real estate broker license law · 2019. 8. 15. · nearly 50,000 real estate broker, appraiser, and...

CR1 and CR2 Required Reading Part Two

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Real Estate Broker License Law

I . Reason fo r I t s Ena c t men t

The Colorado Real Estate Broker L icense Law was passed to protect the people

of the State of Colorado. Through l i censing , the law seeks competency and

integr i ty on the part of those engaged in the real estate business. The law has

had the ef fect of ra is ing the general standing of the real estate business and has

helped to safeguard the interests of both the publ ic and those engaged in

the business.

I I . Wha t the Law Does No t Cove r

The law does not d ictate the eth ical standards that should be observed in the

real estate industry, or general ly of any trade, business, or profession. The law

imposes responsib i l i ty for one’s moral misconduct only indirect ly, through the

law of cr imes (publ ic wrongs) and of tor ts (pr ivate wrongs). As an example,

one entrusted wi th another ’s money may be held responsib le for i ts misuse in

two ways:

1. Through the cr ime of theft by deception, for which a person may be f ined

and imprisoned; and

2. Through the tort of conversion, for which a person may be required to

return the money and provide compensation for any harm caused by the

wrongful use of the r ightfu l owner’s money.

Codes of eth ics have been voluntar i ly adopted by var ious real estate

organizat ions as guid ing standards of h igh moral and eth ical pract ice. Adherence

to such codes is recommended to a l l who are l icensed to engage in real estate

business.

I I I . The C ommiss ion O f f i ce

The Divis ion of Real Esta te has a f ive-member Commission that meets b i -

monthly to conduct ru lemaking hear ings, make pol icy decis ions, consider l icensing

matters, review complaints, and take discip l inary act ion against real estate

brokers. Rules are promulgated after not ice and publ ic hearings at which a l l

in terested part ies may part i c ipate. The f ive Commission members consist of three

real estate brokers and two members of the publ ic. Commission members serve a

three-year term.


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The Divis ion of Real Estate is part of the Department of Regulatory Agencies

and is responsib le for budget ing, purchasing, and re lated management funct ions.

The director of the Div is ion is an administrat ive off icer who executes the

direct ives of the Commission and is g iven statutory author i ty in a l l matters

delegated by the Commission.

The Div is ion of Real Estate is the l icensing, regulat ion, and enforcement

agency for real estate brokers, appraisers, mortgage loan or ig inators, subdiv is ion

developers, and conservat ion easement holders. To become l icensed, indiv iduals

must comply with education and/or exper ienc e requirements, qual i fy for

reciproci ty, and/or pass a general and/or state port ion of the

l icensing exam.

The Div is ion ’s ob jec t i ves are to :

• Provide protect ion to consumers and other stakeholders

• Educate consumers on their r ights and promote consum er awareness

throughout the

State of Colorado

• Enforce state and federal laws, ru les, regulat ions, and standards and

impose discip l inary act ion when recommended

• L icense real estate brokers

• L icense real estate appraisers

• L icense mortgage loan originators

• Register t imeshares, raw land subdiv is ions developers and homeowners’

associat ions

• Cert i fy the holders of conservat ion easements

• Invest igate complaints

• Enforce compl iance with state and federal laws

• Impose recommended discip l inary act ions against l icensees

The Commission exercises i ts dut ies and author i t ies independently through the

fo l lowing programs or act ivit ies.


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A. The Ma st e r F i l e

The Divis ion staff records the histor ical and day-to-day information concerning

the l icensing status of employers, employees, corporat ions, l imi ted l iabi l i ty

companies and partnership ent i t ies, trade names, off ice locat ions, and

discip l inary act ions. The computer ized master f i le suppl ies publ ic in formation and

is used as evidence in lawsui ts conce rning real estate transact ions.

B . L i cens ing

The Licensing sect ion’s major responsib i l i ty is the data entry and upkeep of

near ly 50,000 real estate broker, appraiser, and mortgage loan originator

l icensing records, as wel l as registrat ion of subdiv is ion /t imeshare developers ,

homeowners’ associat ions and conservat ion easement holders. The Licensing

staff reviews and processes al l incoming appl icat ions, which are screened for

required qual i f icat ions, including education, exper ience, examinat ions, errors &

omission (E&O), and criminal h istory background checks. The Licensing sect ion

a lso issues l icense histor ies to l icensees who need to prove their credent ia ls to

other jur isdict ions.

Colorado recognizes real estate l icenses issued by al l other U.S. and

Canadian jur isdict ions if the l icensee in the other jur isdict ion has held that

l icense for 2 years or more. L icensing current ly administers th is program and

offers a l imi ted recogn i t ion program to these l icensees. The Div is ion a lso

reciprocates wi th most other appraisal jur isdict ions.

Appl icants with a past civi l judgment or cr iminal convict ion may request a

“pre l iminary advisory opinion” regarding the l ike l ihood of receiv ing a l icense

before complet ing the requirements to apply for a l icense (Commiss ion Rule A-

12). The Commission/board may issue ei ther a favorable or unfavorable opinion.

Both “pre l iminary advisory” appl icants and l icense applicants are subject to

pre- l icensing invest igat ions and f ingerpr int ing to safeguard the statutory mandate

for truth fu lness, honesty, and good moral character. (See §§ 12-61-102, -103(3), -

709(1), and -905(1) C.R.S) Al l appl icat ions that d isclose c iv i l or cr iminal v io lat ions

or any form of previous l icense discip l ine in any j ur isd ic t ion are reviewed and

invest igated thoroughly.

L icenses issued by the sect ion i nclude:

• Real estate broker


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• Corporate/LLC real estate brokerage

• Partnership real estate brokerage

• Temporary real estate broker

• Registered appraiser

• L icensed appraiser

• Cert i f ied resident ia l appraiser

• Cert i f ied general appraiser

• Temporary appraiser

• Mortgage loan originator

The Div is ion a lso reviews and r egisters:

• Raw ground subdiv is ion developers

• Timeshare and vacat ion c lub developers

• Condominium conversion developers

• Homeowners’ associat ions

• Conservat ion easement holders

Information on l icensing is located on the Div is ion of Real Estate websi te at:

http:/ /dora.colorado.gov/dre

C. En fo r ce m en t Se c t ion

The Real Estate Commission has the power upon its own motion to invest igate

any l icensee’s real estate act iv i t ies. I f a wr it ten complaint is f i led, the of f ice is

compel led to invest igate.

I f the complaint against the l icensee is of such a ser ious nature that i t may

resul t in d iscip l inary act ion against a l icensee, a hearing wi l l be held before an

administrat ive law judge. The judge is appointed by the Department of

Personnel and Administrat ion. The administrat ive law judge wil l make an init ia l

decis ion of revocation, suspension, censure, or d ismissal . Education courses,

probation, and f ines can also be mandated. I f wr i t ten object ions are not f i led wi th

the Commission wi th in 30 days, the in i t ia l decis ion becomes f inal . I f wr i t ten

object ions are f i led, the Commission may adopt the f indings and ini t ia l decision of


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the administrat ive law judge, modi fy the discip l inary act ion, or refer the matter

back for rehear ing. The Commission can also issue letters of admonishment in

instances where conduct does not warrant formal d iscip l inary proceedings.

This program also includes:

• Invest igat ion of appl icants

• Evaluat ion of complaints

• Invest igat ion of complaints

• Routine and invest igative audits

• Recommendations for d ismissal or d iscip l inary act ion

• Preparat ion and execution of subpoenas, and other legal documents

• Preparat ion of cases for formal hear ing, restra in ing orders, in junct ions,

or complaints for f i l ing wi th d istr ic t at torneys and local law

enforcement agencies

• Work ing wi th federa l agenc ies , e.g . , the Secur i t ies and Exchange

Commission or Housing and Urban Development, the Federal Bureau of

Invest igat ion, or the In ternal Revenue Service.

The Real Es tate Commission should not be confused wi th the Colorado

Associat ion of REALTORS®, which is a pr ivate trade organizat ion aff i l ia ted wi th

the National Associat ion of REALTORS® whose members are the only l icensees

author ized to use the registered trademark “REALTOR”®.

I V . L i ce n se La w

A . Par t 1 – B rok e rs

§ 12 -61 -101, C .R.S. Def in i t ions .

As used in th is part 1, unless the context otherwise requires:

(1) “Employing real estate broker” or “employing broker” means a broker

who is shown in real estate commission records as employing or engaging

another broker.


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(1.2) “HOA” or “homeowners’ associat ion” means an associat ion or uni t owners’

associat ion formed before, on, or after July 1, 1992, as part of a common

interest community as def ined in sect ion 38-33.3-103, C.R.S.

(1.3) “L imited l iabi l i ty company” shal l have the same meaning as i t is g iven in

sect ion 7-80-102 (7), C.R.S.

(1.5) “Option dealer” means any person, f i rm, partnership, l imi ted l iabi l i ty company,

associat ion, or corporat ion who, d i rect ly or indirect ly, takes, obta ins, or uses

an opt ion to purchase, exchange, rent, or lease real property or any interest

therein wi th the intent or for the purpose of buying, sel l ing, exchanging,

rent ing, or leasing said real property or interest therein to another or others

whether or not said opt ion is in that person’s or its name and whether or not

t i t le to said property passes through the name of said person, f i rm,

partnership, l imi ted l iabi l i ty company, associat ion, or corporat ion in connect ion

wi th the purchase, sa le, exchange, renta l , or lease of said real property or

in terest therein.

(1.7) “Partnership” includes, but is not l imi ted to, a registered l imi ted l iabi l i ty

partnership.

(2) (a) “Real estate broker” or “broker” means any person, f i rm, partnership, l imi ted

l iab i l i ty company, associat ion, or corpora t ion who, in considerat ion of

compensation by fee, commission, salary, or anyth ing of value or wi th the

intent ion of receiv ing or col lect ing such compensation, engages in or offers

or attempts to engage in, e i ther d i rect ly or indirect ly, by a continuing

course of conduct or by any s ingle act or transact ion, any of the

fo l lowing acts:

( I ) Se l l ing, exchanging, buying, rent ing, or leasing rea l es tate, or interest

there in , or improvements af f ixed thereon;

( I I ) Of fer ing to sel l , exchange, buy, rent, or lease real estate, or in terest

therein, or improvements aff ixed thereon;

( I I I) Sel l ing or offer ing to sel l or exchange an exist ing lease of real estate,

or interest therein, or improvements aff ixed thereon;

( IV) Negotiat ing the purchase, sale, or exchange of real estate, or in terest

therein, or improvements aff ixed thereon;


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(V) L ist ing, offer ing, at tempting, or agreeing to l is t real estate, or in terest

therein, or improvements aff ixed thereon for sale, exchange, rent, or

lease;

(VI) Auct ioning or offer ing, attempting, or agreeing to auct ion real estate, or

interest therein, or improvements aff ixed thereon;

(VII) Buying, sel l ing, offering to buy or sel l, or otherwise deal ing in

options on real estate, or interest therein, or improvements aff ixed

thereon or act ing as an “opt ion dealer”;

(VI I I) Performing any of the foregoin g acts as an employee of, or in behal f of,

the owner of real estate, or in terest therein, or improvements aff ixed

thereon at a salary or for a fee, commission, or other considerat ion;

( IX) Negotiat ing or attempting or offer ing to negotiate the l is t ing, sale,

purchase, exchange, or lease of a business or business opportuni ty or

the goodwi l l thereof or any interest therein when such act or transact ion

involves, d i rect ly or indirect ly, any change in the ownership or interest in

real estate, or in a leasehold interest or estate, or in a business or

business opportuni ty which owns an interest in real estate or in a

leasehold unless such act is performed by any broker- dealer l icensed

under the provis ions of ar t ic le 51 of t i t le 11, C.R.S., who is actual ly

engaged general ly in the business of offer ing, sel l ing, purchasing, or

trading in secur i t ies or any off icer, partner, salesperson, employee, or

other author ized representat ive or agent thereof;

(X) Sol ic i t ing a fee or valuable considerat ion from a prospect ive tenant for

furn ishing information concerning the avai lab i l i ty of real property,

including apartment housing which may be leased or rented as a pr ivate

dwel l ing, abode, or p lace of residence. Any person, f irm, partnership,

l imited l iabi l i ty company, assoc iat ion, or corporat ion or any employee

or author ized agent thereof engaged in the act of sol ic i t ing a fee or

valuable considerat ion from any person other than a prospect ive tenant

for furn ishing information concerning the avai labi l i ty of real property,

inc luding apartment housing which may be leased or rented as a pr ivate

dwel l ing, abode, or p lace of residence, is exempt from this def in i t ion of

“ real estate broker” or “broker” . This exemption appl ies only in respect


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to the furn ishing of information concerning the avai labi l i ty of real

property.

(b) “Real estate broker” does not apply to any of the fol lowing:

( I ) Any at torney - i n - fac t act ing wi thout compensation under a power of

attorney, duly executed by an owner of real estate, author iz ing the

consummation of a real estate transaction;

( I I ) Any publ ic of f ic ia l in the conduct of h is or her off ic ia l dut ies;

( I I I ) Any receiver , t rustee, admin is trator , conservator , executor , o r guardian

act ing under

proper authorizat ion;

( IV) Any person, f i rm, partnersh ip , l imi t ed l i ab i l i t y company , o r associa t ion

act ing personal ly or a corporat ion act ing through its off icers or

regular salar ied employees, on behal f of that person or on its own

behal f as pr incipal in acquir ing or in negotiat ing to acquire any

interest in real estate;

(V) An at torney-at - l aw in connect ion wi th h is or her representat ion of

c l ients in the pract ice of law;

(VI) Any person, f i rm, partnersh ip , l imi ted l iab i l i ty company , associat ion , or

corporat ion , or any employee or author ized agent thereof, engaged in

the act of negotiat ing, acquir ing, purchasing, assigning, exchanging,

sel l ing, leasing, or deal ing in oi l and gas or o ther mineral leases or

in terests therein or other severed mineral or royalty interests in real

property, including easements, r ights -of-way, permits, l icenses, and

any other in terests in real property for or on behal f of a th i rd party,

for the purpose of, or faci l i t ies re lated to, in t rastate and interstate

p ipel ines for o i l , gas, and other petro leum products, f low l ines, gas

gather ing systems, and natural gas storage and distr ibut ion;

(VI I ) A natural person act ing personal ly wi th respect to property owned or

leased by that person or a natural person who is a general partner of a

partnersh ip , a manager of a l imi ted l iabi l i ty company , or an owner o f twenty

percent or more of such partnership or l imited l iabi l i ty company, and

author ized to sell or lease property owned by such partnership or


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l imi ted l iabi l i ty company, except as provided in subsect ion (1.5) of

th is sect ion;

(VII I) A corporat ion with respect to property owned or leased by i t , act ing

through its off icers or regular salar ied employees, when such acts

are incidental and necessary in the ordinary course of the

corporat ion’s business activit ies of a non-real estate nature (but only

if the corporat ion is not engaged in the business of land

transact ions), except as provided in subsect ion (1.5) of this sect ion.

For the purposes of this subparagraph (V II I) , the term “off icers or

regular salar ied employees ” means persons regular ly employed

who derive not less than seventy-f ive percent of their

compensation from the corporat ion in the form of salar ies.

( IX) A pr incipal o f f i cer o f any corpora t ion with respect to property owned by it

when such property is located wi th in the state of Colorado and when

such pr incipal off icer is the owner of twenty percent or more of the

outstanding stock of such corporat ion, except as provided in

subsect ion (1.5) of this sect ion, but this exemption does not

include any corporat ion sel l ing previously occupied one -fami ly and

two-fami ly dwell ings;

(X) A sole propr i e tor , corp orat ion , par tn ersh ip , o r l imi t ed l i ab i l i t y company ,

act ing through its off icers or partners, or through regular salar ied

employees, with respect to property owned or leased by such sole

propr ietor, corporat ion , partnership, or l imi ted l iabi l i ty company on

which has been or wil l be erected a commercia l , industr ia l , or

re s iden t ia l bu i ld ing wh ich has no t been prev ious ly occup ied and where the

cons idera t ion pa id fo r such p roper t y i nc lud es t he co s t o f su ch bu i l d in g , p aya b le ,

le ss de po s i t o r d o wn p a ym en t , a t t he t ime o f co n ve yan ce o f su ch prope r ty and

bu i ld ing ;

(XI)(A) A corporat ion, par tnersh ip , or l imited l iab i l i ty company act ing

through its off icers, partners, managers, or regular ly salaried

employees receiv ing no addi t ional compensation therefor, or its

whol ly owned subsid iary or off icers, partners, managers, or

regular salar ied employees thereof receiv ing no addi t ional

compensation, with respect to property located in Colorado which


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is owned or leased by such corporat ion, partnership, or l imi ted

l iabil i ty company and on which has been or wi l l be erected a

shopping center , of f ice bui lding , or industr ia l park when such

shopping center, off ice bui ld ing, or industr ia l park is sold, leased,

or otherwise offered for sale or lease in the ordinary course of

the business of such corporat ion, partnership, l imited l iabi l i ty

company, or whol ly

owned subsidiary.

(B) For the purposes of this subparagraph (X I), “shopping center”

means land on which bui ld ings are or wi l l be constructed which

are used for commercia l and off ice purposes around or adjacent

to which off -street parking is provided; “off ice bui ld ing” means a

bui ld ing used pr imari ly for off ice purposes; and “ industr ia l park”

means land on which bui ld ings are or wi l l be constructed for

warehouse, research, manufactur ing, processing, or

fabricat ion purposes.

(XI I ) A regular l y sala r i ed emp loyee of an owner of an apartment bui ld ing or

complex who acts as an on-s i te manage r of such an apartment bui ld ing

or complex. This exemption appl ies only in respect to the customary

dut ies of an on-site manager performed for h is or her employer.

