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Real Estate > Colorado Contracts > Flashcards

Colorado Contracts Flashcards

1
Q

Being given the power to sign on ones behalf would be an example of what?

A

An Attorney in Fact is the limited power of attorney to sign on ones behalf.

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2
Q

When is a Real Estate License not required?

A

When serving as an attorney-in-fact under a power of attorney

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3
Q

What entity appoints members to the Colorado Real Estate Commission?

A

The Governor

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4
Q

What is an action that may violate Real Estate License Law in Colorado?

A

Using multiple names for conducting real estate business

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5
Q

How long do members of the Real Estate Commission hold office?

A

3 years

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6
Q

What is the consequence of failing to file the appropriate broker’s application within one year of passing the examination?

A

Automatic cancellation of the examination results

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7
Q

In the event of termination of employment, who is responsible for notifying the commission?

A

Both the licensee and the broker

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8
Q

How long does a licensee have to notify the commission of a change of employment or business location?

A

Immediately

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9
Q

How long does a person have to apply for reinstatement after the expiration of a license before being treated as a new applicant?

A

3 years

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10
Q

What is the consequence of failing to renew a license before January 1st of the succeeding year following expiration of your license?

A

Inactivation of your license

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11
Q

What happens to every real estate broker’s license if the employing broker’s license is suspended, expired, or revoked?

A

They are automatically suspended pending notification

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12
Q

What type of payment is allowed under affiliated business arrangements (ABA) regulations?

A

A fee to an attorney for services rendered

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13
Q

How long do I have to keep CE requirements?

A

4 years

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14
Q

What must a broker provide to both the purchaser and seller of real estate?

A

A closing statement of the transaction

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15
Q

Under what condition can a real estate broker be disciplined for the unlawful acts of their employees?

A

If the broker was negligent in supervising employees

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16
Q

When can a real estate agent or broker claim a commission if the transaction is not consummated?

A

When the owner refuses or neglects to consummate the transaction as agreed upon

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17
Q

From whom can a real estate broker employed by another broker legally accept a commission or valuable consideration?

A

The broker’s employer, who is a licensed real estate broker

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18
Q

What must an agent or broker do to ensure the owner corrects title defects?

A

Secure an enforceable contract from the purchaser

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19
Q

What is a real estate broker’s liability for the unlawful acts of an employee?

A

The broker is liable if they had actual knowledge of the act or were negligent in supervision

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20
Q

What must a broker disclose in writing before engaging in any activities as a transaction broker?

A

That they are not acting as an agent for the party

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21
Q

What is a “designated broker”?

A

A broker designated to serve as a single agent or transaction-broker

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22
Q

What does “Broker,” “employing real estate broker,” or “employing broker” mean?

A

A broker who employs or engages another broker

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23
Q

What happens if the fees accompanying any application to the Commission are paid with a check that is not immediately paid upon presentment to the bank?

A

The application will be canceled

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24
Q

What is required for a temporary broker’s license to be issued to a corporation, partnership, or limited liability company?

A

The designated individual must be a Colorado real estate broker with two years of active license experience

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25
Q

Who is responsible for the maintenance of all trust accounts when a broker is employed by another broker?

A

The employing broker

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26
Q

What must a broker do with earnest money received under an executory sales contract for new construction?

A

Deposit it in a trust account and not use it for construction without written consent

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27
Q

What is prohibited under diversion/conversion rules?

A

Using one beneficiary’s money for the benefit of another beneficiary

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28
Q

What is required if a branch office maintains a separate trust account?

A

What is required if a branch office maintains a separate trust account?

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29
Q

What must a holdover agreement provision refer to?

A

Properties or persons negotiated with during the term of the agreement

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30
Q

What must a broker do if they deliver earnest money to a lawyer or closing entity?

A

Obtain a dated and signed receipt from the person or transaction file

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31
Q

Who is responsible for the proper closing of a transaction?

A

The individual licensee who established the brokerage relationship with the buyer or seller

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32
Q

What are real estate brokers required to use according to Rule F?

A

Commission-approved forms as appropriate to a transaction or circumstance

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33
Q

What is the significance of the printed portions of the form, except differentiated additions?

A

They are approved by the Colorado Real Estate Commission

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34
Q

Which of the following brokerage relationships are available?

A

Buyer agency, seller agency, or transaction-brokerage

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35
Q

What happens if more than one individual is designated as a broker in a multiple-person firm?

