Restrictions on Foreclosures and Evictions Loosen

By: Lia Szasz – Published in the BizWest Thought Leaders column in March 2021.

Private landlords and lenders’ hands were tied in initiating and prosecuting some legal actions against defaulting tenants and borrowers in Colorado for some or all of 2020. Governor Polis’ various COVID-19 executive orders seriously restricted or temporarily prohibited foreclosure and eviction actions statewide. Most of the restrictions at the state level, however, have expired, and foreclosure and eviction actions since resumed in Colorado, subject to some remaining restrictions and requirements. Limited federal moratoriums remain in place.

Evictions. A federal eviction moratorium is currently in place until March 31, 2021. The federal moratorium, however, only applies to residential evictions—not commercial evictions. Even for residential evictions, the tenant seeking to take advantage of the moratorium must meet certain financial qualifications and follow a declaration procedure. Moreover, the moratorium only applies for evictions sought on the basis of non-payment of rent. If an eviction is sought because a lease expires or for some other breach of the lease, the residential eviction may proceed. At the state level, eviction restrictions are mostly lifted in Colorado. All that remains is a protection from late fees for both residential and commercial tenants pursuant to Governor Polis’ Executive Order D 2021 029, which expires at the end of February if not extended before.

Foreclosures. A federal foreclosure moratorium is presently in place for federally backed loans, but does not apply to loans made by private lenders where a federal mortgage program is not involved. At the state level, Governor Polis’ foreclosure moratorium expired in 2020, and is no longer in place.

Private landlords and lenders in Colorado have not escaped the economic impacts of the COVID-19 pandemic, but federal and state level restrictions on evictions and foreclosures have generally loosened. Certain notices must still be given to defaulting tenants before an eviction action may proceed, and executive orders are constantly changing in these areas. Landlords and lenders seeking to take action against tenants and borrowers should ensure they have complied with state and federal requirements before taking legal action.

Lia Szasz