The legislature is back at it again, thinking that they are going to solve the housing crisis by even more regulations and expense on property owners. The new proposal (HB 26-1106) will essentially ban evictions in many towns and quadruple the cost of evictions requiring a trial for every single eviction and limit the ability of counties to actually evict even after getting a court order. What is in this new bill and how will it impact property owners throughout the state of Colorado?
What is in the new Colorado eviction bill:
- The bill limits the number of forcible entry and detainer (eviction) actions that a county court schedules on one business day.
- The bill prohibits including a minor defendant as a named defendant in an eviction complaint when a parent or adult guardian is also listed as a defendant on the same complaint.
- The bill prohibits a court from entering judgment without a trial or a hearing when a tenant’s answer to an eviction complaint expresses an intent to cure nonpayment.
- The bill specifies that the following reasons excuse a tenant from filing a timely written answer to an eviction complaint: A hospitalization, a sickness or injury, a reasonable accommodation request for a disability, a lack of proper service, a transportation issue, a complication related to electronic filing that was reasonably outside of the tenant’s control, and a court issue that was reasonably outside of the tenant’s control.
- When a tenant in an eviction action asserts that they were affected by one of the specified reasons, the bill requires a court to:
- Relieve a tenant from final judgment, vacate any judgment or writ of restitution that was issued, and provide the tenant with a reasonable amount of time to file an answer;
- Permit additional and amended pleadings; and
- Extend the trial date.
- The bill repeals appeals bond in eviction cases.
- The bill extends the time for executing a writ of restitution in an eviction action from 48 hours to 30 days, except in cases involving substantial violations.
- The bill prohibits the execution of writs in eviction actions during inclement weather: if it is forecasted to rain, snow, or be too warm or cold and eviction cannot happen
No evictions when cold, hot, raining, snowing, cloudy
The way the law is written is if it is below 32, above 90 or has a chance of rain or snow you can’t evict. Furthermore it limits the number of evictions per day in each county. Assume you are in Summit County. For 6-8 months of the year it is cold, snowing, or raining. Furthermore there is a daily cap so when the weather is good only a small number of evictions can take place. Even after you get an eviction order, it could take a year to enforce the eviction. During that time, the tenant could stay rent free with nothing a property owner can do legally. This is a total disaster for any long term rentals in the mountains and throughout the state.
Merely Claiming repayment requires a trial by jury
A tenant can merely claim that they intend to repay the past due debt without showing any wherewithal or putting up any money into a bond or with the court. By claiming to repay any tenant will now get a jury trial for their eviction regardless of whether they can actually pay or not.
Trial by Jury exponentially increases the expense and time
Any tenant can now request a trial by jury and no consideration must be given. In essence, someone getting evicted doesn’t have money to pay their bills and therefore will use a trial by jury to indefinitely delay an eviction. The time to evict could now be basically into perpetuity as jury trials for evictions will now compete with criminal trials, other civil trials, etc…
A jury trial leads to huge risks for property owners.
The whole premise of this bill is crazy as there is no dispute of facts regarding an eviction. Either someone paid the rent or didn’t pay the rent per the contract. Introducing a jury trial creates a whole new risk. Regardless of whether someone didn’t pay their rent a jury might be empathetic to the tenant and grant them additional reprieve. For example if the tenant were a single mom with kids and an elderly parent, even though they didn’t pay their rent, the jury might be swayed by their personal struggles and allow them to stay in the property for additional time.
Huge risks to rent long term in Colorado
Long and short, property owners are going to have a hard time with this new law. The costs to hire an attorney and prepare for a jury trial are enormous. The property owners will have to eat these fees. Remember the overwhelming majority of rental property owners are small owners with less than 3 properties. This new law will bankrupt many property owners due to legal expenses and the time to get their property back.
If this law goes into effect you will also see a huge pullback in new construction of apartments leading to a further decrease in supply.
Commercial property owners impacted as well
The law, how it is written now, also impacts commercial property owners. To evict a commercial tenant, they will also be entitled to a jury trial. Just like for residential property owners, the time and expense to evict a tenant will be enormous.
Lenders also impacted by this new law
Note that real estate lenders will also be impacted by this new law. If a lender forecloses on a property, an eviction action must be taken in order to get the prior owner out of the property. This eviction will add considerable time and expense onto an already lengthy foreclosure process.
