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Colorado Real Estate Exam > CO Real Estate - Legal Issues, Contracts & Regulations > Flashcards

CO Real Estate - Legal Issues, Contracts & Regulations Flashcards

1
Q

Who established the Colorado Real Estate Commission and why?

A

The Colorado legislature, and to protect the public in real estate transactions

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2
Q

What does the Commission do with formal written complaints?

A

They must investigate and response, verbal complaints don’t require the same attention

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3
Q

What types of complaints are not pursued?

A

Complaints relating to compensation disputes between brokers, complaints based solely on “ethics” violations and complaints related to generally poor business practices

These issues are outside the purview of the Real Estate Commission

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4
Q

The licensee being investigated is called the

A

Respondent

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5
Q

Must respondent’s respond to Commission inquiries?

A

YES - failure to do so is a violation in itself and can be more serious than the original complaint

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6
Q

If a complaint is escalated to the Commission, what are the 3 general directions of next steps?

A
  1. If there appears to be no infraction, the Commission can dismiss the complaint
  2. If infraction appears to be minor and there is no history of problems with the respondent broker, the can issue a “Letter of Admonishment” which is the lowest form of disciplinary action and is basically a warning
  3. If there is a clear violation serious enough to pursue a hearing, the Commissioners and Staff work in conjunction with other sources to prepare a case.
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7
Q

What type of judge hears a real estate Commissions hearing?

A

An administrative law judge

NOT a jury trial, judge renders a decision but doesn’t pose impose a punishment. The judge then refers the matter back to Commission to dismiss or impose penalties

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8
Q

What are the different types of penalties the Commission may render?

A
  1. Public censure: written reprimand, typical for lessor offenses and first time violations
  2. Suspension of license (year or less)
  3. Revocation of lciense
  4. Fines up to $2,500
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9
Q

Does the Commission have authority to investigate or prosecute criminal matters?

A

NO, but they can refer matter to the appropriate district attorney

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10
Q

Can Commission impose actual damages?

A

No, but if the respondent agrees to pay complainant, then it’s considered restitution and becomes an enforceable agreement

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11
Q

How long must brokers maintain transaction files for ?

A

Four years

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12
Q

Who audits brokerage firm’s files and trust accounts?

A

The commission, can be performed at any time with or without advance notice

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13
Q

What happens if a new rule needs to be created or modified?

A

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

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14
Q

Where are hearings and proposals for rules published

A

In a Notice of Proposed Rule Making

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15
Q

A full discussion of a certain rule or point of law the Commission realizes the real estate community found confusing is a

A

Position Statement

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16
Q

Do position statements have the same force and effect of a Commission rule?

A

No - they just provide clear notice to community regarding how the Commission will interpret rules and laws

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17
Q

Three requirements for brokers until the Conway-Bogue Realty Investment COmpany vs Denver Bar Association rule

A
  1. Broker firm must be connected with the transaction as a broker, not preparing documents for parties with who they don’t have a brokerage relationship with
  2. Must be no fee for preparing the documents other than normal real estate commission
  3. Documents must be prepared on commonly used, printed, standard or approved forms
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18
Q

Outcome of the Title Guaranty Co. v Denver Bar Association case

A

Title companies do not have the right to complete legal documents. A broker must hire the title company as a scrivener to complete all legal documents and that broker is required to pay the title company for that performance.

**Brokers are not allowed to receive referral fees
Also, brokers must recommend to buyer and seller that an attorney examine the title

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19
Q

What is Rule F?

A

Describes the forms and requires brokers use approved form when one exists for the goal the broker is trying to achieve. Additional requirements of this rule are as follows:

  1. Brokers can’t alter standard language as approved
  2. Brokers may add information identifying the brokerage firm when forms are printed
  3. Deletions or strikes from forms must be crossed out so that deleted words remain legible
  4. Language added in blank spaces must be in italics or a different font
  5. Certain specific provisions may be omitted if they don’t apply
  6. Approve forms must have statement of approval by the Colorado RE Commission
  7. A broker who is not a party to a contract cannot add personal provisions in the addendum
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20
Q

If an addendum is added to the Commission approved contract and does not result from a negotiation, then it must be prepared by one of the following

A

Attorney representing the brokerage

Principal to the transaction

An attorney representing the principal party

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21
Q

Can brokerage firms have their attorney prepare contracts for general use in the firm?