(XII I) A regular l y sa lar i ed employee o f an owner o f condomini um un i ts who ac ts as

an on -s i te manager of such uni ts. For purposes of this subparagraph

(X I I I) only, the term “owner” includes a homeowners ’ assoc ia t ion

formed and act ing pursuant to its recorded condominium declarat ion

and bylaws. This exemption appl ies only in respect to the customary

dut ies of an on -si te manager performed for h is or her employer .

(XIV) A real es ta te broker l i censed in another s ta te who receives a share of a

commission or f inder ’s fee on a cooperat ive transact ion from a

l icensed Colo rado real estate broker;

(XV) A sole propr i e tor , corp orat ion , par tn ersh ip , o r l imi t ed l i ab i l i t y company ,

act ing through its off icers, partners, or regular ly salar ied employees,

wi th respect to property located in Colorado, where the purchase r of

such property is in the business o f developing land for resident ia l ,

commercial , or industr ia l purposes;


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(XVI) Any person, f i rm, partnersh ip , l imi ted l iabi l i ty company , associat ion , o r

corporat ion , or any employee or author ized agent thereof, engaged in

the act of negotiat ing, purchasing, assigning, exchanging, sel l ing,

leasing, or acquir ing r ights -of-way, permits, l icenses, and any other

in terests in real property for or on behal f of a th i rd party for the

purpose of, or faci l i t ies re lated to:

(A) Telecommunicat ion l ines;

(B) Wire less communicat ion fac i l i t ies ;

(C) CATV;

(D) Electr ic generat ion, transmission, and distr ibut ion l ines;

(E) Water d iversion, col lect ion, d istr ibut ion, treatment, and storage

or use; and

(F) Transporta t ion, so long as such person, f irm, partnership,

l imi ted l iabi l i ty company, associat ion, or corporat ion, including

any employee or author ized agent thereof, does not represent

any d isplaced person or ent i ty as an agent thereof in the

purchase, sale, or exchange of real estate, or an interest

therein, result ing f rom resident ia l or commercia l re locat ions

required under any transportat ion project, regardless of the

source of publ ic funding.

§ 12 -61 -102, C .R.S. L icense requ i red .

I t is unlawful for any person , f i rm, partnership, l imi ted l iabi l i ty company,

associat ion, or corporat ion to engage in the business or capaci ty of real estate

broker in th is state wi thout f i rst having obta ined a l icense from the real estate

commission. No person shall be granted a l icense unt i l such person establ ishes

compl iance with the provis ions of this part 1 concerning educat ion, exper ience,

and test ing; truthfu lness and honesty and otherwise good moral character; and, in

addi t ion to any other requirements of this sect ion, competency to transact the

business of a real estate broker in such manner as to safeguard the interest of

the publ ic and only after sat isfactory proof of such quali f icat ions, together wi th the

appl icat ion for such l icense, is f i led in the of f ice of the commission. In determining

such person’s character, the real estate commission shall be governed by

sect ion 24-5-101, C.R.S.


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§ 12 -61 -103, C .R.S. App l i ca t i on f o r l i cense – ru les .

(1) (a) Al l persons desir ing to become real estate brokers shal l apply to the

real estate commission for a l icense under the provis ions of th is part 1.

Appl icat ion for a l icense as a real estate broker shal l be made to the

commission upon forms or in a manner prescr ibed by it .

(b) ( I) Pr ior to submitt ing an appl icat ion for a l icense pursuant to

paragraph (a) of this subsect ion (1), each appl icant shal l submit a

set of f ingerpr ints to the Colorado bureau of invest igat ion for the

purpose of conduct ing a state and national f ingerpr int -based cr iminal

h istory record check ut i l iz ing records of the Colorado bureau of

invest igat ion and the federal bureau of invest igat ion. The appl icant

shall pay the fee establ ished by the Colorado bureau of

invest igat ion for conduct ing the f ingerpr int -based cr iminal h istory

record check to the bureau. Upon complet ion of the cr iminal history

record check, the bureau shal l forward the resul ts to the real estate

commission. The real estate commission may acquire a name-based

cr iminal h istory record check for an appl icant who has twice

submitted to a f ingerpr int-based c r iminal h is to ry record check and

whose f ingerpr in ts are unc lass i f iable . (Ed. Note : See Rule A-16)

( I I ) For purposes of th is paragraph (b), “appl icant” means an indiv idual ,

or any person designated to act as broker fo r any partnership,

l imi ted l iabi l i ty company, or corporat ion pursuant to subsect ion (7) of

th is sect ion.

(2) Every real estate broker l icensed under th is part 1 shal l mainta in a p lace of

business wi th in th is state, except as provided in sect ion 12-61-107. In case

a real estate broker mainta ins more than one place of business with in the

state, the broker shal l be responsib le for supervis ing a l l l icensed act iv i t ies

or ig inat ing in such off ices.

(3) The commission is author ized by this sect ion to require and procure any

such proof as is necessary in reference to the truthfu lness, honesty, and

good moral character of any appl icant for a real estate broker ’s l i cense or,

if the applicant is a partnership, l imi ted l iabi l i ty company, or corporat ion, of

any partner, manager, d i rector, of f icer, member, or stockholder if such


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person has, e i ther d i rect ly or indirect ly, a substant ia l in terest in such

appl icant pr ior to the issuance of such l icense.

(4) (a) An appl icant for a broker ’s l icense shal l be at least e ighteen years of

age. The appl icant must furn ish proof sat is factory to the commission that

the appl icant has ei ther received a degree from an accredi ted degree-

grant ing col lege or university wi th a major course of study in real estate

or has successfu l ly completed courses of study, approved by the

commission, at any accredi ted col lege or universi ty or any pr ivate

occupational school that has a cert i f icate of approval from the private

occupational school d iv is ion in accordance wi th the provis ions of art ic le

59 of this t it le or that has been approved by the commission or

l icensed by an off ic ia l state agency of any other state as fol lows:

( I) Forty-e ight hours of c lassroom instruct ion or equivalent

correspondent hours in real estate law and real estate pract ice; and

( I I) Forty-e ight hours of c lassroom instruct ion or equivalent

correspondent hours in understanding and preparat ion of Colorado

real estate contracts; and

( I I I ) A tota l of seventy-two hours of instruct ion or equivalent

correspondence hours from the fo l lowing areas of study: (Ed. Note:

See also Rule A-17)

(A) Trust accounts and record-keeping;

(B) Real estate closings;

(C) Current legal issues; and

(D) Pract ical applicat ions.

(b) An appl icant for a broker ’s l icense who has been l icensed as a real

estate broker in another jur isd ict ion shal l be required to complete only

the course of study compris ing the subject matter areas descr ibed in

subparagraphs (I I) and ( I I I ) (B) of paragraph (a) of th is subsect ion (4).

(c) An appl icant for a broker ’s l icense who has been l icensed as a real

estate salesperson in another jur isd ict ion shal l be required to complete

on ly the course of s tudy requi red in subparagraphs ( I I ) and ( I I I ) of

paragraph (a) of th is subsect ion (4).


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(d) (Deleted by amendment, L. 96 , p. 414, § 2, effec t ive January 1, 1997.) (5)

(Deleted by amendment, L. 96, p. 414, § 2, effect ive January 1, 1997.)

(6) (a) The appl icant for a broker ’s l icense shal l submit to and pass an

examinat ion designated to determine the competency of the appl icant

and prepared by or under the supervis ion of the real estate commission

or its designated contractor. The commission may contract with an

independent test ing service to develop, administer, or grade

examinat ions or to administer l icensee records. The contract may al low

the test ing service to recover the costs of the examinat ion and the

costs of administer ing exam and l icense records from the appl icant. The

commission may contract separate ly for these funct ions and al low

recovered costs to be col lected and reta ined by a single contractor for

d istr ibut ion to other contractors . The commission shal l have the

author i ty to set the minimum passing score that an appl icant must

receive on the examinat ion, and said score shal l ref lect the minimum

level of competency required to be a broker. Said examinat ion shall be

given at such t imes and places as the commission prescr ibes. The

examinat ion shal l include, but not be l imi ted to, ethics, reading,

spel l ing, basic mathematics, pr incip les of land economics, appraisal ,

f inancing, a knowledge of the statutes and law of this state re lat ing to

deeds, trust deeds, mortgages, l is t ing contracts, contracts of sale, bi l ls

of sale, leases, agency, brokerage, trust accounts , c losings, secur i t ies ,

the provis ions of this part 1, and the rules of the commission. The

examinat ion for a broker ’s l icense shal l a lso include the preparat ion of a

real estate c losing statement.

(b) An appl icant for a broker ’s l icense who has held a real estate l icense in

another jur isd ict ion that administers a real estate broker ’s examinat ion

and who has been l icensed for two or more years pr ior to apply ing for a

Colorado l icense may be issued a broker ’s l icense i f the appl icant

establ ishes that he or she possesses credentia ls and qual i f icat ions that

are substant ively equivalent to the requirements in Colorado for

l icensure by examinat ion.

(c) In addi t ion to al l other appl icable requirements, the fo l lowing provis ions

apply to brokers that did not hold a current and val id broker ’s l icense on

December 31, 1996:


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( I) No such broker shal l engage in an independent brokerage pract ice

wi thout f i rst having served act ively as a real estate broker for at

least two years. The commission shal l adopt ru les requir ing an

employing broker to ensure that a h igh level of supervis ion is

exercised over such a broker dur ing such two -year per iod . (Ed. Note :

See Rule E-32)

( I I) No such broker shal l employ another broker wi thout f i rst having

completed twenty -four c lock hours of instruct ion, or the equivalent in

correspondence hours, as approved by the commission, in brokerage

administrat ion.

(7) (a) Real estate brokers’ l icenses may be granted to indiv iduals,

partnerships, l imi ted l iabi l i ty companies, or corporat ions. A partnership,

l imi ted l iabi l i ty company, or corporat ion, in i ts appl icat ion for a l icense,

shall designate a quali f ied, act ive broker to be responsib le for

management and supervis ion of the l icensed act ions of the partnership,

l imited l iabil i ty company, or corporat ion and al l l icensees shown in the

commission’s records as being in the employ of such ent i ty. The

appl icat ion of the partnership, l imi ted l iabi l i ty company, or corporat ion

and the appl icat ion of the broker designated by it shal l be f i led wi th the

real estate commission.

(b) No l icense shal l be issued to any partnership, l imi ted l iabi l i ty company,

or corporat ion unless and unt i l the broker so designated by the

partnership, l imi ted l iabi l i ty company, or corporat ion submits to and

passes the examinat ion required by this part 1 on behal f of the

partnership, l imited l iabi l i ty company, or corporat ion. Upon such

broker ’s successfu l ly passing the examinat ion and upon compl iance

with al l other requirements of law by the partnership, l imited l iabi l i ty

company, or corporat ion, as wel l as by the designated broker, the

commission shal l issue a broker ’s l icense to the partnership, l imi ted

l iabi l i ty company, or corporat ion, which shal l bear the name of such

designated broker, and thereupon the broker so designated shal l

conduct business as a real estate broker only th rough the said

partnership, l imi ted l iabi l i ty company, or corporat ion and not for the

broker ’s own account.


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(c) I f the person so designated is refused a l icense by the real estate

commission or ceases to be the designated broker of such partnership,

l imi ted l iabi l i ty company, or corporat ion, such ent i ty may designate

another person to make appl icat ion for a l icense. I f such person

ceases to be the designated broker of such partnership, l imited

l iabi l i ty company, or corporat ion, the director may issue a temporary

l icense to prevent hardship for a per iod not to exceed ninety days to the

l icensed person so designated. The director may extend a temporary

l icense for one addi t ional per iod not to exceed ninety days upon

proper appl icat ion and a showing of good cause; if the director refuses,

no further extension of a temporary l icense shal l be granted except by

the commission. If any broker or employee of any such partnership,

l imited l iabi l i ty company, or corporat ion, other than the one designated

as provided in th is sect ion, desires to act as a real estate broker, such

broker or employee shal l f i rst obta in a l icense as a real estate broker as

provided in this sect ion and shal l pay the regular fee therefor. (Ed. Note :

See Rule A-26)

(8) The broker designated to act as broker for any partnership, l imi ted l iabi l i ty

company, or corporat ion is personal ly responsib le for the handl ing of any

and all earnest money deposi ts or escrow or trust funds received or

d isbursed by said par tnership , l imi ted l iabi l i ty company, or corporat ion. In

the event of any breach of duty by the said partnership, l imi ted l iabi l i ty

company, or corporat ion as a f iduciary, any person aggrieved or damaged

by the said breach of f iduciary duty shal l have a cla im for relief against

such partnership, l imi ted l iabi l i ty company, or corporat ion, as wel l as

against the designated broker, and may pursue said cla im against the

partnership, l imi ted l iabi l i ty company, or corporat ion and the designated

broker personal ly. The said broker may be held responsib le and l iable for

damages based upon such breach of f iduciary duty as may be recoverable

against the said partnership, l imi ted l iabi l i ty company, or corporat ion, and

any judgment so obtained may be enforced joint ly or several ly against said

broker personal ly and the said partnership, l imi ted l iabi l i ty company,

or corporat ion.

(9) No l icense for a broker registered as being in the employ of another broker

shal l be issued to a partnership, a l imi ted l iabi l i ty company, or a


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corporat ion or under a f ic t i t ious name or trade name; except that a marr ied

woman may elect to use her birth name.

(10) No person shal l be l icensed as a real estate broker under more than one

name, and no person shal l conduct or promote a real estate brokerage

business except under the nam e under which such person is l icensed. (Ed.

Note: See also Rule C-19)

(11) Repealed.

(12) A l icensed attorney shal l take and pass the examinat ion referred to in this

sect ion after having completed twelve hours of c lassroom instruct ion or

equivalent correspondent hours in trust accounts, record -keeping, and real

estate closings. (Ed. Note: A t to rney may be l icensed a t any bar)

§ 12 -61 -103.5 , C .R.S. T rans i t i ona l p rov i s i ons – ho lde rs o f ex i s t i ng sa lespe rson ’ s

l i censes. (Repea led )

§ 12 -61 -103.6 , C .R.S. E r rors and omiss ions insurance – ru les .

(1) Every l icensee under this part 1, except an inact ive broker or an attorney

l icensee who mainta ins a pol icy of profess ional malpract ice insurance that

provides coverage for errors and omissions for their act iv i t ies as a l icensee

under th is part 1, shal l mainta in errors and omissions insurance to cover a l l

act iv i t ies contemplated under parts 1 to 8 of th is art ic le. The div ision of

real estate shal l make the errors and omissions insurance avai lable to a l l

l icensees by contract ing wi th an insurer for a group pol icy after a

competi t ive b id process in accordance wi th art ic le 103 of t i t le 24, C.R.S. A

group pol icy obta ined by the division of real estate must be avai lable to all

l icensees wi th no r ight on the part of the insurer to cancel a l icensee. A

l icensee may obtain errors and omissions insurance independently if the

coverage compl ies wi th the minimum requirements establ ished by the

d iv is ion of real estate.

(2) (a) If the div is ion of real estate is unable to obta in errors and omissions

insurance coverage to insure all l icensees who choose to part ic ipate in

the group program at a reasonable annual premium, as determined by

the d iv is ion of real estate, a l icensee shal l independently obta in the

errors and omiss ions insurance required by th is sect ion.


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(b) The div is ion of real estate shal l so l ic i t and consider in formation and

comments from interested persons when dete rmining the reasonableness

of annual premiums.

(3) The div is ion of real estate shal l determine the terms and condi t ions of

coverage required under this sect ion based on rules promulgated by the

commission. The commission shal l not i fy each l icensee of the required terms

and condi t ions at least thirty days before the annual premium renewal date

as determined by the commission. Each l icensee shal l f i le a cert i f icate of

coverage showing compl iance wi th the required terms and condi t ions wi th

the commission by the annual premium renewal date, as determined by the

d iv is ion of real estate.

(4) In addi t ion to a l l o ther powers and dut ies conferred upon the commission by

th is art ic le, the commission shal l adopt such rules as i t deems necessary or

proper to carry out the prov is ions of th is sect ion . (Ed. Note: See Rule D-14)

(5) (Deleted by amendment, L. 2008, p . 497, § 4, effec t ive Apr i l 17, 2008.)

§ 12 -61 -104, C .R.S . L icenses – issuance – content s – d isp lay .

(1) The commission shal l make avai lable for each l icensee a l icense in such

form and size as said commission shal l prescr ibe and adopt. The real

estate l icense shal l show the name of the l icensee and shal l have

imprinted thereon the seal, or a facsimi le, of the department of regulatory

agencies and, in addi t ion to the foregoing, shal l conta in such other matter

as said commission shal l prescribe.

(2) and (3) (Deleted by amendment, L. 2001, p. 24, § 2, effect ive March 9, 2001.)

§ 12 -61 -105, C .R.S . Commiss ion – compensa t ion – immun i ty – sub jec t

to te rmina t ion .

(1) There shal l be a commission of f ive members, appointed by the governor,

which shal l administer parts 1, 3, and 4 of this art ic le. This commission

shal l be known as the real estate commission, a lso referred to in th is part 1

as the “commission”, and shal l consist of three real estate brokers who

have had not less than f ive years’ exper ience in the real estate business

in Colorado and two representat ives of the publ ic at large. Members of the

commission shal l hold off ice for a per iod of three years. Upon the death,

resignat ion, removal , or otherwise of any member of the commission, the


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governor shal l appoint a member to f i l l out the unexpired term. The

governor may remove any member for misconduct , neglect of duty,

or incompetence.

