Category Archives: Longmont Real Estate Attorney

Renters: Protect Your Security Deposit

Just before ski season each year, a shuffle ensues. Most of us are familiar with this ritual. It generally consists of the frantic search for housing, schlepping one’s personal belongings around town, leaving old roommates, and learning the habits and moods of new ones. Frequently, the shuffle’s aftermath confronts residential landlords and tenants with the following security deposit issues.

How long can a landlord withhold a security deposit?
A landlord has until 30 days after expiration or termination of the lease to return a security deposit or provide a written accounting of any withholding, unless the lease provides for more time. In no case may a landlord hold a security deposit for more than 60 days without reason.

What must a landlord do to keep all or a portion of a security deposit?
If a landlord plans to keep all or a portion of a security deposit, he or she must give written notice to the tenant within the 30 to 60 day time period after lease termination. The landlord is only responsible for sending notice to a tenant’s last known address. Thus, former tenants should notify their former landlords of address changes. The notice must list the exact reasons for retaining any amount of the security deposit and must be accompanied with a refund of any amount of the deposit not being retained. If such notice is not given, the landlord forfeits any right to the security deposit.

For what kinds of damage can a landlord deduct from a security deposit?
A landlord may only withhold for nonpayment of rent, abandonment of the premises, nonpayment of utility charges, repair work or cleaning contracted for by the tenant, and damages exceeding normal wear and tear. What is “normal wear and tear” is not described in the Security Deposit Act and is one of the grayer areas of landlord tenant law. Generally, damage caused by a tenant to something which would not have otherwise deteriorated or would not have fallen into disrepair during the term of the lease, if the premises had been occupied by a reasonably prudent tenant and in compliance with the lease, exceeds normal wear and tear.

What can a tenant do if their landlord wrongfully withholds their security deposit?
Victims of wrongful withholdings may be vindicated in small claims court. Wrongful withholding of a security deposit occurs when a landlord retains a deposit in bad faith. Deliberate improper withholding is considered bad faith. A landlord who keeps all or a portion of a deposit in bad faith may be held liable for the tenant’s attorney’s fees, costs and “treble” damages (three times the amount of the security deposit wrongfully withheld). Prior to calculating treble damages, however, a court will generally offset the amount of damages to the premises caused by the tenant. In many cases, the cost (including time and effort) of recovering a wrongfully withheld security deposit exceeds the amount recovered.

What can be done to help prevent disputes over security deposits?
A lease should fairly and comprehensively address the expectations of the parties concerning the condition of the premises upon lease expiration and/or termination. Further prevention may take the form of a written inventory and photographic record of any defects or damages existing when the tenant moves in. The tenant and landlord should both sign off on such list.

As always, readers must understand that this column is not intended as advice. The purpose of this article is merely to explain general mechanics of the Security Deposit Act. Each lease situation presents a different set of facts to take under consideration.