A

The references in the Seller Listing Contract include all designated persons

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36
Q

Is a broker obligated to seek additional offers while the property is under contract for sale?

A

No, never

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37
Q

What are additional duties of a Seller’s Agent?

A

Promoting the interests of the seller with the utmost good faith, loyalty, and fidelity

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38
Q

What must a Transaction-Broker do

A

Facilitate sales transactions without being an advocate or agent for either party

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39
Q

What must the Listing Period have?

A

A definite start and end date

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40
Q

What change occurs if a broker delivers a written Change of Status to the Seller?

A

The broker works with both the Seller and buyer as a Transaction Broker

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41
Q

What is required for a broker to earn a commission on a sale after the listing period has expired?

A

The broker must have submitted the buyer’s name in writing during the listing period

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42
Q

What must happen for a commission to be earned during a holdover period?

A

The broker must submit the buyer’s name in writing

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43
Q

What is Colorado Withholding?

A

If the seller is not exempt, the Colorado Department of Revenue may require a portion of the seller’s proceeds to be withheld after closing when seller with not be a Colorado resident after closing.

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44
Q

What may the Colorado Department of Revenue require if the Seller is not exempt?

A

A portion of the Seller’s proceeds to be withheld after Closing

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45
Q

What is the Brokerage Firm authorized to do with the earnest money deposit?

A

Deliver it to the closing agent at or before the closing

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46
Q

When is withholding not required by the Colorado Department of Revenue?

A

When the selling price of the property is not more than $100,000

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47
Q

Under what circumstances does the Brokerage Firm need to handle the earnest money deposit?

A

Pursuant to a proposed contract for the Sale of the Property

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48
Q

If a check is received as earnest money under contract, what must be done with it according to the contract?

A

It must be identified as a check in the contract and presented for payment in a timely manner

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49
Q

What must be done for a fixture to be excluded from the sale?

A

It must be listed as an exclusion in the contract

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50
Q

What are trade fixtures?

A

Improvements made by a tenant to facilitate business operations

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51
Q

Which items are included in the property if they are attached on the date of the Seller Listing Contract?

A

Lighting, heating, and air conditioning units

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52
Q

Which of the following is typically included in the property if attached?

A

Inside telephone wiring and connecting blocks/jacks

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53
Q

Which type of deed provides the most comprehensive guarantee of title?

A

General Warranty Deed

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54
Q

What should the Seller’s Property Disclosure Form reflect?

A

The seller’s current, actual knowledge of the property’s condition

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55
Q

In what condition will the property be conveyed unless otherwise agreed in writing?

A

As-is condition existing as of the date of the contract for Sale or Lease

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56
Q

Who can agree to any repairs or other work to be performed on the property prior to sale?

A

The seller, at the seller’s sole option, in writing

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57
Q

What must a Seller disclose to any prospective buyer under Colorado law?

A

All adverse material facts actually known by the Seller

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58
Q

What must a real estate licensee recommend before the closing of a real estate transaction?

A

An examination of title and the use of legal counsel

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59
Q

What is required if a licensee sells, buys, or leases real property on their own account?

A

They must disclose any known conflict of interest and their license status in the contracting instrument or in a separate concurrent writing

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60
Q

Under what condition can a Colorado broker pay a commission to an out-of-state broker?

A

If the out-of-state broker resides and maintains an office in another state or country

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61
Q

What is required for funds to be considered “Good Funds” at closing?

A

They must be available for immediate withdrawal from the financial institution

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62
Q

What must a broker do if they change their status from an agent to a transaction broker in a transaction?

A

Check the box for “Transaction Broker” and “This is a Change of Status” in the Commission-approved form

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63
Q

When must a broker disclose a change from acting as a party’s agent to a transaction broker?

A

At the time the broker begins to assist as a transaction broker, but not later than the time the party signs the contract

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64
Q

How must an office brokerage relationship policy be provided to licensees?

A

In a written document that is read, agreed to, and signed by each licensee

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65
Q

What is the obligation of a licensee regarding the preparation of legal documents in a real estate transaction?

A

There is no obligation to prepare legal documents, and no separate fee can be charged for their preparation

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66
Q

What must a broker determine before engaging in real estate brokerage activities?

A

Whether they possess the necessary experience, training, and knowledge

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67
Q

What must a supervising broker have to receive confidential information from a designated broker?

