Where landlords typically get into trouble is by allowing their tenants more time to pay after issuing a 3 day notice to quit.  If you are a landlord, be sure to memorialize this extension in a written agreement.  Otherwise, landlords can be stuck with a “he said, she said” situation in Court.  Although payment extensions are effective, and one of the most effective ways to allow tenants to catch up on missed rent, landlords must be ready to issue another pay or quit notice in the event the tenant does not pay by the extended deadline.  This, of course, results in more carrying costs for the landlord.  Of course, it is always best to hire a Colorado real estate attorney to assist you in every step of the leasing process.

Chad Lee is a real estate and water attorney located in Glenwood Springs, Colorado.

Every successful landlord-tenant relationship begins with a good lease.  Landlords would be well-advised to seek the guidance of a licensed Colorado real estate attorney to draft their leases.  Internet-bought leases often fail in several respects, and often don’t grasp the nuances of the laws of Colorado.

Whether the lease is iron-clad or oral, there are still efficient and effective paths to evict a tenant.  The first step is for the landlord to issue the proper notice.  Colorado courts have designed several official forms that landlords can use. Please consult an attorney to determine which form to use.  In most common event of nonpayment of rent, landlords should use the Demand for Compliance or Right to Possession.  Be sure all fields are filled in properly, and it is signed by the landlord or its agent.  If this form is properly delivered to the tenant, such as posting it in a “conspicuous” location, the tenant has three days to pay the past-due amount.  If not paid within three days, the landlord may file an eviction (FED) action in Colorado County Court.

Landlords should consult with a lawyer prior to filing an FED action.  There are often several outstanding issues in the lease that need to be addressed.  Landlords should be careful to negotiate with tenants in writing only, or at least to document their conversations with the tenant in writing.  In Colorado, landlords sometimes “waive” their right to evict a tenant, even if the tenant has not paid within three days of the notice.

FED suits in Colorado are entitled to preference on the judicial docket, which means you can expect a court hearing within two weeks of filing the suit.  At this hearing, if the tenant does not appear, the landlord will often receive a default judgment for possession of the premises, and/or damages against the tenant (damages are only available if the tenant was personally served).  If the tenant opposes the action or appears at all, the Court will require the parties to negotiate.  Effective FED counsel is necessary to successfully negotiate with a tenant.  Most of the time this negotiated resolution involves a stipulated date of vacation (the date the tenant leaves the building) and a payment plan.  If properly drafted, the tenant’s default on either of these items leads to automatic issuance of a judgment.  Occasionally, hiring a collection agency or collection attorney is necessary to collect the judgment.

The costs on an FED suit vary depending on the type of FED (residential or commercial) and the outstanding legal issues.  Court filing costs are around $100.  Service fees are often $50.  Attorney fees vary, but are often between $500 and $750 for unopposed evictions. If properly drafted, leases in Colorado can provide for attorney fees to the prevailing party.

Chad Lee is a real estate attorney located in Glenwood Springs, Colorado who routinely files successful FED / eviction actions.   He can be reached at clee@balcombgreen.com or (970) 945-6546.

Real Estate Law.

In general, I am a transactional real estate attorney. One of my main jobs is to help clients buy or sell real estate in and around Glenwood Springs, including Carbondale, Basalt, Aspen, New Castle, Silt, and Rifle.  The types of properties vary from condos to multi-million dollar ranches.  When assisting a buyer, I review the contract documents and the title documents to ensure the property will be able to meet the demands of the client.  Occasionally, there are legal impediments in the title documents or the land use code that prohibit certain uses for which the client desires to use the property.

Although Realtors are an important part of the equation, a competent title review cannot be accomplished by a Realtor, because they have not been trained to recognize the legal nuances (not to mention they are financially incentivized to ensure the transaction is successful).  A real estate attorney is necessary to review these documents.  Real estate attorneys charge hourly and very often result in a much smaller fee than a Realtor, who earns a percentage of the sales price.  My hourly rate is currently $215.

