A. License Qualifications, Applications and Examinations A-1. Repealed (1-6-00)

A-2. Requirements must precede application Except for the practical applications and current legal issues courses, educational requirements imposed by statute for an original license, must be completed prior to taking the examination and applying for a license pursuant to Rules A-8, A-9, and A-12. A-3. Examinations will be given only to duly qualified applicants for a real estate broker license; however, one instructor from each real estate school offering real estate courses required of applicants under section 12-61-103(4) C.R.S. may write the examination one time during any 12-month period.

A-4. Repealed.

A-5. Licensing Exam in two parts The real estate license examination is made up of two parts, the uniform part, and the local (state) part. Applicants for licensure who must receive passing scores on both the uniform part and the state part of the examination need not receive them on the same administration date. If one part is failed, the applicant may retake it at a subsequent time. A-6. Repealed A-7. The Real Estate Commission will not certify to any person, state or agency any information concerning the results of any examination as it pertains to any person who has written the examination unless such person is or has been licensed as a Colorado real estate broker or salesperson pursuant to such examination; except, that the Commission may authorize a special examination for existing licensees for certification purposes. A-8. Exam score shelf life Subject to 12-61-103 (6), A person who has successfully passed the written exam must, in compliance with Rule A-5, within one year of the date of passing the entire examination, apply in complete detail for licensure accompanied by the statutory application fee and the appropriate supporting documentation showing the person has completed the required educational and/or experience requirements pursuant to applicable statutes and rules. Such complete application for licensure must be received within the one year period or all rights to a passing score will be terminated and any incomplete application will be canceled. All examination records pertaining to a canceled application will be destroyed.

A-9. License processing time frames For any complete broker application filed with the Commission, a license will be issued within 7 to 10 business days or the applicant will be mailed a notice of deferred status. The license of a broker applicant whose application has been approved by the Commission subject to submitting certain compliance items shall be issued inactive if such compliance items are not submitted within 20 days after written notification by the Commission. A-10. The Commission may deny or defer an original license application pursuant to 12-61-103(3). Under no circumstances will an examination be recognized by the Commission as complying with 12-61- 103(6) after 18 months from the date an applicant took the examination which resulted in a passing score.

A-11. An applicant for a Colorado real estate broker license, who has been licensed as a real estate broker or salesperson in any other state must file with the application for a Colorado license a “certification of licensing history” issued by each state where licensed or has been licensed as a real estate broker or salesperson. If currently licensed, such certificate must bear a date of not more than 90 days prior to submission date of the application. If no longer licensed, such certificate must bear a date subsequent to expiration date. A-12. (a) Pursuant to 12-61-103 C.R.S., an applicant who has been convicted or pleaded nolo contendere to a misdemeanor or a felony, or any like municipal code violation, or has such charges pending or has agreed to a deferred prosecution, a deferred judgment, or a deferred sentence (violations) (excluding misdemeanor traffic violations) within the last ten years must file prior to or with his or her application for licensing the following information and documentation:

1. 1. A written and signed personal explanation and detailed account of the facts and circumstances surrounding each violation, which shall include the statement, “I have been charged with no other criminal violations either past or pending, other than those I have stated on the application.”
2. 2. The completed Commission form number REC-BAA, including results of court hearing(s), in the form of copies of charges, disposition, pre-sentencing report and most recent probation or parole report.
3. 3. If the applicant is to be employed by another licensee, the employing broker must submit a letter stating that he/she is aware of the specific charge(s) or convictions(s).
   1. (b) (1) At any time prior to submission of a formal application for licensure a person may request that the Commission issue a preliminary advisory opinion regarding the potential effect that previous conduct, criminal conviction(s) or violation(s) of the real estate license law may have on a future formal application for licensure. Such opinion may be issued by the Commission, in its discretion, in order to provide preliminary advisory guidance. Any such opinion shall not be binding on the Commission or limit the Commission's authority to investigate a future formal application for licensure. However, if the Commission issues a favorable advisory opinion, the Commission may elect to adopt such advisory opinion as the final decision of the Commission without further investigation or hearing.
4. (2) An individual seeking a preliminary advisory opinion under this rule is not an applicant for licensure and the issuance of an unfavorable opinion shall not prevent such individual from making application for licensure pursuant to the real estate licensing law and the rules and regulations of the Commission. A-13. Proof of education required Each broker applicant for licensure must file with such application a Certificate of Completion form REC-33, the form and content as prescribed by the Commission, or an official college or university transcript, or a certification by an official state agency of any other state, attesting that the applicant has successfully completed, on the dates indicated thereon, the respective educational qualifications required by 12-61-103(4) and (6)(C)(II) C.R.S. A-14. A salesperson license will automatically be placed on inactive status unless there is satisfactory proof submitted to the Commission that the requirements of 12-61-103.5 C.R.S have been met prior to renewal of such license for the year 2000 and thereafter. A-15. Effective January 1, 2004, each broker applicant for examination must submit a Certification of Completion form REC-33, the form and content as prescribed by the Commission, attesting that the applicant has successfully completed the respective educational qualifications required by 12- 61-103(4) and (6)(C)(II) C.R.S. prior to taking the exam. A-16. Each original application for a real estate broker's license must be accompanied by the applicant's fingerprints on Card No. FD-258. This card must be signed by the applicant and completed in a manner satisfactory to the Commission.

