Colorado Real Estate Broker

Key Concepts

Composition and meetings of the Commission — The Division of Real Estate has a five-member Commission that meets bi-monthly to conduct rulemaking hearings, make policy decisions, consider licensing matters, review complaints, and take disciplinary action against real estate brokers. Rules are promulgated after notice and public hearings at which all interested parties may participate. The five members are three real estate brokers with not less than five years' experience in the real estate business in Colorado (one of whom has substantial experience in property management) and two representatives of the public at large. Members hold office for three years. (Page 33)

Division structure — The Division of Real Estate is part of the Department of Regulatory Agencies. The director is an administrative officer who executes the directives of the Commission and is given statutory authority in all matters delegated by the Commission. The Division is the licensing, regulation, and enforcement agency for real estate brokers, appraisers, mortgage loan originators, and subdivision developers, and it registers HOAs. (Page 33)

Key Concepts

Who can be licensed / license levels - "Real estate brokers' licenses may be granted to individuals, partnerships, limited liability companies, or corporations" — §12-10-203(6)(a), C.R.S. (Manual p. 52). The entity must designate a qualified, active broker responsible for management and supervision. - Three broker license levels: Associate Broker (Rule 1.6), Employing Broker (Rule 1.24), Independent Broker (Rule 1.29) (pp. 115–118). - "No person shall be licensed as a real estate broker under more than one name," and no one may conduct or promote a brokerage business except under the licensed name — §12-10-203(9), C.R.S. (p. 54). - Sole proprietors must hold an Independent or Employing Broker level license and must not adopt a trade name containing "corporation, partnership, limited liability company, limited, incorporated," or abbreviations — Rule 2.9.A–B (pp. 135–136). - Entity applications must certify Secretary of State registration/good standing, trade-name filing, and appointment of the Independent/Employing Broker — Rule 2.10.A (p. 136).

Key Concepts

Advertising (Rule 1.2, Page 115). "Advertise or Advertising" means the promotion, solicitation, or representation of Real Estate Brokerage Services requiring a License. It may include, but is not limited to, business cards, brochures, websites, signage, property flyers, mailings (paper or electronic), social media, letterhead, email signatures, and contract documents. A URL and an email address are not considered Advertising for purposes of Rule 6.10 so long as they are not directly used to promote or solicit Real Estate Brokerage Services.

Trade Names (Rule 1.56, Page 122). A Trade Name is the name a Brokerage Firm does business under other than its legal name. Any Trade Name used by a Brokerage Firm must be on file with the Commission and must be filed with the Colorado Secretary of State pursuant to § 7-71-101, C.R.S. A Trademark (logo/service mark) may be registered with the Secretary of State under § 7-70-102, C.R.S. (Rule 1.55).

Key Concepts

Water rights and prior appropriation - All water in Colorado is a resource owned by the public; a water right is the right to use a portion of the state's waters, not ownership of the water (Page 1082). Prior appropriation is recognized in the Colorado Constitution, Article XVI, Sections 5 and 6. - Under prior appropriation, water users do not share the burden of shortages: the more senior user may divert the full amount of his or her water right before the next junior user diverts any water (Page 1082). - The prior appropriation system is codified in the Water Right Determination and Administration Act of 1969, §§ 37-92-101, et seq., C.R.S. (Page 1084). A conditional water right requires the applicant to return to Water Court every six years to show reasonable diligence (Page 1085). - Colorado has seven water divisions, generally co-extensive with the seven major river basins originating in the state; each has its own Water Court with exclusive jurisdiction (Page 1086). Administration is by the Division of Water Resources…

Key Concepts

Standard Forms (Rule 7.1). Under § 12-10-403(4), C.R.S., a broker may complete Standard Forms when performing licensed activities as a Single Agent or Transaction-Broker. Rule 1.50 defines "Standard Form" as having the meaning pursuant to § 12-10-403(4), C.R.S. and as set forth in Rule 7.1 (Page 121). Types of Standard Forms (Pages 205–207): - Commission-Approved Form (7.1.A) — must be used when such a form exists and is appropriate. Listing brokers and firms using title companies to hold earnest money must have a completed Closing Instructions form signed by buyer and seller prior to depositing the funds with the title company. - Attorney Form (7.1.B) — usable only if no Commission-Approved Form exists or is appropriate; must state "This form has not been approved by the Colorado Real Estate Commission" and name the preparing attorney/law firm and the broker, employing broker, or brokerage firm for whom it was prepared. Not alterable except by filling blanks. - Client Form (7.1.C) — provided by a party for whom the broker acts as Single Agent…

Key Concepts

Definition of a Trust or Escrow Account (Rule 1.59, Page 122). Any checking, demand, passbook or statement account that has, at a minimum, these four elements: (A) the account is separate and contains only Money Belonging to Others; (B) the account is custodial and fiduciary; (C) all funds are available on demand; and (D) the account is held with a Recognized Depository. There is no interest requirement.

Recognized Depository (Rule 1.46, Page 121). Any bank, savings and loan association, or credit union that accepts deposits or shares insured by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA) respectively.

Money Belonging to Others (Rule 1.35, Page 119). Money accepted by the Broker or Brokerage Firm for deposit in the Trust or Escrow Account, including but not limited to money received in connection with Management Agreements, partnerships, limited liability companies, syndications, lease agreements, advance fee contracts, guest deposits for short term rentals, rental receipts, security deposits, earnest money deposits, or Money Belonging to Others received for any other purpose.…

Key Concepts

Who is responsible for the closing statement - Title companies normally conduct closings in Colorado; brokers, attorneys, or independent closing agents may also do so (Page 1309). Use of a title company does not relieve the employed designated broker or that broker's employing broker of responsibility for verifying accuracy (Page 1310). - Rules 6.14.A.2 and 6.19.A require brokers to provide complete and accurate closing statements to buyers and sellers in any transaction where the broker assists or acts in a real estate capacity. The designated listing broker and any designated buyer's broker must carefully review their respective statements even if they will not conduct the closing (Page 1310). - A designated broker who attends the closing must sign the Closing Statement and is primarily responsible for providing a proper Closing Statement to the party assisted or represented. A broker associate must deliver a copy to the employing broker immediately after closing (Page 1310). - If the designated broker cannot attend, the employing broker may designate another broker, and **both designated brokers assume…

Key Concepts

Default relationship. Colorado presumes a Transaction-Broker relationship unless the parties agree in writing to a different relationship (Rule 1.57, which gives "Transaction-Broker" the same meaning as § 12-10-402(8), C.R.S.). A Transaction-Broker assists one or more parties without being an agent or advocate for any party and must remain neutral (Rule 6.7, Page 183; CP-17, Page 279).

Single Agent. Rule 1.49 gives "Single Agent" the same meaning as § 12-10-402(6), C.R.S. — a broker representing one party with fiduciary duties. Per CP-17 (Pages 279–280), a Single Agent's duties "go beyond facilitation of the transaction as a neutral party" and require advocacy, fidelity, loyalty and other fiduciary duties. A Listing Contract with the "Agency" box checked is required before the broker performs the three (3) additional duties (§§ 12-10-405 and -406, C.R.S.) on top of the seventeen (17) uniform duties (§ 12-10-407, C.R.S.). CP-9 (Page 246) likewise states an agent must perform "the additional duties of seller's Agent as outlined in Section 6 of the Listing Contract in addition to the uniform duties."