(2) Each member of the commission shal l receive the same compensation and

re imbursement of expenses as those provided for members of boards and

commissions in the div is ion of professions and occupations pursuant to

sect ion 24-34-102 (13), C.R.S. Payment for al l such per diem

compensation and expenses shal l be made out of annual

appropr iat ions f rom the div is ion of real estate cash fund provided

for in sect ion 12-61-111.5.

(2.5) Members of the commission, consul tants, expert wi tnesses, and

complainants shal l be immune from sui t in any c iv i l act ion based upon any

d iscip l inary proceedings or other off ic ia l acts they performed in good faith.

(3) No real estate broker ’s l icense shal l be denied, suspended, or revoked

except as determined by a major i ty vote of the members of the

commission.

(4) The provis ions of sect ion 24-34-104, C.R.S. , concerning the terminat ion

schedule for regulatory bodies of the state unless extended as provided in

that sect ion, are appl icable to the real estate commission created by

th is sect ion.

§ 12-61-106, C .R.S. D iv is ion o f rea l es ta te – D i rec tor , c l e rks , and ass is tan ts .

(1) The executive d i rector of the department of regulatory agencies is

author ized by this sect ion to employ, subject to the provis ions of the state

personnel system laws of the state, a d irector of the div is ion of real estate,

who in turn shal l employ such at torneys, deputies, invest igators, c lerks,

and assistants as are necessary to d ischarge the dut ies imposed by parts 1,

3, and 4 of this art ic le. The div is ion of real estate, which shal l be a

div is ion in the department of regulatory agencies, and the director of the

div is ion shal l exercise their powers and perform their dut ies and funct ions

under the department of regulatory agencies as i f they were transferred to

the department by a type 2 transfer.

(2) I t is the duty of the d i rector, personal ly, or h is designee to a id in the

administrat ion and enforcement of parts 1, 3 , and 4 o f this art ic le and in

the prosecution of all persons charged with v io lat ing any of their


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provis ions, to conduct audits of business accounts of l icensees, to perform

such dut ies of the commission as the commission prescr ibes, and to act in

behal f of the commission on such occasions and in such c i rcumstances as

the commission directs.

§ 12 -61 -107, C .R.S. Res ident l i censee – non res iden t l i censee – conse nt t o

serv ice .

(1) A nonresident of the state may become a real estate broker in this state

by conforming to al l the condi t ions of this part 1; except that the

nonresident broker shal l not be required to mainta in a place of business

wi th in this state if that broker mainta ins a def in i te p lace of business in

another state.

(2) I f a broker has no registered agent registered in this state , such registered

agent is not located under its registered agent name at i ts registered agent

address, or the registered agent cannot wi th reasonabl e d i l igence be

served, the broker may be served by registered mail or by cert i f ied mail,

return receipt requested, addressed to the ent i ty at its pr incipal address.

Service is perfected under th is subsect ion (2) at the ear l iest of :

(a) The date the broke r receives the process, not ice, or demand;

(b) The date shown on the return receipt, i f s igned by or on behal f of the

broker; or

(c) Five days af ter mail ing.

(3) Al l such appl icat ions shal l conta in a cert i f icat ion that the broker is

author ized to act for

the corporat ion.

§ 12 -61 -108, C .R.S. L is t o f l i censees – pub l i ca t ions .

The commission shal l mainta in a record of the names and addresses of a l l

l icensees l icensed under the provis ions of parts 1 and 4 of this art ic le, together

with such other information re lat ive to the enforcement of said provis ions as

deemed by the commission to be necessary. Publ icat ion of the record and of any

other in formation c i rculated in quanti ty outs ide the execut ive branch shal l be in

accordance wi th the provis ions of sect ion 24-1-136, C.R.S.


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§ 12 -61-108 .5 , C.R.S. Compi la t ion and publ i cat ion o f pass ing ra tes per

educat ional i ns t i tu t ion fo r rea l es ta te l i censu re

examina t i ons – ru les .

(1) The commission shal l have the author i ty to obta in information from each

educational inst i tu t ion author ized to offer courses in real estate for the

purpose of compi l ing the number of appl icants who pass the real estate

l icensure examinat ion from each educational inst i tu t ion. The information

shal l include the name of each student who attended the inst i tu t ion and a

statement of whether the student completed the necessary real estate

courses required for l icensure. The commission shal l have access to such

other in formation as necessary to accompl ish the purpose of th is sect io n.

For the purposes of th is sect ion, an “ appl icant” is a student who completed

the required education requirements and who appl ied for and sat for the

l icensure examination.

(2) The commission shal l compi le the information obta ined in subsect ion (1) of

th is sect ion wi th appl icant in formation reta ined by the commission.

Speci f ica l ly , the commission shal l compi le whether the student appl ied for

the l icensure examinat ion and whether the appl icant passed the l icensure

examinat ion. The commission shal l create s tat ist ica l data sett ing forth:

(a) The name of the educational inst itut ion;

(b) The number of students who completed the necessary real estate course

required for l i censure ;

(c) Whether the student registered and sat for the l icensure examinat ion;a nd

(d) The number of those appl icants who passed the l icensure examinat ion.

(3) The commission shal l publ ish th is stat ist ica l data and make i t avai lable to

the publ ic quarter ly.

(4) The commission shal l reta in the stat ist ica l data for three years.

(5) Speci f ic examinat ion scores for an appl icant wil l be kept conf ident ia l

by the commission unless the appl icant author izes re lease of

such information.

(6) The commission may promulgate ru les for the administrat ion of th is sect ion.


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§ 12 -61 -109, C .R.S . C hange o f l i cense s ta tus – inac t i ve – cance l la t ion .

(1) Immediate not ice shal l be given in a manner acceptable to the commission

by each l icensee of any change of business location or employment. A

change of business address or employment wi thout not i f icat ion to the

commission shal l automatical ly inact ivate the l icensee’s l icense.

(2) A broker who transfers to the address of another broker or a broker

appl icant who desires to be employed by another broker shal l in form the

commission if said broker is to be in the employ of the other broker. The

employing broker shal l have the contro l and custody of the employed

broker ’s l icense. The employed broker may not act on behal f of sa id broker

or as broker for a partnership, l imi ted l iabi l i ty comp any, or corporat ion

dur ing the term of such employment; but this shal l not affect the employed

broker ’s r ight to transfer to another employing broker or to a locat ion

where the employed broker may conduct business as an independent

broker or as a broker act ing for a partnership, l imi ted l iabi l i ty company,

or corporat ion.

(3) In the event that any l icensee is d ischarged by or terminates employment

wi th a broker, i t shal l be the jo in t du ty o f bo th such part ies to immediate ly

not i fy the commission. Ei ther pa rty may furn ish such not ice in a manner

acceptable to the commission. The party g iv ing not ice shal l not i fy the other

party in person or in wr i t ing of the terminat ion of employment.

(4) I t is unlawful for any such l icensee to perform any of the acts author ized

under the l icense in pursuance of this part 1, either d i rect ly or indirect ly,

on or af ter the date that employment has been terminated. When any

real estate broker whose employment has been terminated is employed by

another real estate broker, the commission shal l , upon proper notif icat ion,

enter such change of employment in the records of the commission. Not

more than one employer or p lace of employment shall be shown for any real

estate broker for the same per iod of t ime.

§ 12 -61 -110, C .R.S. L icense fees – par tnersh ip , l im i ted l iab i l i t y company and

co rpo ra t i on l i censes – ru les .

(1) Fees establ ished pursuant to sect ion 12-61-111.5 shal l be charged by and

paid to the commission or the agent for the commission for the following:


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(a) and (b) (Deleted by amendment, L. 96, p. 419, § 5, effect ive January 1, 1997.)

(c) Each broker ’s examinat ion;

(d) Each broker ’s or ig inal appl icat ion and l icense;

(e) (Deleted by amendment, L. 96, p. 419, § 5, effec t ive January 1, 1997.)

( f) Each three-year renewal of a broker ’s l icense;

(g) (Deleted by amendment, L. 96, p. 419, § 5, effec t ive January 1, 1997.)

(h) Any change of name, address, or employing broker requir ing a change in

commission records;

( i ) A new appl icat ion which shal l be submitted when a l icensed real estate

broker wishes to become the broker act ing for a partnership, a l imi ted

l iabi l i ty company, or a corporat ion.

(2) The proper fee shal l accompany each appl icat ion for l icensure. The fee

shal l not be refundable. Fai lure by the person taking an examinat ion to f i le

the appropr iate broker’s appl icat ion wi th in one year of the date such

person passed the examinat ion wi l l automatical ly cancel the examinat ion,

and al l r ights to a passing score wi l l be terminated.

(3) Each real estate broker ’s l icense granted to an indiv idual shal l ent i t le such

indiv idual to perform al l the acts contemplated by th is part 1, wi thout any

further appl icat ion on his part and wi thout the payment of any fee other

than the fees speci f ied in this sect ion.

(4) (a) The commission shal l require that any person l icensed under th is part 1,

whether on an act ive or inact ive basis, renew said l icense on an

anniversary date every three years. Renewal shal l be condi t ioned upon

fu l f i l lment of the cont inuing educat ion requirements set for th in sect ion

12-61-110.5 and submission of f ingerpr ints as required in sect ion

12-61-110.8; except that any person l icensed under this part 1 who

mainta ins an inact ive l icense and wants to renew to an act ive status

shall only submit f ingerpr in ts as required in sect ion 12-61-110.8 upon

appl icat ion to an act ive status and, except that, the real estate

commission may acquire a name-based cr iminal h istory record check for

an appl icant who has twice submitted to a f ingerpr int -based cr iminal

history record check and whose f ingerpr ints are unclassi f iable. For


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persons renewing or re instat ing an act ive l icense, wr i t ten cert i f icat ion

ver i fy ing complet ion for the previous three-year l icensing per iod of the

continuing education requirements set for th in said sect ion shal l

accompany and be submitted to the commission wi th the appl icat ion for

renewal or re instatement. For persons who did not submit cert i f icat ion

ver i fy ing compl iance wi th sect ion 12-61-110.5 at the t ime a l icense was

renewed or re instated on an inact ive status, wr i t ten cert i f icat ion

ver i fy ing complet ion for the previous three -year l icensing per iod of the

cont inuing education requirements set for th in said sect ion shal l

accompany and be submitted wi th any future appl icat ion to react ivate

the l icense. The commission may by ru le establ ish procedures to

faci l i ta te such a renewal. Unti l such procedures are establ ished, every

l icense issued under the provis ions of this part 1 shal l expire at 12

midnight on December 31 of the year in which issued; ex cept that each

renewal of such l icense shal l be for three years and shal l expire at 12

midnight on December 31 of the th i rd year. In the absence of any

reason or condi t ion that might warrant the refusal of the grant ing of a

l icense or the revocation thereo f, the commission shal l issue a new

l icense upon receipt by the commission of the wri t ten request of the

appl icant and the fees therefor, as required by this sect ion.

Appl icat ions for renewal wi l l be accepted th i r ty days pr ior to January

1. A person who fails to renew a l icense before January 1 of the year

succeeding the year of the expirat ion of such l icense may re instate the

l icense as fo l lows: (Ed. Note: See Ru les D -11 and D-13)

( I) If proper appl icat ion is made wi th in th i r ty -one days after the date of

expirat ion, by payment of the regular three-year renewal fee;

( I I) If proper appl icat ion is made more than th i r ty -one days but wi th in

one year after the date of expirat ion, by payment of the regular

three-year renewal fee and payment of a reinstatement fee equal to

one-hal f the regular three-year renewal fee;

( I I I ) I f proper appl icat ion is made more than one year but wi th in three

years after the date of expirat ion, by payment of the regular three-

year renewal fee and payment of a re instatement fee equal to the

regular three-year renewal fee.


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(a.5) Repealed.

(b) Any re instated l icense shall be effect ive only as of the date of

re instatement. Any person who fails to apply for re instatement wi th in

three years after the expirat ion of a l icense shal l , wi thout exception, be

treated as a new appl icant for l icensure.

(c) Al l re instatement fees shal l be transmitted to the state treasurer, who

shal l credi t same to the d iv is ion of real estate cash fund, as establ ished

by sect ion 12-61-111.5.

(5) The suspension, expirat ion, or revocation of a real estate broker ’s l icense

shall automatical ly inact ivate every real estate broker ’s l icense where the

holder of such l icense is shown in the commission records to be in the

employ of the broker whose l icense has expired or has been suspended or

revoked pending not i f icat ion to the commission by the employed l icensee of

a change of employment.

(6) (Deleted by amendment, L. 91, p. 1628, § 8, effect ive July 1 , 1991.)

§ 12 -61 -110.5 , C .R.S. Renewal o f l i cense – con t inu ing educat ion requ i rement .

(1) Commencing January 1, 1992, except as otherwise provided in subsect ion

(4) of th is sect ion, a broker apply ing for renewal of a l icense pursuant to

sect ion 12-61-110 (4) shall include with such appl icat ion a cert i f ied

statement ver i fy ing successful complet ion of real estate courses in

accordance wi th the fo l lowing schedule:

(a) and (b) Repealed.

(c) For l icensees apply ing for renewal in 1994 and thereafter, passage

wi th in the previous three years of the Colorado port ion of the real

estate exam or complet ion of a minimum of twenty-four hours of credi t ,

twelve of which shal l be the credi ts developed by the real estate

commission pursuant to subsect ion (2) of th is sect ion.

(2) The real estate commission shal l develop twelve hours of credit designed

to assure reasonable currency of real estate knowledge by l icensees,

which credits shal l include an update of the current statu tes and the

rules promulgated by the commission that affect the pract ice of real estate.

I f a l icensee takes a course pursuant to rule 260 of the Colorado ru les of

civi l procedure and such course concerns real property law, such l icensee


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shal l receive credi t for such course toward the fu l f i l lment of such l icensee’s

continuing education requirements pursuant to this sect ion. Such credi ts

shal l be taken from an accredi ted Colorado col lege or universi ty; a

Colorado community col lege; a Colorado pr ivate occupational school hold ing

a cert i f icate of approval from the sta te board for community col leges and

occupational education; or an educational inst i tu t ion or an educational

service descr ibed in sect ion 12-59-104. Successfu l complet ion of such

credits shall require sat isfac tory passage o f a wr i t ten examinat ion or

wr i t ten examinat ions of the mater ia ls covered. Such examinat ions shal l be

audi ted by the commission to ver i fy their accuracy and the val id i ty of the

grades g iven. The commission shal l set the standards required for

sat i s factory passage o f the examinat ions . (Ed. Note: See Rule B-3(c))

(3) Al l credi ts, other than the credi ts speci f ied in subsect ion (2) of this

sect ion, shal l be acquired f rom educational courses approved by the

commission that contr ibute d i rect ly to the professional competence of a

l icensee. Such credi ts may be acquired through successfu l com plet ion of

instruct ion in one or more of the fo l lowing subjects:

(a) Real estate law;

(b) Property exchanges;

(c) Real estate contracts;

(d) Real estate f inance;

(e) Real estate appraisal ;

( f ) Real estate c losing;

(g) Real estate ethics;

(h) Condomin iums and coopera t ives;

( i ) Real estate t ime-shar ing;

( j ) Real estate market ing pr inc ip les ;

(k) Real estate construct ion;

( l ) Land development;

(m) Real estate energy concerns;

(n) Real estate geology;


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(o) Water and waste management;

(p) Commercia l real estate;

(q) Real estate secur i t ies and syndica t ions;

( r ) Proper ty management;

(s) Real estate computer principles;

( t ) Brokerage administ rat ion and management;

(u) Agency; and

(v) Any other subject matter as approved by the real estate commission.

(4) A l icensee apply ing for renewal of a l icense which expires on December 31

of the year in which it was issued is not subject to the education

requirements set for th in subsect ion (1) of t h is sect ion.

(5) The real estate commission shal l promulgate ru les and regulat ions to

implement th is sect ion .

§ 12 -61 -110.6 , C .R.S. S tudy – repea l . (Repea led)

§ 12 -61 -110.8 , C .R.S. Renew al o f l i cense – f i nge rp r i n t based c r im ina l h i s to ry

reco rd ch eck – repea l . (Repea led )

§ 12 -61 -111, C .R.S. D ispos i t ion o f f ees .

Al l fees col lected by the real estate commission under parts 1 and 4 of th is

art ic le, not including administrat ive fees that are in the nature of an administrat ive

f ine and fees reta ined by contractors pursuant to contracts entered into in

accordance wi th section 12-61-103 or 24-34-101, C.R.S., shal l be transmitted to

the state treasurer, who shal l credi t the same to the d iv is ion of real estate cash

fund. Pursuant to section 12-61-111.5, the general assembly shall make annual

appropr iat ions from said fund for expendi tures of the commission incurred in the

performance of i ts dut ies under parts 1 and 4 of th is ar t ic le. The commission may

request an appropr iat ion speci f ica l ly designated for educational and enforcement

purposes. The expendi tures incurred by the commission under parts 1 and 4 of

this art ic le shal l be made out of such appropr iat ions upon vouchers and warrants

drawn pursuant to law.


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§ 12 -61 -111.5 , C .R.S . Fee ad jus tments .

* (1) This sect ion shal l apply to all act iv i t ies of the div ision under parts 1, 3, 4,

and 7 of this ar t ic le . (Ed. Note: This vers ion of subsect ion (1) is e f fect i ve

unt i l January 1 , 2015.)

* (1) This sect ion shal l apply to a l l act iv i t ies of the d iv is ion under parts 1, 3 , 4, 7,

and 10 of th is a r t ic le . (Ed. Note: This vers ion of subsect ion (1) is e f fect i ve

January 1, 2015.)

* (2) (a)(I) The div is ion shal l propose, as part of its annual budget request, an

adjustment in the amount of each fee that it is author ized by law to

col lect under parts 1, 3, 4, and 7 of this art ic le. The budget request

and the adjusted fees for the div is ion shal l ref lect d i rect and

indirect costs. (Ed. Note: This vers ion of subparagraph (I) is ef fect ive

unt i l January 1, 2015.)

