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— Property Management Quarterly — October 2016
DENVER’S
PROPERTY MANAGEMENT
POWERHOUSE.
Leasing Advisory
Global Corporate Services
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Multihousing
Consulting
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Valuation and Advisory Services
Dan Simpson, Director of Management Services
1800 Larimer Street, Suite 1700, Denver CO 80202 T 303.892.1111
Newmark Grubb Knight Frank has built a reputation for delivering superior
operations and services for all classes of commercial properties, regionally
and worldwide.
Newmark Grubb Knight Frank provides property management for more than
210 million square feet in the U.S.
A
s every experienced property
manager knows, the typical
lease agreement generally is
for a specified period of time.
It is every property man-
ager’s hope that the entire lease term
will pass with only minimal issues.
Unfortunately, one major issue that
sometimes occurs is that the ten-
ant does not honor the lease agree-
ment until the end of the term and,
instead, abandons the property.
Abandonment is a serious, but
often underestimated, issue for prop-
erty managers. Failing to understand
the issues that arise out of an aban-
donment situation and failing to take
the proper precautions can subject
a property manager to a significant
and unnecessary risk of liability.
Determining abandonment.
One of
the most difficult issues arising out
of abandonment sometimes is sim-
ply determining whether a tenant
actually abandoned the property. For
example, some or even what appears
to be all of the tenant’s belongings
are still at the property, but the ten-
ant is not answering the property
manager’s communications and the
utilities at the property have been
turned off – has the tenant aban-
doned the property?
In a perfect world, the tenant will
tell the property manager that he has
abandoned the property or is return-
ing possession during the lease term.
However, rarely is abandonment so
straightforward. Rather, determining
that a property has been abandoned
can mean stringing together various
signs, such as:
• Tenant’s removal of a majority of
his property;
• Utilities turned off at the property;
• Tenant’s fail-
ure to respond to
property manager’s
communications; or
• A neighbor
informing the
property manager
that she witnessed
a U-Haul truck at
the property the
last time the ten-
ant was seen at the
property.
Unfortunately,
failing to properly
determine when a
tenant has abandoned can be a cost-
ly mistake. For example, if a property
manager fails to timely recognize the
signs of abandonment, the property
manager will waste precious time
in retaking and reletting the prop-
erty. This could subject the property
manager to significant damages lost
in rent and, possibly, damages to
the property itself. Alternatively, if a
property manager incorrectly deter-
mines that the property has been
abandoned, she could waste a sig-
nificant amount of time and money
trying to retake the property when
it actually has not been abandoned
and be named as the defendant in a
case for damages.
Protect yourself in the lease agree-
ment.
To protect himself, the property
manager should ensure that the
lease agreement has adequate provi-
sions concerning abandonment.
Far too many lease agreements fail
to address abandonment – this is a
sure sign of a poor lease agreement.
An adequate lease, at the very least,
will define abandonment. An exem-
plary lease will define abandonment
and address some
process issues that
arise when a ten-
ant abandons the
property. Specifi-
cally, a lease agree-
ment should speci-
fy the following:
• How the prop-
erty manager will
determine that the
property has been
abandoned;
• What notice
the property man-
ager will give if he
believes the property has been aban-
doned; and
• What rights the property man-
ager has to enter the property and
remediate issues or prevent addi-
tional damages in the potentially
abandoned property while going
through the legal process.
Protect yourself with the legal pro-
cess.
In the event that the property
manager determines that a tenant
has abandoned the property, it can
be extremely tempting for the prop-
erty manager to simply reenter the
property and relet it without taking
formal legal action.
However, failing to use the legal
process when a tenant abandons the
property puts the property manager
at significant risk for liability. Even if
the property manager is 99 percent
sure that the tenant has abandoned
the property, the property manager
still should go through the steps to
formally evict the tenant.
Going through the formal eviction
process and getting a judgment for
possession against the tenant and
executing a writ of restitution will
ensure that the tenant no longer
has any legal right to possess the
property and any personal property
remaining does not create liability
for the property manager. Nothing
would be worse than the property
manager failing to formally evict
a tenant whom she thought had
abandoned the property only to have
that tenant return after the property
is relet or to bring suit against the
property manager for destroying the
valuable personal property that was
thought to be abandoned.
Protect yourself after the legal pro-
cess.
Another significant issue arises
after the property manager retakes
the abandoned property. That issue
is what the property manager should
do with the tenant’s personal prop-
erty.
Often in cases of abandonment,
the property manager is struggling
to contact the tenant. However, a
property manager cannot simply
dispose of the tenant’s property just
because he cannot contact the ten-
ant to come remove her property.
Rather, the property manager needs
to ensure that even after he obtains
a judgment for possession to keep
following the legal process to remove
the presumptively abandoned per-
sonal property.
Take abandonment seriously.
Aban-
donment is a serious issue facing
property managers today. Failing
to take steps to protect themselves
against abandonment issues can
be a costly mistake. When in doubt,
property managers should consult
with a real estate attorney to ensure
that they are not unnecessarily sub-
jecting themselves to liability when a
property appears to be abandoned.
s
Legal
Donald
“Corky” Eby
Attorney, Robinson
and Henry PC,
Castle Rock
Kayla Weeres
Law clerk,
Robinson and
Henry PC,
Castle Rock