History of Dealing with Legal Remedies for Property Owners with Polybutylene

Anyone whose business or interests lie in real estate would want to know about a product liability case that effected property values nationwide. It concerns the Qest Quik Sert plastic (polybutylene) plumbing system that was installed in the supply lines of a large number of single family homes condominiums, town homes, apartments, mobile homes, and manufactured homes throughout the United States. It is estimated that between 20,000 and 40,000 properties in Colorado have this system.
The plastic system is a component plumbing system which is manufactured from polybutylene and celcon resins (i.e. plastic). It is assembled with a combination of plastic tubing, plastic fittings, and metal crimp rings. The system was installed in homes built between approximately 1978 through 1993, however, in 1987, the plastic fittings were replaced by metal. Experts have testified that the system is defective (i.e. the fittings crack causing leaks, pipes and fittings pull apart, plastic resins chemically react to chlorine which causes the pipes to erode, continuously circulating hot water weakens the pipes causing leaks and under freezing conditions the pipe/fittings connections loosen).
The system was developed, manufactured, and marketed by U.S. Brass and Vanguard Plastics, Inc. in conjunction with Shell Oil Company, Hoescht-Celanese Corporation, and E.I. du Pont de Nemours & Company. U.S. Brass, Vanguard and other manufactures designed, manufactured, and sold the polybutylene plumbing system. The system was marketed nationally to plumbing manufacturers and cities and counties were lobbied in order to put polybutylene plumbing systems on the list of approved products, despite knowledge of numerous failures and ongoing litigation involving the system. The plastic was marketed as a material suitable for use as fittings for plumbing applications, despite conclusive data that was available in the 1960s and 1970s that chlorinated tap water could erode the fittings. Juries in numerous court cases have found that the manufacturers sold the system despite knowledge of the problems and that they misrepresented their products, knowingly engaged in deceptive trade practices, and acted with gross negligence.
The system is identifiable by looking under a kitchen or bathroom sink, and/or at the plumbing leading to and from the water heater. The piping and fittings are light grey in color and the letters Q-E-S-T, or simply the letter Q are often embossed on a valve or fitting. The piping and fittings are connected with an aluminum, copper or brass crimp ring which is approximately one-half inch wide.
This plumbing has affected property value. Owners and realtors have had difficulty selling property because of the problems associated with the plumbing. Plumbing leaks have damaged and stained carpets, walls, and baseboards. Vinyl flooring curls up at the edges or the seam. Insulation, sheet rock, furniture, and rugs have been ruined. In some cases, ant, spider, roach, and termite problems have developed due to wood rot.
Other damages include the loss of personal time and wages to deal with plumbing problems. Some property owners have had to pay hotel bills while their tenants were turned out of their homes while repairs were being made to the property. Some people have experienced an increase in insurance premiums and utility bills. Many plumbers refuse to work on the polybutylene plumbing system.
In 1989, I became involved in litigation involving the system almost everywhere it was installed and became a national problem. This system was the subject matter of a “60 Minutes” segment in 1990 and was also highlighted on the “Good Morning America” show on March 11, 1993.
I researched and handled claims regarding serious problems with this defective plastic plumbing system for several years. After extensive negotiations with the manufacturers of this product we settled the claims of over 10,000 single-family home, town home, condominium, apartment, manufactured, and mobile home owners which were plumbed with the system throughout Colorado. We were part of a national settlement of $1.2 billion in 1993, the largest property settlement in history as of that time.

What are the rights of a ditch company in maintaining a ditch?

The right to a ditch easement is recognized under the Colorado Constitution and statutory law. The Colorado Supreme Court has held a ditch easement includes the rights to “inspect, operate, maintain and repair the ditch” and the rights of ingress and egress over the burdened estate.

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A ditch easement can arise by condemnation, grant or prescription. When an easement arises by grant, one must look to the document creating the easement to establish the rights of the dominant and servient estates. If the document is silent regarding maintenance, the owner of the easement has the right to maintain it. When an easement arises by prescription, history plays a role in determining the dominant estate’s maintenance rights but is not dispositive.

Absent a writing setting forth the dimensions of the right of way, the easement extends to the bed of the ditch with sufficient ground on either side to operate the ditch properly, depending on the particular circumstances. As long as the owner of the ditch easement does not expand the easement, the owner can do “whatever is reasonably necessary” to maintain the ditch. The owner of the ditch easement may do whatever is reasonably necessary to permit “full use and enjoyment of the easement including the exercise of rights of ingress and egress for maintenance, operation, and repair.” It is not trespassing to enter land to maintain a ditch. But the owner of the easement cannot put a greater burden on the land than that which existed when the ditch was constructed or was reasonably necessary to operate it. At the same time courts have recognized the right to modernize the methods and tools of maintenance.

The owner of the burdened estate may also make certain uses of the easement as long as he or she does not “damage the ditch or unreasonably inhibit the benefited estate owner’s ability to maintain the ditch.”

Ditch companies not only have the right to maintain ditches, but also the duty. Willful interference with a company’s ditch or road easement is a misdemeanor and gives rise to damages and costs in the event of a suit.

Colorado courts have recognized particular ditch maintenance rights. The holder of the ditch easement may operate machinery and other appliances and may remove obstructions. The holder of the easement may travel on the access road and spray and burn weeds. It may use a dragline to remove weeds and vegetation to retain the normal grade and cross section of the ditch. It may clean ditches of silt.

Courts in other states also have recognized specific ditch maintenance rights. The Supreme Court of Montana found that installation of a culvert and bridge across a ditch by a property owner unreasonably interfered with the ditch company’s maintenance rights because it made bringing in a bulldozer difficult. The Supreme Court of Washington ordered a property owner to remove trees and sprinklers within 20 feet of a lateral centerline to allow the ditch company to safely bring in and operate backhoes, slopers, and mowers. The Supreme Court of Idaho held a ditch company could clean the ditch and put the dirt on the banks as long as the ditch wasn’t enlarged or deepened. An appellate court in New Mexico ordered a property owner to remove a fence that interfered with operation of a tractor and other ditch-cleaning equipment.

