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Commercial Evictions: Things Every Commercial Landlords Should Know
Evicting a tenant is seldom a pleasant experience but evicting a commercial tenant can be especially difficult. Not only can evictions be expensive and time-consuming but in certain situations, they can even become hostile and dangerous. However, by using knowledgeable and experienced landlord tenant attorney and by having a strong and clear lease agreement in place the expense and unpleasantness of an eviction can be kept to a minimum. The information below will help you to understand the eviction process and avoid a costly and time-consuming Forcible Entry and Detainer (FED) action to evict your commercial tenant – (this information is also helpful for tenants to understand the process in order to properly defend themselves).
A strong and clear lease can prevent a disputed eviction.
As the wise tale states: an ounce of prevention is worth a pound of cure. Poorly drafted, unclear, and incomplete lease agreements are the leading cause of landlord-tenant disputes. Because the language of the lease agreement will govern the landlord-tenant relationship for the next five, ten, or even twenty years, whether you are a Landlord or a prospective Tenant you should consider hiring an attorney prior to signing any lease agreement. This is likely less expensive than you may imagine and in many cases may actually result in increased revenue for a landlord or savings for a tenant in excess of the attorney fees expended. A good attorney not only understands the legal world of real estate and commercial leases but also understands the business world that the lease will serve. Through this knowledge, he or she will create a lease which contains strong and clear language that will serve to prevent expensive litigation in the future.
Some important yet often overlooked issues that must be addressed in your lease are:
- 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?
- 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?
- Can I be sure the landlord won’t rent a nearby property to a direct competitor of mine?
- What happens if the premises are not ready for occupancy on the commencement date?
- 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?
- Is the landlord demanding a personal guarantee?
These are just a few of the issues that must be dealt with during the course of a commercial lease negotiation.
The eviction process must proceed according to the FED Statute.
If a landlord wishes to evict a tenant he or she must follow that Forcible Entry and Detainer (FED) statute. The process is the same for residential and for commercial tenants. Colorado does not allow self-help evictions. Thus, a tenant can only be evicted when they have lost the right to retain possession of a property as a result of a default and proper notice, which in most cases must contain an opportunity to cure. This notice is generally referred to as a three-day notice and may be posted to the premises or delivered personally. Generally the eviction process will proceed through the steps below:
- Deliver the proper Notice to the tenant or post the Notice on the premises.
- After the notice expires a Complaint may be filed with the Court and a Summons delivered to initiate the formal judicial eviction process. This summons must be served on the Tenant by a disinterested party. The notice may be posted to the premises or served on the Tenant personally. If personal service can be obtained that is preferable for a landlord as personal service must be had in order to proceed against the tenant for monetary damages based on the breach of contract.
- The summons will create a deadline for the tenant to respond to the court by Answering the Complaint stating why he or she is not guilty of unlawful detainer. If the tenant fails to respond the landlord may obtain a default judgment for possession. However, if the tenant files an Answer the court will set the case for trial usually within a week of the filing of the Answer.
- Of course at any point during the process, the parties can reach an agreement which would serve to make the case moot and extinguish the need for a trial.
Many landlords are unsuccessful in obtaining a court order for possession at trial because of a faulty notice.
- Many tenants believe that the court may mediate a settlement between the tenant and the landlord. However, this is false, once a case moves to trial there will generally only be one winner meaning if the landlord has a legal right to recover possession he will likely be awarded possession.
- The Judgment is effective immediately, however, the court will not issue a Writ of Restitution for two days. The Writ is the Court’s order to the Sheriff directing the Sheriff to remove the tenant and his or her possessions from the property.
A strong and clear lease can often be used as convincing leverage to compel compliance with the agreement rather than forcing a landlord to resort to evicting an otherwise good tenant and inheriting a vacant space. Nevertheless, if a tenant needs to be evicted landlords should not fear the process. An attorney familiar with leases and the eviction process can be an invaluable resource.
If you need help crafting a strong and effective lease agreement, or if you are a landlord who wishes to evict a problem tenant or a tenant who feels you have been treated unfairly by your landlord or are being evicted, the attorneys at Robinson & Henry, LLC, in Castle Rock, Colorado, will be your allies. Call 303-668-0944, email us, or make an appointment online, your initial consultation is FREE.