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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.
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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
pursuant to th is art ic le; and
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(e) To comply wi th any appl icable federal , state, or local laws, ru l es,
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 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
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 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
pursuant to th is art ic le; and
(d) 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.
(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
psychological ly impact or st igmatize any real property pursuant to
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
CR1 and CR2 Required Reading Part Two
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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.