Colorado § 38-38-305 - Lessee, easement holder, and installment land contract vendor considered as lienors - installment land contract vendee considered as an owner.

§ 38-38-305. Lessee, easement holder, and installment land contract vendor considered as lienors - installment land contract vendee considered as an owner.

(1) For the purposes of this article, a lessee of, or the holder of an easement encumbering, property shall be considered as a lienor, but without any lien amount, and shall be subject to all requirements in this article with respect to lienors. If a subsequent lienor redeems from the redemption of a lessee or easement holder, such subsequent lienor in acquiring said property takes the same subject to such lease or easement.

(1.5) (a) The notice to the lessee or lessees who have unrecorded possessory interests in the property being foreclosed as provided for by this article and article 37 of this title by virtue of any foreclosure of a mortgage, trust deed, or other lien or by virtue of an execution and levy shall be mailed to the lessee or lessees of a single-family residence or a multiple-unit residential dwelling. Such notice shall be in writing and shall be sent by regular mail. Notice is complete upon mailing to the lessee at the address of the premises or by addressing such notice to "Occupant" followed by the address.

(b) Nothing in this section shall affect any rights under this article of a lessee whose residential lease is recorded.

(2) For the purposes of this article, an installment land contract vendor of property shall be considered as a lienor for the unpaid portion of the purchase price, interest, and other amounts provided under the installment land contract and shall be subject to all requirements in this article with respect to lienors; but such installment land contract vendor shall not be considered as an owner as to any portion of such property.

(3) For the purposes of this article, an installment land contract vendee of property shall be considered as an owner except as to any portion of such property that such vendee may thereafter have transferred, as evidenced by a recorded instrument, and such vendee shall be subject to all requirements in this article with respect to owners.

(4) Repealed.

Source: L. 90: Entire article R&RE, p. 1667, § 2, effective October 1; (1.5) added, p. 1684, § 4, effective October 1. L. 2007: (4)(b) added by revision, pp. 1848, 1849, §§ 26, 28.

Editor's note: (1) This section is similar to former § 38-39-106, as it existed prior to 1990.

(2) Subsection (4)(b) provided for the repeal of subsection (4), effective January 1, 2008. (See L. 2007, pp. 1848, 1849.)

ANNOTATION

Law reviews. For article, "Foreclosure by Sale by Public Trustee of Deeds of Trust in Colorado", see 14 Dicta 5 (1936). For article, "Foreclosure by Sale by Public Trustee of Deeds of Trust in Colorado", see 28 Dicta 437 (1951). For article, "Forms Committee Presents Additional Standard Pleading Samples for Use in Foreclosure Through Public Trustee", see 29 Dicta 1 (1952).

Annotator's note. Since § 38-38-305 is similar to § 38-39-106 as it existed prior to the 1990 repeal and reenactment of this article and article 39, relevant cases construing that provision have been included in the annotations to this section.

An implied lease based on the terms of an earlier pre-foreclosure lease was created since the property owner/landlord accepted monthly payments from the tenant and did not renounce the prior agreement. Tanktech, Inc. v. First Interstate Bank, 851 P.2d 174 (Colo. App. 1992).

Because a property lessee is considered a lienor under this section, upon foreclosure of a senior security interest, any subordinate leases, liens, or encumbrances are extinguished once the applicable redemption period has expired. First Interstate Bank v. Tanktech, Inc., 864 P.2d 116 (Colo. 1993).

A right of redemption may not be severed from the property interest it serves. Backhart v. HTS Props., LLC, 981 P.2d 208 (Colo. App. 1998).

This section does not require an installment land contract vendor to foreclose upon default as a matter of law. Instead, the section describes when certain redemption rights and rights to cure a default exist. The section simply codifies previously existing equitable rights of redemption that were recognized by courts of equity. Paraguay Place-View Trust v. Gray, 981 P.2d 681 (Colo. App. 1999).

However, this does not mean that the provisions of this section have no application when there is a default in an installment land contract. When a default occurs in such a contract and the vendor seeks to obtain possession, the vendor may initiate a forcible entry and detainer (FED) action. Thereafter, a court may determine whether the vendor can proceed by way of FED action or, instead, must proceed by way of foreclosure. If the court requires foreclosure, the vendor must foreclose under the terms of article 38 and, under this section, the vendee has a right to cure and a right of redemption. Paraguay Place-View Trust v. Gray, 981 P.2d 681 (Colo. App. 1999).