The Mind of a Property Manager

Web Admin - Monday, November 12, 2018

I’ve always thought the mind of a property manager is rather extraordinary because it has to switch gears countless times during one day, then it has to remember what was happening before the first, second, third, hundredth and so on gear switch.  On any given day, there are countless phone calls, emails, meetings, showings, inspections, etc. along with pop-up emergencies.  Property managers are extreme task handlers and juggle to do lists with ease and grace, and I truly admire anyone in the profession who is a successful property manager.

A long, long time ago in a land thankfully forgotten, I worked in HOA Management. I had 11 communities in my portfolio, ranging from communities with hundreds of single family homes, to smaller communities with less than 20 units.  Some were new communities, some were very old. It was a little taste of everything and very fast paced so I learned just about everything on the fly.  I went to the monthly lawyer sessions, chatted with long time community managers, read all of the materials that I could, handled financials, learned about reserves and reserve studies, studied for, took, and passed the required state tests, and tried to absorb every single piece of information that was available to me. While I was learning, I also had to be the best community manager that I could be to each of my communities.  Talk about a crash course! 

Along with trying to learn and do my job, the world of property management was spinning around me.  It seemed to me that there were dozens of horror stories brewing with each passing moment. Daily, I would hear grumblings in the hallways of this and that emergency, and would have various co-workers in my office chairs, some in tears, with these stories. Tales of the wrong address on a landscape contract, which lead to work being done on the exterior of the wrong property.  The contract was signed, the work was completed, the bill was generated, the manager was devastated! And we aren’t talking about a small bill either! Or water and land rights of a new community, involving original city plans, lawyers, and red tape. How about sound/security walls that were threatening to tumble down onto city property that was right on a public jogging path where children also played (for a very long time, multiple vital details were skimmed over and because of this, the clock had already begun ticking, unknowingly putting the responsibility into the association’s hands).  All the way down to mouse infestation in an ancient building where the lobby doors were always propped open.  Then there was the trash that wasn’t picked up on the usual day at a particular community, and began to blow around the streets during a period of 50 mile an hour winds.  A board member called and said it looked like she lived at a public dump! And did I mention special assessments because there was nothing planned in advance to replace roofs, boilers, or pavement; and budgets where major items like landscaping and the rising cost of insurance were ignored due to heavy deadlines, inexperience, and last minute annual meeting planning?  And from my own experience, waking up at 3:00 a.m. worrying about insurance, work orders, paperwork, emails, returning tenant phone calls, meetings, board packets; along with sitting in my driveway answering my phone and emails for hours at a time after leaving work – I just didn’t have it in me every day to run at that pace. Needless to say, I went running for the hills, never looking back!    

So I decided I wanted to go back to what I do best – and that is office management and bookkeeping, for a residential property management company. I currently work with very talented Property Managers who provide the best customer service that they can, and with a combined 25 years of experience, they can handle any situation that comes their way with poise and confidence.  And I can understand what they go through, so I try to help in any way that I can.  They treat each situation with care and are thorough.  And when fires start burning, they are even tempered and clear headed, all the while maintaining a sense of humor!  They are also members of NARPM.  NAPRM sets the industry standard, keeping the best property managers in the business in touch with each other.  And I am proud to be a part of this organization and surrounded by endless knowledge and expertise.


Amanda McCLean, a CRMB candidate, is the Office Manager for Blue Sage Realty in Westminster, CO.  She is a Colorado Native whose career background is comprised of experience in Corporate Real Estate, Law, and Residential Property Management.  She joined NARPM in 2016 and is excited to obtain her certification.

October Chapter Update

Web Admin - Tuesday, October 18, 2016

Hello, NARPM Denver Chapter!

Mark your calendars now!  You don’t want to miss the NARPM Denver Chapter October 25th meeting or the fun and exciting Holiday Party December 6th 7-10 pm.  Both will be excellent opportunities to network with vendors and fellow property managers. 

October is the month to pay your Denver Chapter dues, dues billing will be sent out via email on October 1st.

Be sure to sign up for the required NARPM Ethics class to be held November 9th 1-4 pm.  Rob Lynde will guide you through the basics of property management ethics while you earn CE credit and upgrade your NARPM membership from Associate member to Professional member!

Do you know someone who would be interested in joining NARPM?  Please invite them to the October 25th luncheon meeting.  Their luncheon payment will be credited toward their 2017 Denver Chapter membership dues.  New members can bring a check for $65 with a copy of this article and join our local chapter!  We would love to meet them and share the benefits of NARPM Denver Chapter membership!

Congratulations to the Denver NARPM Chapter 2017 board members! 

            President, Bill Martin

            President-Elect, Ben Parham

            Secretary, Kate Roth

            Treasurer, Geff Kempsell

            Past President, Susan Melton

            1st Vice President, Bob Alldredge

            2nd Vice President, Peter Meer

If you would enjoy working as a chapter volunteer please contact Susan Melton or Bill Martin or send an email via the contact page on the website.  Joining the leadership team is a fun and easy way to earn those much needed points for RMP or MPM designations.   