* ( I) The div is ion shal l propose, as part of its annual budget request, an

adjustment in the amount of each fee that it is author ized by law to

col lect under parts 1, 3, 4, 7 , and 10 of th is art ic le. The budget

request and the adjusted fees for the div is ion shal l ref lec t d i rect and

indi rec t cos ts . (Ed. Note: This vers ion o f subparagraph ( I ) is e f fec t ive

January 1, 2015.)

( I I) The costs of the HOA information and resource center, created in

sect ion 12-61-406.5, shal l be paid from the HOA information and

resource center cash fund created in sect ion 12 -61-406.5. The

div is ion of real estate shal l est imate the direct and indirect costs of

operat ing the HOA information and resource center and shal l

establ ish the amount of the annual registrat ion fee to be col lected

under

sect ion 38-33.3-401, C.R.S. The amount of the registrat ion fee shal l

be suff ic ient to recover such costs, subject to a maximum l imi t of

f i f ty dol lars and subject to adjustment to ref lect the actual d i rect and

indi rect costs of operat ing the HOA information and resource center

pursuant to the general d i rect ive to adjust fees to avoid exceeding

the statutory l imi t on uncommitted reserves in administrat ive agency

cash funds as set for th in sect ion 24-75-401 (3), C.R.S.


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(b) Based upon the appropr iat ion made and subject to the approval of the

executive d i rector of the department of regulatory agencies, the div is ion

of real estate shal l adjust i ts fees so that the revenue generated from

said fees approximates its d i rect and indirect costs . Such fees sha l l

remain in effect for the f iscal year for which the budget request appl ies.

Al l fees col lected by the div is ion, not including fees reta ined by

contractors pursuant to contracts entered into in accordance with

sect ion 12-61-103 or 24-34-101, C.R.S., shal l be t ransmitted to the

state treasurer, who shall credi t the same to the div is ion of real estate

cash fund, which fund is hereby created. Al l moneys credi ted to the

d iv is ion of real estate cash fund shal l be used as provided in th is sect ion

and shal l not be deposi ted in or transferred to the general fund of th is

state or any other fund.

(c) Beginning July 1, 1979, and each July 1 thereafter, whenever moneys

appropr iated to the d iv is ion for i ts act iv i t ies for the pr ior f iscal year are

unexpended, said moneys shal l be made a part of the appropr iat ion to

the d iv is ion for the next f iscal year, and such amount shal l not be ra ised

from fees col lected by the d iv is ion. I f a supplemental appropr iat ion is

made to the div is ion for its act iv i t ies, i ts fees, when adjusted for the

f iscal year next fo l lowing that in which the supplementa l appropr iat ion

was made, shal l be adjusted by an addi t ional amount which is

suff icient to compensate for such supplemental appropr iat ion. Funds

appropr iated to the div is ion in the annual long appropriat ions b i l l shal l

be designated as a cash fund and shal l not exceed the amount

ant ic ipated to be ra ised from fees col lected by the division.

§ 12 -61 -112, C .R.S. R eco rds – ev idence – inspec t ion .

(1) The executive d i rector of the department of regulatory agencies shal l adopt

a seal by which a l l proceedings author ized under parts 1, 3, and 4 of this

art ic le shall be authenticated. Copies of records and papers in the off ice

of the commission or department of regulatory agencies re lat ing to the

administrat ion of parts 1, 3, and 4 of this art ic le, when duly cert i f ied and

authenticated by the seal , shal l be received as evidence in al l courts

equal ly and with l ike effect as the or ig inals. Al l records kept in the off ice

of the commission or department of regulatory agencies, under author i ty of

parts 1, 3, and 4 of th is art ic le, shal l be open to publ ic inspect ion at such


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t ime and in such manner as may be prescr ibed by ru les and regulat ions

formula ted by the said commission.

(2) Repealed.

(3) The commission shal l not be required to mainta in or preserve l icensing

h istory records of any person l icensed under the provis ions of th is part 1

for any per iod of t ime longer than seven years.

§ 12 -61 -113, C .R.S I nves t iga t i on – revocat ion – ac t ions aga ins t l i censee – repea l .

(1) The commission, upon i ts own motion, may, and, upon the complaint in

wr i t ing of any person, shal l , invest igate the act iv i t ies of any l icensee or any

person who assumes to act in such capaci ty wi th in the state, and the

commission, after the hold ing of a hear ing pursuant to sect ion 12-61-114,

has the power to impose an administrat ive f ine not to exceed two

thousand f ive hundred dol lars for each separate offense and to censure a

l icensee, to p lace the l icensee on probation and to set the terms of

probation, or to temporar i ly suspend or permanently revoke a l icense when

the l icensee has performed, is performing, or is at tempting to perform any

of the fo l lowing acts and is gui l ty of :

(a) Knowingly making any misrepresentat ion or knowingly making use of any

fa lse or misleading advert is ing;

(b) Making any promise of a character which inf luences, persuades, or

induces another person when he could not or d id not intend to keep

such promise;

(c) Knowingly misrepresenting or making fa lse promises through agents,

advert is ing, or otherwise;

(c.5) Violat ing any provision of the “Colorado Consumer Protect ion Act” ,

ar t ic le 1 of t i t le 6, C.R.S.;

(d) Act ing for more than one party in a transact ion wi thout the knowledge

of a l l part ies thereto;

(e) Representing or attempting to represent a real esta te broker other than

the l icensee’s employer wi thout the express knowledge and consent of

that employer;


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( f ) In the case of a broker registered as in the employ of another broker,

fail ing to place, as soon af ter receipt as is pract icably possible, in the

custody of that l icensed broker -employer any deposi t money or other

money or fund entrusted to the employee by any person deal ing with the

employee as the representat ive of that l icensed

broker-employer;

(g) Fai l ing to account for or to remit, wi th in a reasonable t ime, any moneys

coming into the l icensee’s possession that belong to others, whether

act ing as real estate brokers or otherwise, and fa i l ing to keep records

re lat ive to said moneys, which records shal l conta in such information as

may be prescr ibed by the ru les of the commission re lat ive thereto and

shal l be subject to audi t by the commission;

(g.5) Convert ing funds of others, d ivert ing funds of others wi thout proper

author izat ion, commingl ing funds of others wi th the broker ’s own funds,

or fail ing to keep such funds of others in an escrow or a trustee

account with some bank or recognized deposi tory in th is s tate, which

account may be any type of checking, demand, passbook, or statement

account insured by an agency of the Uni ted States government, and to

so keep records re lat ive to the deposi t which contain such information

as may be prescr ibed by the ru les and regulat ions of the commission

re lat ive thereto, which records shal l be subject to audi t by the

commiss ion ; (Ed. Note: See Rule E- l(f ))

(h) Fai l ing to provide the purchaser and sel ler of real estate wi th a c losing

statement of the transact ion, conta in ing such information as may be

prescr ibed by the ru les and regulat ions of the commission or fa i l ing to

provide a signed dupl icate copy of the l is t ing contract and the contract

of sale or the prel iminary agreement to sel l to the part ies thereto;

( i) Fai l ing to mainta in possession, for future use or inspect ion by an

author ized representat ive of the commission, for a per iod of four years,

of the documents or records prescr ibed by the ru les and regulat ions of

the commission or to produce such documents or records upon

reasonable reques t by the commission or by an author ized

representat ive of the commission;


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( j ) Pay ing a commission or valuable consideration for performing any of the

funct ions of a real estate broker, as descr ibed in th is part 1, to any

person not l icensed under th is p art 1; except that a l icensed broker may

pay a f inder ’s fee or a share of any commission on a cooperat ive sale

when such payment is made to a real estate broker l icensed in another

state or country. I f a country does not l icense real estate brokers, then

the payee must be a c i t izen or resident of said country and represent

that the payee is in the business of sel l ing real estate in said country.

(k) Disregarding or v io lat ing any provis ion of this part 1 or part 8 of this

art ic le, v io lat ing any reasonable rule or regulat ion promulgated by the

commission in the interests of the publ ic and in conformance wi th the

provis ions of th is part 1 or part 8 of th is art ic le; v io lat ing any lawful

commission orders; or a id ing and abett ing a vio lat ion of any ru le,

regula t ion, commission order, or provis ion of th is part 1 or part 8 of th is

art ic le;

( l ) Repealed.

* (m) Convict ion of, enter ing a plea of gui l ty to, or enter ing a plea of nolo

contendere to any cr ime in art ic le 3 of t i t le 18, C.R.S.; parts 1, 2, 3, and

4 of ar t ic le 4 of t i t le 18, C.R.S. ; part 1, 2, 3, 4, 5, 7, 8 , or 9 of ar t ic le 5

of t i t le 18, C.R.S. ; ar t ic le 5.5 of t i t le 18, C.R.S.; parts 3, 4, 6, 7, and 8

of art ic le 6 of t i t le 18, C.R.S.; parts 1, 3, 4, 5, 6, 7, and 8 of art ic le 7

of t i t le 18, C.R.S.; part 3 of art ic le 8 of t i t le 18, C.R.S.; ar t ic le 15 of

t it le 18, C.R.S.; ar t ic le 17 of t it le 18,C.R.S. ; sect ion 18 -18-404, 18-18-

405, 18-18-406, 18-18-411, 18-18-412.5, 18-18-412.7 , 18-18-412.8, 18-

18-415, 18-18-416, 18-18-422, or 18-18-423, C.R.S. , or any other l i ke

cr ime under Colorado law, federal law, or the laws of other states. A

cert i f ied copy of the j udgment o f a court of competent jur isd ict ion of such

convict ion or other off ic ia l record indicat ing that such plea was entered

shal l be conclusive evidence of such convict ion or p lea in any hearing

under th is part 1.

(Edi to r ’s no te : The numbered ar t ic les in T i t le 18 of Colorado Revised

Statute shown in th is Part “m” refer to the fo l lowing types of cr imes:

Art ic le 3 is t i t l ed Offenses Agains t the Person and consis ts of four

par ts : homic ide , assaul t , k idnapping and unlawful sexual behavior.

http://advance.lexis.com/api/document/citation/COLO.%20REV.%20STAT.%2018-18-405


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Art ic le 4 deals wi th o f fenses agains t proper ty , under wh ich par t 1 i s

arson, par t 2 is burg la ry , par t 3 robbery , and pa r t 4 i s the f t .

Art ic le 5 consis ts o f o f fenses invo lv ing f raud, inc lud ing par t 1 – forgery ,

ob ta in ing a s igna tu re by decept ion , o f fe r ing a fa l se ins t rument f o r

record ing , e t a l , pa r t 2 – f raud ob ta in ing p roper ty or serv ices (dual

con t rac ts ) , par t 3 – f raud u len t sa les and bus iness p rac t i ces (un lawfu l

ac t i v i t y conce rn ing t he sa le o f l and ) , pa r t 4 – b r i be ry , par t 5 – o f f enses

re l a t i ng t o the un i fo rm commerc ia l code, pa r t 7 – f inanc ia l t ransact ion

dev ice c r ime ac t (ATM’s , e t a l ) , and pa r t 8 – equi t y sk imming

Art ic le 5.5 consis ts of compu te r c r ime o f fenses .

Art ic le 6 consis ts o f o f fenses invo lv ing fami l y re l a t ions .

Art ic le 7 consis ts of o f f enses re l a t ing t o mora ls .

Art ic le 8 – pa r t 3 re fe rs t o gove rn men t ope ra t i ons , spec i f i ca l l y b r i be ry and

corrup t in f luence.

Art ic le 15 deals wi th making, f inanc ing and co l lect ing of loans .

Art ic le 17 is the Colorado o rgan i zed c r ime con t ro l ac t .

Art ic le 18 is the Un i fo rm Contro l led Substances Act , par t 4 dea ls wi th

o f fenses and pena l t ies . )

(m.5) Vio lat ing or a id ing and abett ing in the v io lat ion of the Colorado or federal

fa i r housing laws;

(m.6) Fai l ing to immediate ly not i fy the commission in wr i t ing of a convict ion,

p lea, or v io lat ion pursuant to paragraph (m) or

(m.5) of th is subsect ion (1);

(n) Having demonstrated unworth iness or incompetency to act as a real

estate broker by conduct ing business in such a manner as to endanger

the interest of the public;

(o) In the case of a broker l icensee, fa i l ing to exercise reasonable

supervis ion over the act iv i t ies of l icensed employees; (Ed. Note : See

also Rule E-31)


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(p) Procur ing, or attempting to procure, a real estate broker ’s l icense or

renewing, re instat ing, or react ivat ing, or at tempt ing to renew, re instate,

or react ivate, a real estate broker ’s l icense by fraud, misrepresentat ion,

or decei t or by making a mater ia l misstatement of fact in an appl icat ion

for such l icense;

(q) Cla iming, arranging for, or taking any secret or undisclosed amount of

compensation, commission, or prof i t or fa i l ing to reveal to the l icensee’s

pr incipal or employer the full amount of such l icensee’s compensation,

commission, or prof i t in connect ion wi th any acts for which a l icense is

required under th is part 1;

( r ) Using any provision a l lowing the l icensee an opt ion to purchase in any

agreement author iz ing or employing such l icensee to sel l , buy, or

exchange real estate for compensation or commission, except when such

l icensee, pr ior to or coincident wi th e lect ion to exercise such option to

purchase, reveals in wr i t ing to the l icensee’s pr incipal or employer the

fu l l amount of the l icensee’s p rof i t and obta ins the wr i t ten consent of

such pr incipal or employer approving the amount of such prof it ;

(s) ( I) Fraud, misrepresentat ion, decei t , or conversion of trust funds that

resul ts in the payment of any c la im pursuant to part 3 of this art ic le.

This subparagraph (I) is repealed, effect ive when the last f inal

judgment f rom any of the civil act ions al lowed pursuant to sect ion

12-61-302 (2) becomes effect ive and any resul t ing c la im has been

paid according to law. The director of the div is ion of real estate

shal l not i fy the revisor of statutes, in wr i t ing, when the condi t ion

speci f ied in th is paragraph (s) has

been satisf ied.

( I I) Effect ive on and after the repeal of part 3 of this art ic le, fraud,

misrepresentat ion, decei t , or conversion of trust funds that resul ts in

the entry of a c iv i l judgment for damages.

( t) Any other conduct, whether of the same or a di f ferent character than

speci f ied in this subsect ion (1), which const i tutes d ishonest dealing;

(u) Repealed.


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(v ) Hav ing had a real estate broker ’s or a subdiv is ion developer ’s l icense

suspended or revoked in any jur isdict ion, or having had any d iscip l inary

act ion taken against the broker or subdiv is ion developer in any other

jur isd ict ion if the broker ’s or subdiv is ion developer ’s action would

const i tute a v io lat ion of this subsect ion (1). A cert if ied copy of the

order of d iscipl inary act ion shal l be pr ima facie evidence of such

d iscip l inary act ion.

(w)Fai l ing to keep records documenting proof of complet ion of the

continuing education requirements in accordance with sect ion

12-61-110.5 for a per iod of four years f rom the date of compl iance wi th

said section;

(x ) ( I ) V io lat ing any prov is ion of sect ion 12-61-113.2.

( I I ) In addi t ion to any other remedies avai lable to the commission

pursuant to th is t i t le , after not ice and a hear ing pursuant to

sect ion 24-4-105, C.R.S. , the commission may assess a penal ty for a

v io lat ion of sect ion 12-61-113.2 or of any rule promulgated pursuant

to sect ion 12-61-113.2. The penal ty shal l be the amount of

remunerat ion improperly paid and shal l be transmitted to the state

treasurer and credi ted to the general fund.

(y) With in the last f ive years, having a l icense, registrat ion, or cert i f icat ion

issued by Colorado or another state revoked or suspended for fraud,

decei t , mater ia l misrepresentat ion, theft , or the breach of a f iduciary

duty, and such discip l ine denied the person author izat ion to pract ice as:

( I ) A mortgage broker or mortgage loan or ig inator;

( I I ) A real estate broker or salesperson;

( I I I ) A real estate appraiser, as def ined by sect ion 12 -61-702 (5);

( IV) An insurance producer, as def ined by sect ion 10-2-103 (6), C.R.S.;

(V) An attorney;

(VI) A secur i t ies broker -dealer, as def ined by sect ion 11-51-201 (2), C.R.S.;

(VI I ) A secur i t ies sales representat ive, as def ined by sect ion 11-51-201

(14), C.R.S.;

(VII I) An investment advisor, as def ined by sect ion 11-51-201 (9.5), C.R.S. ; or


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( IX) An investment advisor representat ive , as def ined by sect ion 11-51-201

(9.6), C.R.S.

(1.5) Every person l icensed pursuant to sect ion 12-61-101 (2) (a) (X) shal l g ive

a prospect ive tenant a contract or receipt; and such contract or receipt

shal l include the address and te lephone number of the real estate

commission in prominent letters and shal l s tate that the regulat ion of renta l

locat ion agents is under the purview of the real estate commission.

(2) In the event a f i rm, partnership, l imi ted l iabi l i ty company, associat ion, or

corporat ion operat ing under the l icense of a broker designated and

l icensed as representat ive of said f i rm, partnership, l imi ted l iabi l i ty

company, associat ion, or corporat ion is gui l ty of any of the foregoing acts,

the commission may suspend or revoke the r ight of the said f irm,

partnership, l imited l iabi l i ty company, associat ion, or corporat ion to

conduct its business under the l icense of said broker, whether or not the

designated broker had personal knowledge thereof and whether or not the

commission suspends or revokes the indiv idual l icense of said broker.