A

No - they need to use Commission approved forms

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22
Q

According to Rule F, when should contract forms be filled out?

A

AFTEr negotiation with the party

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23
Q

What types of contracts does rule F not apply to?

A

Contracts for new homes with warranties

Contracts prepared by a subdivision developer

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24
Q

Colorado Law on Meth Labs

A

Disclosure requirements in place for sellers regarding known previous use of a property used as a meth lab. Would be exempt from disclosure requirement if the property has been remediated

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25
Q

Colorado laws regarding foreclosures

A

Law requires disclosure of the situation and places very stringent requirements on licensees involved in situations.

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26
Q

CO Commission position on square footage

A

Method of measurement is to be consistent with local custom and as long as everyone in the market measures and reports in the same way than it is sufficient

Square footage disclosure form when SQ ftg is used for marketing

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27
Q

Seller’s Property Disclosure

A

An approved form to be completed by the seller, not the listing broker to disclose all material facts about the property

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28
Q

Who does RESPA apply to?

A

Lenders, title companies and real state brokers`

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29
Q

Three levels of responsibility for brokers based on experience and education recognized by the Commission

A

Associate Brokers

Independent Brokers

Employing Brokers

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30
Q

How many years do you spend as an associate broker before qualifying for independent broker status?

A

2 years

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31
Q

True or false: Independent/associate brokers under an employing broker are responsible for themselves

A

False - employing broker is responsible for all licensees below them

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32
Q

Colorado laws allow for two type of representation:

A

Agency

Transaction Brokerage

**Third relationship where consumer is an unrepresented customer: dual or subagency relationship which is NOT allowed by Colorado

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33
Q

Difference between Real Estate Agent and Real Estate broker

A

An agent is HIRED to represent a principal while a broker has numerous jobs including finding buyers and sellers to represent

A licensee always has the duties of a real estate broker but are not agents unless hired to represent a principal

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34
Q

Fiduciary duties under common law of agency

A

Care
Obedience
Loyalty
Disclosure
Accounting
Confidentiality

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35
Q

With what document is a universal agency created?

A

Power of attorney

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36
Q

What is the main job of a transaction broker?

A

To disclose all material facts, maintain confidentiality about price, terms, and motivations, account for all funds and uses reasonable skill and care (CD-AC)

Not Loyalty or Obedience

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37
Q

What are the duties of a real estate broker to a CUSTOMER (not a principal)

A

Disclosure, Accounting and Honesty (DAH)

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38
Q

When must a disclosure of agency be made known?

A

No later than at the first substantive contract

Disclose before the consumer is at a disadvantage (because they don’t know that you have to disclose all facts learned about the non-principal to your actual principal)

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39
Q

In CO, must a written disclosure form be given to a consumer?

A

Yes

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40
Q

What is the default brokerage relationship in Colorado

A

Transaction Broker - does not require a contract, only a written disclosure of responsibilities

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41
Q

A form used as a primary tool to educate the public about the brokerage relationships available under colorado law

A

Definitions of Working Relationships disclosure form

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42
Q

A form that provides definitions of the various relationships a broker can have with a seller or buyer

A

Brokerage Disclosure to Buyer form

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43
Q

Is dual agency allowed in Colorado?

A

No - but you can double end a transaction

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44
Q

What is double ending a transaction?

A

When the broker is working with both the buyer and seller in the same transaction BUT

  1. Broker remains an agent for either the buyer or the seller and treats the non-principal as a customer only
  2. With the permission from principal, the broker can change to a transaction broker in order to work both sides of the transaction. CANNOT be an agent to one party and a transaction broker to another
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45
Q

What is the law implemented by Rule E-35?

A

Requires that brokers disclose in writing the relationships they may provide to the public: representation or non representation. THey must also disclose any existing relationship they have with one party to a transaction to the other party before discussing potential confidential information

**Note, the nonrepresented party does NOT have to sign the presented disclosure form in order for the broker to be in compliance.

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46
Q

Designated Brokerage

A

In a designated brokerage, the brokerage relationship stops with the designated broker and does not extend to the rest of the brokerage firm - this must be done in writing

Basically creates a exclusive listing between the principal and the single designated broker rather than allowing the listing to be acted upon by all brokers in the brokerage firm

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47
Q

Who has the right to change language in a contract in CO?