Susan Melton

2016 NARPM Denver Chapter President


Assistive Animals - You Have Questions, We Have Answers

Web Admin - Tuesday, October 18, 2016

Assistive Animals - You Have Questions, We Have Answers by Mark Tschetter, Senior Managing Partner of Tschetter Hamrick Sulzer, P.C.

Does a landlord have to allow assistive animals at no pet communities or no pet properties? Yes. Assistive animals are not pets.  Assistive animals are necessary for a disabled tenant to use and enjoy the rental on the same basis as a non-disabled individual. Under fair housing laws, disabled tenants are entitled to an exception to any “no pet” policy if they meet the legal requirements. A disabled tenant’s legal right to have an assistive animal, to meet a disability related need, is called a reasonable accommodation. Failure to accommodate a qualified disabled tenant, by allowing an assistive animal at a no pet community, is housing discrimination and subjects the landlord to significant legal liability.

If the tenant’s animal does not perform a service, do we still have to allow the animal? Yes, if the tenant meets legal requirements. While the rental industry consistently uses the term “service animal”, the proper term is “assistive animal”. An assistive animal is either a service animal or an emotional support animal, also known as a companion animal. Service animals perform a service for the tenant or provide a disability related benefit. An emotional support animal lessens a tenant’s disability related symptoms or provides other disability related benefits. Under fair housing laws, if a disabled tenant has a disability related need for an emotional support animal, you must accommodate the tenant by making an exception to your no pet policy, just as you would be required to make such an exception for a disabled tenant requesting a service animal.

What legal requirements must a tenant meet to have an assistive animal? A tenant must meet three requirements to be granted a reasonable accommodation (an exception to your pet policies). First, the tenant must be disabled as defined by fair housing laws. Generally, this means that the tenant must have a physical or mental impairment that substantially affects a major life activity. However, we advise some caution in basing reasonable accommodation decisions solely on this definition. Specifically, while not likely, a tenant can also be considered disabled under fair housing laws based on other tests. Second, the tenant must have a disability related need for the assistive animal. Generally, this means that there is a relationship between the tenant’s disability and the need for the animal, i.e. the animal will lessen the impact of the tenant’s disability. Third, the request must be reasonable. Whether a specific request for an assistive animal is reasonable can be extremely complicated, and should be left to the experts. Thus, you should never deny a tenant’s request for an assistive animal, because you believe the request is unreasonable, without consulting us.

Can we require the tenant to provide documentation? Maybe. If the tenant’s disability and need for an assistive animal is obvious, then you may not require documentation. If the tenant’s disability and need for the assistive animal is not obvious, then you may require documentation.  You should have well thought out and specifically defined policies for handling reasonable accommodation requests in general, and specifically for handling assistive animal requests made by tenants. You should also attend our fair housing classes. Our advanced fair housing class discusses how to properly handle reasonable accommodations in detail, including which forms to use when a tenant makes an assistive animal request.

Is documentation provided by an Internet company sufficient documentation of a tenant’s disability and need for an assistive animal? Probably not. Under the law, a person providing documentation must be in a position to know that the tenant is disabled and has a disability related need for an assistive animal. Generally, a company that generates revenue by churning out assistive animal letters, based on ten minute phone calls, is not in a position to know whether or not a tenant is disabled or has a disability related need for an assistive animal. For an extended discussion of Internet assistive animal letter companies, see the Emotional Support Animal series published in previous editions of Landlord News. Can we deny the request if the assistive animal isn’t a dog or cat? No. While most assistive animals are dogs and cats, assistive animals can include other domesticated animals.

Do assistive animals have to be specifically trained or certified? No. An assistive animal does not need any specific training or certification. However, specific training or certification doesn’t mean that a tenant automatically should be allowed an assistive animal. Specifically, more and more tenants request landlords to allow an animal because they obtained a certificate or ID Card on the Internet, or because the animal wears a tag, cape, or harness. These issues are all irrelevant. The tenant’s disability and disability related need for an assistive animal are the only relevant considerations.

Can we deny the request based on the animals size or weight, or because the animal is on our restricted breed list? Probably not. Remember, a reasonable accommodation request asks for an exception to your rules and policies because of a disability related need. Thus, a disabled tenant may ask for an exception to your breed restrictions, size, or weight policies. In most cases, if the tenant is disabled, you will have to grant their request. Because exceptions to breed restrictions can be complicated requests for a reasonable accommodation, you should attend THS’s advanced fair housing class to explore this issue in more detail. Additionally, HUD has written a specific memo on this issue.

