CO Real Estate - Current Legal Issues

Question 1

How many members are on the CO commission?

Answer 1

5

Question 2

How long is a Commission members term?

Answer 2

3 year terms

Question 3

When the COmmission receives a written complaint about a licensee do they investigate?

Answer 3

Yes, staff of the COmmission investigates all written complaints. If a verbal complaint is voiced they’re usually encouraged to file a written one since verbal complaints don’t require a response in the same way that written ones do

Question 4

What types of complaints are not persued?

Answer 4

About compensation between brokers, based solely on ethics violations or complaints related to generally poor (but legal) business practices

Question 5

If a violation appears to have occurred, what is the next step by the Commission?

Answer 5

The staff of Commission will contact the licensee (respondent) to advise them of the complaint and obtain an initial response (required)

Question 6

Before receiving a response, the Commission does not have the right to

Answer 6

start a lawsuit, issue a subpoena or take the firm’s records - this would only occur after a response during an ongoing investigation

Question 7

After the response is received, Commission meets monthly and next actions are often one of the following

Answer 7

1. If no infraction of insufficient evidence, Commission will dismiss
2. If infraction appears to be minor and no history of problems, they can issue a letter of admonishment (lowest form of disciplinary action)
3. If there appears to be a serious enough violation a hearing may occur

Question 8

Who hears a RE commission case?

Answer 8

An administrative law judge

Question 9

Are RE hearings jury hearings?

Answer 9

No, but evidence and testimony is presented by both sides

Question 10

Who imposes discipline in a case?

Answer 10

The judge hears and renders a decision but refers back to the Commission for disciplinary action/penalties

Question 11

Types of RE Commission penalties

Answer 11

1. Public censure
2. Suspension of license
3. Revocation of license
4. Fines up to $2.5k

Question 12

Are disciplinary actions public?

Answer 12

Yes, all actions are made part of the broker’s public record and posted on the COmmission’s website

Question 13

Can Commission impose actual damages?

Answer 13

No, but during the hearing the broker could agree to restitution in some form

Question 14

Can Commission investigate a criminal matter?

Answer 14

No, but they can refer them to the district attorney for criminal investigation and prosecution

Question 15

When can audits occur?

Answer 15

Commission can perform an audit at any time with or without notice to the brokerage firm

Question 16

What do routine audits typically cover?

Answer 16

Trust accounts, past transaction files, written office policy and property management records

Question 17

What is the intent of an audit?

Answer 17

To ensure compliance with the appropriate rules and to make recommendations for improved operations

Question 18

What happens if audits reveal errors or procedures that risk future violations?

Answer 18

Suggestions are made by COmmission to correct problem areas. Or the can open an investigation on its own if issue is serious enough

Question 19

What happens if a RE rule needs to be modified

Answer 19

A public hearing process is followed to give the general public and real estate community an opportunity to raise concerns and present testimony

Question 20

How are hearings and proposals published?

Answer 20

In a Notice of Proposed Rule Making

Question 21

Are rules and updates effective immediately?

Answer 21

Not usually, but if deemed necessary an Emergency Rule can be implemented

Question 22

3 requirements of brokers under the Conway-Bogue Decision?

Answer 22

1. Broker firms must be connected with the transaction as a broker (as either an agent or transaction broker) in order to prepare documents
2. There must be no fee for preparing documents other than a normal RE commissino
3. Documents must be prepared on commonly used, printed, standard or approved forms (those approved by Commission and fall under Rule F)

Question 23

What must brokers recommend in every real estate transaction?

Answer 23

The use of an attorney

Question 24

Result of Title Guaranty Co vs Denver Bar

Answer 24

Title companies do not have the right to complete legal documents, they must be hired by the broker as a scrivener to complete any legal documents. The broker who orders the title comapny to prepare must pay the fees for completion

Question 25

What form is used to hire a title company

Answer 25

Closing Instructions

Question 26

2 other rules from Title Guaranty Co vs denver Bar

Answer 26

Brokers not allowed to receive referral fees from title companies

Brokers must recommend an attorney should examine the title

Question 27

If an addendum is used and does not result from negotiations of the parties then it must be prepared by one of the following

Answer 27

The attorney representing the brokerage
The principal to the transaction
An attorney representing a principal party

Question 28

Rule F does not apply to the following

Answer 28

Contracts for new homes with warranties
Contracts prepared by a subdivision developer

Question 29

Conway Bogue complaints requires compliance with what rule?

Answer 29

Rule F

Question 30

Additional requirements of Rule F

Answer 30

1. Brokers must use approve forms when they exist
2. Brokers can’t alter standard language as approved
3. Brokers can add info identifying the brokerage firm when forms are printed
4. If an approved provision is deleted/struck out it must be crossed out so that the words can still be read
5. Language added in blank spaces must be in italics or a different type face than preprinted language
6. Certain specific provisions may be omitted from the approved form when it is printed if those provisions don’t apply to the transaction. But the headed/caption must remain with the word OMITTED
7. All approved forms must have the following statement of COmmission approval on first page
8. Brokers who aren’t parties to the transaction can’t add personal provisions, exculpatory language or personal disclaimers

Question 31

Who is responsible for the square footage disclosure form?

Answer 31

Listing broker

Question 32

Who must sign Disclosure forms?

Question 33

Who must follow RESPA?

Answer 33

Lenders, title companies and real estate brokers

Question 34

Does respa allow title companies to take brokers to sports events?

Answer 34

NO