A

A principal to a contract can add, delete or draft language to be added to a contract

A broker who is not a party to the contract may not.

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48
Q

Signatures are acknowledged to show that the document …

A

Is signed properly. ACKNOWLEDGED by a notary

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49
Q

The purpose of commission rule F relating to approved forms is to

A

help ensure the broker’s compliance with the Conway-Bogue decision of the colorado supreme court

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50
Q

All of the following are essential elements of every contract EXCEPT
a. mutual agreement
b. competent grantor
c. lawful objective
d. consideration

A

B. competent grantor

Grantors are parties to a deed, no EVERY contract such as a lease

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51
Q

When a colorado licensee completes the blanks in a Commission approved form this…

A

is the practice of law but is specifically permitted by COlorado law

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52
Q

Independent brokers are authorized to do what under CO law?

A

Work independently without supervision of another broker

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53
Q

What must a broker do if they are using the approved Contract to Buy and Sell and wish to print only party of the financing options?

A

Must add “OMITTED” to the section head being removed

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54
Q

Who do agency contracts belong to?

A

The brokerage firm, not the individual associate who found the client

This means that the employing broker can replace the original associate broker at any time which means the death of the associate broker won’t terminate the contract but “death” of the brokerage firm or the client could

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55
Q

Essential elements of a representation contract

A
  1. competent parties
  2. meeting of the minds
  3. acceptance
  4. lawful objective
  5. consideration

These five elements create a contract that is valid and enforceable

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56
Q

Are oral listing contracts enforceable in CO?

A

No

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57
Q

All representation contracts must have a definite _____

A

Termination Date

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58
Q

Are automatic extensions permitted in CO?

A

No, the client must be asked if they’d like to extend at the end of the term and must do so in writing

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59
Q

What is a broker protection clause?

A

Begins and extends for a set period of time after expiration of the listing, the clause states that upon expiration of the listing, if the seller sells the property to an interested buyer to whom the firm has shown the property and the firm notified the seller of the showing, then the seller agrees to pay the firm a commission

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60
Q

3 main contracts used in CO to create agency relationships

A
  1. Exclusive right to sell listing
  2. exclusive right to buy listing
  3. Property management agreement/contract
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61
Q

What document is used to sell personal property?

A

A bill of sale

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62
Q

What document is used to sell real property

A

A deed

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63
Q

Brokers in a brokerage relationship owe their obligations to the party that pays them - True or False?

A

False, they owe their obligations to the party that EMPLOYS them aka seller or buyer

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64
Q

What are the two approved addenda in the CO approved Exclusive right to sell listing contracts

A

one used to create an exclusive agency

one used to create an open agency

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65
Q

In Colorado, a consumer can become a customer…

A

by signing a written disclosure

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66
Q

Rule E-35 does NOT require that a listing broker who is going to discuss confidential information with a buyer

A

sign the brokerage disclosure to buyer form

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67
Q

According to the exclusive right to sell contract, fixtures listed on the approved form will be included….

A

if they are attached as of the date of the listing, unless specifically excluded by the seller

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68
Q

Legal descriptions describe the…

A

land

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69
Q

Who is responsible for selected the agent-broker relationship in an in-company transaction within the exclusive right to sell contract?

A

The seller and broker negotiate the most appropriate choice based on company policy and the seller’s desires

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70
Q

If a defaulting buyer forfeits an earnest money deposit under an exclusive right to sell listing, the funds go where?

A

Broker and seller split the funds but the amount may not exceed the agreed upon commission

71
Q

Who CANNOT draft addenda that are not negotiated between the parties of a transaction?

A

the brokers representing the parties

72
Q

To modify an executory contract, a broker uses what form?

A

An amendment

73
Q

For contracts involving transfer of property the statute of frauds requires that the contract be..

A

in writing. with the exception of certain shorter term leases

74
Q

Conditions of competency

A

Sane, sober, and of legal age (18)

75
Q

A valid deed requires who to be a competent party?

A

The grantor only

BUT contracts require both parties be competent

76
Q

If a minor sells a property, and after reaching age of 18 can they rescind the sale?

A

Yes, the minor is given a reasonable period after reaching majority age to either affirm or disaffirm a contract

77
Q

A purchase contract is an offer until when

A

until both parties reach a meeting of the minds and communication of acceptance has been made

78
Q

At what point is an offer officially under contract?

