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Law Offices of Ronald W. Rutz
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April 6, 1999: First Amendment Rights; "Due on Sale" Clause

Q: I thought this was a free country? If I call somebody a (expletive deleted), now I am a criminal? (Expletive deleted)!!!

A: The First Amendment does guarantee free speech but that does not mean all speech is protected. One widely known exception is the example of yelling "fire" in a crowded theater.

Here in Colorado the so-called ethic intimidation law does not make it a crime just to use inappropriate language but something more is needed than just words to violate the statute. Otherwise you are correct in reflecting that the law probably would be unconstitutional.

The prohibited verbiage must be intended to intimidate or harass. But in addition, one of three things must also be present: bodily injury occurs, or property associated with the hearer is harmed, or the hearer is put in reasonable fear of imminent lawless actions directed to his or her own person or property and the words would likely produce such a result. But look it up for yourself in 18-9-121 of the Colorado Revised Statutes.

I am not a constitutional scholar per se, nor am I a criminal attorney. But as confirmed by a number of District Attorneys and defense attorneys to whom I have talked, the law seems to be very narrow and not as broad as recent news stories have suggested.

But even though something is legal and protected by the Constitution, does that mean we should exercise those rights at the extreme end of the legal spectrum as you did in your Q?

Q: As an attorney, I really enjoy reading your column, but I can not say the same for your counterpart who writes those Q and As in the real estate section. There always seems to be at least one major error each week. The most serious was his advice to the seller to retain a 1% interest in the sold property to avoid having the loan called due and payable by the lender under the "due on sale" clause of the security instrument.

A: Keep in mind that the writer is based in California, so his answers are not intended to fit Colorado law.

Here in Colorado whether this technique would work depends upon the language in the deed of trust (or mortgage which is rarely used in Colorado), state law, and federal law. To be sure I got it right, I called several real estate attorneys both in and outside of Colorado to verify that there is nothing in either Colorado or federal law that supports the columnist's position. (If there is, please let me know.)

I also examined the language in both current and past Colorado deeds of trust forms but again I found nothing to support the columnist.

Thus my advice would be to consult with an attorney before relying on this 1% rule in structuring a sale here in Colorado.

And please lighten up a bit in reading the other column. Accept it for what it is entertainment and in the legal area as very general knowledge with a definite California accent.

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