CO Real Estate - Current Legal Issues Flashcards
How many members are on the CO commission?
5
How long is a Commission members term?
3 year terms
When the COmmission receives a written complaint about a licensee do they investigate?
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
What types of complaints are not persued?
About compensation between brokers, based solely on ethics violations or complaints related to generally poor (but legal) business practices
If a violation appears to have occurred, what is the next step by the Commission?
The staff of Commission will contact the licensee (respondent) to advise them of the complaint and obtain an initial response (required)
Before receiving a response, the Commission does not have the right to
start a lawsuit, issue a subpoena or take the firm’s records - this would only occur after a response during an ongoing investigation
After the response is received, Commission meets monthly and next actions are often one of the following
- If no infraction of insufficient evidence, Commission will dismiss
- If infraction appears to be minor and no history of problems, they can issue a letter of admonishment (lowest form of disciplinary action)
- If there appears to be a serious enough violation a hearing may occur
Who hears a RE commission case?
An administrative law judge
Are RE hearings jury hearings?
No, but evidence and testimony is presented by both sides
Who imposes discipline in a case?
The judge hears and renders a decision but refers back to the Commission for disciplinary action/penalties
Types of RE Commission penalties
- Public censure
- Suspension of license
- Revocation of license
- Fines up to $2.5k
Are disciplinary actions public?
Yes, all actions are made part of the broker’s public record and posted on the COmmission’s website
Can Commission impose actual damages?
No, but during the hearing the broker could agree to restitution in some form
Can Commission investigate a criminal matter?
No, but they can refer them to the district attorney for criminal investigation and prosecution
When can audits occur?
Commission can perform an audit at any time with or without notice to the brokerage firm
What do routine audits typically cover?
Trust accounts, past transaction files, written office policy and property management records
What is the intent of an audit?
To ensure compliance with the appropriate rules and to make recommendations for improved operations
What happens if audits reveal errors or procedures that risk future violations?
Suggestions are made by COmmission to correct problem areas. Or the can open an investigation on its own if issue is serious enough
What happens if a RE rule needs to be modified
A public hearing process is followed to give the general public and real estate community an opportunity to raise concerns and present testimony
How are hearings and proposals published?
In a Notice of Proposed Rule Making
Are rules and updates effective immediately?
Not usually, but if deemed necessary an Emergency Rule can be implemented
3 requirements of brokers under the Conway-Bogue Decision?
- Broker firms must be connected with the transaction as a broker (as either an agent or transaction broker) in order to prepare documents
- There must be no fee for preparing documents other than a normal RE commissino
- Documents must be prepared on commonly used, printed, standard or approved forms (those approved by Commission and fall under Rule F)
What must brokers recommend in every real estate transaction?
The use of an attorney
Result of Title Guaranty Co vs Denver Bar
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
What form is used to hire a title company
Closing Instructions
2 other rules from Title Guaranty Co vs denver Bar
Brokers not allowed to receive referral fees from title companies
Brokers must recommend an attorney should examine the title
If an addendum is used and does not result from negotiations of the parties then it must be prepared by one of the following
The attorney representing the brokerage
The principal to the transaction
An attorney representing a principal party
Rule F does not apply to the following
Contracts for new homes with warranties
Contracts prepared by a subdivision developer
Conway Bogue complaints requires compliance with what rule?
Rule F
Additional requirements of Rule F
- Brokers must use approve forms when they exist
- Brokers can’t alter standard language as approved
- Brokers can add info identifying the brokerage firm when forms are printed
- If an approved provision is deleted/struck out it must be crossed out so that the words can still be read
- Language added in blank spaces must be in italics or a different type face than preprinted language
- 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
- All approved forms must have the following statement of COmmission approval on first page
- Brokers who aren’t parties to the transaction can’t add personal provisions, exculpatory language or personal disclaimers
Who is responsible for the square footage disclosure form?
Listing broker
Who must sign Disclosure forms?
Who must follow RESPA?
Lenders, title companies and real estate brokers
Does respa allow title companies to take brokers to sports events?
NO