A

As early as when the selling broker notifies the buyer’s broker that the most recent offer has been accepted by the seller, even if the buyer’s broker hasn’t called the buyer yet.

79
Q

Is earnest money required, or considered “consideration?

A

No, earnest money is not considered consideration and is not required to create a valid contract. If used, it is deemed a liquidated damage that the seller will receive if the buyer defaults

80
Q

Can a real estate broker draft contracts for either party?

A

No, Colorado uses forms created and approved by the RE Commission, an attorney may also draft contracts

81
Q

What are the five forms for the Contract to Buy and Sell real estate approved by the state of COlorado?

A
  1. Residential
  2. Income-residential
  3. Colorado Residential Foreclosure Act
  4. Commercial
  5. Land - used for vacant land sales
82
Q

8 segments of a contract

A
  1. heading
  2. agreement
  3. transaction provisions
  4. disclosure, inspection and due diligence
  5. closing provisions
  6. general provisions
  7. additional provisions and attachments
  8. signatures
83
Q

What is included in the agreement section of a contract?

A

Defines parties, property and what is being agreed to
Any exclusion of fixtures and inclusions of personal property listed here
Dates and deadlines of all contingencies in the contract are listed here
Purchase price and how it should be paid are last in this section

84
Q

What is included in the transaction provisions section of a contract?

A

Further defines loan terms and contingencies, such as an appraisal
Title issues are also described

85
Q

What is included in the disclosure, inspection and due diligence section of a contract?

A

Seller’s property disclosure
Buyer’s right to a property inspection
Timeline of inspection objection, resolution and termination deadlines
Buyer can request documents such as leases, and the right to object any documents
Environmental notices given here too

86
Q

What is included in the closing provisions section of a contract?

A

Determines the closing and possession dates as well as closing instructions, transfer of title and prorations

87
Q

What is included in the general provisions section of a contract?

A

Defines how any damage or loss of the property during the execratory phase will be handled (contract default, pay liquidated damages or use specific performance)

Defines who will pay legal fees if contract goes to litigation and how notice of delivery of documents will be given

Reminder to work in good faith to complete the transaction

88
Q

What tenancies are available in CO?

A

Colorado does NOT recognize tenancy by the entireties or community property , the DO however recognize tenancy in common and joint tenancy

89
Q

What is a negative consent provision?

A

Means that one party has a right to object to something or even terminate the contract with written notice to the other party

90
Q

What is an appraisal condition?

A

Creates the appraisal contingency baed on the type of the loan the buyer is using

91
Q

Law that provides HOAs with statutory lien power for unpaid assessments, HOA has right to foreclose if assessments aren’t paid

A

Colorado Common Interest Ownership Act

92
Q

Is the Sellers Disclosure Form required by law?

A

No, state law doesn’t require that it be a part of the RE transaction but it is requested that the seller provide it. If they decide not to, the Disclosure section must state it and would have to counter offer in order to remove the provision from the Contract to buy and sell

93
Q

After an inspection, what are the buyer’s three options?

A
  1. Don’t give notice and let the contingency expire (waive the right to object)
  2. Terminate the contract
  3. Use inspection objection form to give the seller a written list of items that are unsatisfactory and must be corrected
94
Q

In colorado, how are closing costs usually prorated?

A

Seller is responsible up to the date of closing, buyer is responsible for closing date

95
Q

HOw are security deposits treated for rental properties?

A

They are credited to the buyer in entirety

96
Q

If the property is damaged by fire or other casualty while under contract, what happens

A
  1. If damaged less than 10%, seller will repair the property
  2. If damaged more than 10%, buyer may terminate or collect insurance proceeds for the real property damage
97
Q

If a property is condemned while under contract, what are the buyer’s two options?

A
  1. Terminate the contract
  2. Proceed and collect the funds from condemnation
98
Q

In CO, what is the seller’s default option if buyer defaults?

A

Default is liquidated damages (seller keeps the earnest money)

But they can elect to choose specific performance in the initial contract

99
Q

In the residential Contract to buy and sell estate, what is true regarding financing language?

