exam

Question 1

Purpose of the Colorado License Law

Answer 1

To protect the public of CO in re matters

Question 2

Define Conway-Bogue

Answer 2

• Also tied to Rule F. (F stands for filling in)

- Allows a licensee to practice law by filling in standard contracts

Question 3

Under Conway-Bouge, licensees must

Answer 3

• Be connected to the transaction
• Use standard and approved forms
• May not charge a separate fee for preparing docs

Question 4

RESPA

Answer 4

• Real Estate Procedures Settlement Act
• Says that you cannot accept gifts or fees for referring vendors to others for services
• Affiliated business arrangement rules/forms (ABA)
• If you have an interst in a company that you are referring, you must disclose and have the client sign the forms

Question 5

The title company

Answer 5

• Can only prepare closing statements, not legal docs (only attorneys)
• Act as a scrivener (recorder) of the re listing broker

Question 6

Brokers are responsible for what with the title company?

Answer 6

• All docs produced by the title company

- Payment for the legal docs

Question 7

Who must have a re license?

Answer 7

Anyone for who lists, leases, buys, exchanges, auctions, options, negotiates or sells for compensation

Question 8

Requirements for licensing

Answer 8

• Complete 168 hours of education
• Pass (not just take) the exam
• US ID
• 18+

Question 9

Why could you be investigated?

Answer 9

• False advertising
• Violating the CO Consumer Protection Act
• Failing to manage money/docs
• Failing to provide a settlement closing statement
• Not keeping docs for 4 years
• Paying an unlicensed person for work that requires one
• Dual contracting (loan fraud)

Question 10

The commission must get a complaint in writing before it can be investigated?

Answer 10

True

Question 11

When must a licensee disclose their license status immediately?

Answer 11

• If they have an interest in buying property
• If they are a principal in the sale of a property
• Must disclose in WRITING in any purchase contract in which they are a party
• When they are at an open house

Question 12

The commission can audit a broker’s escrow account at anytime, without notice?

Answer 12

True

Question 13

The commission can audit a broker’s escrow account at anytime, without notice, to verify what?

Answer 13

• Docs for 4 years
• No commingling of funds
• Provided all purchasers and sellers with closing statements

Question 14

What is commingling?

Answer 14

Putting the broker’s funds together with a client’s funds in the same account

Question 15

Commission cannot investigate?

Answer 15

• Ethics violations (that’s REALTORS)
• Disputes between brokers
• Criminal violations (that is handled by criminal courts and damages too)

Question 16

The commission cannot do what before they get the written complaint?

Answer 16

• Can’t subpoena files or docs (bring into court)
• Can’t use lawsuits to obtain records
• May not take a firm’s records without cause

Question 17

What 3 possible actions can be done after a complaint investigation?

Answer 17

• Dismiss bc of a stigmatized property (homicide, suicide, HIV/AIDS)
• Issue a letter of admonishment (warning): lowest level of disciplinary action - a letter will go to you and your employing broker, not the public.
• Send the complaint to the administrative law judge (doesn’t determine penalty, just if they broke the rules).

Question 18

If the licensee is guilty of a complaint, the re commission does what?

Answer 18

• Imposes a fine not the exceed $2,500 for each offense.
• Censures (make public), suspend, or revoke license
• CAN’T charge damages or impose jail sentences
• Makes licensee records/status available to the public for inspection on the re comm. website.

Question 19

Who can revoke a license?

Answer 19

The RE Commission (only entity that can)