Last year the Colorado Legislature passed a law “cause for eviction” that has radically altered the residential real estate industry and has led to over 200 police calls just at one apartment complex. Because of this new law, property owners and the police are stuck with no way to get rid of problem tenants. There is one quick solution to Colorado’s problems that was recently passed in AZ, can we do it here in Colorado?
What is in the Colorado Just cause for eviction law
On the surface it doesn’t seem like monumental changes, but the legislature has added a few key provisions that make it difficult if not impossible to get tenants out that are not paying. The new law is a solution in search of a problem as there were ample safeguards under the prior law to adequately protect tenants while balancing the rights of other tenants and property owners
Here is the gist of the big changes in the Just cause for eviction law:
Under the new law, property owners must have “cause for eviction” and/or non renewal of leases. Under the prior law, if landlord decided not to renew the lease at the end of the term that was their choice. Now the new law requires 90 days notice and changes the presumption that: “Any person in possession of real property with the assent of the owner is presumed to be a tenant at will until the contrary is shown”
Long and short if someone states that they are a tenant at will property owners have to file a court action to get them out and there are severe penalties for property owners for not following the law to a T. We can see in the Arvada complex this is allowing squatters to stay in the property basically indefinitely with the police and property owners stuck
What happened in the Arvada apartment complex?
Nearly 200 police calls have been made this year to the Aspen Ridge Apartments in Arvada, making it one of the busiest addresses for law enforcement in the area.
Residents say squatters and problem tenants are making daily life difficult, and both police and management agree that a change in Colorado law has made it harder to get them out.
Residents are frustrated as well: “They’re not paying nothing. I pay my rent every month,” said resident Darin Barton, who told FOX31 squatters have been moving in and causing problems.
Arvada police say the majority of calls at the complex are for trespassing, often involving people trying to get back into apartments after being removed.
Under Colorado’s new eviction law, landlords must provide longer notice periods and mandatory mediation before evicting tenants, slowing down the process significantly.
Both police and management say they’re doing what they can — with added patrols and extra security — but they’re limited by the law.
New Colorado Law eliminates affordable housing
The law has only caused havoc for property owners that will ultimately lead to the elimination of market rate affordable housing. It is not profitable if a property owner must spend 6 months and 10k on attorney fees to get a tenant out. Furthermore, it is terrible press for apartment owners to be on the front page of the paper like the complex highlighted above.
Property owners will pull back from the affordable market by raising credit scores, income requirements, etc.. in order to weed out possible bad tenants as the new law makes it catastrophic to end up with a bad tenant as the expenses to remove them are prohibitive.
Colorado needs to pass a law like AZ to help property owners:
AZ passed a law to allow property owners to deduct expenses due to homelessness. In the case of the Arvada complex, they could offset their property taxes by installing fences, security, etc… to keep squatters off the property and make the complex safer for everyone. This is fair as the legislature continues to place unfunded mandates on property owners.
Should property owners get a tax break to refund them for mitigating the effects of homelessness?
The Arizona Legislature added this measure to amend state law in 2024. The proposed statutory amendment was supported only by Republicans and opposed by Democrats. This measure was passed by voters in the last election cycle.
Proposition 312 allows Arizona property owners to apply for a property tax refund for private mitigation efforts if their city does not curb homelessness by enforcing laws pertaining to public camping, blocking roads, panhandling, urinating or defecating in public, consuming alcohol in public or using illegal substances.
This Measure Would
- Allow property owners to apply for a property tax refund equal to documented and reasonable expenses incurred to mitigate the effects of homelessness on their property
- Permit the refunds if a city, town or county does not enforce existing laws prohibiting illegal camping, obstructing a public thoroughfare, loitering, panhandling, urinating or defecating in public, consuming alcoholic beverages in public or possessing or using illegal substances and the property owner incurs documented expenses to mitigate the effects of the policy, pattern, practice or public nuisance on their real property
- Require the Arizona Department of Revenue to notify the appropriate city, town or county of a refund request, which would then accept or reject the refund; if the refund is rejected, the property owner could file a lawsuit to determine whether they are entitled to a refund
- Limit approved property tax refunds to the amount of taxes the owner paid on the property for that year, but allow the owner to apply in subsequent years to receive any remaining balance of the refund
Colorado needs to prioritize hard working renters over trouble makers
Unfortunately Colorado once again is trying to solve an issue that impacts very few by passing a radical just cause for eviction law. As we can see this law is having a profound impact on other tenants, property owners, and anyone who needs affordable housing. The law makes it very expensive and difficult to get tenants out that ultimately ties up thousands of hours of police time and creates a dangerous situation for other tenants.
To resolve this issue, Colorado must put forth a ballot initiative similar to Arizona that allows property owners to deduct costs of dealing with homelessness so that they are not on the hook for the unfunded legislative mandates. I hope that someone will put forth a similar measure for the upcoming election as this will be the only way to protect tenants, property owners, and affordable housing in Colorado.
Additional Reading/Resources
https://coloradohardmoney.com/colorado-just-cause-for-eviction/
https://www.fairviewlending.com/property-tax-measure-to-make-cities-pay-for-homeless-impacts/
https://leg.colorado.gov/sites/default/files/documents/2024A/bills/2024a_1098_01.pdf
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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…
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