Page 26 —
COLORADO REAL ESTATE JOURNAL
— April 6-April 19, 2016
experience
perspective
BKD National Construction & Real Estate Group
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BKD brings 90 years
of experience to the table,
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Experience how
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90
years
Colorado Springs
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719.471.4290
Denver
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303.861.4545
Law & Accounting
T
he Colorado Real Estate
Commission requires
that every licensed bro-
ker take an annual update course
as part of the continuing educa-
tion requirement to maintain a
brokerage license. Each active real
estate broker must complete 12
hours of three different versions
of the four-hour Annual Commis-
sion Update Course every three
years. The course covers updates
to the standard forms, compliance
issues, general practice issues,
new regulations, and CREC news
and updates.
A hot topic continues to be the
use of and modification to CREC
approved forms and is a focus of
the update course. CREC requires
brokers to use CREC approved
forms inmost contracts and trans-
actions. CREC Rules F-1 to F-7
set forth the requirements for use
of CREC-approved forms. Only
very limited changes to the CREC
forms are permitted by Rule F-1.
A broker may add his name and
information and fill in the blanks.
Any “additional provisions” or
“addenda” that amend or delete
portions of the approved forms
must result from the negotiations
or instructions of the party to the
transaction and must be made
directly on the printed body of the
form by striking the amended or
deleted portion in a legible man-
ner that does not obscure the dele-
tion that has been made. Certain
provisions that are not applicable
to the transaction may be omit-
ted and the provision’s caption or
heading must remain unaltered
on the form followed by the word
“omitted.”
Rule F-2 again emphasizes that
“additional provisions” must con-
tain only those transaction-specific
terms or acknowledgements that
result fromnegotiations or instruc-
tions from the parties. A broker
who is not a principal party to the
contract may not insert personal
provisions, personal disclaimers
or exculpatory language in favor
of the broker in the “additional
provisions.”
Rule F-3 is clear that if a broker
initiates the use of a preprinted or
preparedaddendumthatmodifies
the terms of the CREC-approved
forms that is not the result of nego-
tiation by the parties, such adden-
dum must be prepared by an
attorney representing the broker,
a principal party to the transaction
or an attorney representing the
principal party and such provi-
sions must not be included in the
“additional provisions” portion of
the CREC-approved forms. There
are additional
requirements
in Rules F-3
to F-7 to com-
ply with the
use of CREC-
a p p r o v e d
forms.
The update
course
dis-
cussed
the
CREC form
“Contract to
Buy and Sell
Real Estate”
to be used by brokers after Jan.
1, 2016, which has substantial
changes from the 2015 version.
The changes were to address on-
going issues and also to add new
provisions. Mineral disclosures
and post-occupancy agreements
are among the new additions to
the form.
The redlined forms worthy of
review are available at: https://
drive.google.com/folderview?id=
0B1VD36mBqe1EWExDMWJ3UT
c5YzQ&usp=sharing#list. CREC
will not change the Contract to
Buy and Sell Real Estate again
until 2019 unless changes are
necessary due to 1) a legislative
change, 2) a change in the case
law or 3) an Office of the Attor-
ney General recommendation to
change the form.
Various issues related to brokers
limiting services or having multi-
ple brokers performdifferent parts
of the transaction are also ongo-
ing issues. “Entry-only” listings
are not permitted by statute and
brokers should report to CREC
properties that are listed as “entry
only.” Abroker performing activi-
ties that require a license requires
that the broker act as either a trans-
action broker or as a single agent,
and the broker must fully perform
the statutory duties required of
the broker in the transaction. Seller
agent duties are set forth in CRS
12-61-804, buyer agent duties are
set forth in CRS 12-61-805 and
transaction broker duties are set
forth in CRS 12-61-807. “Limit-
ed-services listings” violate the
broker’s statutory duties. There
must be a designated agent if a
party to a transactionhas an agent.
Business models that have differ-
ent agents doing different steps
of the transaction are problematic
because the client must still have
a designated agent that both the
client and the other party to the
transaction can contact at all steps
of the transaction.
Another ongoing issue for bro-
kers discussed is disclosure of
latent defects. Latent defects in
the property must be disclosed by
sellers in writing. Latent defects
are different than “stigmatized
properties” as defined in 38-35.5-
101, which does not carry a duty
to disclose.
Also discussed were the new
requirements to manage a com-
mon-interest community. A
licensed broker must obtain a
community association manager-
designated manager level license
from CREC or work under a
CAM-licensed designated man-
ager. All CAMs must be licensed
or not participate in activities that
require a license. To obtain the
CAM license, a broker must have
additional insurance and must
complete additional continuing
education requirements or pass
the CAM examination.
Broker advertising disclosures
continues to be an area of concern
for CREC. CREC Rule E-8 (c) sets
forth the requirements for adver-
tising on the Internet. If a bro-
ker owns a website or controls its
content, every page must include
the broker’s name (or team name)
and the broker’s brokerage firm
name. If a broker authorizes a
third party to advertise on behalf
of the broker, the broker is respon-
sible that all information provided
to the third party is accurate. All
expired listings must be removed
from the advertisingmediawithin
three days. A broker who com-
municates through email, chat,
instant messages, news groups,
discussion lists, blogs or other sim-
ilar means for purposes of adver-
tising the broker’s real estate ser-
vices must use the broker’s name
(or team name) and the broker’s
brokerage firm name; however,
once disclosed to a specific cli-
ent or customer, the broker is not
required to continue to make the
same disclosure. If it is not reason-
able to include the broker’s name
(or team name) and the broker’s
brokerage firm name because
space is limited (i.e., Twitter) the
broker must disclose clearly and
conspicuously on the broker’s
web page to which the advertis-
ing links, within the first click of
the mouse.
Avariety of other issues are dis-
cussed in the course update; this
article only outlines the highlights.
Finally, CREC emphasized its new
online license management and
database (eLicense). All brokers
must use eLicense for initial appli-
cations, renewals and all other
change requests. CREC recom-
mends not waiting until license
renewal to set up the eLicense
account.
s
Amy Brimah
Managing partner,
Brimah LLP, Denver
Real
Estate
Attorneys
with
Rea l
Experience
Our national real estate practice
is focused on the evolving
needs of clients.
We advise on current positions,
opportunities, and complex
transactions in:
• Acquisition
• Development
• Financing
• Leasing
For more information, please call
Beverly Quail at 303.292.2400
