Commercial Evictions in 2021: Will There Be Calm After the COVID-19 Storm?
By David Laird, Attorney, Moye White LLP
The pandemic threw evictions into a state of chaos. Under normal circumstances, evictions in Colorado are technical, time-sensitive, and involved. Executive orders, regulatory edicts, and limited judicial resources brought on by COVID-19 complicated and stalled evictions in 2020. Worse, the landscape was constantly shifting as Colorado’s Governor Polis issued new executive orders throughout 2020, and various courts imposed their own restrictions and requirements. Many landlords chose not to join the fray, opting to grant their tenants payment extensions and lease modifications. Fortunately, the procedural upheaval of 2020 has largely subsided. Left in the wake of 2020, however, is the potential for an imposing backlog of evictions. Before delving into the ramifications of the executive orders and related modifications to the eviction process, a brief explanation of the eviction process might prove helpful.
In Colorado, an eviction is often referred to as “forcible entry and detainer” (FED). Before an FED can be filed with the court, the landlord must first give the tenant an opportunity to cure its lease default. The lease should provide some of the basics for how to cure, but generally speaking, the law requires that the landlord provide the tenant with what is usually referred to as a “demand for compliance or possession.” The demand will inform the tenant that it is in default under the lease. The tenant has a certain amount of time to cure the default (which is usually non-payment of rent) or vacate the premises. In the context of commercial (non-residential) FEDs, the tenant must be afforded the amount of time specified in the lease to cure. Under the applicable statutes, the minimum amount of time available for a commercial tenant to cure is three days.
If the tenant does not cure the default after the demand is issued, the landlord may file the FED lawsuit. The law requires the court to hold a hearing within a matter of days after the lawsuit is filed. If the tenant does not formally dispute its default, and all of the procedural requirements have been met by the landlord, the court will enter a judgment affording the landlord the right to take possession of the premises. If the tenant does not thereafter vacate the premises, or if the tenant leaves its belongings in the premises, the landlord may enlist the assistance of the sheriff to help remove the tenant and/or its belongings. In the same FED lawsuit, the landlord has the right to also request a monetary judgment for the amount of rent and other charges it is owed. However, the process for obtaining a monetary judgment is separate from the process for regaining possession. Obtaining a monetary judgment will typically take months, whereas the process for obtaining a judgment for possession will typically take weeks.
During the early stages of the pandemic, courts continued to process FEDs; however, some courts were closed or not accepting new FEDs for a period of time. Also, certain county sheriffs were not available to restore possession of the premises to landlords even after the court entered its judgment for possession. While those issues diminished fairly quickly, a variety of executive orders were issued by Governor Polis that curtailed the landlords’ ability to remove tenants in default. Of most relevance, throughout much of 2020, Governor Polis ordered that tenants (both residential and commercial) were required to receive no less than 30 days to cure any monetary default under a lease. That requirement expired on December 31, 2020.
As matters presently stand, commercial FEDs may proceed as they did before the pandemic. However, the Governor has ordered that, through at least March 2021, landlords are prohibited from charging certain fees related to a tenant’s monetary default. As stated by Governor Polis:
“No landlord, mobile home park owner, property management entity, or any individual or entity acting on behalf of a landlord, mobile home park owner, or property management entity shall charge a monetary sum, fee, or other penalty against a tenant or mobile homeowner for failure to timely pay any portion of rent.”
This restriction applies to rent due on the following dates:
- May 1- 31, 2020
- June 1-13, 2020
- October 15, 2020, through March 31, 2021 (subject to further extension).
Finally, courts are now working at full capacity, but the landscape has changed. Many courts conduct hearings remotely over virtual platforms. Also, judicial budgets have been cut, which could impact courts’ ability to set and conduct hearings as promptly as in the past. However, we have found that judges and their staff are working exceptionally hard to conduct hearings timely. Nevertheless, some judges have expressed that they anticipate a large influx of FED cases as restrictions ease and federal stimulus efforts begin to tail-off. Accordingly, judges will expect landlords to fully comply with all procedural requirements both before and during the FED process to help ensure that the expected heavy caseload will run as smoothly as possible. Additionally, some judges are encouraging landlords and tenants to engage in alternative dispute resolution (such as mediation) to see if they can resolve their disputes without judicial intervention.
There is little doubt that FEDs will increase substantially in 2021 as the pandemic gradually releases grasp. Moye White is here to help guide both landlords and tenants in navigating the FED process.