Fair housing: federal and Colorado law, ADA, advertising

Bottom line: you may not treat people differently in housing because of who they are. Colorado's list is longer than the federal one. A violation can end your license, and a broker who violates or aids a violation of fair housing law must tell the Commission within 30 days (4 CCR 725-1 Rule 6.23.B).

The Federal Fair Housing Act

The Fair Housing Act (Title VIII of the Civil Rights Act of 1968, 42 U.S.C. 3601 et seq.) protects seven protected classes (groups of people the law shields from discrimination): race, color, religion, sex, national origin, familial status, and disability. Familial status means having children under 18 living with you, being pregnant, or being in the process of getting custody.

It covers sales, rentals, financing, advertising, brokerage and appraisals. Prohibited acts under 42 U.S.C. 3604 include refusing to sell or rent, changing terms or services, making discriminatory statements, falsely saying a home is unavailable, and (3604(e)) blockbusting. The law also bars retaliation against anyone who files a complaint or helps someone who did.

Federal exemptions

• Single-family home sold or rented by the owner who owns no more than three such homes, and who does not use a broker or discriminatory ads. (Limits on how often an owner not living there can sell.)
• Owner-occupied building of four or fewer units (sometimes called the "Mrs. Murphy" exemption).
• Religious organizations and private clubs may favor members for non-commercial lodging (but not on race).
• Housing for older persons: familial status does not apply to housing for those 62 or older, or where at least 80% of occupied units have a person 55 or older and the community follows rules showing that intent.

Three warnings. A broker never gets these exemptions. No exemption lets anyone run a discriminatory ad. And race discrimination is barred separately by the Civil Rights Act of 1866 (42 U.S.C. 1982) with no exemptions at all.

The big violations, in plain words

• Steering: guiding people toward or away from neighborhoods because of a protected class. "You will be more comfortable in that area" is a warning sign. Even well-meant steering is illegal.
• Blockbusting (panic selling): pushing owners to sell cheaply by claiming people of a protected class are moving in. Colorado bars it for profit (C.R.S. 24-34-502(1)(i)).
• Redlining: a lender, insurer or appraiser refusing or charging more for loans in a whole area, named for the red lines once drawn on maps, because of the people living there.
• Discriminatory advertising: any ad that says or implies a preference or limit. Do not write "perfect for a young couple," "no kids," "adults only," or "Christian neighborhood." You may describe the property ("2 bedrooms," "wheelchair accessible," "near a park"). Use words about the home, not about who should live there. Use the Equal Housing Opportunity logo. Colorado bars discriminatory ads for sale or rent (C.R.S. 24-34-502(1)(d)).

Disparate treatment vs disparate impact

Disparate treatment is intentional different treatment: a landlord quotes a family $2,150 and a single adult $2,000 for the same unit. Disparate impact (also called discriminatory effects) is a neutral policy that hurts a protected class far more than others and is not necessary for a real business need, even if no one meant harm. The Supreme Court upheld disparate-impact claims under the Fair Housing Act in the 2015 Inclusive Communities decision. HUD's rule is at 24 C.F.R. 100.500.

HUD guidance on sexual orientation and gender identity

In February 2021, HUD announced it would enforce the Fair Housing Act's ban on sex discrimination to cover sexual orientation and gender identity, following the Supreme Court's 2020 Bostock decision. Federal enforcement priorities can change, so treat the federal position as shifting. In Colorado it does not matter: state law names sexual orientation, gender identity and gender expression directly (below).

ADA and accessibility

The Americans with Disabilities Act (42 U.S.C. 12101 et seq.) is a separate law. Title III requires public accommodations (businesses open to the public: stores, offices, hotels, a brokerage's office, a rental leasing office) to be accessible and to make reasonable changes to policies. A private home is generally not a public accommodation, but a model home sales office or leasing office is. The Fair Housing Act has its own rules for housing:

• Reasonable accommodation: a change in a rule or service so a person with a disability has equal use. Example: an assigned parking space near the door for a tenant with a mobility disability, or allowing an assistance animal in a no-pets building. The housing provider generally pays the cost of the accommodation, may ask for reliable proof of the disability-related need when it is not obvious, and cannot charge a pet deposit for an assistance animal.
• Reasonable modification: a physical change to the unit, such as a ramp or grab bars. In private housing, the tenant normally pays for it, and the landlord may require the unit restored if reasonable.
• Design and construction: new multifamily buildings with four or more units first occupied after March 13, 1991 must meet accessibility rules.
• The ADA defines a service animal as a dog (and in limited cases a miniature horse) trained to do work for a person with a disability. Housing law is broader and can cover other assistance animals.