Can we deny certain breeds based on insurance requirements? Maybe, but only after you have exercised due diligence in exploring all available insurance options. Similar to many other reasonable accommodation requests, clients often tell us that they can’t grant a certain request because of insurance requirements or limitations, or impose an insurance requirement on the tenant as a condition to granting a reasonable accommodation or a reasonable modification. Both HUD and the courts will view this as an attempt to impose barriers (deny the request) unless you have thoroughly evaluated the insurance issue. Specifically, you can’t request an insurance carrier to impose this limitation so that you can deny requests. You must also determine whether other insurance carriers would provide insurance without the limitation, or whether your existing carrier would remove the limitation either upon request or upon the payment of additional premium.

Can we require an assistive animal to be vaccinated and have applicable pet licenses? Yes.

Can we require an assistive animal to be well groomed and housebroken? Yes.

Can we charge pet deposits, pet fees, and pet rent for an assistive animal? No. Remember an assistive animal is not a pet.

Can we require an assistive animal to comply with other community pet related policies? Yes, as long as any policy applies to all other animals at the community, and does not act as a barrier to prevent disabled tenants from having assistive animals. For example, you can require assistive animals to be leashed when outside of a tenant’s unit. As a condition to granting an assistive animal request, you can also require the disabled tenant to execute an Assistive Animal Addendum that spells out the tenant’s responsibilities with respect to the animal, such as picking up after the animal, and that the animal may not disturb or threaten other tenants. Because a typical Pet Addendum may contain provisions that are inapplicable to assistive animals and refers to assistive animals as pets, we advise against using a standard Pet Addendum for assistive animals. Instead, we recommend using the Assistive Animal Addendum drafted by THS.

Don't Let The Clock Run Out On Your Client's Insurance Claim

Web Admin - Tuesday, September 20, 2016

Don’t let the clock run out on your client’s insurance claim

By: Evan Wolfe, Property Damage Attorney

If you are a residential property manager and you do not have a client with a pending insurance claim for hail, smoke, water, fire or other property damage, you probably have not been in Colorado that long.  Don’t feel left out, an insurance claim will probably come across your desk very soon.

As part of the property manager’s responsibilities, handling insurance claims for their owners is becoming more and more common.  Everything falls into your lap.  Inspecting the damage, calling in the claim, meeting with the insurance company adjuster, retaining experts to prove the damage and if necessary, hiring a public adjuster and or attorney to force the insurance company to pay what is rightly owed.  If you think that the insurance company will voluntarily cough up what it will really cost to fix the property, without a fight, again, you have not been in Colorado that long.

This article is not about how to properly handle the owner’s insurance claim, which was the topic of my presentation to NARPM Denver Chapter, at their August lunch.  For a detailed outline of that presentation, please contact us through our website, and we will be glad to send you a copy.  This article will focus on one of the major tricks that the insurance companies play with their policyholders, after a claim is filed.

The trick is what I call, “Let the clock run out”.  In Colorado, most commercial insurance claims, which include those for multi-family rental units, must be settled within two (2) years of the date of loss, or a lawsuit against the insurance company needs to be filed.  This is referred to as the “Statute of Limitations”.  Basically, if a lawsuit is not filed within two (2) years of the date of the storm, the insured will forever lose their right to receive compensation for their claim.

No one likes to get involved in litigation, as the main complaint is that now, the claim will take several more years to resolve.  Roofs will leak, siding will deteriorate, windows will loosen and at the end of the day, it is usually the property manager that is bearing the brunt of the owner’s complaints, aggravation and frustration.

What is even worse, is when the Statute of Limitations runs out, and a lawsuit has not been filed. Over the years, I have seen Property Managers become legally liable to the owner for the full amount of the damages, because they may have breached their fiduciary responsibilities to that owner, by not properly handling the insurance claim, and in some cases, have let the Statute of Limitations run out.

How can this happen?  The insurance company is “making payments”, they are “helping get the claim resolved” they are “sending another check.”  If you ever found yourself making these statement, you were being lured into the insurance company trap, that will end with them walking away paying only pennies on the claim, and you, holding the bag.

Let’s assume that you reported the claim within 30 days of the storm and the insurance adjuster gets to the property in another 30 days.  This is reasonable, but 2 months have lapsed.  After the initial inspection, the adjuster calls you in another 30 days and tells you that he needs to bring his roofing consultant to inspect the damage. “This is company policy” he says, and again this does not seem too unreasonable.  However, the date of the inspection is 30 days past that and now it is 4 months since the storm.  Because the adjuster is so busy will all the claims from the storm, he has to reschedule the inspection and now 5 months have gone by.

After the inspection, the adjuster tells you that he will have his report to you in a few weeks and because his roofing consultant did not get his report to the adjuster on time, the day you receive the adjuster’s report, accompanied with the small payment, marks 7 months since the date of the storm.  Obviously you are not happy with the first payment so you request a re inspection.  Because the re inspections are handled by a different department, it is not until 9 months since the storm that the re inspector visits the property.

When you get the revised report, 11 months after the storm, and you are still not happy with the result, you can get your own estimates from roofers, a public adjuster and sometimes an engineer.  All of this takes time and once you submit your reports, the insurance company has to put together more experts on their side and by the time all the additional inspections are done, and the reports are furnished, 16 months have lapsed.  I have seen many claims die on the vine, as the Property Managers let the insurance company drag their feet and suit was not filed.