(3) Upon request of the commission, when any real esta te broker is a party to

any suit or proceeding, e i ther c ivi l or cr iminal, ar is ing out of any

transact ion involv ing the sale or exchange of any interest in real property or

out of any transact ion involv ing a leasehold interest in the real property

and when such broker is involved in such t ransact ion in such capaci ty as a

l icensed broker, i t shal l be the duty of said broker to supply to the

commission a copy of the complaint, indictment, in formation, or other

in i t ia t ing p leading and the answer f i led, i f any, and to advise the

commission of the disposi t ion of the case and of the nature and amount of

any judgment, verdict, f inding, or sentence that m ay be made, entered, or

imposed therein.

(4) This part 1 shal l not be construed to re l ieve any person from civ i l l iab i l i ty or

cr iminal prosecution under the laws of th is state.

(5) Complaints of record in the off ice o f the commission and commission

invest igat ions, including commission invest igat ive f i les, are c losed to publ ic

inspect ion. St ipulat ions and f inal agency orders are publ ic records subject

to sect ions 24-72-203 and 24-72-204, C.R.S.


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(6) When a complaint or an invest igat ion d iscloses an instanc e of misconduct

which, in the opin ion of the commission, does not warrant formal act ion by

the commission but which should not be d ismissed as being wi thout meri t ,

the commission may send a letter of admonit ion by cert i f ied mai l , return

receipt requested, to the l icensee against whom a complaint was made and

a copy thereof to the person making the complaint, but the letter shal l

advise the l icensee that the l icensee has the r ight to request in wr i t ing,

wi th in twenty days after proven receipt, that formal d i scip l inary proceedings

be in i t ia ted to adjudicate the propr iety of the conduct upon which the letter

of admonit ion is based. I f such request is t imely made, the letter of

admoni t ion shal l be deemed vacated, and the matter shal l be processed by

means of formal d iscipl inary proceedings.

(7) Al l administrat ive f ines col lected pursuant to th is sect ion shal l be

transmitted to the state treasurer, who shal l credi t the same to the d iv is ion

of real estate cash fund.

(8) Any appl icat ion for l icensure from a person whose l icense has been revoked

shal l not be considered unt i l the passage of one year from the date of

revocat ion.

(9) When the d iv is ion of real estate becomes aware of facts or c i rcumstances

that fa l l wi th in the jur isdict ion of a cr iminal just ice or other law enforcement

author i ty upon invest igat ion of the act iv i t ies of a l icensee, the d iv is ion

shal l , in addi t ion to the exercise of its author i ty under th is part 1, refer and

transmit such information, which may include or ig inals or copies of

documents and mater ia ls, to one or more cr iminal just ice or other law

enforcement author i t ies for invest igat ion and prosecution as authorized

by law.

§ 12-61-113.2 , C .R.S. Af f i l ia ted bus iness ar rangements – def in i t i ons –

d isc losures – en fo rceme nt and pena l t i es – repo r t ing –

ru les – i nvest i ga t i on i n f o rma t i on sha red w i t h t he d iv i s i on

o f insurance.

(1) As used in th is sect ion, unless the context otherwise requires:

(a) “Aff i l ia ted business arrangement” means an arrangement in which:


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( I ) A provider of sett lement services or an associate of a provider of

sett lement services has e i ther an aff i l ia te r e lat ionship wi th or a d irect

benefic ia l ownership interest of more than one percent in another

provider of sett lement services; and

( I I ) A provider of sett lement services or the associate of a provider

d i rect ly or indirect ly refers sett lement service business to another

provider of sett lement services or aff i rmatively in f luences the

select ion of another provider of sett lement services.

(b) “Associate” means a person who has one or more of the fo l lowing

re lat ionships with a person in a posi t ion to refer sett lement service

business:

( I ) A spouse, parent, or chi ld of such person;

( I I ) A corporat ion or business ent i ty that contro ls, is contro l led by, or is

under common contro l wi th such person;

( I I I) An employer, off icer, d i rector, partner, franchiser, or franchisee of

such person, including a broker act ing as an independent

contractor; or

( IV) Anyone who has an agreement, arrangement, or understanding wi th

such person, the purpose or substant ia l effect of which is to enable

the person in a posi t ion to refer sett lement service business to

benefi t f inancia l ly from referra ls of such business.

(c) “Sett lement service” means any service provided in connect ion wi th a

real estate sett lement including, but not l imi ted to, the following:

( I ) T i t le searches;

( I I ) T i t le examinat ions;

( I I I ) The prov is ion of t i t le cert i f ica tes;

( IV) Ti t le insurance;

(V) Services rendered by an attorney;

(VI) The preparat ion of t i t le documents ;

(VI I ) Proper ty surveys;


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(VI I I) The render ing of credi t reports or appraisa ls ; ( IX) Real estate

appraisal services;

(X) Home inspect ion services;

(XI) Services rendered by a real estate broker ;

(XII) Pest and fungus inspections;

(XII I ) The or ig inat ion of a loan;

(XIV) The taking of a loan appl ica t ion ;

(XV) The processing of a loan;

(XVI) Underwri t ing and funding of a loan; (XVII) Escrow

handl ing services;

(XVI II) The handl ing of the processing; and

(XIX) Closing of sett lement.

(2) (a) An aff i l ia ted business arrangement is permitted where the person

referr ing business to the aff i l ia ted business arrangement receives

payment only in the form of a return on an investment and where i t does

not v io late the provis ions of sect ion 12-61-113.

(b) I f a l icensee or the employing broker of a l icensee is part of an af f i l ia ted

business arrangement when an offer to purchase real property is fu l ly

executed, the l icensee shal l d isclose to all part ies to the real estate

transact ion the existence of the arrangement. The disclosure shal l be

wri t ten, shal l be signed by a l l part ies to the real estate transact ion, and

shal l comply with the federal “Real Estate Set t lement Procedures Act of

1974”, as amended, 12 U.S.C. sec. 2601 et seq.

(c) A l icensee shal l not require the use of an aff i l ia ted business

arrangement or a part icu lar provider of sett lement services as a

condi t ion of obta in ing services from that l icensee for any sett lement

service. For the purposes of th is paragraph (c), “ require the use” shal l

have the same meaning as “required use” in 24 CFR 3500.2 (b).

(d) No l icensee shal l g ive or accept any fee, k ickback, or other th ing of

value pursuant to any agreement or unders tanding, oral or otherwise,

that business incident to or part of a sett lement service involv ing an


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aff i l ia ted business arrangement shal l be referred to any provider of

sett lement services.

(e) Nothing in th is sect ion shal l be construed to prohib i t payment of a

fee to:

( I) An attorney for services actual ly rendered;

( I I ) A t i t le insurance company to its duly appointed agent for services

actual ly performed in the issuance of a pol icy of t i t le insurance;

( I I I ) A lender to i ts duly appointed agent for services actual ly performed

in the making of a loan.

( f) Nothing in th is sect ion shal l be construed to prohib i t payment to any

person of:

( I) A bona f ide salary or compensation or other payment for goods or

faci l i t ies actual ly furn ished or for services actual ly performed;

( I I ) A fee pursuant to cooperat ive brokerage and referra l arrangements

or agreements between real estate brokers.

(g) I t shal l not be a vio lat ion of th is sect ion for an aff i l ia ted business

arrangement:

( I) To require a buyer, borrower, or sel ler to pay for the services of any

attorney, credi t report ing agency, or real estate appraiser chosen by

the lender to represent the lender ’s in terest in a real estate

transact ion; or

( I I) If an attorney or law f i rm represents a c l ient in a real estate

transact ion and issues or arranges for the issuance of a pol icy of

t i t le insurance in the transact ion d i rect ly as agent or through a

separate corporate t it le insurance agency that may be establ ished by

that at torney or law f i rm and operated as an adjunct to h is or her law

pract ice.

(h) No person shal l be l iable for a v io lat ion of this sect ion if such person

proves by a preponderance of the evidence that such v io lat ion was not

in tent ional and resul ted from a bona f ide error notwi thstanding

maintenance of procedures that are reasonably adopted to avoid

such error.


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(3) On and af ter July 1, 2006, a l icensee shal l d isclose at the t ime the

l icensee enters into or changes an aff i l ia ted business arrangement, in a

form and manner acceptable to the commission, the names of a l l a f f i l ia ted

business arrangements to which the l icensee is a party. The disclosure

shal l include the physical locat ions of the aff i l ia ted businesses.

(4) On and after July 1, 2006, an employing broker, in a form and manner

acceptable to the commission, shal l at least annual ly d isclose the names of

al l aff i l ia ted business arrangements to which the employing broker is a

party. The disclosure shall include the physical locat ions of the af f i l ia ted

businesses.

(5) The commission may promulgate ru les concerning the creat ion and conduct

of an aff i l ia ted business arrangement, including, but not l imi ted to, ru les

def in ing what const i tutes a sham aff i l ia ted business arrangement. The

commission shal l adopt the rules, pol ic ies, or guidel ines issued by the

United States department of housing and urban development concerning

the federal “Real Estate Sett lement Procedures Act of 1974”, as amended,

12 U.S.C. sec. 2601 et seq. Rules adopted by the commission shal l be at

least as str ingent as the federal ru les and shal l ensure that consumers are

adequately in formed about aff i l ia ted business arrangements. The

commission shal l consul t wi th the insurance commissioner pursuant to

sect ion 10-11-124 (2), C.R.S. , concerning rules, pol ic ies, or guidel ines the

insurance commissioner adopts concerning aff i l ia ted business

arrangements. Nei ther the ru les promulgated by the commissioner nor the

real estate commission may create a conf l ic t ing regulatory burden on an

aff i l ia ted business arrangement.

(6) The div is ion may share information gathered dur ing an invest igat ion of an

aff i l ia ted business arrangement wi th the d iv is ion of insurance.

§ 12 -61 -113.5 , C .R.S. Mob i le home t ransact ion – requi rements . (Repea led )

§ 12 -61 -114, C .R.S. H ear i ng – admin is t ra t i ve law judge – rev iew –

ru le-mak ing au thor i ty .

(1) Except as otherwise provided in th is sect ion, a l l proceedings before the

commission wi th respect to d iscip l inary act ions and denia l of l icensure

under this part 1 and part 8 of this art ic le and cert i f icat ions issued under


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part 4 of this art ic le shal l be conducted by an administrat ive law judge

pursuant to the provis ions of sect ions 24 -4-104 and 24-4-105, C.R.S.

(2) Such proceedings shal l be held in the county where the commission has its

off ice or in such other p lace as the commission may designate. I f the

l icensee is an employed broker, the commission shal l a lso not i fy the broker

employing the l icensee by mai l ing, by f i rst -c lass mai l , a copy of the wr i t ten

not ice required under sect ion 24-4-104 (3), C.R.S., to the employing

broker’s last-known business address.

(3) An administrat ive law judge shal l conduct a l l hear ings for denying,

suspending, or revoking a l icense or cert i f icate on behal f of the

commission, subject to appropr iat ions made to the department of

personnel . Each administrat ive law judge shal l be appointed pursuant to

part 10 of art ic le 30 of t i t le 24, C.R.S. The administr at ive law judge shal l

conduct the hear ing pursuant to the provis ions of sect ions 24-4-104 and

24-4-105, C.R.S. No l icense shal l be denied, suspended, or revoked unti l

the commission has made i ts decis ion by a

major i ty vote.

(4) The decis ion of the commission in any discip l inary act ion or denia l of

l icensure under th is sect ion is subject to review by the court of appeals by

appropr iate proceedings under sect ion 24-4-106 (11), C.R.S. In order to

effectuate the purposes of parts 1, 3, 4, and 8 of th is art ic le, the

commission has the power to promulgate ru les and regulat ions pursuant to

art ic le 4 of t i t le 24, C.R.S. The commission may appear in court by i ts

own attorney.

(5) Pursuant to said proceeding, the court has the r ight, in its d iscret ion, to

stay the execution or effect of any f inal order of the commission; but a

hear ing shal l be held afford ing the part ies an opportuni ty to be heard for

the purpose of determining whether the publ ic heal th, safety, and wel fare

would be endangered by staying the commis sion’s order. If the court

determines that the order should be stayed, it shal l also determine at said

hear ing the amount of the bond and adequacy of the surety, which bond

shal l be condi t ioned upon the fa i thfu l performance by such pet i t ioner of a l l

obl igat ions as a real estate broker and upon the prompt payment of all

damages ar is ing from or caused by the delay in the taking effect of or


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enforcement of the order complained of and for a l l costs that may be

assessed or required to be paid in connect ion wi th such proceedings.

(6) In any hear ing conducted by the commission in which there is a possib i l i ty of

the denia l , suspension, or revocation of a l icense because of the convict ion

of a fe lony or of a crime involv ing moral tu rp i tude, the commission shal l

be governed by the provis ions of sect ion 24-5-101, C.R.S.

§ 12 -61 -114.5 , C .R.S. Ru les .

Al l ru les adopted or amended by the commission on or after July 1, 1979, shal l

be subject to sect ions 24-4-103 (8) (c) and (8) (d) and 24-34-104 (9) (b) ( I I ) ,

C.R.S.

§ 12 -61 -115, C .R.S. Subpoena compel l i ng a t tendance o f w i t nesses, records

and documents . (Repea led)

§ 12 -61 -116, C .R.S. Fa i l u re t o obey subpoena – pena l t y . (Repea led )

§ 12 -61 -117, C .R.S. Broke r remunera t ion .

I t is unlawful for a real estate broker registered in the commission off ice as

in the employ of another broker to accept a commission or valuable considerat ion

for the performance of any of the acts speci f ied in th is part 1 from any person

except the broker ’s employer, who shal l be a l icensed real estate broker.

§ 12 -61 -118, C .R.S. Ac t s o f th i rd par t i es – broker ’s l i ab i l i t y .

Any unlawful act or v io lat ion of any of the provis ions of th is part 1 upon the part

of an employee, off icer, or member of a l icensed real estate broker shal l not be

cause for d iscipl inary act ion against a real estate broker, unless it appears to the

sat isfact ion of the commission that the real estate broker had actual knowledge

of the unlawful act or v io lat ion or had been negl igent in the supervis ion

of employees.

§ 12 -61 -119, C .R.S. V io la t ions .

Any natural person, f i rm, partnership, l imi ted l iabi l i ty company, associat ion, or

corporat ion v io lat ing the provis ions of th is part 1 by act ing as real estate broker in

th is state wi thout having obta ined a l icense or by act ing as real estate broker after

the broker’s l icense has been revoked or dur ing any per iod for which said l icense

may have been suspended is gui l ty of a misdemeanor and, upon convict ion

thereof, i f a natural person, shal l be punished by a f ine of not more than f ive


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hundred dol lars, or by impr isonment in the county ja i l for not more than six

months, or by both such f ine and imprisonment and, if an ent i ty, shal l be punished

by a f ine of not more than f ive thousand dol lars. A second vio lat ion, i f by a

natural person, shal l be punishable by a f ine of not more than one thousand

dol lars, or by imprisonment in the county ja i l for not more than six months, or by

both such f ine and imprisonment.

§ 12 -61 -120, C .R.S. Subpoena compel l i ng a t tendance o f w i t nesses and

p roduc t ion o f records and documents .

The commission, the director for the commission, or the administrat ive law

judge appointed for hear ings may issue a subpoena compel l ing the attendance

and test imony of wi tnesses and the product ion of books, papers, or records

pursuant to an invest igat ion or hear ing of such commission. Such subpoenas shal l

be served in the same manner as subpoenas issued by distr ic t courts and shal l

be issued wi thout d iscr iminat ion between publ ic or pr ivate part ies requir ing the

attendance of witnesses and the product ion of documents at hearings. I f a

person fails or refuses to obey a subpoena issued by the commission, the

director, or the appointed administrat ive law judge, the commission may pet i t ion

the d istr ic t court having jur isdic t ion for issuance of a subpoena in the premises,

and the court shal l , in a proper case, issue its subpoena. Any person who refuses

to obey such subpoena shal l be punished as provided in sect ion 12-61-121.

§ 12 -61 -121, C .R.S. Fa i l u re t o obey subpoena – pena l ty .

Any person who wi l l fu l ly fa i ls or neglects to appear and test i fy or to produce

books, papers, or records required by subpoena, duly served upon him in any

matter conducted under parts 1, 3, and 4 of this art ic le, is gui l ty of a

misdemeanor and, upon convict ion thereof, shal l be punished by a f ine of twenty -

f ive dol lars, or impr isonment in the county ja i l for not more than th i r ty days for

each such offense, or by both such f ine and imprisonment. Each day such person

so refuses or neglects shal l const i tute a separate offense.

§ 12 -61 -122, C .R.S. Pow ers o f commiss ion – in junc t ions .

The commission may apply to a court of competent jur isd ict ion for an order

enjo ining any act or pract ice which const i tutes a v io lat ion of parts 1, 3, and 4 of

th is art ic le, and, upon a showing that a person is engaging or in tends to engage in

any such act or pract ice, an in junct ion, restra in ing order, or other appropr iate

order shal l be granted by such court regardless of the existence of another


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remedy therefor. Any no t ice, hear ing, or durat ion of any in junct ion or restra in ing

order shal l be made in accordance with the provis ions of the Colorado ru les of

c iv i l procedure.

§ 12 -61 -123, C .R.S. – Repeal o f pa r t .

This part 1 is repealed, ef fect ive July 1, 2017. Pr ior to such repeal, the

real estate div is ion, including the real estate commission, shal l be reviewed as

provided for in sect ion 24-34-104, C.R.S.

B. Par t 2 – B rok e rs Commi ss ions

§ 12-61-201, C .R.S. When ent i t led to commission.

No real estate agent or broker is ent i t led to a commission for f inding a

purchaser who is ready, wi l l ing, and able to complete the purchase of real estate

as proposed by the owner unt i l the same is consummated or is defeated by the

refusal or neglect of the owner to consummate the same as agreed upon.

