CREJ - Journal

Page 24 —

COLORADO REAL ESTATE JOURNAL

— May 6-May 19, 2015

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Law & Accounting

ki resorts, property man-

agement

companies,

apartment communi-

ties, motels, hotels and nursing

homes all provide employee

housing. However, when the

employment relationship ends,

in many cases not amicably, it

becomes a safety concern for the

employee to continue to live on

site.

For purposes including pro-

tecting the rights and safety of

the employer’s patients, clients,

customers or tenants, in 1997

the Colorado Legislature passed

the Employee Occupancy Law,

C.R.S. § 8-4-123, to provide a

mechanism for employers to

remove an employee from the

premises without wasting time

obtaining a court order autho-

rizing the removal. The EOL

provides that in employee hous-

ing situations, the employee’s

occupancy of the premises is not

a tenancy, but a license to occu-

py the premises pursuant to an

employment relationship. The

rationale being that the employ-

ee’s occupancy of the premises is

not for the purpose of providing

housing, but is “a means to pro-

vide services to the employer’s

patients, clients, customers or

tenants.”

Under the EOL, a written

license to occupy the premises,

entered into as part of an employee’s

compensation,

may be terminated

at any time after the employ-

ment relationship ceases. Once

terminated, the employee has

three days after receipt of the

notice of termination to vacate

the premises. If the employee

fails to vacate the premises with-

in three days after receipt of

the notice, the sheriff is autho-

rized to remove the employee

from the premises upon being

shown the notice of termina-

tion of the license to occupy the

premises and the written agree-

ment pursuant to which the

license to occupy the premises

was granted. This procedure is

far less time-consuming than the

normal eviction process, where

the landlord would have to file

a civil eviction action under

Colorado’s Forcible Entry and

Detainer Statute and would then

have to wait until after a show-

cause hearing to obtain a writ of

restitution from the court autho-

rizing the county sheriff to evict.

Importantly, the notice of ter-

mination of

a license to

occupy the

p r e m i s e s

must set forth

the timewhen

the license to

occupy the

premises will

t e r m i n a t e ,

and it must be

signed by the

employer or

the employ-

er’s agent or

attorney. In

order for the termination to be

effective, the employer/land-

lord must have a written license-

to-occupy agreement with the

employee that meets specific

statutory requirements. Under

the EOL, the occupancy license

agreement must include: (i)

the names of the employer and

employee; (ii) a statement that

the license to occupy the prem-

ises is provided to the employee

as part of the employee’s com-

pensation and is subject to ter-

mination at any time after the

employment relationship ceases;

(iii) the address of the premises;

and (iv) the signature of both the

employer and the employee.

It is not entirely clear under

the EOL whether the notice of

termination must be person-

ally served on the employee, or

whether posting a copy of the

notice in a conspicuous place

on the premises is acceptable.

The EOL states that termination

of the license to occupy is effec-

tive three days after “service.”

It also states that the sheriff is

authorized to remove the ten-

ant from the premises if the

employee fails to vacate within

three days after “receipt” of the

notice of termination. Nowhere

in the EOL does it provide for

the method of service. Howev-

er, given the safety purpose of

the EOL, it makes sense that

posting the notice of termina-

tion in a conspicuous place on

the premises, which is far more

expedient than trying to person-

ally serve an employee who may

be difficult to find or may be

deliberately avoiding service, is

sufficient to terminate the occu-

pancy. Furthermore, posting of

an eviction complaint is suffi-

cient under the FED statute for

purposes of obtaining a court

order authorizing eviction.

In addition to the occupancy

license agreement, employers

also may want the employee

to sign and enter into a writ-

ten lease agreement with the

employer that sets forth the

respective rights and obligations

of the parties as landlord and

tenant, including provisions for

payment of any additional rent

above the amount being applied

as employment compensation,

and standard provisions relating

to subletting, security deposit

and the like. If a separate lease

is entered into, as a precaution-

ary measure employers should

incorporate the occupancy

license into the lease and should

include a provision permitting

termination of the lease on three

days’ notice, as set forth in the

occupancy license. If these steps

are not taken, the employee

could argue that notwithstand-

ing the EOL, a normal landlord-

tenant relationship also exists

with the employer, which enti-

tles the employee to the rights,

protections and procedures

afforded under the FED statute,

including an opportunity to be

heard at a show-cause hearing.

While this may not appear to be

a viable argument, it might get

traction with the county sher-

iff, who for liability purposes

may not be satisfied with sim-

ply being shown a notice of

termination and an occupancy

license, and may require a for-

mal court order before evicting

the employee.

Employee housing: Normal eviction process may not apply

William H.

Eikenberry, Esq.

Darling Milligan

Horowitz PC, Denver

The rationale

being that the

employee’s

occupancy of the

premises is not

for the purpose of

providing housing,

but is ʻa means to

provide services

to the employer’s

patients, clients,

customers or

tenants.ʼ

Our national real estate practice

is focused on the evolving

needs of clients.

We advise on current positions,

opportunities, and complex

transactions in:

• Acquisition

• Development

• Financing

• Leasing

Phoenix | Salt Lake City | San Diego | Washington, DC | Wilmington

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