I also practice other aspects of real estate law, including drafting deeds, easements, covenants, or any other document affecting title to real estate.  Occasionally, these documents arise out of discussions between neighbors or adjacent businesses, or even between the city and a developer.

Mechanic’s liens are another important part of my practice.  As real estate development digs its way out of the recession in Colorado, more and more disputes will arise between contractors, subcontractors, and the owner of the property.

I also represent HOAs.  HOAs in Colorado often need a real estate lawyer on call.  Various issues arise and, due mostly to lost institutional knowledge, various documents need to be interpreted.  I assist HOAs with all real estate and corporate needs, including water rights, super priority liens, and other aspects of CCIOA.

I also represent several mobile home parks in Garfield County.  I assist these parks with the myriad of issues that a mobile home park presents.  Mobile homes have elements of both real and personal property, and are therefore complicated.  Further, Colorado has special provisions that apply to mobile home parks, including the Mobile Home Park Act.  Also, the SAFE Act has made lending in mobile home parks especially tricky.

Finally, one of my major practice areas is evictions, or FEDs (forcible entry and detainer) suits in Colorado. Problem tenants can be troublesome, both for the management and other tenants.  The first step towards effective tenant control is to have a properly drafted lease, which will enable management to easily evict a tenant if necessary.  Once an eviction becomes necessary, I work with clients to ensure their notices are properly drafted and served, and the lawsuit is properly filed.  Eviction lawsuits in Colorado are abbreviated, which means you will receive a court date within two weeks of filing.  Unopposed evictions can often be accomplished for between $600 and $900 if there are no other outstanding issues.

Water Law.

My second primary practice area is water law, both transactionally and in the water court.

Although anyone can file an application in water court, it is not recommended for many reasons.  Water rights are very technical, and legal and engineering counsel is absolutely necessary to ensure optimal and efficient results.

As a water lawyer, I help navigate clients through the water court process.  This may involve filing an application for “junior” conditional or absolute rights, or filing a request for a plan for augmentation using senior water rights the client has already acquired to replace the consumptive use of the client’s operations.  The water court process can either be efficient or cumbersome, depending on the type of opposition encountered during the process.  My philosophy is to diligently work with opposers from day one to ensure the request is processed as quickly as possible.  This saves the client money and headaches in the long run.

I also help clients buy and sell water rights.  Colorado water rights are a complicated animal.  Several documents are necessary to securitize or consummate a sale of water rights, including a special water deed, dry-up covenants, affidavits of historical use, and UCC filings if necessary.

Natural Resources/ Environmental Law.

I also practice general natural resources law.  This including public lands, negotiating ditch easements with federal entities, assisting clients with water quality issues, permitting of renewable energy sites, especially at the county level,  helping landowners negotiate leases with oil and gas companies, or any other aspect of oil and gas law.  I also have a law degree from Lewis & Clark Law School, which is perennially ranked as one of the top environmental law schools in the country.  This has provided me with the tools to effectively represent clients on issues invoking the Clean Water Act, Clean Air Act, CERCLA, FIFRA, and other federal and state environmental laws.  Because I am located in Garfield County, I am better situated to negotiate with entities located on the Western Slope.

General Law.

I work in a small town, and many of its residents have small scale disputes.  I have been professionally trained in the law, negotiation, and writing.  I use these skills in many different situations to assist clients realize their maximum outcome given the circumstances.

If you need a real estate lawyer in Glenwood Springs, or any other part of Colorado, please feel free to contact me at clee@balcombgreen.com, or to call me at (970) 945-6546.  Initial consultations are always free.

A Landlord’s Guide to Buying a Lease Online

By Chad J. Lee, Esq.

I practice real estate law in Garfield County, where the oil and gas boom and bust of the past few years has caused great turmoil in the landlord-tenant arena. Based on my experience with FED lawsuits (Forcible Entry and Detainer), and in real estate law generally, I decided to write this article to provide landlords in Colorado some tips if they choose to the risk of buying a form lease rather than hiring an attorney to draft one.  In short, your best option is to hire a real estate attorney to draft a lease specific to your situation.  If you cannot afford an attorney, your next best bet is to buy a Colorado-specific form online from a respectable site such as Coloradolegaldocuments.com.