§ 12 -61 -202, C .R.S. Ob jec t i ons on account o f t i t l e .

No real estate agent or broker is ent i t led to a commission when a proposed

purchaser fa i ls or refuses to complete h is contract of purchase because of defects

in the t i t le of the own er, unless such owner, wi th in a reasonable t ime, has said

defects corrected by legal proceedings or otherwise.

§ 12-61-203, C .R.S. When owner must per fec t t i t l e .

The owner shal l not be required to begin legal or other proceedings for the

correct ion of such t i t le , unt i l such agent or broker secures f rom the proposed

purchaser an enforceable contract in wr i t ing, b inding him to complete the

purchase whenever the defects in the t i t le a re corrected.

§ 12 -61 -203.5 , C .R.S. Refe r ra l fees – in t e r f e rence w i t h b roke rage re la t ionsh ip .

(1) No l icensee under parts 1 to 4 of this art ic le shal l pay a referra l fee

unless reasonable cause for payment of the referra l fee exists. A

reasonable cause for payment means:

(a) An actual in troduct ion of business has been made;

(b) A contractual refer ra l fee re lat ionship exists; or

(c) A contractual cooperat ive brokerage re lat ionship exists.

(2) (a) No person shal l in terfere wi th the brokerage re lat ionship of a l icensee.


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(b) As used in th is subsect ion (2):

( I) “Brokerage re lat ionship” means a re lat ionship entered into between a

broker and a buyer, sel ler , landlord, or tenant under which the

broker engages in any of the acts set for th in sect ion 12-61-101 (2).

A brokerage re lat ionship is not establ ished unt i l a wr i t ten brokerage

agreement is entered into between the part ies or is otherwise

establ ished by law.

( I I) “ Interference with the brokerage re lat ionship” means demanding a

referra l fee f rom a l icensee wi thout reasonable cause.

( I I I ) “Referra l fee” means any fee paid by a l icensee to any person or

ent i ty, other than a cooperat ive commission offered by a l is t ing

broker to a sel l ing broker or v ice versa.

(3) Any person aggr ieved by a vio lat ion of any provis ion of th is sect ion may

br ing a civ i l act ion in a court of competent jur isdict ion.

The prevai l ing party in any such act ion shal l be ent i t led to actual damages and,

in addi t ion, the court may award an amount up to three t imes the amount of actual

damages susta ined as a resul t of any such vio lat ion p lus reasonable attorney fees.

§ 12 -61 -204, C .R.S. Repea l o f pa r t .

This part 2 is repealed, effec t ive July 1, 2017. Pr ior to such repeal ,

the provis ions in th is part 2 shal l be reviewed as provided for in sect ion

24-34-104, C.R.S.

C. Par t 3 – Recove ry Fund

§ 12-61-301, C .R.S. Rea l es ta te recovery fund – fees – repea l . (Repea led)

§ 12-61-302, C .R.S. L imi ta t ion on payments ou t o f the rea l es ta te

cash fund – repea l .

(1) No payment shal l be made from the general fund pursuant to th is

part 3 unless:

(a) The appl icant has not i f ied the commission, in wr i t ing, of the

commencement of a c iv i l act ion for a judgment that may result in an

appl icat ion for recovery f rom the fund. Such writ ten not ice shall

be given no later than ninety days af ter commencement of the

c iv i l act ion.


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(b) The revenues, if any, transferred to the div is ion of real estate cash

fund pursuant to subsect ion (11) of th is sect ion have f i rst been

exhausted. As used in this part 3, “ fund” shal l mean in the f i rst

instance such revenues tra nsferred pursuant to subsect ion (11) of

th is sect ion and then, i f such revenues have been exhausted, the

general fund.

(2) No payment shal l be made from the fund unless the under ly ing c iv i l

act ion, on the basis of which payment from the fund is sought, was

commenced wi th in the t ime per iod prescr ibed in sect ion 13-80-103,

C.R.S., and by th i r ty days af ter May 27, 2005.

(3) (a) No payment shall be made from the fund unless the order of

judgment in the under ly ing civi l act ion contains specif ic f indings of

fact and conclusions of law that the l icensed real estate broker or

salesperson committed negl igence, fraud, wi l l fu l misrepresentat ion,

or conversion of trust funds.

(b) Notwi thstanding the provis ions of paragraph (a) of th is subsect ion

(3), no payment fo r negl igence shal l be made from the fund if said

l icensed real estate broker or salesperson had in effect a complying

pol icy of errors and omissions insurance coverage pursuant to

sect ion 12-61-103.6 at the t ime of the negl igent act or omission.

(4) The fund shal l be l iable to pay only for re imbursement of actual and

direct out -of-pocket losses, court costs and reasonab le attorney fees

that remain unpaid on the judgment, and post judgment interest as

provided by law. The fund shal l not be l iable for the payment of

pre judgment interest of any kind.

(5) The fund shal l not be l iable for losses attr ibutable to pain and suffer ing

or mental anguish.

(6) Attorney fees recoverable pursuant to th is sect ion shal l not exceed

twenty-f ive percent of the amount of actual and direct out- of-pocket

losses paid from the fund.

(7) The fund shal l be l iable only for c la ims based on judgments against

natural persons.


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(8) The fund shal l not be subject to a cla im by a l icensee involv ing a

transact ion in which the appl ican t performed acts for which a broker ’s or

salesperson’s l icense is required.

(9) Notwi thstanding any provis ion of th is part 3 to the contrary, the l iabi l i ty

of the fund shal l not exceed:

(a) For appl icat ions f i led after July 1, 1987, and before July 1, 1991,

f i f teen thousand dol lars per claimant;

(b) For appl icat ions f i led on or af ter July 1, 1991, and before July 1,

1995, f if teen thousand dollars per t ransact ion, regardless of the

number of persons aggr ieved or the number of real estate l icensees

or parcels of real estate involved in such transactions;

(c) For appl icat ions f i led on or af ter July 1, 1995, and before July 1,

1999, twenty thousand dollars per t ransact ion, regardless of the

number of persons aggr ieved, the number of parcels, or the number

of real estate l icensees involved in such transaction;

(c.5) For appl icat ions f i led on or af ter July 1, 1999, f if ty thousand

dol lars per transact ion, regardless of the persons aggr ieved, the

number of parcels, or the number of real estate l icensees involved in

such transactions;

(d) One hundred f if ty thousand dol lars for any one l icensee, regardless

of the number of judgments entered against the l icensee, parcels of

real estate involved, number of l icensees involved, or number of

persons aggr ieved in such transactions.

(10) (a) If the val id ly f i led appl icat ions exceed the l imi tat ion on l iabi l i ty set

for th in paragraphs (a) to (d) of subsect ion (9) of this sect ion, then

payment from the fund shal l be d istr ibuted among such appl icants in

the rat io that their respect ive c la ims bear to the aggregate of such

val id c la ims or in such other manner as a court of record may deem

equi table. Distr ibut ion of such moneys shal l be among the persons

ent i t led to share therein wi thout regard to the order of pr ior i ty in

which their respective judgments may have been obta ined or their

appl icat ions may have been f i led.


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(b) I f the commission issues an administrat ive order which d irects

payment from the fund in accordance wi th sect ion 12-61-303 and

this subsect ion (10), any prospect ive appl icant affec ted by such

order may f i le a pet i t ion wi th the appropr ia te court pursuant to

section 12-61-304. In that proceeding, the commission may then

move the court for an order consol idat ing or jo in ing a l l appl icants

and prospect ive appl icants whose judgments have been entered

against a common l icensee judgment debtor in to one act ion so that

the respect ive r ights of a l l such appl icants may be equi tably

adjudica ted and sett led.

(11) (a)The unexpended and unencumbered balance of the real estate

recovery fund, as such fund existed pr ior to its repeal, shal l be

transferred to the d iv is ion of real estate

cash fund.

(b)This part 3 is repealed, effect ive when the last f inal judgment from

any of the c iv i l act ions a l lowed pursuant to subsect ion (2) of th is

sect ion becomes effect ive and any resul t ing c la im has been paid

according to law. The director of the divis ion of real estate shal l

not i fy the revisor of statutes when the condi t ion speci f ied in th is

paragraph (b) has been satisf ied.

§ 12 -61 -303, C .R.S. S impl i f i ed p rocedure – app l i ca t i on f o r admin i s t ra t i ve

o rde r f o r pay men t f rom the f und – ru les .

(1) A person who obtains a f inal judgment in any court of competent jur isd ict ion

against a real estate broker or salesperson may f i le a ver i f ied appl icat ion

wi th the Colorado real estate commission for an administrat ive order for

payment from the fund of any amount remaining unpaid on the judgment.

The burden shal l be upon such appl icant to show the val id i ty of the

appl ica t ion under th is part 3 and to provide the commission wi th such

information as the commission may deem necessary to determine the

val id i ty of the applicat ion.

(2) The appl icat ion shal l be made on a form provided by the commission, which

form shal l be suff ic ient to provide the appl icant wi th a reasonable

opportuni ty to show compl iance wi th this part 3 and shal l require that the

appl icant submit the fol lowing information:


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(a) The name, address, and te lephone number of the appl icant;

(b) If the appl icant is represented by an attorney, the name, business

address, te lephone number, and Colorado Supreme Cour t registrat ion

number of the attorney;

(c) Ident i f icat ion of the under ly ing judgment forming the basis of the

appl icat ion, including the named part ies, case number, and court

enter ing judgment;

(d) The amount of the c la im and an explanation of the appl icant ’s

computat ion of the

c la im; and

(e) Any other in formation the commission reasonably deems necessary to

determine the val id i ty of the applicat ion.

(3) The form provided to the appl icant by the commission shal l conta in, in a

prominent p lace, the fo l lowing not ice to the l icensee judgment debtor:

NOT ICE: B a se d on a j u dg m en t e n te re d a ga i n s t y ou i n t he ab ov e - c ap t i on ed m a t te r , a n

app l i ca t i on fo r a n admin is t ra t i ve o rde r d i re c t ing payment has been f i l ed w i th the re a l

es ta te commi ss ion .

I f the rea l es ta te commiss ion issues an admin is t ra t i ve o rder fo r payment , your rea l

es ta te l i cense w i l l au to ma t i ca l l y be re v ok ed wh en t he o rd e r i s i s su ed an d p ay m e n t i s

m ade t o th e app l i c an t . Any subsequen t app l ica t i on f o r a l i cense sha l l no t be g ran ted

un t i l the amount pa id has been re imbursed , p lus in te res t a t the s ta tu to ry ra te , and the

passage o f one year f rom the da te o f revo ca t ion .

I f you w ish t o ob jec t t o t h e app l i c a t io n , you m us t f i l e a w r i t t en ob jec t i on , se t t i ng f o r t h t h e

spec i f i c g rounds f o r su ch ob je c t i on , w i t h th e co m miss ion w i th i n th i r t y d ays a f t e r

ha v in g be en se r ve d w i th a cop y o f the app l ica t ion . I f you do no t f i l e a wr i t ten

ob jec t ion , you wa i ve your r igh t to defend aga ins t the c la i m .

(4) The appl icant shal l a lso be required to show that:

(a) There is no col lusion between the appl icant and the judgment debtor or

any other person l iable to the appl icant in the transact ion for which the

appl icant seeks payment from the fund;


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(b) The judgment debtor was l icensed as a real estate broker or salesperson

at the t ime of

the transact ion;

(c) The judgment debtor was act ing in a real estate transact ion as a real

estate broker or salesperson, performing acts for which a real estate

broker ’s or salesperson’s l icense is required under th is art ic le, or that

the transact ion involved acts for which a real estate l icense was

required and the judgment debtor was act ing as a pr incipal , not an

agent, in that transaction;

(d) The judgment debtor committed fraud, wi l l fu l misrepresentat ion, or

conversion of

t rust funds;

(d.5)The judgment debtor committed negl igence and did not , at the t ime of

the negl igent act or omission, have in effec t a complying pol icy of

errors and omissions insu rance coverage pursuant to sect ion

12-61-103.6;

(e) The applicat ion was not f i led more than one year af ter f inal i ty of the

judgment against the judgment debtor, i nc luding appeals;

( f ) The appl icant has reasonably sought to obta in a judgment against a l l

persons and ent i t ies

that are l iable to the appl icant for losses su ffered in the transact ion

upon which the fund cla im is based;

(g) The appl icant has made reasonable searches and inquir ies to ascerta in

whether there exists real or personal property or other assets avai lable

to sat isfy the judgment in the under ly ing c iv i l act ion and has undertaken

reasonable legal means to reach such assets or other property in

sat isfact ion of the judgment;

(h) The judgment debtor has been served wi th a copy of the appl icat ion as

required by subsect ion (5) of th is sect ion.

(5) When any person f i les an appl icat ion wi th the commission request ing the

issuance of an administrat ive order for payment from the fund, a copy of

the ver i f ied appl icat ion including the not ice required by subsect ion (3) of

this sect ion and any other documents f i led wi th the appl icat ion shal l be


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served upon the l icensee judgment debtor by the appl icant wi th in twenty

days after the date upon which the appl icat ion is f i led. A cert i f icate or

aff idavi t of such service shal l be f i led wi th the commission. Service upon a

l icensee judgment debtor shal l be made according to the Colorado ru les of

c iv i l procedure and subsect ion (6) of th is sect ion.

(6) (a) Service upon any real estate broker who is l icensed or who renews a

l icense under part 1 of th is ar t ic le on or af ter January 1, 2008, and upon

whom personal service cannot be made wi th reasonable d i l igence shal l

be upon the registered agent of such real estate broker. I f the real

estate broker has no registered agent, the registered agent is not

located under its registered agent name at i ts registered agent

address, or the registered agent cannot with reasonable d i l igence be

served, the real estate broker may be served by registered mai l or by

cert i f ied mai l , return receipt requested, addressed to the ent i ty at i ts

pr incipal address. Service is perfected under th is subsect ion (6) at the

ear l iest of :

( I ) The date the rea l estate broker rece ives the process, not ice,

or demand;

( I I ) The date shown on the return receipt, i f s igned by or on behal f of the

real estate broker; or

( I I I ) F ive days af ter mai l ing.

(b) (Deleted by amendment, L. 2008, p. 498, § 6, ef fect ive Apr i l 17 , 2008.)

(7) The judgment debtor shal l have th i r ty days after being served w i th the

appl icat ion wi th in which to f i le a wri t ten object ion to payment from the

fund by the commission. Such object ion shal l be served upon the

commission in accordance with the Colorado ru les of c iv i l procedure and

shal l c lear ly set for th the grounds upo n which the object ion is made. Fai lure

to f i le such an object ion shal l const i tute waiver of any r ight to proceed

under sect ion 12-61-304.

(8) (a) I f the commission determines that an appl icat ion is complete and val id,

the commission may, by administrat ive order:

( I) Pay the requested amount or such lesser amount as the commission

may deem appropriate;


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( I I ) Set t le the c la im with the appl icant for an appropr iate agreed

amount ; or

( I I I ) Deny the appl icat ion on the grounds that the appl icat io n does not

demonstrate compliance wi th th is part 3.

(b) Such administrat ive determinat ion shal l be promptly made by the

commission or its designee in wr i t ing in the form of an administrat ive

order and, i f the appl icat ion is denied, sett ing for th the gene ral

grounds therefor.

(c) Such administrat ive order shal l be sent by regular mail to the

appl icant and the judgment debtor at their last known addresses

according to records of the commission.

(9) The commission may adopt ru les implementing th is part 3 in accordance

wi th art ic le 4 of t i t le 24, C.R.S.

§ 12 -61 -304, C .R.S. Procedu re upon ob jec t i on to payment o r den ia l

o f app l i ca t ion .

(1) If the commission issues an administrat ive order that denies an appl icat ion

for payment from the fund in whole or in part , the appl icant may f i le a

ver i f ied pet i t ion for payment from the fund in the court that entered the

judgment on which the appl ica t ion is based. When an applicant f i les such a

pet i t ion, the appl icant shal l serve a copy of the ver i f ied pet i t ion, incl uding

the not ice required by subsect ion (2) of this sect ion upon the real estate

commission and upon the l icensee judgment debtor in accordance wi th the

Colorado ru les of c iv i l procedure and sect ion 12 -61-303 (6). A cert i f icate or

aff idavi t of such service shall be f i led wi th the court.

(2) When a pet i t ion is f i led wi th the court pursuant to subsect ion (1) of th is

sect ion, the pet i t ion shal l be accompanied by a not ice that shal l s tate

as follows:

NOT ICE: Based on a j udg men t en te red aga ins t you i n the abov e - cap t ioned ma t te r , a

pe t i t i on fo r an o rd e r d i rec t ing payment ha s been f i l e d w i th the cour t .

I f th e r ea l es ta te co m m is s i on ma k es a p ay m en t pu rs u an t to a c ou r t o rd e r ba se d upo n

th i s pe t i t i on , your rea l es ta te l i cense w i l l au to ma t i ca l l y b e r e vo ke d whe n t he c o u r t

o r de r b ec o me s f ina l a nd p ayme nt i s made . An y subsequen t app l ica t ion fo r a l i cense


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sha l l no t b e g ran ted un t i l t he amount pa id has been re i mbu rsed , p l us in t e re s t a t the

s ta tu to ry ra t e , and th e passage o f one year f rom th e da te o f re voc a t ion .

I f you w i sh to de fend aga in s t th i s c la i m , you mus t f i l e a wr i t ten respon se w i th the cou r t

and ma i l a cop y to th e p a r t y f i l i ng th e p e t i t i o n a nd t o th e r ea l e s ta te c o m mi ss i on w i th i n

th i r t y d ay s a f t e r ha v i ng be en se rved w i th th is no t i c e . I f you do no t f i l e a wr i t t en

re sponse , you wa iv e your r igh t to defend aga ins t the c la i m .