Colorado law: more protected classes

Colorado's Anti-Discrimination Act makes it an unfair housing practice to refuse to show, sell, rent or lease housing or otherwise deny housing "because of disability, race, creed, color, sex, sexual orientation, gender identity, gender expression, marital status, familial status, veteran or military status, religion, national origin, or ancestry" (C.R.S. 24-34-502(1)(a)(I)).

That is fourteen classes: disability, race, creed, color, sex, sexual orientation, gender identity, gender expression, marital status, familial status, veteran or military status, religion, national origin, ancestry. Beyond the federal seven, Colorado adds creed, sexual orientation, gender identity, gender expression, marital status, veteran or military status and ancestry.

Source of income (renters only). A person may not refuse to rent or lease, refuse to show, or treat a prospective tenant differently because of source of income (C.R.S. 24-34-502(1)(l)-(m)), nor advertise a limit based on it ((1)(n)). Public housing assistance is included. Exceptions: the source-of-income rules do not apply to a landlord with three or fewer units (C.R.S. 24-34-502(1.5)(a)); a landlord with five or fewer single-family rental homes and no more than five total rental units need not accept federal housing choice vouchers for those homes (C.R.S. 24-34-502(1.7)). SB23-184 (2023), Colorado General Assembly, effective 2023-08-07, restricts, with certain exceptions, what a landlord may consider or ask about a prospective tenant's income and credit history, and a landlord may not require annual income above 200% of the annual rent. The saved summary does not list the exceptions, so check the current C.R.S. 24-34-502 before you teach a credit-check rule. Do not teach checking every applicant as a permission until the exceptions are checked.

Other Colorado rules in the same section: no questions about a protected class ((1)(a)(I)); a lender may not ask either ((1)(b)); no honoring restrictive covenants ((1)(c)); no retaliation ((1)(e)); no refusal of access to a multiple listing service or broker organization on these grounds ((1)(h)); no false "not available" statement ((1)(j)). Veteran inquiries are allowed when needed to qualify someone for veteran or military housing (C.R.S. 24-34-502(1)(a)(II)). Colorado also has its own exemptions that echo the federal ones, including the owner-with-up-to-three-single-family-homes rule and the four-unit owner-occupied rule, with the same ban on using a broker or a discriminatory notice (C.R.S. 24-34-502(8)). A seller may still weigh legitimate, nondiscriminatory factors in choosing an offer (C.R.S. 24-34-502(10)(a)). Housing for older persons follows the 62+ / 55+ test with at least 80% of occupied units (C.R.S. 24-34-502(7)(b)).

Enforcement

A person may file a complaint with HUD within one year of the violation (42 U.S.C. 3610) or sue in court within two years (42 U.S.C. 3613). Colorado complaints go through the state civil rights process. Penalties can include actual damages, civil penalties, attorney fees and loss of a license.

Example with real numbers

A landlord rents a Boulder duplex unit for $2,000 a month. A family with two children applies; the landlord tells them the rent is $2,150 "because of wear and tear from kids."

1. Extra charge: $2,150 - $2,000 = $150 a month.
2. Over a 12-month lease: $150 x 12 = $1,800 more.
3. This is disparate treatment based on familial status, in the terms and conditions of a rental, which is illegal under the Fair Housing Act and under C.R.S. 24-34-502(1)(a)(I).
4. A neutral policy the landlord could use instead: the same $2,000 rent and the same security deposit for everyone.
5. A second tenant shows a housing voucher paying $1,900 of the rent. If the landlord owns more than three units and refuses based only on the voucher, that is a source-of-income violation under C.R.S. 24-34-502(1)(l). Credit and screening rules changed in 2023 (SB23-184 (2023), Colorado General Assembly, effective 2023-08-07, see above), so check the exceptions before you apply the same credit and screening to every applicant.

Reasonable modification example: a tenant using a wheelchair asks to install a $3,500 ramp. In private housing the tenant ordinarily pays the $3,500, while the landlord must allow it. A request for an assigned parking space is an accommodation; the landlord pays the small cost of reserving the space.