A

A broker may print forms with only the financing terms needed for the transaction

100
Q

A broker acting as a transaction-broker, listing agent, buyer’s agent, or single agent would owe the consumer all of the following EXCEPT

Advocating for the best interest of the party being represented
Advising the buyer or seller regarding the transaction
Keeping all parties fully informed regarding the transaction
Disclosure of all known material facts about the property

A

The answer is advocating for the best interest of the party being represented. Advocating or promoting is one of the three additional duties of an agent under the uniform duties in the seller and buyer listing contracts.

101
Q

In the approved Contract to Buy and Sell Real Estate, dates and deadlines are

A

Listed only in the section as a checklist for compliance

102
Q

In a transaction with a listing broker and a buyer’s agent, who usually holds the earnest money deposit?

A

Listing broker

103
Q

When and how must you inform a for-sale-by-owner (unrepresented) seller that you are an agent for a buyer who wants to see the house?

A

In writing at the first physical contract

104
Q

What is the purpose of the broker’s signature on the sales contract?

A

It provides a receipt for the earnest money and confirms the brokerage relationship

105
Q

Who’s responsibility is it to disclose lead based paint?

A

Seller or Landlord of a property - although they are not required to test of lead based paint themselves

106
Q

Colorado requires a lead based paint disclosure form for what properties?

A

All properties with building permits dated prior to Jan 1, 1978

107
Q

When should the buyer receive the disclosure form for lead based paint?

A

Prior to an offer being accepted, or else the contract will be void

108
Q

Two options for square footage measurement

A
  1. Licensee’s measurements
  2. Outside source of measurement

Determined by box checked on form

109
Q

How long does a buyer have to test for lead based paint?

A

10 days

110
Q

How long does a buyer have to complete investigations of square footage?

A

Until inspection objection deadline

111
Q

What is square footage used for?

A

Marketing only- not to be used in loan valuations

112
Q

What does a seller’s disclosure form provide

A

Any known material defects in the property, should be completed BY THE SELLER ONLY (not seller’s broker)

113
Q

Is a seller’s disclosure form required/

A

Not necessarily, but it will be requested. Therefore, a counteroffer will need to be made in order to remove the request

Seller can disclose material defects in another written form, which they must do if they decide not to use the seller’s disclosure form itself

114
Q

What is required regarding the source of drinkable (potable) water?

A

Seller must list the source either in the seller’s disclosure form or in the Source of Water Addendum to Contract to buy/sell

Seller is obligated to disclose the source of water (for purpose of providing info that there is a long term water source), but they aren’t required to verify that the source of water is sufficient

115
Q

What are “Closing Instructions”?

A

Appoints a third party closing company to conduct the closing, agreeing to prepare the closing documents (except for legal documents, which should be prepared by the broker)

116
Q

who is held responsible for the accuracy of the Closing Instructions and the payment at closing?

A

The broker

117
Q

What is required if the seller remains on the property for 30 days or less after closing?

A

A post-closing occupancy agreement

118
Q

What must be used if buyer/seller want to make a change to a purchase contract during the executory phase?

A

Agreement to Amend/Extend Contract

119
Q

What is the licensee buy-out addendum used for?

A

Requires licensees to confirm that they are licensed and have enough resources to complete the transaction, they must also notify the seller that the broker may make a profit on resale but would be obligated to pay any loss or expense after closing. Seller pays no commission if the buyout closes and removes the appraisal provision because the broker is responsible for valuation

120
Q

When is a Short Sale addendum often used?

A

Generally when a seller’s debt against the property is greater than the market value

It informs seller that foreclosure assistance is available and that a short sale may not be the seller’s best option.

Form states that even if the lender allows the sale, it may still have the right to collect any deficiency. Bank must agree to terms of the sale because the purchase price will not clear liens.

121
Q

What’s the use of the Real Property Transfer Declaration form

A

required for a recorded deed that has a documentary fee. It does not transfer real or personal property, it simply lists the values of each at the time title is transferred.

122
Q

How does Colorado base its water rights?

A

Doctrine for prior appropriation

123
Q

Who regulates well water?

A

Wells are a right of us and are regulated by the state engineer

124
Q

What do most real estate loans use in the state of Colorado?

A

A deed of trust

125
Q

What are the three parties typically involved in a colorado deed of trust?