A

Informed consent from the party the designated broker is assisting

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68
Q

What must a licensee advise a buyer and seller if exact square footage is a concern?

A

To independently measure the property

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69
Q

What must be disclosed to the buyer and seller if the square footage information is provided from another source?

A

The date of issuance of the measurement

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70
Q

What must a licensee disclose when disseminating information about the square footage of a property?

A

The methodology or manner in which the measurement was taken

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71
Q

What must a broker do if they delete part or all of a provision in a Commission-approved form?

A

Retain the provision’s caption or heading followed by the words “omitted-not applicable”

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72
Q

What is a broker required to ensure when using transaction-specific clauses drafted by their licensed Colorado attorney?

A

The broker understands the clauses and uses them appropriately

73
Q

How must provisions inserted into blank spaces on Commission-approved forms be printed?

A

In a style or type that clearly differentiates from the original form

74
Q

What type of disciplinary actions taken in another jurisdiction must be reported to the commission?

A

Actions that would constitute a violation of the real estate license law in Colorado

75
Q

What must be included in any form drafted by a licensed Colorado attorney representing the broker, the employing broker, or the brokerage firm?

A

The language “This form has not been approved by the Colorado Real Estate Commission” and the name of the attorney or law firm

76
Q

What is required in the written notice when a broker prepares an estimate of value or evaluation?

A

A statement that the preparer is not a licensed or certified real estate appraiser

76
Q

What must a broker do if they receive earnest money in a real estate transaction?

A

Retain it in a trust account until the transaction is consummated, defeated, or settlement has occurred

77
Q

Under what circumstances does Rule F-7 require the use of the Licensee Buyout Addendum?

A

When a licensee enters into a contract to purchase a property concurrent with the listing of such property

78
Q

What does the Brokerage Relationships Act require of agents?

A

To promote the interests of their buyers or sellers with the utmost good faith

79
Q

What must be included in the written notice to tenants when a security deposit is transferred to a new broker or landlord?

A

The specific requirements for the procedure in which the tenant may request return of the deposit

80
Q

Within how many business days must a broker deposit money belonging to others received while acting as a property manager?

A

5 business days

81
Q

What does the subdivision improvement contract need to be accompanied by?

A

Collateral sufficient to ensure completion of the improvements

82
Q

What happens if a developer sells land from an unapproved subdivision?

A

They are subject to a financial penalty and the sale may be enjoined by the zoning commission

83
Q

What types of subdivisions must be registered with the Real Estate Commission in Colorado?

A

Any division of real property into twenty or more interests intended solely for residential use

84
Q

What is the concern with “coming soon” listings according to the Commission?

A

They provide limited exposure of the property on the open market

85
Q

In what year did the legislature give the Colorado Real Estate Commission statutory authority to promulgate standard forms for use by real estate licensees?

A

1993

86
Q

What must a broker’s office be connected with to legally prepare documents according to the Colorado Supreme Court?

A

The transaction

87
Q

According to the summary by John E. Gorsuch, what should a broker always recommend to the purchaser?

A

Examining the title

88
Q

What happens to property owned by a person who dies without leaving a will or heirs?

A

It is taken by the state through escheat

89
Q

When is a broker required to transfer a tenant’s security deposit?

A

When the broker no longer manages the property

90
Q

Which type of easement attaches to and benefits the land owned by the easement holder?

A

Appurtenant easement

91
Q

In “tenancy in common,” what happens to the decedent’s interest?

A

It passes according to the decedent’s will or state law

92
Q

What is a key characteristic of “joint tenancy”?

A

The title is vested equally in all joint tenants

93
Q

Which term describes a common-interest community where portions of the real estate are designated for separate ownership, and the remainder is commonly owned?

A

Condominium

94
Q

What is NOT a characteristic of a planned community?

A

It is exclusively owned by individual unit or lot owners as tenants in common

95
Q

Does a deed need to be notarized and recorded to be valid?

A

No

96
Q

What is the main purpose of recording a deed?

A

To provide constructive notice

97
Q

What does an owner’s title insurance policy protect?

A

An owner’s title insurance policy protects the owner’s financial interest in the property, covering potential defects or issues with the title that could affect the owner’s right to the property.

98
Q

By when did Colorado law require that the source of potable water be disclosed in residential real estate contracts?

A

January 1, 2008

99
Q

What are the dates and deadlines section in a real estate contract considered?

A

Contingencies

100
Q

What are common contingencies in a contract?