DO NOT be lured into this trap.  The solution is very simple.

Immediately after the storm, call in the claim and demand that an adjuster inspect the property within 2 weeks.  Make sure this is in writing.  After the inspection, demand that you get the initial report and check, in another 2 weeks.  Do not let the company delay any longer than that.  If you feel that the initial check is not enough to completely repair all of the damage, start putting together your claims team.  You will need an experienced contractor to bid the repair job, and if he or she is ignored by the insurance company adjuster, then you may need a public adjuster.  They are great at compiling the numbers to repair the damage, but the insurance company knows they cannot file suit and there is no incentive on the insurance company part, to settle quickly.

A common trend in Colorado, is to add an experienced Insurance Claims attorney to your claims team, as the right attorney can help speed up the process.  Insurance companies do not want to get sued and if they are properly pushed into the corner, they usually settle fairly quickly.  Recently we helped a local property manager, who had been fighting with the owner’s insurance company for almost 2 years and was unsuccessful in obtaining any money on the claim.  By pushing the company into the corner, we were able to obtain a full settlement in less than 2 weeks.  This happens very rarely and every claim is different.

When most people hear “attorney” they think that the claim will automatically be delayed for months or even years.  This is possible with an attorney that does not specialize in this area.  You owe it to yourself and your owners to find out how an experienced Insurance Claim attorney can actually help speed up the process and get the claim paid quickly.  Several of the tactics that are used to accomplish this will be discussed in a future article.

For more information on this and any other insurance claims questions you may have, please email us at


Three Tips for Running a Profitable Property Management Practice

Web Admin - Tuesday, September 20, 2016

Three Tips for Running a Profitable Property Management Practice

By: Marc Cunningham, President and Director of Operations of Grace Property Management

When it comes to property management, the unfortunate truth is that there is no correlation between being good at property management and being good at running a property management company – zip, zero, nada.

You can be really good at collecting rents, adept at handling maintenance calls, and even excel at dealing with difficult tenants. But if you are not engaging in the behaviors necessary to run a successful company, then your business is doomed to fail.

In the past several years, my firm has purchased three different property management companies.  Each company’s owners were very good at the day-to-day tasks of property management, but they lacked skills and knowledge when it came to running the business itself. In fact, one seller was so good at property management, that we actually hired her as a property manager after we purchased her company. Five years later, she is still one of our top agents!

The good news is that operating your business successfully is all about behaviors. It can be as simple as looking at what successful companies are doing and copying their behavior. However, simple does not necessarily mean easy. Below are three behaviors that you can adopt to get your property management business on the road to success.

1.  Successful Companies Hire Well

The most important duty you have as a business owner is hiring employees. Those of us that have ever made a bad hire understand this all too well.  Whether you have one employee or twenty employees, how much better would your business be if they were all A+ players?  In sports, the team with the best players usually wins - the same is true in business. So the next time you are ready to make a new hire, slow down your interviewing process.  Think of it like a marriage. You would never commit to marrying someone on a first date, so why would you even consider hiring someone after one interview? Here are two tips for hiring:

  1. Schedule multiple interviews. You need to stop talking and make them sell themselves on why they would be the best person for the position.
  2. You are not looking for a reason to say “yes” to the candidate, rather you are looking for a reason to say “no.” Once you have found the candidate to whom you can’t say no, you have your new hire.

Yes, this process will take more time on the front end. But it will save you frustration, lots of money, and headaches by taking your time and getting that top performer.

The other side of the hiring coin is that successful companies also fire quickly.  If you have an employee who is performing poorly, you need to get up the courage to do what is necessary - that is what leaders do.  It will not be easy, and you will have a terrible night of sleep the day before, but your life and business will be better every day after that. My motto is, “Hire slow, fire fast.”

2.  Successful Companies Rely on Systems

What makes so many cheap fast food restaurants successful even with sub-par food? People keep coming back because of consistency (even if it is consistently crummy food). There are more reasons to use systems manuals than I have room to write, but here are three of the most important:

  1. They stop the revolving door. When your team members have those re-occurring questions they should first reference their systems manual before they interrupt you.
  2. They reduce liability. If the unimaginable happened and you were hit with a fair housing (or similar) lawsuit, you can show that you have a process in place. That will give you some amount of legal protection.
  3. They increase the net worth of the company. Utilizing systems manuals is the easiest way for you to increase the value of your business. Otherwise, the worth of your business lies only in your property management accounts, and those will come and go. However, a systematized business has much more market value and can be sold for a higher price. A buyer will pay a premium for a business that can replicate itself and run on auto-pilot due to utilizing a systems manual.

3.  Successful Companies Have Multiple Profit Centers

The property management industry is full of ways to provide multiple services to your tenants and owners, and to charge accordingly.  It is not about being greedy or trying to squeeze the last penny from your clients; rather, it’s about fulfilling needs.

