Colorado Commercial Evictions: Things Every Commercial Landlord and Tenant Should Know

Evicting a tenant is rarely a pleasant experience, but evicting a commercial tenant can present a real challenge. Not only can evictions be expensive and time-consuming – in certain situations, they can be dangerous. You can keep expenses and unpleasantness to a minimum when you have a strong lease agreement in hand and a knowledgeable and experienced landlord-tenant attorney by your side.

Prevent a Dispute: Get a Strong and Clear Lease

“[A]n ounce of prevention is worth a pound of cure.” – Benjamin Franklin

Vague and incomplete lease agreements lead to landlord-tenant disputes. The language in your lease agreement will influence you and your tenant’s relationship for years to come. That’s why landlords should have an attorney review a lease before signing it.

While consulting an attorney may sound expensive, it isn’t as costly as you may think. In fact, hiring an attorney to draft or review a lease can actually save you money if the landlord-tenant relationship runs afoul. How? You’ll spend far more money trying to fix issues brought on by a bad lease.

A landlord-tenant attorney has experience practicing real estate and business law. They can advise you on the legal and operational implications of what’s written in your lease.

Consider these questions when reviewing your lease agreement:

• Is this an all-inclusive lease rate or a triple net lease (NNN) wherein the tenant pays an additional charge generally associated with the costs of taxes, insurance and maintenance charges?
• Who is responsible for maintenance issues as they arise
• How are the expenses associated with tenant finishes handled?
• Is an option to renew or extend the lease being offered? At what rate?
• Does the lease contain a rent escalation clause?
• What if the premises are damaged or condemned during the course of the lease?
• What constitutes a default and how will a default be handled?

These are just a few of the issues that must be dealt with during the course of a commercial lease negotiation.

Following the Forcible Entry and Detainer (FED) Process

A landlord wishing to evict a tenant must follow the terms of the Forcible Entry and Detainer (FED) statute. It’s separate from the Colorado Civil Code and governs how a landlord can legally repossess property.

“No person, having peaceably entered into or upon any real property without right to the possession thereof, shall forcibly hold or detain the same as against the person who has a lawful right to such possession.” C.R.S. 13-40-103

FED applies to residential and commercial tenants, though recent legislation introduced more rules that only apply to residential tenants. Regardless, everything has to happen by the books. So as a landlord, you can’t evict a tenant without the court’s involvement. In order to comply with FED, the problematic tenant has to receive a series of pre-suit notices before you can reclaim possession of the property. These pre-suit notices are described below in order of priority.

Default and Proper 

A tenant can only be evicted if and when they have lost the right to retain possession of a property. This can only happen lawfully if the tenant has received a default and proper notice that’s been delivered to the commercial tenant personally or posted in a visible location on the property where the tenant will find it.

Whether the tenant failed to pay rent, violated a different lease term, or stayed beyond their lease terms, this notice should inform the tenant of what they’ve done to violate their lease. Unless there are extenuating circumstances, the notice should give the tenant an opportunity to cure default.

“Regardless of the default provisions in the lease, three days’ notice must be served on the tenant.” C.R.S. 13-40-104(1)

It’s important to complete this step correctly. Failing to do so can result in a landlord being denied a court order to reclaim possession at trial. Just look at what happened to these landlords:

Case 1: Missing Language In Notice

In Tumbarello v. Byers, the tenant appealed the landlord’s unlawful detainer action to the District Court of Jefferson County in Colorado’s judgment. The tenant prevailed on appeal because the pre-suit notice he received at the start of the eviction process was missing a demand for payment within three days of receipt, or the landlord would take steps to repossess the property.

“Here, since the notice did not demand,  [***3]  in the alternative, payment within three days or possession, it was insufficient to work a forfeiture for nonpayment of rent. And, since the notice was defective, whether tender of the overdue rent to plaintiff’s attorney was sufficient to constitute tender to plaintiff is irrelevant. Hence, the trial court did not err in refusing to terminate the lease for an alleged default in rental payments.”

Case 2: Waiver of Notice

If a landlord serves a default and proper notice and collects a rent payment within that three-day window, the landlord forfeits that notice. In Merkowitz v. Mahoney, the commercial landlord tried to go through the FED process to remove a tenant for selling alcohol to minors. But the landlord waived the notice after accepting a rent payment from the tenant.

“[I]t was agreed therein that no assent, expressed or implied, to  [*40]  any breach should be deemed a waiver of any succeeding or other breach, and that in case of default in any of the covenants lessor might declare the term ended and repossess the premises.”

Notice to Terminate Tenancy

If the commercial tenant is on a month-to-month tenancy or at the end of their lease term, the landlord can serve them with a notice to terminate tenancy. A notice to terminate tenancy must include:

• a description of the property
• particular time for lease termination
• grounds for termination (if substantial violation) C.R.S. 13-40-107.5(4)(b)

If a tenant doesn’t leave after these notices, you can take legal action.

Filing the Complaint

After the notice to terminate tenancy or demand for compliance expires, you can start the formal judicial eviction process by filing a complaint with the court that accuses your tenant of unlawful detention. This step gets you closer to regaining possession of the property and possibly recovering monetary damages.

Summons and Response to Complaint

Your commercial tenant will receive a summons to respond to the court. If the tenant doesn’t respond, you might win a default judgment in the case. But if the tenant files an answer to the complaint before the deadline, the court will schedule the case for trial – usually seven to 10 business days after getting a response.

Trial and Judgment

At any point during the process, the parties can reach an out-of-court agreement that would eliminate the need for a trial. Once a case moves to trial, there will generally only be one winner. The court will award the landlord possession of the property if it determines they have a legal right to it.

The Timeline to Take Back the Property

While a judgment is effective immediately, you won’t be able to recover the property right away. You will have to wait 48 hours for a writ of restitution. C.R.S.13-40-122 (1)(a)

The writ of restitution is the legal document that permits you to reclaim possession of a property. It allows the sheriff to remove the tenant and their belongings from the property.

Commercial Evictions: Know Your Rights

A strong and clear lease is your best course of defense if the relationship with your commercial tenant breaks down. If well written, a lease agreement can be convincing leverage to compel compliance and avoid the eviction of an otherwise good tenant. Should eviction become necessary, a landlord-tenant attorney can help you seamlessly navigate the eviction process. Call 303-688-0944 to set up a case assessment today.