There is a proliferation of generic and ineffective leases circulating on the internet. These leases cause many problems down the road with the parties’ circumstances change, or the landlord-tenant relationship deteriorates. Every lawyer rolls their eyes when they see a generic lease form come across their desk, and the use of these leases usually ends up costing landlords much more money during the eviction process, for which landlords are rarely reimbursed. Oftentimes, if a landlord had only hired an attorney up front, or purchased a quality state-specific lease, these problems would not occur. Below are a few tips on choosing a lease online, and in managing the landlord-tenant relationship in general.

I.            A Word About Property Management

As implied above, the landlord and tenant are in a relationship. Successful landlord-tenant relationship starts with a good “working” or personal relationship with the other party. Always be respectful of the tenant, and vis-versa. Occasionally, the best way to get what a landlord wants (i.e. profitability) is to accommodate the tenant where necessary to preserve a working relationship. Landlords should budget for such contingencies. Initially, landlords should strive to meet all tenants in person and spend a few minutes getting to know their circumstances.

Leasing a property is a business transaction, but it is one with special features. For example, not only will the tenant be occupying property in which the landlord has a vested monetary, and perhaps emotional, interest, but the parties must continue to deal with each other for the foreseeable future. Therefore, good landlords separate people from substance. In other words, good landlords are soft on the tenants, but are sure to enforce the clear letter of the lease. This is often a difficult balance, but is necessary to preserve a landlord’s legal rights.

# 1 – Use a Written Lease

While it is true that properties can be leased without a written lease (for less than a year), this is a recipe for disaster. Without a written lease, the parties cannot possible agree on all important terms of the lease. Therefore, Landlords should always use a written lease.

# 2 – Use a Colorado-Specific Lease

Despite the fact that the essential goals of a lease are the same in all fifty states, all fifty states have different laws about various aspects of the landlord tenant relationship. Therefore, a lease drafted for use in California will work in Colorado for some purposes, but may not contain enforceable provisions. For example, Colorado law states that landlords are not entitled to their attorney fees and costs for evicting tenants unless there is a reciprocal fee shifting provision in the lease.

If a tenant refuses to leave, landlords must spend hundreds in attorney fees and process server costs for a simple eviction, and thousands for a complex eviction. If the lease does not contain the appropriate provision regarding attorney fees, the landlord will not be able to recoup these costs from the tenant. For this reason, and others, it is advisable to find the most Colorado-specific lease form available for your use. ColoradoLegalDocuments.com provides a great Colorado specific residential lease.

# 3 – Customize the Lease to Meet the Deal

A lease is a simple contract, meaning that the goal is to memorialize the agreement between two parties. Despite their major similarities, each property is different and each landlord-tenant relationship is different. When buying a lease, be sure it is customizable to the deal at hand and strive to reach agreement up front with the tenant on the meaning of certain provisions of the lease. If you are unsure, always ask an attorney.

# 4 – Don’t Waive Your Right to Evict the Tenant

When a Tenant refuses to pay, a prudent Landlord sends a written warning immediately. There are two major reasons for this. First, most tenants are renters because they have yet to accumulate much wealth. Therefore, your chances of actually collecting unpaid rent are slim. Although a security deposit provides a landlord with a small buffer against this risk, if unpaid rent accumulates too rapidly, a landlord sets him or herself up for disaster.

Second, the legal doctrine of “waiver” states that where a landlord turns a blind eye to a breach of the lease, the landlord may waive his ability to enforce that provision in the future. For example, if your lease provides for a late fee, and a landlord does not collect the late fee, she may waive her ability to enforce the late fee in the future.