  1. Define the scope of your services with owners. If you don’t tell your property owners where your services stop, they will keep asking until you find yourself doing things like making special trips to the property to pick up their mail and pull their trash cans into the garage. Next time they ask for a favor, respond with, “Sure, I am happy to have someone do that for you, but they will bill for their time.” See if that helps to stop the requests.
  2. Consider the apartment industry. The apartment industry runs their properties like businesses - because they are. Most apartment complexes charge for things like application fees, lease administration fees, non-refundable pet fees, roommate addition fees, and inspection fees. Why don’t you?

These are just three behaviors necessary to succeed in the property management business, but even these few steps will have a dramatic impact on the success of your business if you focus on them.


Web Admin - Tuesday, September 20, 2016


By Mark Tschetter, Senior Managing Partner, Tschetter Hamrick Sulzer

Clients frequently call for advice when a fire or other casualty event has damaged the community. While casualty events can vary significantly, we do see a number of recurring issues associated with them. This month we discuss the key issues that commonly arise when a casualty event occurs at a community. We will refer to “a fire,” but it could be a flood, mold infestation, asbestos situation, etc.

Most fire-related issues involve insurance. Some landlords still only “strongly recommend” renter’s insurance. However, the clear industry best practice is to require tenants to purchase renter’s insurance, or have some forced damage liability program in place. For example, some landlords require tenants to pay a fee for each month the tenant fails to carry renter’s insurance. The landlord then uses the fees to self-insure, by establishing a damage claim pool or reserve. We always advise our clients to require renter’s insurance or maintain an equivalent. Renter’s insurance may not (usually does not) cover everything, but some renter’s insurance is better than none.

Surprise! Believe it or not, the THS situation board is littered with situations involving renter’s insurance surprises. One surprise is that the tenant’s insurance doesn’t cover damage caused by the fire. Insurance coverage varies widely. If you are going to require insurance and you should, you should know what is covered and what is not.  Typically, most renter’s insurance only covers liability, and does not cover property damage. Usually this means that if a tenant starts a fire in 301, and 301, 302, and 303 are damaged, the insurance company is only going to pay for the damage to 302 and 303. For another example, if ninety percent of the casualty events, over the last five years, involved tenant water incidents, your renter’s insurance better cover water-related events.

A second surprise is that there is no coverage at all for any of the fire damage. The tenant who started the fire was supposed to have insurance but doesn’t. The tenant never purchased the insurance or failed to maintain the insurance. You should never be surprised that a tenant doesn’t have required renter’s insurance. If you require insurance, never allow a tenant to move in without proof of purchasing insurance. Your lease should also give you the right to purchase insurance for the tenant, and charge the insurance cost to the tenant as additional rent. Regardless of your policies, no policy requiring renter’s insurance will succeed without monitoring. However, we frequently hear from clients that they “don’t have time or the resources to monitor” tenant insurance. Fortunately, you don’t have to. Many insurance related multifamily vendors offer both insurance and insurance monitoring. With the cost being paid by the tenants and the work being done by the insurance vendor, a landlord has no excuse for not monitoring tenant compliance with insurance requirements.

When a fire occurs, you should promptly investigate and inspect, notify insurance, determine obligations, and communicate the community’s position to the tenants. Regardless of any other investigation, to protect the community’s interests, you should always conduct your own investigation, and complete a detailed incident report. Tenants, like all people, are more likely to give an accurate account of an incident nearer the time of the event. When given time to think about an event, tenants may change their story to avoid financial responsibility.

The fire department and insurance investigators may have different motivations. For example, tenant insurance companies have gotten much more aggressive about pursuing subrogation claims. The insurance company will pay out under the tenant’s renter’s insurance, but then tries to recover the money paid out by asserting someone else was at fault for the fire. The community is usually the “somebody” that the tenant’s insurance company tries to recover from. An incident report where the tenant admits fault should prevent the tenant’s insurance company from asserting the community was somehow at fault, and otherwise defeat their attempt to get their money back from you.

Insurance companies also want to pay the least amount as possible. Accordingly, an insurance company may not thoroughly inspect adjoining units for damage. Your onsite team should always conduct a detailed inspection of any potentially damaged areas as soon as possible. Fire is almost always considered an emergency and frequently requires immediate repairs or other actions. However, before a third-party vendor takes any action at your property, you should always confirm their qualifications, and their action plan. Fires at asbestos-containing properties are particularly problematic. Accordingly, you should discuss containment of the asbestos with the vendor, and confirm that no action on the part of the vendor will result in spreading any asbestos. If a fire exposes asbestos but also resulted in water damage, you don’t want the vendor blowing asbestos all over the place by using blowers to dry the carpet. For those of you wondering, yes, this really has happened.

