Colorado Supreme Court rules CARES Act still applies in Colorado - resulting in delaying the eviction process for tenants and landlords.
Key Points:
CARES Act was passed in March 2020
CARES Act “Notice” provision only applies to covered properties
Although the CARES Act has expired, the Colorado Supreme Court ruled that the Notice provision still applies
In the past month, a significant case came across the Colorado Supreme Court. This ruling impacts tenants, landlords, and real estate investors in Colorado, as the eviction process has been changed. The end result is a more complicated and longer timeline that landlords must follow in order to initiate and complete a legal eviction process on a non-paying tenant, or a tenant who has violated any lease terms resulting in a legal eviction process.
CARES Act, Passed - March 2020
The CARES Act (Coronavirus Aid, Relief, and Economic Security), passed in March 2020 paused most evictions until July 2021. This also created the CARES Act ‘notice’ provision.
CARES Act ‘notice’ Provision
The CARES Act included a notice provision requiring landlords to provide tenants with a 30-day notice before initiating a legal eviction on what is called a “covered” property.
What is a covered property?
A covered property is any property that receives government funding. These covered properties typically include-
Public housing
Section 8 housing vouchers
Section 202 housing for the elderly
Properties with federally backed loans
CARES Act Expired - July 2021
The eviction moratorium provision expired, but the bill did not have explicit language that the notice provision was also to expire. Most everyone agrees that the intent of the law was that the notice period was to expire at the same time as the entire law. Colorado is one of only four states that still enforce the notice provision of this now-expired law.
CARES Act extended in CO
“If Congress made a mistake and intended to include an expiration date for the entirety of section 9058, then it should amend the statute. We are not empowered to rescue Congress from its drafting errors and to provide for what we might think… is the preferred result “
Colorado Supreme Court Justice Melissa Hart
Where the CARES Act Still Applies:
Connecticut
Oklahoma
Washington
Colorado
What this means for Real Estate Investors and landlords:
Before serving a rental demand notice, landlords need to know if the rental property is considered “covered”. If it is“covered” then the landlord must provide specific documentation to the tenant at the time of the notice, and the tenant must be given 30 days to pay AFTER the serving of the notice before any legal eviction process can begin.
The most straightforward determination of what makes a property ‘covered’ is if the tenants receive federal funding from the government, or if the property has a federally-backed mortgage. If so, the landlord will need to give the tenant a 30-day notice with disclosure documentation at the time the initial notice is served.
Final comments:
For non-covered properties: Landlords must give tenants a 10 days notice after the rent is delinquent before initiating any form of legal procedure.
For covered properties: Landlords must give tenants a 30-day notice plus additional disclosures after the rent is delinquent and before initially any form of legal procedure.
Although evictions are rare for Grace Management properties, we are currently seeing the full legal eviction process take up to 90 days in Colorado.
If you are an owner-client of Grace Property Management we will ensure that any legal process is handled correctly and complies with all current state and federal laws.
Property Management is not just our business - it is a relationship between us, our owner-clients, and our tenant-residents. If these are important to you, we may be a good fit to provide you, your property, and your tenant-resident with our award-winning property management service.
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