A-17. The seventy two hours of instruction or equivalent distance learning hours required in 12-61-103(4) (a)(III) C.R.S. must be satisfied by successful completion of courses of study approved by the Commission as follows:

(a) A minimum of 24 hours in Real Estate Closings; and (b) A minimum of 8 hours in Trust Accounts and Record Keeping; and (c) A minimum of 8 hours in Current Legal issues; and (d) A minimum of 32 hours in Practical Applications.

A-18. Repealed (effective 1-1-96)

A-19. Repealed (effective 3-4-99)

A-20. If the applicant for licensure is denied by the Commission for any reason, the applicant will be informed of the denial and the reason therefore.

A-21. Repealed (effective 1-1-97)

A-22. Repealed.

A-23. Completion of the courses of study approved by the Commission as required in 12-61-103(4)(a)(I), (II), (III), & 6(c) (II) C.R.S., whether through classroom or distance learning, must be based upon educational principles acceptable to the Real Estate Commission. A-23.5. Effective January 1, 2001, pre-licensing courses as required in 12-61-103(4)(a)(I), (II), (III), & 6(c) (II) C.R.S., offered through distance learning, must be approved by the Real Estate Commission. Course material, instruction and method of delivery must be consistent with acceptable education standards assuring that the desired learning objectives are met. The Commission will approve methods of delivery certified by the Association of Real Estate License Law Officials (ARELLO), or by a substantially equivalent authority and method. Distance learning is defined as courses of instruction and education that do not take place in a traditional classroom setting but rather through other media in which the instructor and learner are separated by distance and sometimes by time. Distance education formats include, but are not limited to, traditional correspondence, audio and videotapes, internet, computer based and remote TV broadcasts. A-24. The Commission may audit courses and may request from each school offering a Commission approved course of study under 12-61-103(4)(a) and (b), C.R.S., all instructional material related thereto and student attendance records as may be necessary for an investigation in the enforcement of Section 103 of the License Law and Commission Rules and Regulations. The purpose of the audit shall be to ensure that schools adhere to the approved course of study, offer course material and instruction consistent with acceptable education standards and instruct in such a manner that the desired learning objectives are met. Failure to comply with the provisions of this rule may result in the withdrawal of Commission course approval. A-25. If the fees accompanying any application or registration made to the Commission (including fees for the recovery fund, renewals, transfers, etc.) are paid for by check and the check is not immediately paid upon presentment to the bank upon which the check was drawn, the application shall be canceled; the application may be reinstated only at the discretion of the Commission and upon full payment of any fees together with payment of the fee required by state fiscal rules for the clerical services necessary for reinstatement.

A-26. Pursuant to 12-61-103(7)(c) C.R.S., a temporary broker's license may be issued to a corporation, partnership or limited liability company to prevent hardship. No application for a temporary broker's license will be approved unless the designated individual is a Colorado real estate licensee. No more than two temporary licenses may be issued to any corporation, partnership or limited liability company, whether consecutive or not, during any 18 month period, except by the Commission.

B. Continuing Education B-1. When continuing education is required Licensees must satisfy the continuing education requirement for a three-year license period before applying to renew an active license, to activate an inactive license or to reinstate an expired license to active status.

B-2. Methods of completing continuing education Licensees satisfy the entire continuing education requirement through one of the following options:

(a) Completing the eight hours required by C.R.S. 12-61-110.5(l)(c) and (2) and an additional 1 hour required by this rule in 3-hour annual increments developed by the Commission and called the “Annual Commission Update” course. Licensees choosing this option must complete an additional 15 hours of elective coursework to meet the 24-hour total continuing education requirement during the 3-year license period in subject areas listed in C.R.S. 12-61-110.5(3).