Any insurance policy requires that the insurance company be notified when a damage event occurs. Most communities do a good job providing notice to applicable tenant renter’s insurance companies. However, many times, communities fail to notify their own insurance company of a potential claim. A community fails to notify their carrier because the community concludes their own insurance won’t be used. Most communities have very high deductibles and frequently, the damage is less than the deductible. High deductibles combined with the assumption that the tenant’s renter’s insurance will pay leads to the erroneous conclusion that the community’s insurance carrier shouldn’t be notified.

However, failing to notify the community’s insurance carrier can be a serious mistake for several reasons. If you don’t provide notice of a claim by a certain date, all insurance policies bar you from making a claim in the future. For example, if notice is not provided on what is believed to be a $15,000 claim, you might be out of luck if a year and half later it turns out to be a $150,000 claim. Providing notice to your own carrier protects you if the damage turns out to be far worse than anyone anticipated. Additionally, insurance companies make two promises in every insurance policy. The insurance company promises to pay (duty to indemnify) and promises to defend you against claims (duty to defend). Most folks forget about the insurance company’s duty to defend. In many instances, you can avoid paying significant legal fees by notifying your insurance company and demanding that they defend you (hire and pay the attorneys to deal with litigation or legal demands arising from a fire).

Many problems for a community arising from a fire are caused by inadequate lease language. Absent contractual language, the law determines rights and obligations between a tenant and a landlord. Unless the premises are totally destroyed, Colorado law is not specific or particularly helpful in sorting out the rights and obligations between a landlord and a tenant after a fire. At common law, absent a lease provision, the tenant remains liable for the rent even if the property burned to the ground. Similarly, at common law, the landlord has no duty to repair or rebuild upon partial damage or destruction. Even absent a lease provision today, the landlord can terminate a lease under Colorado law upon destruction of the premises. However, unless the tenant was at fault (caused the fire), no Colorado court is going to hold the tenant liable for damages or the remaining rent if the premises are destroyed due to no fault of the tenant.

Because most fires don’t result in the destruction of the premises, inadequate lease language frequently comes into play. Any partial damage scenario will quickly test the sufficiency of your lease. Leases often fail the partial damage scenarios, fire damage can turn into a legal quagmire, and a logistical nightmare (constant arguments with tenants which impede repairs and result in bad PR for the community).

Specific lease language addressing partial damage scenarios solves this problem. Every lease should have a clause giving the landlord the right to terminate upon partial destruction. Based on the tens of thousands of situations we been involved with, we rate this clause in the top 10 most important lease clauses.

The Colorado Warranty of Habitability Act (WHA) also demonstrates the importance of lease language. Specifically, WHA states that it does not prevent a landlord from terminating a rental agreement as a result of a casualty or catastrophe to the dwelling unit without further liability to the landlord or tenant. If your lease gives you the right to terminate after a fire, the WHA makes it clear that you can do this, and thus you can terminate the tenant’s lease and defeat any WHA claims raised by tenants because of the fire. What is not clear is if the WHA gives you the right to terminate based upon a casualty event absent lease language. Arguably it does, but of course you are in a stronger position with termination language.

Your lease should also address the alternative living accommodations issue. If one or more of the buildings at your community burns to the ground, both the tenants and the press will expect you to arrange for and pay for the displaced tenants to live somewhere else (alternative living accommodations). This problem should be addressed in the lease as well. Specifically, the landlord may arrange for alternative living accommodations, but is not obligated to provide the tenant with alternative living accommodations if the unit is destroyed. Further, landlord strongly recommends that the tenant obtain renter’s insurance that provides alternative living accommodation coverage. It’s one thing to tell the tenants and Channel 9 you’re not responsible. However, the community looks much better if you can say that you told the tenant up front about this potential issue, and encouraged them to take action to avoid the very situation they are in now.

When it comes to fires, or any casualty for that matter, the key is to have a plan. Renter’s insurance is a huge part of any plan. You can’t just assume that the insurance your tenants sign up for will cover all damage scenarios. You should verify that the insurance would yield the expected result. If your tenant renter’s insurance program won’t cover what you want and need, find a program that will. Keep in mind that a community’s insurance program is a lot easier to control and monitor than renter’s insurance from outside providers, e.g. State Farm, Farmer’s, Allstate, etc. For business reasons, you may allow outside insurance. However, there is no legal requirement that you allow residents to have outside insurance. Once you have the insurance equation solved, make sure that your lease doesn’t leave you in no man’s land. Your lease should clearly define your rights in the event of a fire or other casualty, including specifically setting forth the procedures to be followed. While your attorney should always there for you, your lease should be so clear you don’t need to call them.

2017 Board Nominees

Web Admin - Tuesday, September 20, 2016

Elections for the Denver NARPM Chapter 2017 board members will be conducted at the September 27th Chapter meeting. The Nominating Committee has nominated the following:


Bill Martin


Ben Parham


Kate Roth


Geff Kempsell


Susan Melton

 1st Vice President:

Bob Alldredge

 2nd Vice President:

Peter Meer

Our nomination team is looking for property managers who would enjoy working with the Chapter volunteer leadership as we continue to provide successful, professional events.  If you are thinking of volunteering just contact Susan Melton or Bill Martin or send an email via the contact page on the website.  Joining the leadership team is a fun and easy way to earn those much needed points for RMP or MPM designations.   