A
  1. Trustor (borrower)
  2. Beneficiary (lender)
  3. Trustee (government office of public trustee)
126
Q

Three forms used to financing a deed of trust lien

A
  1. Due on Transfer - Strict (requires payment in full when property is sold)
  2. Due on Transfer - Creditworthy (allows credit restriction on a buyer assuming the loan)
  3. Assumable - not due on transfer (allows future buyer to assume the loan without approval of credit)
127
Q

When a borrower who executed a deed of trust is in default, what does the lender do?

A

Lender notifies the public trustee who then files and sends a notice for election & demand to the borrower, which starts the foreclosure process

128
Q

In Colorado, who has the right to a nonjudicial foreclosure process

A

Only a public trustee

129
Q

What is unique about Colorado law in relation to foreclosures?

A

No statutory redemption period is granted

BUT, state’s law requires the borrower to bring back payments and fees to stop the foreclosure prior to the sale in order to redeem the property (Agricultural have 215-230 days, all others have 110-115 days)

130
Q

What is equity skimming?

A

When a non-owner occupant takes over a foreclosed property and collects rent but does not make any payments - this is considered a serious crime / felony in Colorado.

131
Q

What protects the public in consumer credit transactions by setting maximum permisslbe interest rates a lender may charge?

A

the Uniform Consumer Credit Code

132
Q

What are the rates available in CO?

A

Creditor may charge up to 21% on loans over $1K, or up to 36% on loans of $1K or less.

A noncreditor may charge up to 45% interest

133
Q

What is dual contracting?

A

Form of loan fraud - when a buyer and seller illegally agree to write two different purchase contracts

134
Q

By common law, adverse possession and easement by prescription require that the possession or use of property be…

A

Open
Continuous
Exclusive
Actual
Notorious (hostile)

Each state sets its own requirement for how long the possession or use must be in order for the party to seek ownership - in CO it’s 18 years

135
Q

What does “under color of title” mean

A

The party has reason to believe that they own the property, such as a fraudulent deed or the party pays general property taxes for 7 years

136
Q

Colorado Tax calendar

A

2 options

Pay in full by April 30

Pay half by February 28 and half by June 15

137
Q

How long does a property owner have to redeem a sale due to delinquent taxes?

A

3 years - during which the highest bidder receives a certificate of purchase showing the bidder’s rights

138
Q

Colorado definition of a subdivision

A

20 ore more lots or interests sold for residential use

139
Q

What is the purpose of registering a development?

A

So that consumers with complaints against a development are able to find the proper person to file a complaint against

140
Q

A developer converting apartments into condos, time-shares or cooperatives is a

A

Subdivision

141
Q

What does E&O insurance do?

A

Pays for legal defense and judgments for professional mistakes and negligence - required for all active brokers and brokerage firms

142
Q

Employing Broker Supervision requirements:

A

Employed brokers with 2+ years of active experience require a reasonable level of supervision

Must provide all employees with a company policy manual and ensure that they all read and sign

Brokers with less than 2 years should receive a high level of supervision

143
Q

What can an unlicensed assistant do/not do?

A

They CAN: provide access to properties, distribute listing information prepared by a broker, deliver paperwork to other brokers, hold an open house, deliver paperwork to sellers or buyers, prepare market analyses, measure a property for square footage and sign checks on a trust account if authorized

they CANNOT: negotiate, list, sell, draft contracts or filings in legal documents, offer opinions, advice or interpretation of anything else that may require a license

144
Q

What protection does Colorado add to fair housing laws?

A

Marital status and sexual orientation

145
Q

HOw long does a landlord have to return a tenant’s security deposit after the end of a lease?

A

30 days unless there is a lease extension - landlords must provide a detail of why they are holding funds if they do

146
Q

Who can revoke a real estate license in colorado?

A

ONLY the Commission

147
Q

How long does a person have to file a complaint after alleged unfair housing practices?

A

1 year

148
Q

Failure to design units first occupied as accessible after March 1991 are a violation of

A

Fair housing

149
Q

Can a broker associate be a property manager?

A

No, not without the supervision/sign off of an employing broker

150
Q

Can a landlord hold a security deposit for “normal wear and tear”

A

No - that is a natural physical deterioration that occurs with the use of property and passage of time.

151
Q

what is required to obtain a colorado broker license?

A

Complete 168 hours of prelicense education

Pass state exam

Submit a set of fingerprints

Submit an application to the Colorado RE Commission

152
Q

How long does a real estate license last before it must be renewed or it will expire?

