rental industry erroneously believes that any aggressive or hostile tenant behavior can be addressed by terminating the tenant’s lease for committing a SSV.  Specifically, we have seen an increasing number of eviction notices for “substantial” violations that are not strong, or even viable cases.  While a tenant’s conduct may be aggressive, hostile, rude, outrageous, intimidating, threatening, or uncivilized, the conduct does not always legally or factually support evicting the tenant for committing a SSV because such conduct does not meet one of the legal tests set forth in the preceding paragraph.

Landlords serve SSV notices in tenant threat cases.  While it certainly depends on the type and nature of the threats, most threat scenarios do not legally support evicting a tenant for a SSV.  For example, if a tenant threatens to sue the community or the manger, or to get the manger fired, such threats are not a SSV.  Sometimes physical threats or even physical altercations won’t hold up in court as a SSV.  While there are certainly exceptions, the rule of thumb is that the incident must involve the police to constitute a SSV.  In other words, most incidents involving threats or physical altercations won’t constitute a SSV if the police were not called.  If no serious injuries occurred, a physical altercation probably is not a viable SSV without an arrest.  If there was no arrest or injuries, verbal threats, even if violent, probably won’t constitute a SSV, unless the tenant making the threats is clearly intimidating and has the ability to carry out such threats.
When it comes to SSVs, we see the same mistakes being made by clients over and over.  The most common mistake is serving a tenant a SSV notice to quit for verbal threats or other types of harassing or annoying behavior.  Landlords often serve a SSV for verbal threats or harassing type of behavior because the tenant is driving them and other tenants crazy, they can’t take it any more, and just want the tenant out.  Based on the many cases we review, the better route is usually to serve a three-day Demand for Compliance or Possession (DCP), demanding that the behavior cease.  If a threat or behavior is not a crime, the DCP is always the better strategy rather than trying to make something a substantial when it is not, or trying to bluff a tenant out on a bad substantial violation notice.  By serving a DCP,  you have given the tenant one strike.  If the tenant gets a second strike, you can then end the relationship by serving a Notice to Quit for Repeat Violation.  Because we review all notices for clients, don’t make the mistake of not getting us involved prior to serving a notice.

If a tenant’s behavior does not constitute a SSV, the tenant conduct might still violate your lease, and such violation may give you the right to terminate the tenant’s right of possession (give you the right to serve a notice to quit with no right to cure).  Obviously, your ability to take action in the absence of a SSV is entirely dependent on your lease language.  The ability to terminate a tenant based on lease language (a contractual right) is sometimes referred to as a Contractual Substantial Violation (“CSV”).  A CSV should not be confused with SSV.  A CSV is based on your lease, and a SSV is based on Colorado statute.  Some attorneys argue that you can’t have a CSV because the area has been preempted by the General Assembly.  In other words, Colorado statute defines what a substantial violation is and therefore a contract can’t expand this definition.  We disagree.  While there are certainly no guarantees in court, we have had good success enforcing CSVs.  One common CSV provision is to include all crimes.  The SSV limits crimes to those that occur or or near the property.  Common sense dictates that you should be able to evict a tenant for shooting someone, whether it is on the property, or across town.

Sooner or later, you are going to have to evict a tenant over behavioral issues.  Regardless of what you may think or want to do, you either have the cards or you don’t.  The tenant’s conduct is either a substantial violation (statutory or contractual), or it is not.  If it is not a substantial violation trying to make it one because you just want the tenant out with no right to cure isn’t without potential problems.  If you play a bad notice and the tenant calls your bluff, you could lose, and either have to start over or not have a case at all.  If you try to make an incident a substantial when it is not, if you lose the case you could also face liability for attorneys’ fees.  If a tenant’s violation is not a statutory substantial violation, or a contractual substantial violation, then it is a compliance issue.  Serve a Demand for Compliance or Possession, which gives the tenant a right to cure.   Winning evictions is about setting the table correctly.  Since we are always available to review any notice or scenario, you should never serve the wrong notice.

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