# 5 – When to Evict

In Colorado, it is illegal to lock out your tenant without getting a court order (called a “writ of restitution”). Even with a writ of restitution, the Sheriff must oversee the eviction of the tenant. Therefore, no matter what your lease form says, you cannot evict your tenant without going to Court. Standard forms for eviction (of “FED”) are available on the Colorado Court website. Or see a local attorney experienced in landlord-tenant law.

Above all, remember that once a lease is executed, it defines the relationship between the landlord and tenant, including who is liable for unpaid rent, who is responsible for utilities and maintenance, and when the landlord can and can’t enter the property. Be sure to read the provisions of any lease thoroughly and entirely before executing it. I wish all of you successful property management.

Which Type of Deed Should I Use in Colorado?

It can be difficult to understand the differences between certain types of deeds, especially in Colorado.  There is often misinformation or misunderstanding about the effect of different types of deeds.  This post provides readers with a very general outline of the different types of deeds to transfer real estate in Colorado. Remember, you should always talk to a real estate lawyer before conveying any type of real property.  (Realtors don’t count, btw).

There are four types of deeds in Colorado (1) general warranty deed; (2) special warranty deed; (3) bargain and sale deed; and (4) quitclaim deed.  Each deed provides a different degree of protection or guarantee to the grantee (buyer).

• General Warranty Deed.  A general warranty deed guarantees the title to the real property against any defects existing before the grantor owned the land, and even before he owned it.  A “defect” in the property includes any encumbrance that was not specifically listed as an exclusion in the deed, including easements and rights of way, or even deeds of trust. Note that the guarantee is only to the title (i.e. who owns the property) rather than any physical condition of the property itself.
• Operative Language: “…and warrants title to the same against all persons.”
• Uses: Land, Homes.

• Special Warranty Deed.  A special warranty guarantees title only against defects arising during the period in which the grantor owned the property.
• Operative Language: “…and warrants title to the same against all persons claiming under Grantor.”
• Uses: Land, Homes, Water Deeds.

• Bargain and Sale Deed.  A bargain and sale deed does not guarantee anything.  It merely conveys title if the Grantor had title.  It also conveys “after-acquired” title.
• Operative Language: “Grantor does hereby sell, convey, assign, transfer, and set over unto Grantee…”
• Uses: Water Deeds, Mineral Deeds.

• Quitclaim Deed.  A quitclaim deed warrants nothing, and only conveys whatever interest the grantor has in the property, if any at all, at the time the deed is executed.
• Operative Language: “has remised, released, sold and QUITCLAIMED…”
• Uses: Cleaning up title issues; water deeds, mineral deeds.

Mineral and Water Deeds

Water and Mineral deeds are often characterized as special types of deeds in Colorado.  But water deeds and mineral deeds are really just one of the four types of deeds described above.

Mineral Deeds.  A mineral deed transfers the mineral estate of a property.  The minerals underlying a property are a separate legal “estate” (part of the property) from the surface estate.  Depending on the language of the deed, it can transfer all, or part of the minerals of a property.  Usually, there is no warranty because mineral title chains are often extremely fractionated and difficult to ascertain with the benefit of a comprehensive legal title opinion, which costs tens of thousands of dollars.  Usually the deed transfers all “oil, gas, and other minerals underlying” the property.  But this doesn’t necessarily transfer a gravel deposit. An attorney should be consulted any time there is a transfer of mineral rights.

Water Deeds.  A water deed transfers all or part of the water rights associated with a parcel of real property.  Water deeds can either be general (i.e. all water rights appurtenant to and associated with the real property described on Exhibit A), specific (i.e. ___ c.f.s. of the ___ ditch, Priority No. ___, Decreed in Case No. ____  with a Date of Appropriation of _____), or both.  Water deeds are usually transferred by quitclaim deed, but there is little reason a seller should not agree to transfer water rights by bargain and sale deed or special warranty deed.  Note that the only element warranted in a special warranty deed is that the seller itself has not damaged title to the rights.  Sellers who refuse to transfer water rights by special warranty deed either do not understand the type of deed, or have something to hide.

A Colorado water deed form can be purchased here.