(3) If the judgment debtor f i les an object ion to the issuance of an

administrat ive order for payment from the fund in accordance wi th sect ion

12-61-303 (7) and the commission issues an administrat iv e order d irect ing

payment from the fund, the judgment debtor may f i le a ver i f ied pet i t ion

object ing to payment from the fund in the court that entered the judgment

on which the appl icat ion was based. When a judgment debtor f i les such a

pet i t ion, the judgment debtor shal l serve a copy of the petit ion upon the

real estate commission and the appl icant in accordance wi th the Colorado

ru les of c iv i l procedure. A cert i f icate or aff idavi t of such service shal l be

f i led wi th the court.

(4) A pet i t ion f i led wi th a court pursuant to subsect ion (1) or (2) of th is sect ion

shal l be in the form of a p leading and shal l comply wi th the ru les of

procedure appl icable to the court in which it is f i led. Such pet i t ion shal l be

f i led in the appropr iate court no later than th i r ty days from the date upon

which the administrat ive order is mai led by the commission pursuant to

sect ion 12-61-303 (8). The pet i t ion shal l be accompanied by a ver i f ied

copy of the appl icat ion form and any attached documents that were f i led

wi th the commission.

(5) The real estate commission and any person served wi th a pet i t ion pursuant

to th is sect ion shal l have th i r ty days af ter service of the pet i t ion wi th in

which to f i le a wri t ten answer. The court shal l thereafter set the matter

for hearing.

(6) At a hear ing under subsect ion (5) of this sect ion, the party f i l ing the

pet i t ion shal l be required to show compl iance, or lack thereof, wi th sect ions

12-61-302 to 12-61-304. Such hear ing shal l be on the meri ts of the

appl icat ion and shal l not be in the nature of judic ia l review of the

administrat ive order issued by the commission or of the procedure

employed in issuing such order.


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§ 12-61-305, C .R.S. Commiss ion may defend agains t pet i t i on – bu rden o f

p roof – p resumpt ion – compromise o f c la ims.

The real estate commission may, on behal f of the fund, defend against a

pet i t ion f i led pursuant to sect ion 12-61-304 and shal l have recourse to a l l

appropr iate means of defense and appeal , including examinat ion of wi tnesses and

the r ight to re l i t igate any issues tha t were mater ia l and re levant to the proceeding

against the fund and that were f inal ly adjudicated in the under ly ing act ion on

which the judgment in favor of the appl icant was based. I f such judgment was by

defaul t , s t ipulat ion, or consent, or whenever the act ion against the l icensee

judgment debtor was defended by a trustee in bankruptcy, the appl icant shal l have

the burden of producing evidence of, and the burden of proving, the negl igence,

fraud, wi l l fu l misrepresentat ion, or conversion of trust funds by the l icensee

judgment debtor; otherwise, the judgment shal l create a rebuttable presumption

of the negl igence, fraud, wi l l ful misrepresentat ion, or conversion of trust funds

by the l icensee, and such presumption shall affect the burden of producing

evidence. The real estate commission may, subject to court approval , sett le a

c la im based upon the pet i t ion of an appl icant and shal l not be bound by any pr ior

compromise of the judgment debtor.

§ 12 -61 -306, C .R.S. Defense aga ins t pe t i t i on – conc lus ive ad jud i ca t ion

o f issues .

The judgment debtor may defend an act ion against the fund and shal l have

recourse to a l l appropr iate means of defense and appeal , including examinat ion of

wi tnesses; except that matters f inal ly adjudicated in the under ly ing act ion,

including, but not l imi ted to, the issues of negl igence, fraud, wi l l fu l

misrepresentat ion, or conversion of trust funds, are conclusive against both the

l icensee judgment debtor and the appl icant and may not be rel it igated.

§ 12 -61 -307, C .R.S. Automat i c re vocat ion o f l i cense – re ins ta tement .

(1) Should the real estate commission pay from the fund any amount in

sett lement of a c la im or toward sat isfact ion of a judgment against a l icensed

broker or salesperson, e i ther by administrat ive order or by order of the

court, the l icense of the broker or salesperson shal l be automatical ly

revoked upon the f inal date of such order.

(2) No such broker or salesperson shal l be el ig ib le to be l icensed again unt i l

such broker or salesperson has repaid in fu l l , p lus interest at the statutory


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rate, the amount paid from the fund on the broker or salesperson’s account

and one year has passed from the date of revocat ion.

§ 12 -61 -308, C .R.S . D is t r ibu t ion f rom fund – fund insu f f i c i en t t o pay c l a ims

– de layed d is t r ibut ion au thor i zed.

(1) Upon the issuance by the commission of an administrat ive order d i rect ing

that payment be made out of the fund, or upon the entry of such an order

by a court of competent jur isd ict ion, the contro l ler is author ized to draw a

warrant for the payment of the same upon a voucher approved by the real

estate commission, and the state treasurer is author ized to pay the same

out of the fund.

(2) If at any t ime the balance remaining in the fund is insuff ic ient to sat isfy

any duly author ized c la im or port ion thereof, the real estate commission,

when suf f ic ient money has been deposi ted in the fund, shal l sat isfy such

unpaid claims or port ions thereof, in the order that such c la ims or

port ions thereof were or ig inal ly f i led, plus accumulated interest at the rate

of four percent per year.

(3) Af ter an administrat ive order for payment from the fund has been issued

by the commission, the commission may delay payment in order to a l low

the f i l ing per iods in sect ion 12-61-304 to expire. In the event that a

pet i t ion is f i led pursuant to section 12-61-304, payment pursuant to the

administrat ive order shal l be withheld pending the outcome of the court

proceeding on the peti t ion.

§ 12 -61 -309, C .R.S. Subrogat i on o f r igh ts .

(1) When, upon administrat ive order of the real estate commission or of any

court, the real esta te commission has made payment from the fund to an

appl icant, the real estate commission shal l be subrogated to the r ights of

the appl icant wi th respect to the amount so paid.

(2) Up to an amount equal to f ive percent of the payment to an appl icant may

be drawn from the fund and expended by the real esta te commission for

the purpose of enforcing the r ights of a particu lar appl icant to which the

commission is subrogated pursuant to th is sect ion.


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D. Par t 8 – B rok e rage Re la t ionsh ips

§ 12 -61 -801, C .R.S. Leg i s la t i ve dec la ra t ion .

(1) The general assembly f inds, determines, and declares that the publ ic wi l l

best be served through a better understanding of the publ ic ’s legal and

working re lat ionships wi th real estate brokers and by being able to engage

any such real estate broker on terms and under condi t ions that the publ ic

and the real estate broker f ind acceptable. This includes engaging a broker

as a single agent or transact ion -broker. Indiv idual members of the publ ic

should not be exposed to l iabi l i ty for acts or omissions of real estate

brokers that have not been approved, d i rected, or rat if ied by such

indiv iduals. Further, the publ ic should be advised of the general dut ies,

obl igat ions, and responsib i l i t ies of the real estate broker they engage.

(2) This part 8 is enacted to govern the re lat ionships between real

estate brokers and sel lers, landlords, buyers, and tenants in real

estate transactions.

§ 12 -61 -802, C .R.S. Def in i t ions .

As used in th is part 8, unless the context otherwise r equires:

(1) “Broker” shal l have the same meaning as set for th in sect ion 12 -61-101 (2),

except as otherwise speci f ied in th is part 8.

(1.3) “Customer” means a party to a real estate transact ion wi th whom the broker

has no brokerage re lat ionship because such party has not engaged or

employed a broker.

(1.5) “Designated broker” means an employing broker or employed broker who is

designated in wr i t ing by an employing broker to serve as a s ingle agent or

transact ion-broker for a sel ler , landlord, buyer, or tenant in a real estate

transact ion. “Designated broker” does not include a real estate brokerage

f i rm that consists of only one l icensed natural person.

(2) “Dual agent” means a broker who, wi th the wr i t ten informed consent of a l l

part ies to a contemplated real estate transact ion, is engaged as a l imi ted

agent for both the sel ler and buyer or both the landlord and tenant.

(3) “L imited agent” means an agent whose dut ies and obl igat ions to a pr incipal

are only those set for th in sect ion 12-61-804 or 12-61-805, wi th any


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addi t ional dut ies and obl igat ions agreed to pursuant to sect ion

12-61-803 (5).

(4) “Single agent” means a broker who is engaged by and represents only one

party in a real estate t ransact ion. A single agent includes the following:

(a) “Buyer ’s agent” , which means a broker who is engaged by and

represents the buyer in a real estate transact ion;

(b) “Landlord’s agent” , which means a broker who is engaged by and

represents the landlord in a leasing transact ion;

(c) “Sel ler ’s agent” , which means a broker who is engaged by and

represents the sel ler in a real estate transact ion; and

(d) “Tenant’s agent” , which means a broker who is engaged by and

represents the tenant in a leasing transaction.

(5) “Subagent” means a broker engaged to act for another broker in

performing brokerage tasks for a pr incipal . The subagent owes the same

obl igat ions and responsib i l i t ies to the pr incipal as does the pr incipal ’s

broker.

(6) “Transact ion-broker” means a broker who assists one or more part ies

throughout a contemplated real estate transact ion with communication,

in terposi t ion, advisement, negotiat ion, contract terms, and the closing of

such real estate transact ion without being an agent or advocate for the

interests of any party to such transact ion. Upon agreement in wr i t ing

pursuant to section 12-61-803 (2) or a wri t ten d isclosure pursuant to

sect ion 12-61-808 (2) (d), a t ransact ion-broker may become a single agent.

§ 12 -61 -803, C .R.S. Re la t ionsh ips be tw een b roke rs and the pub l i c .

(1) When engaged in any of the act iv i t ies enumerated in sect ion 12-61-101 (2),

a broker may act in any transact ion as a single agent or transact ion-

broker. The broker ’s general dut ies and obl igat ions ar is ing from that

re lat ionship shal l be disclosed to the sel ler and the buyer or to the landlord

and the tenant pursuant to sect ion 12-61-808.

(2) A broker shal l be considered a transact ion-broker unless a single agency

re lat ionship is establ ished through a writ ten agreement between the broker

and the party or part ies to be represented by such broker.


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(3) A broker may work wi th a s ingle party in separate transact ions pursuant to

d i f ferent re lat ionships including, but not l imi ted to, sel l ing one property as

a sel ler ’s agent and working with that sel ler in buying another property as

a transact ion-broker or buyer ’s agent, but only i f the broker compl ies wi th

th is part 8 in establ ish ing the re lat ionships for each transaction.

(4) A broker l icensed pursuant to part 1 of this art ic le, whether act ing as a

single agent or transact ion-broker, may complete s tandard forms including

those promulgated by the Colorado real estate commission and may advise

the part ies as to effects thereof if the broker is performing the act iv i t ies

enumerated or referred to in sect ion 12-61-101 (2) in the transact ion in

which the forms are to be used. In any such transact ion, the broker shal l

advise the part ies that the forms have important legal consequences and

that the part ies should con sul t legal counsel before s igning such forms.

(5) Nothing contained in this sect ion shal l prohib i t the publ ic from enter ing

into wri t ten contracts wi th any broker which contain dut ies, obl igat ions, or

responsibi l i t ies which are in addi t ion to those speci f ied in th is part 8.

(6) (a)If a real estate brokerage f i rm has more than one l icensed natural

person, the employing broker or an indiv idual broker employed or

engaged by that employing broker shal l be designated to work wi th the

sel ler , landlord, buyer, or tenant as a designated broker. The employing

broker may designate more than one of its indiv idual brokers to work

with a sel ler, landlord, buyer, or tenant.

(b) The brokerage re lat ionship establ ished between the sel ler , landlord,

buyer, or tenant and a designated broker, including the dut ies,

obl igat ions, and responsib i l i t ies of that re lat ionship, shal l not extend to

the employing broker nor to any other broker employed or engaged by

that employing broker who has not been so designated and shal l not

extend to the f irm, partnership, l imi ted l iabi l i ty company, associat ion,

corporat ion, or other ent i ty that employs such broker.

(c) A real estate broker may have designated brokers working as single

agents for a sel ler or landlord and a buyer or tenant in the same real

estate transact ion wi thout creat ing dual agency for the employing real

estate broker, or any broker employed or engaged by that employing

real estate broker.


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(d) An indiv idual broker may be designated to work for both a sel ler or

landlord and a buyer or tenant in the same transact ion as a transact ion-

broker for both, as a s ingle agent for the sel ler or landlord treat ing the

buyer or tenant as a customer, or as a single agent for a buyer or

tenant treat ing the sel ler or landlord as a customer, but not as a s ingle

agent for both. The appl icable designated broker re lat ionship shal l be

disclosed in wr i t ing to the sel ler or landlord and buyer or tenant in

a t imely manner pursuant to ru les promulgated by the real

estate commission.

(e) A designated broker may work wi th a sel ler or landlord in one

transact ion and work wi th a buyer or tenant in another transact ion.

( f ) When a designated broker serves as a single agent pursuant to sect ion

12-61-804 or 12-61-805, there shall be no imputat ion of knowledge to

the employing or employed broker who has not been so designated.

(g) The extent and l imi tat ions of the brokerage re lat ionship with the

designated broker shall be disclosed to the sel ler, landlord, buyer, or

tenant working wi th that designated broker pursuant to sect ion

12-61-808.

(7) No sel ler , buyer, landlord, or tenant shal l be vicar iously l iable for a

broker ’s acts or omissions that have not been approved, d i rected, or rat i f ied

by such sel ler , buyer, landlord, or tenant.

(8) Nothing in this sect ion shall be construed to l imit the employing broker ’s

or f irm’s responsib i l i ty to supervise l i censees employed by such broker or

f i rm nor to shie ld such broker or f i rm from vicar ious l iabi l i ty.

§ 12 -61 -804, C .R.S. S ing le agent engaged by se l l e r o r land lo rd .

(1) A broker engaged by a sel ler or landlord to act as a sel ler ’s agent or a

landlord ’s agent is a l imi ted agent wi th the fol lowing dut ies and

obl igat ions:

(a) To perform the terms of the wr i t ten agreement made wi th the sel ler or

landlord ;

(b) To exercise reasonable ski l l and care for the sel ler or landlord;


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(c) To promote the interests of the sel ler or landlord wi th the utmost good

fa i th, loyal ty, and f idel i ty , including, but not l imited to:

( I) Seeking a pr ice and terms which are acceptable to the sel ler or

landlord; except that the broker shal l not be obl igated to seek

addi t ional offers to purchase the property whi le the property is

subject to a contract for sale or to seek addit ional offers to lease

the property whi le the proper ty is subject to a lease or le t ter of in tent

to lease;

( I I ) Present ing a l l of fers to and from the sel ler or landlord in a t imely

manner regardless of whether the property is subject to a contract for

sale or a lease or le t ter of in tent to lease;

( I I I ) D isc los ing to the sel ler or landlord adverse mater ia l facts actual ly

known by the broker;

( IV) Counsel ing the sel ler or landlord as to any mater ia l benefi ts or r isks

of a transact ion which are actual ly known by the broker;

(V) Advis ing the sel ler or landlord to obta in expert advice as to mater ia l

matters about which the broker knows but the speci f ics of which are

beyond the expert ise of such broker;

(VI) Accounting in a t imely manner for a l l money and property

received; and

(VII) In forming the sel ler or landlord that such sel ler or landlord shal l not

be vicar iously l iable for the acts of such sel ler ’s or landlord ’s agent

that are not approved, d i rected, or rat i f ied by such sel ler or landlord.

(d) To comply wi th a l l requirements of th is ar t ic le and any ru les promulgated

pursuant to th is art ic le; and

(e) To comply wi th any appl icable federal , state, or local laws, ru les,

regulat ions, or ord inances including fa i r housing and civi l r ights sta tutes

or regulat ions.

(2) The fo l lowing in formation shal l not be disclosed by a broker act ing as a

sel ler ’s or landlord ’s agent wi thout the informed consent of the sel ler

or landlord:


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(a) That a sel ler or landlord is wi l l ing to accept less than the asking pr ice or

lease rate for the property ;

(b) What the motivat ing factors are for the party sel l ing or leasing

the property;

(c) That the sel ler or landlord wi l l agree to f inancing terms other than

those offered;

(d) Any mater ia l in formation about the sel ler or landlord unless d isclosure

is required by law or failure to d isclose such information would

const i tute fraud or d ishonest deal ing; or

(e) Any facts or suspic ions regarding c i rcumstances which may

psychological ly impact or st igmatize any real property pursuant to

sect ion 38-35.5-101, C.R.S.

(3) (a) A broker act ing as a sel ler ’s or landlord ’s agent owes no duty or

obl igat ion to the buyer or tenant; except that a broker shal l , subject to

the l imi tat ions of sect ion 38-35.5-101, C.R.S., concerning

psychological ly impacted property, d isclose to any prospect ive buyer or

tenant a l l adverse mater ia l facts actual ly known by such broker. Such

adverse mater ia l facts may include but shal l not be l imi ted to adverse

mater ia l facts perta in ing to the t i t le and the physical condi t ion of the

property, any mater ia l defects in the property, and any environmental

hazards affect ing the property which are required by law to

be disclosed.

(b) A sel ler ’s or landlord ’s agent owes no duty to conduct an independent

inspect ion of the property for the benefi t of the buyer or tenant and

owes no duty to independently ver i fy the accuracy or completeness of

any statement made by such sel ler or landlord or any

independent inspector.

(4) A sel ler ’s or landlord ’s agent may show al ternat ive propert ies not owned by

such sel ler or landlord to prospect ive buyers or tenants and may l ist

competing propert ies for sale or lease and not be deemed to have

breached any duty or obl igat ion to such sel ler or landlord.

(5) A designated broker act ing as a sel ler ’s or landlord ’s agent may cooperate

with other brokers but may not engage or create any subagents.