September Chapter Update

Web Admin - Tuesday, September 20, 2016

Hello, NARPM Denver Chapter! 

Please be sure to join us for the NARPM Denver Chapter September 27th meeting.  Don’t miss an excellent opportunity to network with vendors and fellow property managers. 

Elections for the Denver NARPM Chapter 2017 board members will be conducted at the September Chapter meeting.  The Nominating Committee has nominated the following:


Bill Martin


Ben Parham


Kate Roth


Geff Kempsell


Susan Melton

 1st Vice President:

Bob Alldredge

 2nd Vice President:

Peter Meer


Our nomination team is looking for property managers who would enjoy working with the Chapter volunteer leadership as we continue to provide successful, professional events.  If you are thinking of volunteering just contact Susan Melton or Bill Martin or send an email via the contact page on the website.  Joining the leadership team is a fun and easy way to earn those much needed points for RMP or MPM designations.   

Do you know someone who would be interested in joining NARPM?  Please invite them to a luncheon meeting in 2016.  Their luncheon payment will be credited toward their 2017 Denver Chapter membership dues.  They can bring a check for $65 with a copy of this article and join our local chapter!  We would love to meet them and share the benefits of NARPM Denver Chapter membership!

Why NARPM? The National Association of Residential Property Managers (NARPM) is the nation’s only professional organization specifically for those who manage residential rental properties. NARPM members are dedicated individuals that demonstrate a high level of commitment in the field of residential property management by continually augmenting their knowledge, skills, and professional growth through networking, education, and certification.

Just a few of the benefits of a NARPM Denver Chapter Membership:

  • FREE CE credit approved Commission Update Class
  • Advertise your available listings and your property management company on the Denver Chapter Website – it has over 1800 unique visitors each month!
  • Discounted monthly luncheon meeting  rate
  • Interesting and dynamic speakers at every luncheon meeting
  • Networking with Denver area property management professionals and affiliate professionals
  • Early notification of the hugely popular annual Property Management Conference held in Lakewood Colorado each spring

Susan Melton

2016 NARPM Denver Chapter President

Money Orders - Convenient but problematic - What you need to know

Web Admin - Tuesday, August 16, 2016


Mark Tschetter, Managing Partner, Tschetter Hamrick Sulzer

Clients have continually had situations involving money orders, most involving stolen money orders. When money orders are stolen, thieves wash them in an acid bath to erase the payee (the name of the apartment community), and turn them into blank bearer instruments. Thieves can cash or convert a stack of blank money orders into cash in a variety of ways.

Given that blank money orders are almost as good as cash, a large cache of money orders presents an irresistible target for thieves. If you have a payment drop box and you accept money orders, you’re going to get hit. It’s not a matter of if. It’s a matter of when. If hackers can breach Target’s payment system, thieves will eventually figure out how to steal the money orders from your drop box. For these reasons, we recommend not having a drop box. However, even if you eliminate an outside drop box, you are still vulnerable to theft if you accept money orders. Clients have reported money order thefts from offices. Fortunately, no client has reported an armed robbery of money orders.

On the one hand, you don’t accept cash for reasons, especially for security reasons. Even on a smaller community, large amounts of cash would encourage armed robbery. On the other hand, you accept money orders because money orders are a cash equivalent, i.e. nearly guaranteed or certified funds. You also accept money orders for the convenience of tenants who don’t have bank accounts. Only you can decide whether the benefits of accepting money orders outweighs the losses you are likely to incur from theft.

If you accept money orders, you should be prepared to deal with a host of issues that arise when money orders are stolen. The tenant’s rent was stolen out of a drop box, has the tenant paid their rent? If the tenant does not replace a stolen money order, can the community serve a rent demand? Does the tenant have to cooperate in tracing the stolen money order? Who bears the risk of loss for money orders stolen from the community’s drop box? Should I address this issue in my lease? If I can’t post the tenant for non-payment of rent, do I have any other legal rights to recover the stolen rent?

When rent is stolen from a drop box, landlords argue that the tenant hasn’t paid the rent because it was never received. A tenant delivers the rent (money order) when they voluntarily transfer possession to you by placing it in your drop box. Simultaneously, you receive delivery of the money order when it comes into your possession, i.e. when it is placed in your drop box. Almost every judge will hold that a tenant has delivered and paid the rent when they place the payment in a drop box.

Thus, the community bears the risk for any losses sustained due to theft of payments from an onsite rental drop box. The community also bears the risk of loss resulting when money orders are stolen from the community’s business office. You cannot successfully shift the risk of loss to the tenant if the money orders are stolen from your office. However, with a drop box, you can attempt to contractually shift the risk of loss back onto the tenant with appropriate lease language.