Other Miscellaneous Requirements for Deeds in Colorado

1. individuals should execute a deed in the exact manner they took title to the property.  (i.e. if the property was conveyed to John P. Smith, the deed conveying the property should be to John P. Smith, not John Peter Smith.)
2. If the grantor is a corporation, the deed must be signed by the president, vice president or other head officer.  The corporate seal must also be affixed and it is customary for the secretary to attest to the deed.
3. If the grantor is another entity, such as an LLC, the deed must be signed by a person with authority to do so (i.e. a manager or managing member if it is an LLC).
4. If the grantee is a trust, it is a good idea to take title to the property in the name of the trust, not the name of the trustee to avoid ambiguities in the future. (See, e.g., C.R.S. 38-30-108).
5. If the deed is executed by someone with a power of attorney, the power of attorney must be recorded along with the deed.  (C.R.S. 38-30-123).
6. A Colorado statutory power of attorney form is located at C.R.S. 15-1-102.
7. In all situations, the deed should be recorded with the Clerk and Recorder of the county in which the property is located.

Remember, you should consult with an attorney prior to any transfer of real estate in Colorado – whether or not you work with a Realtor or title company.  Although it may cost a couple hundred dollars, it could save you thousands in the long run.

Below is the raw data.

Chad J. Lee is a real estate attorney in Glenwood Springs.  If you are considering purchasing or selling a home in the Roaring Fork Valley, Chad Lee is a real estate attorney who may be available to serve your needs.

New federal regulations have broadened the scope of those who must be licensed as a “mortgage originator.” The federal SAFE Act was enacted to provide minimum standards for the licensing of residential mortgage loan originators to combat fraud in the wake of the recent housing market crash. Compliance with the SAFE Act is mandatory. The act is very broad and applies to all types of financing which involve a security interest on a dwelling unit. All persons involved in the financing of a dwelling unit, whether it is real estate, mobile homes, or otherwise, need to comply with Colorado’s version of the SAFE Act. A violation of this act is a Class I misdemeanor and may be punishable by a fine of up to $5,000. (See, e.g. C.R.S. 12-61-910).

Colorado’s version of the SAFE Act was enacted in 2009 as the Mortgage Loan Originator Licensing Act (“MLOLA” C.R.S. § 12-61-901 et seq.). It requires all Colorado loan originators to obtain a license prior to originating a loan which contains any type of consensual security interest in a “dwelling unit.” “Dwelling unit” means any type of home, including a mobile home. A “loan originator” is defined very broadly as “an individual who (I) takes a residential mortgage loan application; or (II) offers or negotiates terms of a residential mortgage loan for compensation or gain.” (C.R.S. § 12-61-902).

According to Colorado’s MLOLA, a “Residential mortgage loan” means: “a loan that is primarily for personal, family, or household use and that is secured by a mortgage, deed of trust, or other equivalent, consensual security interest on a dwelling or residential real estate upon which is constructed or intended to be constructed a single-family dwelling or multiple-family dwelling of four or fewer units.” (C.R.S. § 12-61-902 (emphasis added)).

Under new federal regulations effective August 29, 2011, a “consensual security interest” includes any type of security interest, including installment sales contracts. The feds stated this was “consistent with the treatment by many states of such contracts in the same manner as mortgages and purchase money mortgages offered by sellers of residential real estate. While there is no formal recorded lien held by the provider of financing, the fact that the seller holds title to the property until the contract has been paid in full is the practical equivalent of a lien for purposes of the SAFE Act and its purposes and is comparable to the status of a mortgage in a state that follows title theory under mortgage law.” (SAFE Mortgage Licensing Act: Minimum Licensing Standards and Oversight Responsibilities, 76 FR 38464-01, effective August 29, 2011 (emphasis added)).

