When you think of metamorphosis, you imagine a caterpillar turning into a butterfly. Unfortunately, SB 73, the landlord-tenant bill by Sen. Stan Matsunaka, D-Loveland, metamorphosed a landlord-tenant bill from a caterpillar into a really ugly caterpillar.
To understand the bill, you need background on landlord-tenant law in Colorado. We do not have warranty of habitability (we will call it "warranty") in Colorado for rented premises; only for newly constructed residential housing. Our state supreme court said if you want a rental warranty, the legislature will have to pass a law. Warranty means a human being has the right to rent a place fit for a human being to live in.
Instead of warranty, Colorado has a covenant of quiet enjoyment (we will call it "covenant") which our Supreme Court did agree exists even if there is no covenant statute. Covenant means once you rent a place, you are entitled to have it exist in a condition no worse than when you rented it.
Five of the original 24 pages in SB 73 provided warranty without using the word. It defined "major defect" in rented housing as "a loss of heat or hot water, plumbing stoppage or major leaks, ceiling damage due to a leaking roof, or any other situation that violates the applicable building or housing codes for seventy-two hours or more."
The reference to "building or housing codes" was very important because laws across the nation recognize that as part of the makeup for "warranty". The bill allowed the tenant to terminate the lease, but only if within twenty days after the landlord, being notified of the "major defect", failed to take "reasonable steps" to remedy the major defect.
Which means you have to exist without heat, hot water, or a leaking roof (as examples) for twenty days before you meet the threshold for terminating the lease. (That's not exactly a "great" warranty.) And the termination doesn't occur for another 10 days. This type of termination then becomes a way to obtain return of the tenant's security deposit. The original SB 73 didn't deal with damages, or deny the right to seek damages if the warranty was breached.
The other 19 pages of SB 73 were devoted to solving the landlord's problem in dealing with the "supposed" abandonment by a tenant of the rental property. SB 73 would have overturned the 1985 Colorado Court of Appeals decision in Clark vs. Morris.
In that case, landlord claimed tenant had abandoned the premises. But the landlord didn't use court process to evict the tenant (among other omissions) and "tenant had not removed any furnishings from the premises." Landlord was potentially liable for actual and punitive damages to the tenant.
The original SB 73 would have changed this. The landlord would have had the right to take over the rented premises without going to court if he "reasonably believed" the tenant had abandoned the premises and the rent was ten days overdue. (In the Clark case, the tenant was always late in paying the rent.) And the fact that tenant's furnishing were still on the property would not affect the landlord's "reasonable belief".
Metamorphosis happened in Senate Business Affairs. The 24 page bill was now 10 pages. The caterpillar that emerged was totally anti-tenant. Instead of abandonment, the first few pages dealt with what happens to the tenant's property after eviction. It allowed the landlord to put the property in storage and recover costs by a lien on the property or by payment from the tenant to recover the property.
"Major defect" as originally defined was emasculated, replaced by a landlord who "wrongfully fails to provide...electricity for household purposes, a sufficient amount of heat to maintain a constant minimum indoor temperature of 65 degrees, sufficient quantities of running water and hot water for normal household purposes, or operating sanitary and plumbing systems....and such failure materially affects the health or safety of the tenant or the habitability of the residential premises."
Notice the "lawyerlike" words, all of which can be used by the landlord in court to defeat the tenant: "Wrongfully fails"...and such failure "materially affects the health or safety or the habitability." The amendment did mention "habitability" as in warranty of habitability, but without the right to damages.
It was to be part of the Colorado Consumer Protection Act and the failure to provide the heat, water, and electricity was made a deceptive trade practice, but ONLY to terminate the lease. Tenant was specifically denied the right to damages. Very significantly,
there was NO mention of violating the housing codes adopted in Colorado cities and counties as a reason to terminate the lease.
So the question then becomes, can you "live" there even if the landlord refuses to fix the problem? If so, then it is not a deceptive trade practice. Can you not live there? Then it becomes a deceptive trade practice without the right to seek damages.
Removing the right to seek damages can only be an attempt by the landlord lobby to overturn state court decisions beginning with the 1984 decision of the Colorado Court of Appeals in Kirkland vs. Allen, which is STILL the law in Colorado.
That case stated that being bitten at night by rats triggered the right to abate rent (totally or partially) based on "constructive eviction" because the landlord failed to provide basic necessities. Along with the rats, there were plumbing and structural problems. The case allowed the tenant to seek actual damages as well as treble damages for failure to return the security deposit.
The Kirkland case was followed by Bedell vs. Zapatistis in 1991 in which there were severe problems with the heating and plumbing systems and part of the ceiling collapsed. The court wrote "There
is a covenant of quiet enjoyment in Colorado." The covenant is violated "when there is a disturbance of the lessee's possession by the lessor which renders the premises unfit for occupancy for the purposes leased." The case confirmed that actual abandonment by the tenant is not required.
Under the amended version of SB 73, the termination of the lease 30 days after notice (and 20 days after failure to fix the problem) means the tenant can get back his security deposit, but with fewer rights and recovery (no burden of proof on the landlord, and no court costs) than is presently allowed under normal security deposit returns.
A tenant is presently entitled by case law decided in our courts to get the security deposit back when the covenant of quiet enjoyment is broken, so why do we need the language in this bill?
The bill, carried in the House by Rep. Andy McElhany, R-El Paso, was amended in House Business Affairs to remove everything except the landlord's duties and rights regarding tenant's property after eviction. Whatever happens, the bill will likely return to the Senate and may well end up in a conference committee where the major anti-tenant provisions could be restored.
Instead, why not turn the language of Kirkland vs. Allen, and Bedell vs. Zapatistis, which is Colorado law, into a statute providing that a tenant is entitled to the covenant of quiet enjoyment and that the failure of the landlord to continue to provide a place fit to live in constitutes constructive eviction permitting the right to abate the rent. You aren't changing the law. You are just making it into a statute.
The only people you will make unhappy are those landlords who want to overturn what is presently the law in Colorado.
Jerry Kopel writes a column for the Statesman based on 22 years past experience as a state legislator.
Copyright 2012 Jerry Kopel & David Kopel