As the case law from Colorado and other jurisdictions shows, the right to do “whatever is reasonably necessary” should encompass all normal ditch maintenance. Ditch riders may drive along the ditch to open head gates and to monitor the ditch. If there is a problem with water flow, they may use equipment necessary to repair leaks or open blockages. The removal of weeds and other debris from the ditch should be considered reasonably necessary. Burning brush should be allowed. The ditch company is allowed to use heavy equipment as necessary but not to increase the historical burden on the land. The company is allowed to adjust flows and to maintain embankments. If a landowner sets up an obstacle or obstruction in the easement, such as a gate, bridge or trees, the question will be whether it unreasonably interferes with maintaining the ditch. A wise course is to investigate the circumstances before removing the obstacle. Whether extraordinary activities are allowed as part of maintenance will depend on the circumstances of the case and a balancing of the servient owner’s rights. In the Shrull case, cited above, the court approved blasting to open a ditch, but in that case there was a history of opening the ditch with explosives. Swampy land prevented the use of heavy equipment. If the land had been dry, the court might have required a different method for opening the ditch. Activities that are the standard in the industry will likely be found reasonable and necessary.

Conclusion

A ditch company may do whatever is reasonably necessary to maintain its ditch as long as it does not expand the burden on the servient owner’s estate. In considering activities of the servient estate owner that interfere with the ditch company’s maintenance rights, courts will weigh whether the interference is reasonable or unreasonable given the property owner’s right to a noncompeting use of the easement.

From: Ditch Company

To: Ditch Rider

Re: Right to Maintain the Ditch

As a ditch rider, you have the right to do whatever is reasonably necessary to inspect, operate, repair and maintain the ditch as long as you do not expand the ditch bed or the historical burden on the land. The ditch company’s right of way extends from the ditch bed to sufficient ground on either side of the ditch to operate the ditch properly. You have the right to drive along the ditch in the right of way to operate, inspect and monitor the ditch, to perform maintenance, and to repair the ditch. If necessary, you can bring in appliances and equipment, including heavy equipment. You can remove obstructions from the ditch and the right of way. However, if an obstruction, such as a gate, a tree, or a bridge, does not unreasonably interfere with your ability to access or maintain the ditch, it should not be removed. If you believe it does interfere, you should consult with the company before removing it. You may clean ditches of silt. You can remove weeds (by spraying or burning) and other vegetation and debris from the ditch. If there is a problem with water flow you may do whatever is reasonably necessary to plug leaks or open blockages. The company and you have the right and obligation to maintain the ditch including the embankments. If you are uncertain whether certain actions are permissible, always check with the ditch company.

Business Law-joint owners

It is a common practice when two folks start a business to decide on joint ownership. It might be as 50-50 partners in a partnership, or 50% ownership in stock, or as equal members and joint managers of an LLC. Let me suggest it is a recipe for major trouble, or a disaster. The problem comes when there is a disagreement. How do you settle it? Somebody has to concede, or there is no resolution–which is what commonly happens. Since neither party has a majority, either party can block a decision. The decision then gets made by a third party–either an arbitrator or a judge. That means you have turned your business and the resolution of the dispute over to someone you don’t know, who knows nothing about the nuances of your business, or the effect of resolving the impasse. His/her job is to resolve the dispute–that’s it.

Cam Charges

When tenants are negotiating a lease for a commercial property they commonly look at the rent as the main financial term. While that is critical, there is another critical element, and that is the Common Area Maintenance or CAM charges.

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Those are the charges for the common area of the building. The definition of the common area is critical and should be closely examined. Some landlords include the roof, or the Heating, Ventilation and Air Conditioning (HVAC) system as part of the CAM charges. Tenants think of sidewalks, parking lots and landscaping as common area. While those are all generally included, the above examples are not unusual.

Another element is a management fee. I have seen the fee as a percentage of the rent or other times totally undefined and annually a very big number. I recently saw a 15% depreciation fee included.

The point of all this is that CAM charges are in addition to the rent. Landlords are wise enough to know that tenants focus on rent. CAM charges can add major amounts to the monthly bill, so examine them closely.