At least one court has held that lease language governed when a tenant’s rent payment was delivered. Based on this case, your lease could contain language that contractually “shifts the risk of loss” to the tenant. For example, your lease might say “for tenant’s convenience only, a rent drop box is available at the leasing office.  Tenant acknowledges that placement of payments into the drop box does not constitute payment delivery to landlord unless tenant’s payment is in the drop box when opened by landlord. Until delivery, tenant bears the risk of loss or theft of any payments put in the drop box.” However, with no Colorado legal precedent, there is no guarantee that a court will enforce a risk-shifting clause, and outcomes are determined by individual judges on a case-by-case basis.

Ultimately, even if a court does not uphold a risk-shifting clause, you may want to add it for several reasons. First, it may discourage tenants from fabricating that they paid and that their money order was stolen from the drop box. Second, it will discourage use of the drop box, and encourage payments at the office where money orders are much less likely to be stolen. Third, after a theft, tenants might repay their rent when you point out that risk of theft was on them. Fourth, tenants should be much more likely to cooperate in tracing stolen money orders.

It’s important to remember that without risk-shifting language, you cannot evict a tenant for nonpayment of rent if their money order was stolen from the drop box. This doesn’t mean you are without rights or options. Some tenants will falsely claim they put their rent in the drop box. Payment is a defense to an eviction action. The tenant has the burden to prove this. You don’t have to simply take their word. You still can evict, or would win an eviction case if the tenant cannot prove payment. If the tenant claims to have paid with a money order, the tenant would have to produce the money order receipt. The receipt can then be traced with the company issuing the money order.

While you can’t evict the tenant for non-payment of rent, you still have considerable leverage to get the tenant’s cooperation to replace the money order, or to get the tenant to pay the rent. Specifically, delivery of a money order (placing in the drop box) discharges the underlying obligation (the tenant’s rent payment); it does not discharge the tenant’s contractual obligations on the negotiable instrument (the check or money order used to pay the rent).

Most issuers of money orders will replace stolen money orders. Western Union issues a large number of money orders. Contrary to popular belief, Western Union does not have a thirty-day deadline for reissuing a stolen money order. However, whether it’s Western Union or any other money order issuer, replacement claims for stolen money orders should be made as soon as possible. Most drop box theft cases follow the same pattern. The great majority of tenants cooperate with the affected community, and stolen money orders are promptly re-issued.

However, there are always some tenants who will not cooperate. This reemphasizes the need for appropriate lease language. With appropriate drop box language, the tenant wouldn’t be able to take the position that it was the property’s problem. You should also consider adding lease language that the tenant agrees to promptly cooperate with you in tracing or replacing stolen funds. If your lease contains specific cooperation language, and the tenant fails to cooperate, you could evict the tenant for breach of a non-monetary covenant, i.e. failure to cooperate. If you evict for failure to cooperate, the issue of whether the rent was paid, and who bore the risk of the money order being stolen are non-issues. The only issue is whether the tenant cooperated with your investigation, which is much easier to prove.

Theft of money orders is common and widespread. We recommend eliminating all drop boxes. If you’re going to have a drop box, the drop box should be as secure as possible. A thief should not be able put a coat hanger into the box to fish out payments. You can request proof of delivery (that the tenant put the money order in the drop box), and request that the tenant cooperate in replacing the stolen money order by filing a claim with the issuing company or bank. Risk-shifting language (rent put into a drop box isn’t paid unless received) puts you in a much stronger position and has other advantages. However, risk-shifting language is not a guarantee that you will be successful in court. Risk-shifting language along with lease language requiring cooperation puts you in the strongest position to minimize losses from stolen money orders.

Even though the tenant’s underlying obligation to pay rent may be discharged when a money order is submitted to you, you can still make demand on the tenant to make good on the money order, and sue if the tenant does not. In some cases, you can legally seek payment (reimbursement) from banks involved in processing stolen money orders. However, in almost every stolen money order scenario we have been involved in, and we have been involved in dozens, it doesn’t make economic sense to sue the banks. Finally, if you accept money orders, you should understand that some losses are highly likely.

August Chapter Update

Web Admin - Tuesday, August 16, 2016

Hello NARPM Denver Chapter!

August is here! Have you started working on your wintertime rental property preventative maintenance? Our office starts this project in August to give us plenty of time to schedule those sprinkler and evaporative cooler shut downs before the first freeze. 

Be sure to sign up for the NARPM Denver Chapter August meeting.  Don’t miss an excellent opportunity to network with vendors and fellow property managers. 

Our nomination team is looking for property managers who would enjoy working with the Chapter volunteer leadership team as we continue to provide successful, professional events.  If you are thinking of volunteering just contact Susan Melton or Bill Martin.  Joining the leadership team is a fun and easy way to earn those much needed points for RMP or MPM designations.   

Thanks for taking the time to read this!  Let us know of any suggestions you have that may help or improve your NARPM experience.  Let’s work together to realize and appreciate the value of being a member of NARPM Denver Chapter.

Susan Melton

2016 NARPM Denver Chapter President

National Association of Residential Property Managers

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