A

3 years from the date of issuance

153
Q

How long is the grace period to pay a license renewal fee?

A

31 days

154
Q

The Commission must be notified if any of the following occur

A
  1. there is a change in business location of the firm
  2. a broker associate is changing employment to a new firm
155
Q

How can one activate an inactive license?

A

Complete 24 hours of CPE and apply for a change of license status with the Commission

156
Q

Real estate firms use two types of trade names, what are they?

A
  1. Unique name registered with the state
  2. A brokerage firm using a “name owned by another” such as Century 21, Remax or Metro Brokers
157
Q

Who performs investigations of violations?

Who conducts hearings to settle complaints?

Who issues penalties for violations?

A

Investigations - Division of Real estate

Hearings - an administrative law judge

Penalties - Real Estate Commission

158
Q

License law lists some of the following as specific violations that would call for disciplinary action against the person’s license

A
  1. Fraud or misrepresentation
  2. Improper accounting for funds belonging to others
  3. Violating the colorado consumer protection act
  4. Commingling
  5. Failure to provide the buyer or seller with a proper closing statement
  6. Failure to adequately supervise the activities of employed licensees
  7. Accepting payment for an act that requires a license from anyone except the licensee’s employing broker
  8. Demonstrating unworthiness or incompetence
159
Q

Colorado has four categories of registration, licensing, and certification for appraisers

A
  1. registered appraiser
  2. licensed appraiser
  3. certified residential appraiser
  4. certified general appraiser
160
Q

When using the Square Footage Disclosure, the broker must do all of the following to be in compliance EXCEPT
a. measure the property or hire someone to measure it.
b. state that the measurements are not for loan or valuation purposes.
c. identify the source of measurements if the measuring was not done by the broker.
d. use sources deemed to be reliable for residential measurements.

A

A. measure the property or hire someone to do it - this is not required of the broker but if they do it then they must disclose the method used

161
Q

The Inspection Objection form would be used for all of the following EXCEPT
a. withdrawing the buyer’s inspection objection.
b. extending the date of the objection deadline.
c. alerting the buyer to involve the lender.
d. requesting the seller to repair the property.

A

B. Extend the date of the objection deadline - this would require an agreement to amend/extend

162
Q

The buyer is getting an 80% LTV. The loan amount will be determined by the

A

lower of the sales price or appraised value

163
Q

A nonresident broker must do all of the following EXCEPT
a. keep all trust funds received in a Colorado depository.
b. complete all Colorado license requirements for renewal and continuing education.
c. be supervised by an active Colorado employing broker.
d. have an office in the broker’s home state.

A

C. be supervised by an active Colorado employing broker

They must have a colorado real estate license and meet all requirements to maintain an active one

164
Q

To be in compliance with continuing education requirements, which of the following should all brokers complete during each three-year license cycle?

A

12 hours of ACU courses and 12 hours of electives

165
Q

The purpose of the Inspection Resolution form is to

A

Finalize the agreement between the buyer and seller

166
Q

A broker’s E&O coverage typically expires and must be renewed

A

By December 31 each year

167
Q

The Commission could impose all of the follow- ing on a broker who is found guilty of breaking license law EXCEPT
a. fine and suspension of license.
b. $2,500 fine and censorship of license.
c. notice of the infraction on the Commis- sion’s website.
d. $2,500 fine for damages and a revocation of license.

A

D - the Commission cannot issued a fine for damages

168
Q

Provisions limiting liability of broker are sometimes referred to as

A

Exculpatory Clauses

169
Q

Who is able to help prepare addendum that modifies the terms of a commission approved form?

A

Attorney representing brokerage firm

principal to transaction

attorney representing a principal

NOT a broker themselves

170
Q

Can attorneys prepare contracts for a brokerage?

A

Only for a specific transaction, NOT for general use of the firm

171
Q

If a broker uses square footage in the marketing of a property, they must

A
  1. use the approved square footage disclosure
  2. list method used to measure
    OR
  3. List source of the measurement, such as an appraisal
172
Q

Federal Fair Housing protected Classes:

+ Colorado additions to the list

A

Familial
Race
Sex
Handicap
Color
Religion
National Origin

+Martial status & Sexual orientation

173
Q

What is the default relationship in Colorado?

A

Transaction broker - doesn’t require a written contract

Colorado Real Estate Exam (9 decks)

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