A

Appraisal, Inspection, Title, New Loan Availability, Financing, Insurance, HOA

101
Q

Which of the following must the seller provide to the buyer concerning water rights?

A

Well Permit #

102
Q

If a seller defaults by not signing the Earnest Money Release Form, what can the buyer do?

A

Claim the seller is in default and seek legal remedy

103
Q

Can the buyer get earnest money back if they were in a special taxing district (more taxes due than most people pay)

A

Yes

104
Q

Why might special taxing districts increase mill levies and taxes?

A

To support the servicing of debt

105
Q

What should buyers do to investigate special taxing districts?

A

Contact the county treasurer and review the certificate of taxes due

106
Q

What is the primary purpose of title insurance in a real estate transaction?

A

To ensure clear ownership and protect against title defects

107
Q

When is a title considered “marketable”?

A

When it is free from significant liens and encumbrances

108
Q

What right does the Buyer have if the Buyer discovers an adverse material fact after the contract date?

A

The right to terminate the contract

109
Q

When does the Buyer’s right to terminate based inspection end?

A

Five days after the Buyer’s receipt of the new disclosure and before the specified inspection termination deadline

110
Q

What is the contract conditional upon in the “Conditional Upon Sale of Property” clause?

A

Sale and closing of a property owned by the Buyer

111
Q

What must the Seller do if withholding is required under FIRPTA?

A

Authorize the Closing Company to withhold the amount from Seller’s proceeds

112
Q

What could happen if required withholding for a foreign Seller does not occur?

A

The Buyer could be held liable for the amount of the Seller’s tax, interest, and penalties

113
Q

What should the Seller do to determine if Colorado withholding applies or if an exemption exists?

A

Consult with Seller’s tax advisor

114
Q

Who is responsible for verifying the Seller’s status regarding Colorado withholding?

A

The Seller

115
Q

When will possession of the Property and Inclusions be delivered to the Buyer?

A

On Possession Date at Possession Time specified in the dates & deadlines section of the contract

116
Q

What does the term “Good Funds” refer to?

A

Any form of payment agreed upon by Buyer and Seller

117
Q

What happens if any payment due, including Earnest Money, is not paid on time?

A

The non-defaulting party can cancel the contract

118
Q

What happens if Seller fails to timely execute and return the Earnest Money Release Form?

A

Failure to return the Earnest Money Release Form puts the Seller in default and liable for potential damages to the Buyer.

119
Q

What does an Exclusive Right-to-Buy Contract entail?

A

The broker assists the buyer as a transaction-broker or represents them as an agent.

120
Q
A
121
Q

What is required for an agreement to be considered legally binding and enforceable?

A

Consideration

122
Q

What must be present for a valid contract to exist?

A

Mutual Assent

123
Q

What law requires certain agreements to be in writing to be enforceable?

A

Statute of Frauds

124
Q

What is the term for a promise by one party to act in a certain manner provided the other party acts as requested?

A

Offer

125
Q

What is the purpose of the Parol Evidence Rule?

A

To prevent earlier oral or written statements from varying the terms of a written contract

126
Q

What legal concept protects parties against agreements obtained through fraud, misrepresentation, or duress?

A

Reality of Consent

127
Q

Who are the individuals presumed to have legal capacity to enter into contracts?

A

All parties, except those with certain disabilities

128
Q

What does a buy-sell contract determine in a real estate transaction?

A

The type of title to be conveyed and the manner of payment

129
Q

Under what condition can a lender call the entire balance of the loan due?

A

If the subject property is conveyed without the lender’s consent

130
Q

What must the consideration statement in a deed of trust or mortgage include?

A

The debt being secured, including the loan amount and terms, providing clarity on the obligations of the borrower.

mount

131
Q

Which lien is a general lien

A

Federal Tax Lien

132
Q

What types of liens are specific liens?

A

Mechanic, Judgment, Mortgage

133
Q

What must a property owner do to redeem their property after a tax sale?

A

Pay the delinquent taxes and interest

134
Q

What type of lien is created when a seller does not receive the full purchase price from the buyer?

A

Vendor’s lien

135
Q

What is the priority of federal tax liens among other liens or encumbrances?

A

Based on the date filed

136
Q

What type of lien may arise if a decedent’s personal property is insufficient to pay debts?

A

Estate Lien

137
Q

What must a tenant provide before filing a legal action for wrongful withholding of a security deposit?

