Thought Leaders: Commercial landlords & property managers beware! Alleged discrimination may impede eviction

By Lee J. Morehead, Esq. - Otis and Bedingfield, LLC — 

On February 20, 2024, the Colorado Supreme Court ruled that a tenant could allege violations of the Colorado Fair Housing Act as a defense to an eviction proceeding. Previously, tenants had to countersue for the alleged violations, thus allowing the eviction process to proceed while the discrimination claim was later determined. Under this recent ruling, however, tenants can avoid eviction if the reasons for the eviction were discriminatory.

The Colorado Supreme Court’s decision allows commercial tenants to allege discrimination as a defense to eviction. When asserted, there is a higher likelihood that the eviction proceeding will:

(1) be transferred from the County Court to the District Court; and

(2) require a trial before the landlord can retake possession of the premises.

In either situation, if the landlord is represented by an attorney, the amount of fees will likely increase.

For instance, if a commercial tenant fails to pay rent or common area maintenance expenses, a landlord may initiate an eviction. The law provides that the commercial tenant must plead every defense they have available to them within the constraints of their lease agreement. A well-crafted commercial lease agreement will aim to mitigate most of a tenant’s defenses, with the goal of providing for a timely eviction proceeding in compliance with due process of law.

Commercial tenants can, and have, alleged discrimination as a defense, forcing eviction proceedings into District Court and requiring a trial. Because The Colorado Supreme Court’s decision is so recent, there are situations yet to be addressed and questions yet unanswered. 

If you are a commercial landlord or property manager, it would be advisable to consult with an experienced Business attorney to develop a strategic plan regarding the handling of potential tenant defenses, including lease drafting, property management, and the eviction process itself.