Who is going to pay the costs for jury trials
At the end of the day, the judicial system in Colorado is already close to a breaking point with the criminal and civil matters they already have. Now, with this new law, there will be thousands of new jury trials just in Denver county. Last year there were 16,000 evictions just in Denver County, assume half of these evictions are contested, this would lead to an additional 8k jury trials just in Denver county. Who is going to show up for all the jury trials? Who is going to pay for it as no money has to be put down by person facing eviction so the courts will eat the costs.
New law makes it prohibitively expensive to rent which means less rentals
By making it prohibitively expensive to evict tenants, there will be less affordable rentals. Having a bad tenant will be way more problematic than having a vacant property. With the increased costs and time to evict, property owners are going to tighten rental requirements in regards to credit, income, and references that will make it impossible for anyone to rent to low income tenants.
Banning evictions in Colorado is a terrible idea
This bill is a terrible idea for Colorado. When there is an eviction, there rarely (if ever) is a dispute about facts. The eviction is clear cut, the tenant didn’t pay and needs to vacate the property. There is no reason to implement jury trials for evictions other than to radically eliminate the number of evictions.
Unfortunately the legislature is very short sighted. By even discussing a law like this any landlord is going to be extremely selective before renting their property which will ultimately radically alter the building and renting of affordable housing. The risk of renting to a lower income tenant with less than perfect credit will no longer be palatable because of this proposed law which will ultimately lead to an even larger homelessness issue as market rate lower income properties will not be built.
Long and short, having a jury trial for evictions and all the other onerous eviction rules is a terrible idea that will lead to huge costs for Coloradoans and ultimately eliminate many rental properties due to the expenses.
Please forward to your associates in real estate to let them know of this huge change so hopefully it can be changed before becoming law.
Additional Reading/Resources
- https://leg.colorado.gov/bills/HB26-1106
- https://www.denver7.com/news/front-range/denver/eviction-filings-in-denver-broke-a-record-last-year-with-nearly-16-000-people-being-evicted-from-their-homes
- https://coloradohardmoney.com/does-rent-control-work-in-colorado/
- https://coloradohardmoney.com/colorado-statewide-mandate-20-houses-on-any-lot/
- https://coloradohardmoney.com/20-dollar-beers-will-radically-alter-colorado-real-estate/
We are a Colorado Private/ Hard Money Lender funding in cash!
If you were forwarded this message, please subscribe to our newsletter
I need your help as my goal in writing these articles is to provide the best information/insight on Colorado Real Estate that you cannot get anywhere else! Please like and share my articles on linked in, twitter, facebook, and other social media and forward to your friends/associates 😊 I would greatly appreciate it.
Glen Weinberg personally writes these weekly real estate blogs based on his real estate experience as a lender and property owner. He is the owner of Fairview Commercial Lending. Glen has been published as an expert in hard money lending, real estate valuation, financing, and various other real estate topics in Bloomberg, Businessweek ,the Colorado Real Estate Journal, National Association of Realtors Magazine, The Real Deal real estate news, the CO Biz Magazine, The Denver Post, The Scotsman mortgage broker guide, Mortgage Professional America and various other national publications.
Glen resides in Colorado, lends in Colorado, owns property in Colorado, and services loans in Colorado which provides a unique real estate prospective of what is actually happening on the ground both in Denver and throughout Colorado. My goal of this real estate blog is to provide an honest assessment of what I see happening in Colorado real estate and how it will impact real estate owners, buyers, realtors, mortgage professionals, etc…
Fairview is the recognized leader in Colorado Hard Money and Colorado private lending focusing on residential investment properties and commercial properties both in Denver and throughout the state. We are the Colorado experts having closed thousands of loans throughout the Front range, Western slope, resort communities, and everywhere in between. We also live, work, and play in the mountains throughout Colorado and understand the intricacies of each market.
When you call you will speak directly to the decision makers and get an honest answer quickly. We are recognized in the industry as the leader in Colorado hard money lending with no upfront fees or any other games. Learn more about Hard Money Lending through our free Hard Money Guide. To get started on a loan all we need is our simple one page application (no upfront fees or other games). Learn how to find a reputable hard money lender and why Fairview is the best hard money lender for investors.
Tags: Denver hard money, Denver Colorado hard money lender, Colorado hard money, Colorado private lender, Denver private lender, Colorado ski lender, Colorado real estate trends, Colorado real estate prices, Private real estate loans, Hard money loans, Private real estate mortgage, Hard money mortgage lender, Hard money mortgage lender, residential hard money loans, commercial hard money loans, private mortgage lender, Hard Money Lender, Private lender, private real estate lender, residential hard money lender, commercial hard money lender, No doc real estate lender