A

Seven days’ notice to the landlord

138
Q

What must a landlord provide if there is actual cause for retaining any portion of the security deposit?

A

A written statement listing exact reasons

139
Q

What is the landlord’s burden of proof in any court action brought by a tenant under the security deposit regulations?

A

That the withholding was not wrongful

139
Q

What is considered “normal wear and tear” in the context of security deposits?

A

Deterioration based on intended use without abuse

140
Q

Which type of lease does not require notice for termination?

A

Tenancy at will (because there is a fixed date, no notice is required to terminate it)

141
Q

What is a lease?

A

Both a contract and a conveyance

142
Q

What is a ground lease?

A

A tenancy for years for unimproved land

143
Q

Is it discrimination if someone can’t get a loan because they are on public assistance?

A

No, not if they don’t have the funds for the loan.

144
Q

What does the term “familial status” mean under Colorado Fair Housing law?

A

The presence of one or more individuals under 18 years of age

145
Q

When did Colorado include physical handicap as a protected class in the Fair Housing Act?

A

1977

146
Q

Under Colorado law, which of the following is not considered a material fact subject to disclosure in a real estate transaction?

A

That an occupant was suspected of having HIV

147
Q

What additional protections does the Colorado Fair Housing Act provide compared to the federal Fair Housing Act?

A

Protections against discrimination based on ancestry and marital status

148
Q

When did Colorado include physical handicap as a protected class in the Fair Housing Act?

A

1977

149
Q

Time, possession, interest and title relate to:

A

Joint Tenancy

150
Q

Which lines run east to west?

A

Tier, correction, base lines all run east to west

151
Q

Can a life estate be passed by a will?

A

No. But it can be mortgaged, leased or sold.

152
Q

Sole Ownership of Land Is what type of Holding?

A

Ownership in Severalty

153
Q

What is police power?

A

Zoning and Planning are considered examples of police power.

154
Q

In Colorado when a property is sold for unpaid property tax, the purchaser, at the time of purchase, receives:

A

A certificate of purchase

155
Q

What is the maximum amount of time a lessor can hold a security deposit in Colorado after termination of a lease?

A

60 days regardless of time of the lease.

156
Q

The lenders margin is:

A

An amount added to the Index Rate on an adjustable mortgage.

157
Q

What is the protection clause in a listing?

A

Protects the seller (and the broker) and future commissions for a sale in the future.

158
Q

How long does a broker need to retain settlement statements after a closing?

A

4-7 years

159
Q

how many square feet is an acre?

A

43,560

160
Q

What is the difference between an easement in gross and an appurtenant easement?

A

An easement in gross benefits the person (not tied to the land) while an appurtenant easement is tied to the land.

161
Q

Whether or not an FHA loan is a qualified or unqualified assumption depends on:

A

The date of the loan. If before 1989 it can largely be assumed freely.

162
Q

Damages to a property caused by a life tenant over and above ordinary use and wear are called:

A

Waste

163
Q

First Right of Rescission typically doesn’t apply to which type of loan?

A

First Mortgage on a first home.

164
Q

Sole ownership of land is what type of ownership?

A

Ownership in Severalty - exclusive rights to the property and the simplest form of ownership.

165
Q

What are the two primary actions involved in a real estate closing?

A

Transfer of title and payment of the purchase price

166
Q

What is meant by “delivery and acceptance” in real estate transactions?

A

Seller signs the deed and buyer takes possession of the deed

167
Q

What is the Covenant of Seisin?

A

Assurance that the grantor has the legal right to convey the property

168
Q

What does the Covenant of Quiet Enjoyment guarantee?

A

Undisturbed possession and use of the property

169
Q

Which covenant ensures that the property is free from any undisclosed encumbrances or liens?

A

Covenant Against Encumbrances

170
Q

Which covenant obligates the grantor to defend the title against any claims or challenges in the future?

A

Covenant of Further Assurance

171
Q
A
171
Q

What is included in the payoff statement provided by the seller’s lender?

A

The unpaid principal, accrued interest, and fees

172
Q

What does the buyer’s lender require from the seller before the closing?

A

A title commitment or abstract

173
Q

What is Form 1099-S used for in real estate transactions?

A

Reporting the sale or exchange of real estate

174
Q

What action must be taken if funds are not immediately available for withdrawal on the settlement date?

A

No disbursements may be made until funds are available

175
Q
A
176
Q
A

Real Estate (3 decks)

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