If your job description even comes close to fitting under the definition above, you need to consult with an attorney determine whether you must be licensed. Licensing Requirements can be found on the Colorado Department of Real Estate website. Below is a brief summary of licensing requirements:

(1) Submit fingerprints for a criminal history check
(2) Complete a pre-licensing course
(3) Pass a two part examination developed by DORA
(4) Obtain a surety bond
(5) Obtain errors and omissions insurance
(6) Complete DORA license application
(7) Pass the national component of the SAFE Mortgage Loan Originator exam
(8) Register with the Nationwide Mortgage Licensing System and Registry

B. Exemptions: Seller Financing and Attorneys

1. Seller Financing Exemption.

Earlier this year, the Colorado legislature enacted an exemption for a person who provides mortgage financing for the sale of no more than three properties in any twelve-month period, so long as the property is owned by the person and serves as security for the loan. (House Bill 11-1022). This exemption only applies to persons, estates, and trusts that carry back a loan on the property. Business entities are not entitled to the benefit of this exemption.

2. Attorney Exemption.

Attorneys are also exempt from the law. Many businesses have begun to utilize law firms as their mortgage originators, as this is often more efficient that licensing and in-house compliance. The MLOLA permits an attorney to receive the original application and to negotiate the terms of the loan. Loan processors are exempt from the act, so long as their duties are clerical in nature, like those performed after the receipt of an application, including collection and analysis of information used for processing the loan, and communicating with the borrower to obtain information necessary to underwrite a loan. However, any communication which offers or negotiates loan rates or terms must be done by a licensed originator or attorney.

If you are unsure whether your business or personal activities require licensing under the MLOLA, please consult with a qualified real estate attorney. For those of you who must comply with the law, but do not have the time or energy to be licensed, consider hiring a law firm to act as the mortgage originator instead.

Sustainable Development

The report considers sustainable development as a key concept in the fight against emissions. Items that fall under the umbrella of “sustainable development” may surprise most people. For example:

“There is growing evidence that decisions about macroeconomic policy, agricultural policy, multilateral development bank lending, insurance practices, electricity market reform, energy security and forest conservation, for example, which are often treated as being apart from climate policy, can significantly reduce emissions.”

Social and Economic Feasibility

The report also stresses that implementation of sustainable development can occur in a socially and economically feasible manner.

“Reducing both loss of natural habitat and deforestation can have significant biodiversity, soil and water conservation benefits, and can be implemented in a socially and economically sustainable manner. Forestation and bioenergy plantations can lead to restoration of degraded land, manage water runoff, retain soil carbon and benefit rural economies, but could compete with land for food production and may be negative for biodiversity, if not properly designed.”

American Energy Use

But the United States has a long way to go. It must dig out of the hole it dug for itself over the past 50 years. Over that period, the U.S. thinned its mass-transit infrastructure for the benefit of the auto industry and become heavily dependant on cheap imported fossil fuels. The U.S. is now heavily auto-dependant compared to other countries. Thanks to urban sprawl and cheap gasoline, the average commute for Americans is now 16 miles, or 26 minutes. Luckily the government is no longer in denial of America’s dangerous land use patterns and recognizes not only the environmental implications of gluttonous energy use, but also the national security implications.

According to the Annual Energy Overview published by the Department of Energy, in 2005 renewable energy use (which includes hydro-power) comprised a measly 6% of the total U.S. consumption. 2005 DOE Energy Overview. Nuclear accounted for 8%. Finally 84% of America’s energy needs were satisfied via fossil fuels.

Nuclear: the New Green

Nuclear energy is making a comeback. The IPCC report characterized nuclear as a “key mitigation technology.” The Bush Administration is already on board. Although nuclear’s image suffered due to bad P.R. in the 70′s and 80′s, nuclear technology is now safer, cleaner, and more environmentally friendly than ever before. American must embrace it in order to reduce its reliance on foreign energy sources. Most environmentalists have recently bought tickets on the nuclear express.

Do Something

Regardless of your position on global warming, there are many good reasons for America to reduce its dependence on fossil and foreign fuels. You can help. Try to reduce your carbon footprint by using less energy at home, moving closer to your work, taking mass transit, buying local, and supporting nuclear energy. All of America must support energy efficiency to achieve energy and environmental security.