Denver’s ban on source-of-income discrimination took effect on January 1, 2019.

The ordinance, which the Denver City Council approved back in August, prohibits a wide range of conduct in real estate transactions “based upon … source of income.”  Protected sources of income under the ordinance include government housing assistance, Social Security payments, veterans’ benefits, student loans, legal settlements, and court-ordered child support and alimony payments.  The income source must be both “lawful” and “verifiable” to be eligible for protection.  The new law applies to landlords, real estate agents, property managers, and mortgage lenders.  Property owners who rent a single unit are specifically exempt.

The complaint process will be handled by the Denver’s Agency for Human Rights and Community Partnerships.  An aggrieved party must file a complaint within 180 days of the allegedly discriminatory practice.  The respondent then has 30 days to file a response.  Thereafter, the City has 60 days to conduct an investigation and administrative hearing.  If the Agency determines that the respondent has unlawfully discriminated on the basis of source of income, the Agency can order the respondent to “remediate such discrimination” within 30 days, or if the unit (or a comparable unit) is no longer available, the Agency may impose a fine of up to $5,000.  The Agency may also order the respondent to pay “actual, verifiable” damages.  Either party can appeal to Denver District Court under Colorado Rule of Civil Procedure 106(a)(4).

Although Denver is the first municipality in Colorado to enact such a law, it joins 14 states and 65 cities that have already enacted similar prohibitions.  Courts interpreting these laws in other states have generally not accepted defenses based on preemption by federal regulations or administrative burden, and defenses involving purportedly legitimate business justifications, such as poor credit, have been closely examined for pretext.

A statute that have would prohibited source-of-income discrimination statewide passed the Colorado House last year but died in the Senate.  We’ll be tracking developments at the local and state levels closely.