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  A lease is a contract under Colorado landlord tenat law, and is as legally binding as any other contract. However, it is only binding to a point. Don't want to experience the eviction process in Colorado? Then read on and learn about the...

Avoid 10 Costly Mistakes in a Colorado Residential Lease Agreement

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Posted by Joseph Stengel on January 11, 2017

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If paying for a Colorado real estate attorney is something you want to avoid when signing a Colorado residential lease, then take note of these items and mistakes that typically cause someone to hire a Colorado real estate lawyer. By avoiding these 10 mistakes and situations, you can go a long way in avoiding this kind of pain. Here's a list of the key things you want to make sure to consider.


1. Never lease based on an oral agreement 

The day of a “handshake” oral agreement is over. It’s one thing to shake hands over agreeing to enter into a residential lease agreement, but ALL the details must be in writing. The responsibilities one party owes to the other MUST be clearly set out in WRITING to be enforceable.

2. Oops, a  couple of months into the lease you thought that everything was covered, but you find that there is a "thing or two" you didn’t get down 

Take warning. We all struggle to remember everything that needs covered in a residential lease agreement. Too often,  the person was been presented the lease to sign, they were emotionally invested in the new property and wanted to “move in” to “move on with their life.”  Then sometime later they think of an item that needs covered and the landlord is willing to agree, however it is suggested to “get things moving” everyone orally agrees to a change, condition, or waiver. This creates a potential misunderstanding down the road. Always, step back and get any changes, conditions, or agreements in writing.

3. Document your communications

The explosion of ways to communicate continues to grow. Whatever medium you use, it’s important to document your conversations with the landlord by confirming them in writing----and then save a copy. This can be a huge if later on there is any dispute. There are lots of apps and software now you can use to back up and save any kind of communication medium you may choose to use. Just be sure to back them up.

 4. Length of a real estate lease should be carefully considered 

If you face a situation in a real estate lease in which you are rewarded with lower rent in returning for signing a longer term lease, consider the real monetary tradeoff in monthly rent reduction versus the cost you may incur if you need to get out the lease early due to an emergency, or change in circumstances. The pace of our world moves quicker today than ever before. If you look up the list of Fortune 500 companies in 2006 and look at the list today, you will see 298 of them don’t exist anymore.

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5. If you don’t want to be personally held liable for a real estate lease then you might use a legal entity

Personal liability should not be taken lightly. The legal responsibilites associated with a lease can be huge.  To avoid being held personally liable (for this lease or other contracts you may sign), it is may be worthwhile to create valid legal entity to shield you. By creating a stand alone entity, you are creating a separate and independent “person” through which you can sign contracts. A legal entity limits personal liability. The legal entity you create now assumes the liabilities contemplated in the lease. In order to create this type of protection, you must set it up according to the laws of the state and you must properly file the paperwork in order to remain in good legal standing. You must also maintain clear separation from yourself personally and the legal entity. No co-mingling is permitted! Any deviation from this very basic rule could result in personal liability. This is accomplished by accurate and proper record keeping. Today’s user-friendly “Quickbooks” type software is easy and inexpensive. Please Note: Many landlords will not enter into any lease agreement with a stand alone legal entity without also requiring a personal guarantee. 

6. Creativity runs in your family

After signing a lease, you move in and now you see there are a few "little" changes you would like to make. Nothing big. Maybe just painting a wall. Never assume the changes you visualize are “no big deal.” If you value your security deposit and want to avoid possible additional fees or penalties make sure you can make changes under the lease, and again, get any "change" agreement in writing signed by your landlord.
 

7. Oh it’s so cute

After moving in, you have an emotional need for companionship that is calling out to you. It happens that the solution to that emotional need for companionship is a pet. Almost every Colorado residential lease agreement has a provision or provisions regarding pets. Too many people read the pet provisions and justify to themselves that the pet they now want is really "no big deal." All too often tenants think--the landlord won't care, they won’t see it, they won’t…….. Rationalize all you want, but it’s a huge mistake to try and deceive the landlord. Not only can it be grounds for eviction, it can cost you a lot money.
 

8. Security deposits 

It’s in your interest to really understand the security deposit stipulations. All leases will specify how a landlord can use your security deposit. A typical lease allows a landlord to take from the security deposit if a tenant doesn’t pay their rent. You should also confirm you understand what kind of damages will be taken out of the security deposit when you’re ready to move.

Also, make sure the lease specifies a time frame on the return of the security deposit after you’ve left the apartment. A common rental nightmare is that renters have trouble recovering their security deposits in a timely fashion after they’ve moved out — so be sure how the deposit will be handled---before you move in. Here’s an article that details what a landlord is required to do in returning security deposits under Colorado law..

9. Gotta leave

I will just sublet my place. Don’t think you can sublet your way out of a change in your life…make sure you can sublet before signing---and know what your residential lease agreement says about subletting.  


If you can sublet, be extremely careful when you do. Subletting is extremely risky. Essentially you are still responsible--even after you leave. If your sub-tenant misbehaves, or fails to abide by the terms of the lease, or fails to pay rent, it can (and usually does) fall back on you. Also, If you want to take over someone's lease, work with the landlord to terminate the old lease and sign a new lease directly with you. Here’s some additional information regarding “Termination of a lease or rental agreement.

10. Avoiding fraud or theft 

The greatest single way to prevent fraud or theft is to pay the landlord with traceable and/or documented payments. You should never pay in cash--but if you do get a receipt! This is especially true when paying the first and last months rent and the security deposit. You should also avoid electronic and/or wire transfers unless there is a clear record of that transaction. Never, ever, deal with an anonymous landlord---the landlord checks you out--so you should check them out too!  Again: Always document any transaction with a writing!

Download 7 Point Checklist for Signing A Lease or Contract

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This information is provided for educational purposes only and cannot be taken as legal advice. Neither I, nor the other attorneys at Evans Case, LLP, nor any person or entity that I or any such firm represents, has agreed to enter into any agreement, or to incur any obligation, nor has any attorney/client relationship been created by e-mail, fax or other electronic means unless specifically and expressly so provided. No attorney/client relationship exists in the absence of an executed engagement letter or fee contract.

Topics: Colorado Landlord Tenant Law, Residential Lease Agreements

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