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§ 12 -61 -805, C .R.S . S ing le agent engaged by buye r o r tenant .

(1) A broker engaged by a buyer or tenant to act as a buyer ’s or tenant’s

agent shal l be a l imi ted agent wi th the fo l lowing duties and obligat ions:

(a) To perform the terms of the wr i t ten agreement made wi th the buyer

or tenant;

(b) To exercise reasonable ski l l and care for the buyer or tenant;

(c) To promote the interests of the buyer or tenant wi th the utmost good

fa i th, loyal ty, and f idel i ty , including, but not l imi ted to:

( I) Seeking a pr ice and terms which are acceptable to the buyer or

tenant; except that the broker shal l not be obl igated to seek other

propert ies whi le the buyer is a party to a contract to purchase

property or whi le the tenant is a party to a lease or le t ter of in tent

to lease;

( I I) Presenting all of fers to and from the buyer or tenant in a t imely

manner regardless of whether the buyer is a l ready a party to a

contract to purchase property or the tenant is a l ready a party to a

contract or a let ter of in tent to lease;

( I I I ) D isc los ing to the buyer or tenant adverse mater ia l facts actual ly

known by the broker;

( IV) Counsel ing the buyer or tenant as to any mater ia l benefi ts or r isks

of a transact ion which are actual ly known by the broker;

(V) Advis ing the buyer or tenant to obta in expert advice as to mater ia l

matters about which the broker knows but the speci f ics of which are

beyond the expert ise of such broker;

(VI) Accounting in a t imely manner for a l l money and property

received; and

(VII) Informing the buyer or tenant that such buyer or tenant shal l not be

vicar iously l iable for the acts of such buyer’s or tenant’s agent that

are not approved, d i rected, or rat i f ied by such buyer or tenant;

(d) To comply wi th a l l requirements of th is ar t ic le and any ru les promulgated



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(e) To comply wi th any appl icable federal , state, or local laws, ru l es,


or regulat ions.

(2) The fo l lowing information shal l not be d isclosed by a broker act ing as a

buyer ’s or tenant’s agent wi thout the informed consent of the buyer or

tenant:

(a) That a buyer or tenant is wi l l ing to pay more than the purchase pr ice or

lease rate for the property ;

(b) What the motivat ing factors are for the party buying or leasing

the property;

(c) That the buyer or tenant wi l l agree to f inancing terms other than

those offered;

(d) Any mater ia l in formation about the buyer or tenant unless disclosure

is required by law or failure to d isclose such information would

const i tute fraud or d ishonest deal ing; or

(e) Any facts or suspic ions regarding c i rcum stances which would


sect ion 38-35.5-101, C.R.S.

(3) (a) A broker act ing as a buyer ’s or tenant’s agent owes no duty or

obl igat ion to the sel ler or landlord; except that su ch broker shal l

d isclose to any prospect ive sel ler or landlord a l l adverse mater ia l facts

actual ly known by the broker including but not l imi ted to adverse

mater ia l facts concerning the buyer ’s or tenant’s f inancia l abi l i ty to

perform the terms of the transact ion and whether the buyer intends to

occupy the property to be purchased as a pr incipal residence.

(b) A buyer ’s or tenant’s agent owes no duty to conduct an independent

invest igat ion of the buyer ’s or tenant’s f inancia l condi t ion for the benefi t

o f the sel ler or landlord and owes no duty to independently ver i fy the

accuracy or completeness of statements made by such buyer or tenant or

any independent inspector.

(4) A buyer ’s or tenant’s agent may show propert ies in which the buyer or

tenant is interested to other prospect ive buyers or tenants wi thout

breaching any duty or obl igat ion to such buyer or tenant. Nothing in th is


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sect ion shal l be construed to prohib i t a buyer ’s or tenant’s agent from

showing competing buyers or tenants the same property a nd from assist ing

competing buyers or tenants in attempting to purchase or lease a

part icu lar property.

(5) A broker act ing as a buyer ’s or tenant’s agent owes no duty to conduct an

independent inspect ion of the property for the benefi t of the buyer or

tenant and owes no duty to independently ver i fy the accuracy or

completeness of statements made by the se l ler , landlord, or independent

inspectors; except that noth ing in th is subsect ion (5) shal l be construed to

l imi t the broker’s duties and obl igat ions im posed pursuant to subsect ion (1)

of th is sect ion.

(6) A broker act ing as a buyer ’s or tenant’s agent may cooperate wi th other

brokers but may not engage or create any subagents.

§ 12 -61 -806, C .R.S . Dua l agent .

(1) A broker shal l not establ ish dual agency wi th any sel ler , landlord, buyer,

or tenant.

(2) to (6) (Deleted by amendment, L. 2002, p. 1060, § 6, ef fect ive January 1, 2003.)

§ 12 -61 -807, C .R.S . T ransac t ion-b roke r .

(1) A broker engaged as a transact ion-broker is not an agent for e i ther party.

(2) A transact ion-broker shal l have the fo l lowing obl igat ions

and responsibi l i t ies:

(a) To perform the terms of any wr i t ten or ora l agreement made wi th any

party to the transact ion;

(b) To exercise reasonable ski l l and care as a transact ion-broker, including,

but not l imi ted to:

( I) Presenting a l l o f fers and counteroffers in a t imely manner regardless

of whether the property is subject to a contract for sale or lease or

le t ter of intent;

( I I) Advis ing the part ies regarding the transact ion and suggest ing that

such part ies obta in expert advice as to material matters about which

the transact ion -broker knows but the speci f ics of which are beyond

the expert ise of such broker;


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( I I I ) Account ing in a t imely manner for a l l money and property r eceived;

( IV) Keeping the part ies fu l ly in formed regarding the transaction;

(V) Assist ing the part ies in complying wi th the terms and condi t ions of

any contract including c losing the transaction;

(VI) Disclosing to all prospect ive buyers or tenants any adverse mater ia l

facts actual ly known by the broker including but not l imi ted to

adverse mater ia l facts perta in ing to the t it le, the physical condi t ion

of the property, any defects in the property, and any environmental

hazards affect ing the property required by l aw to be disclosed;

(VII) Disclosing to any prospect ive sel ler or landlord al l adverse mater ia l

facts actual ly known by the broker including but not l imi ted to

adverse mater ia l facts perta in ing to the buyer ’s or tenant’s f inancia l

abi l i ty to perform the terms of the t ransact ion and the buyer ’s in tent

to occupy the property as a pr incipal residence; and

(V II I) In forming the part ies that as sel ler and buyer or as landlord and

tenant they shal l not be vicar iously l iable for any acts of the

transaction-broker;

(c) To comply wi th a l l requirements of th is ar t ic le and any ru les promulgated


(d) To comply wi th any appl icable federal , state, or local laws, ru les,


or regulat ions.

(3) The fo l lowing information shal l not be d isclosed by a transact ion-broker

wi thout the informed consent of a l l part ies:

(a) That a buyer or tenant is wi l l ing to pay more than the purchase pr ice or

lease rate offe red for the property;

(b) That a sel ler or landlord is wi l l ing to accept less than the asking pr ice or

lease rate for the property;

(c) What the motivat ing factors are for any party buying, sel l ing, or leasing

the property;

(d) That a sel ler , buyer, landlord, or tenant wi l l agree to f inancing terms

other than those offered;


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(e) Any facts or suspic ions regarding c i rcumstances which may


sect ion 38-35.5-101, C.R.S.; or

( f) Any mater ia l in formation about the other party unless d isclosure is

required by law or fa i lure to d isclose such informat ion would const i tute

fraud or d ishonest deal ing.

(4) A transact ion-broker has no duty to conduct an independent inspect io n of

the property for the benefi t o f the buyer or tenant and has no duty to

independently ver i fy the accuracy or completeness of statements made by

the sel ler , landlord, or independent inspectors.

(5) A transact ion-broker has no duty to conduct an independent invest igat ion

of the buyer ’s or tenant’s f inancia l condi t ion or to ver i fy the accuracy or

completeness of any statement made by the buyer or tenant.

(6) A transact ion-broker may do the fo l lowing wi thout breaching any obl igat ion

or responsibi l i ty:

(a) Show al ternat ive propert ies not owned by the sel ler or landlord to a

prospect ive buyer

or tenant;

(b) L ist competing properties for sale or lease;

(c) Show propert ies in which the buyer or tenant is interested to other

prospect ive buyers or tenants; and

(d) Serve as a single agent or transact ion -broker for the same or for

d i f ferent part ies in other real estate transactions.

(7) There shal l be no imputat ion of knowledge or information between any

party and the transact ion-broker or among persons wi th in an ent i ty

engaged as a transaction-broker.

(8) A transact ion-broker may cooperate wi th other brokers but shal l not engage

or create any subagents.

§ 12 -61 -808, C .R.S . Broke r d isc losures .

(1) (a) Any person, f i rm, pa rtnership, l imi ted l iabi l i ty company, associat ion, or

corporat ion act ing as a broker shal l adopt a wr it ten of f ice pol icy that


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ident i f ies and descr ibes the re lat ionships offered to the publ ic by

such broker.

(b) A broker shal l not be required to offer or engage in any one or in a l l o f

the brokerage re lat ionships enumerated in section 12-61-804, 12-61-

805, or 12-61-807.

(c) Wri t ten d isclosures and wri t ten agreements required by subsect ion (2)

of this sect ion shal l conta in a statement to the sel ler , land lord, buyer,

or tenant that d i f ferent brokerage re lat ionships are avai lable that

include buyer agency, seller agency, or status as a transact ion-broker.

Should the sel ler , landlord, buyer, or tenant request in formation or ask

questions concerning a brokerage re lat ionship not offered by the broker

pursuant to the broker’s wr i t ten off ice pol icy enumerated in subsect ion

(1) (a) of th is sect ion, the broker shal l provide to the party a wri t ten

def in i t ion of that brokerage re lat ionship that has been promulgated by

the Colorado real estate commission.

(d) Disclosures made in accordance wi th th is part 8 shal l be suff ic ient to

d isclose brokerage re lat ionships to the publ ic.

(2) (a) (I) Pr ior to engaging in any of the act iv i t ies enumerated in sect ion 12-

61-101 (2), a transaction-broker shal l d isclose in wr i t ing to the party

to be assisted that such broker is not act ing as agent for such par ty

and that such broker is act ing as a transaction-broker.

( I I) As part of each re lat ionship entered into by a broker pursuant to

subparagraph (I) of this paragraph (a), writ ten disclosure shal l be

made which shal l conta in a s ignature b lock for the buyer, sel ler ,

landlord, or tenant to acknowledge receipt of such disclosure. Such

disclosure and acknowledgment, by itself , sha ll not const i tute a

contract with the broker. I f such buyer, sel ler , landlord, or tenant

chooses not to s ign the acknowledgment, the broker shal l note that

fact on a copy of the d isclosure and shal l reta in such copy.

( I I I ) I f the transact ion-broker undertakes any obl igat ions or

responsibi l i t ies in addit ion to or d i f ferent from those set for th in

sect ion 12-61-807, such obl igat ions or responsib i l i t ies shall be


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disclosed in a wri t ing which shal l be signed by the

involved part ies.

(b) Pr ior to engaging in any of the act iv i t ies enumerated in sect ion 12-61-

101 (2), a broker in tending to establ ish a single agency re lat ionship wi th

a sel ler , landlord, buyer, or tenant shal l enter in to a wri t ten agency

agreement wi th the party to be represented. Such agreemen t shal l

d isclose the dut ies and responsib i l i t ies speci f ied in sect ion 12 -61-804 or

12-61-805, as appl icable. Not ice of the single agency re lat ionship shall

be furn ished to any prospect ive party to the proposed transact ion in a

t imely manner.

(c) (Deleted by amendment, L. 2002, p. 1061, § 8, effect ive January 1,

2003.)

(d) ( I) Pr ior to engaging in any of the act iv i t ies enumerated in sect ion

12-61-101 (2), a broker in tending to work wi th a buyer or tenant as

an agent of the sel ler or landlord shal l provid e a wri t ten d isclosure to

such buyer or tenant that shal l contain the fol lowing:

(A) A statement that the broker is an agent for the sel ler or landlord

and is not an agent fo r the buyer or tenant;

(B) A l is t of the tasks that the agent in tends to perform for the sel ler

or landlord wi th the buyer or tenant; and

(C) A statement that the buyer or tenant shal l not be v icar iously l iable

for the acts of the agent unless the buyer or tenant approves,

d i rects, or rat i f ies such acts.

( I I ) The wr i t ten disc losure requi red pursuant to subparagraph ( I) of th is

paragraph (d), shal l conta in a s ignature b lock for the buyer or tenant

to acknowledge receipt of such disclosure. Such disclosure and

acknowledgment, by i tse l f , shal l not const i tu te a contract wi th the

broker. I f the buyer or tenant does not s ign such disclosure, the

broker shal l note that fact on a copy of such disclosure and reta in

such copy.

(e) (Deleted by amendment, L. 2002, p. 1061, § 8, effect ive January 1,

2003.)


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( f ) A broker who has a lready establ ished a re lat ionship wi th one party to a

proposed transact ion shal l advise at the earliest reasonable opportuni ty

any other potent ia l part ies or their agents of such establ ished

relat ionship.

(g) ( I ) Pr ior to engaging in any of the act iv i t i es enumerated in sect ion 12 -61-

101 (2), the sel ler , buyer, landlord, or tenant shal l be advised in any

wri t ten agreement with a broker that the brokerage re lat ionship

exists only with the designated broker, does not extend to the

employing broker or to any other brokers employed or engaged by

the employing broker who are not so designated, and does not

extend to the brokerage company.

( I I) Nothing in this paragraph (g) shal l be construed to l imit the

employing broker ’s or f i rm’s responsib i l i ty to supervise l icensees

employed by such broker or f i rm nor to shie ld such broker or f i rm

from vicar ious l iabil i ty.

§ 12 -61 -809, C .R.S . Du ra t i on o f re la t ionsh ip .

(1) (a) The re lat ionships set for th in th is part 8 shal l commence at the t ime that

the broker is engaged by a party and shal l continue unt i l performance or

complet ion of the agreement by which the broker was engaged.

(b) I f the agreement by which the broker was engaged is not performed or

completed for any reason, the re lat ionship shal l end at the ear l ier of

the following:

( I) Any date of expirat ion agreed upon by the part ies;

( I I ) Any terminat ion or re l inquishment of the re lat i onship by the

part ies; or

( I I I ) One year af ter the date of the engagement.

(2) (a) Except as otherwise agreed to in wr i t ing and pursuant to paragraph (b)

of this subsect ion (2), a broker engaged as a sel ler ’s agent or buyer ’s

agent owes no further duty or obl igat ion after terminat ion or expirat ion of

the contract or comple t ion o f performance.


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(b) Notwi thstanding paragraph (a) of th is subsect ion (2), a broker shal l be

responsible after terminat ion or expirat ion of the contract or complet ion

of performance for the following:

( I ) Account ing for a l l moneys and proper ty re la ted to and received during

the engagement; and

( I I) Keeping conf ident ia l all in formation received dur ing the course of the

engagement which was made confident ia l by request or instruct ions

from the engaging party unless:

(A) The engaging party grants wr i t ten consent to d isclose such

information ;

(B) Disclosure of such information is required by law; or

(C) The information is made publ ic or becomes publ ic by the words or

conduct of the engaging party or from a source other than

the broker.

(3) Except as otherwise agreed to in wr i t ing, a transact ion-broker owes no

further obl igat ion or responsib i l i ty to the engaging party after te rminat ion

or expirat ion of the contract for performance or complet ion of performance;

except that such broker shal l account for a l l moneys and property re lated

to and received dur ing the engagement.

§ 12 -61 -810, C .R.S . Compensat ion .

(1) In any real estate transact ion, the broker ’s compensation may be paid by

the sel ler , the buyer, the landlord, the tenant, a third party, or by the

shar ing or spl i t t ing of a commission or compensation between brokers.

(2) Payment of compensation shal l not be construed to establ ish an agency

re lat ionship between the broker and the par ty who paid such

compensation.

(3) A sel ler or landlord may agree that a transact ion-broker or s ingle agent may

share the commission or other compensat ion paid by such sel ler or landlord

wi th another broker.

(4) A buyer or tenant may agree that a s ingle agent or transact ion -broker may

share the commission or other compensation paid by such buyer or tenant

wi th another broker.


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(5) A buyer ’s or tenant’s agent shal l obta in the wri t ten approval of such buyer

or tenant before such agent may propose to the sel ler ’s or landlord ’s agent

that such buyer ’s or tenant’s agent be compensated by shar ing

compensation paid by such sel ler or landlord.

(6) Pr ior to enter ing into a brokerage or l is t ing agreement or a contract to buy,

sel l , or lease, the ident i ty of those part ies, persons, or ent i t ies paying

compensation or commissions to any broker shal l be d isclosed to the part ies

to the transact ion.

(7) A broker may be compensated by more than one party for services in a

transact ion, i f those part ies have consented in writ ing to such mult ip le

payments pr ior to enter ing into a contract to buy, sel l , or lease.

§ 12 -61 -811, C .R.S . V io la t ions .

The vio lat ion of any provis ion of th is part 8 by a broker const i tutes an act

pursuant to sect ion 12-61-113 (1) (k) for which the real estate commission

may invest igate and take administrat ive act ion against any such broker

pursuant to sect ions 12-61-113 and 12-61-114.

(DORA, 1-1 – 1-42)

Ci ted Mater ia l:

DORA. "Chapter 1 : Real Estate Broker L icense Law." Colorado Real Estate

Manual . Char lot tesvi l le, VA: Lex isNexis, 2014. . Pr int.

real estate broker license law · 2019. 8. 15. · nearly 50,000 real estate broker, appraiser, and...

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