(b) Completing the Commission approved 24-hour “Broker Transition” course. (This option is permitted once to each licensee in lieu of the requirements of rule B-2(a).) (c) Completing the Commission approved 24-hour “Brokerage Administration” course. (This option is permitted once to each licensee in lieu of the requirements of rule B-2(a).) (d) By passing the Colorado portion (state part) of the licensing exam. B-3. Annual Commission Update Course Standards (a) Pursuant to Rule B-2, the annual 3-hour “Commission Update” course shall be developed and presented by the division of real estate and furnished upon request without charge to approved providers not later than October 15th of each year. Said course shall be presented without additional development by the provider or instructor, unless pre- approved in advance by the Division of Real Estate.

(b) Any provider specified in commission rule B-6(a) may request and offer the annual 3-hour “Commission Update” course. All other providers must apply annually for approval to offer the course using the commission approved form and procedures in commission rule B- 12, except that the course outline (B-12(a), and course exam (B-12(b) are not required, since they will be furnished by the Division of Real Estate.

(c) Each student must pass a written or on-line course examination provided by the division of real estate. The number of questions and minimum passing score will be furnished to providers along with the course. This may vary from year-to-year depending upon the amount and nature of material presented. A licensee failing the course examination may re-take a different version of the examination until exhausting the database of questions for that year's exam.

(d) Providers must report to the Real Estate Commission the name, real estate license number and completion date for all students successfully completing the annual 3-hour Commission Update course.

B-4. All continuing education courses may be offered and completed by distance learning. Effective January 1, 2001, courses offered through distance learning must be approved by the Real Estate Commission. Course material, instruction and method of delivery must be consistent with acceptable education standards assuring that the desired learning objectives are met. The Commission will approve methods of delivery certified by the Association of Real Estate License Law Officials (ARELLO), or by a substantially equivalent authority and method. Distance learning is defined as courses of instruction and education that do not take place in a traditional classroom setting but rather through other media in which the instructor and learner are separated by distance and sometimes by time. Distance education formats include, but are not limited to, traditional correspondence, audio and videotapes, internet, computer based and remote TV broadcasts. Classroom attendance includes remote, live-video presentations, provided they are proctored and offer real-time interactivity with the instructor. B-5. The following types of courses will not be approved for continuing education credit:

a. Sales or marketing meetings conducted in the general course of a real estate brokerage practice.

b. Orientation, personal growth, self-improvement, self-promotion or marketing sessions.

c. Motivational meetings or seminars.

d. Examination preparation or exam technique courses.

e. Courses or providers not approved in advance unless exempt under this rule. B-6. Courses automatically pre-approved for continuing education credit The following courses, subject to all other pro visions of Rule B, if within the topic areas listed in C.R.S. 12-61-110.5(3), will be accepted for elective continuing education credit without Commission pre-approval.

(a) Courses offered by accredited colleges, universities, community or junior colleges, public or parochial schools, government agencies or proprietary real estate schools approved by the Colorado Division of Private Occupational Schools.

(b) Courses developed and offered by national professional trade organizations offering courses to their own members.

(c) Courses approved by and taken in satisfaction of another occupational Licensing authority's education requirements.

(d) Courses in real property law by a provider approved by the Colorado Board of Continuing Legal and Judicial Education.

(e) Deleted 12/7/00 B-7. Courses requiring pre-approval for continuing education credit The following continuing education courses must receive Commission approval prior to offering:

(a) Courses offered by employing brokers to their employed licensees.

(b) Courses offered by regional, state or local professional trade organizations/affiliates/chapters that are not offered pursuant to Rule B-6(b).

(c) Courses offered by any provider exempt from Colorado school registration under C.R.S. 12- 59-104.

(d) Deleted 10/1/02.

(e) Currently approved courses that are affected by any substantive changes. B-8. The following course format and administrative requirements apply to all Colorado continuing real estate education for licensees:

(a) Courses must be at least 1 hour in length containing at least 50 instructional minutes.

(b) Repealed (Effective February 1,2001)

(c) A maximum of 8 hours of credit may be earned per day.

(d) No course may be repeated for credit in the same calendar year.

(e) Instructors may receive credit for classroom teaching hours once per course taught per year.

(f) Hours in excess of 24 may not be carried forward to satisfy a subsequent renewal requirement (g) No school/provider may waive, excuse completion of, or award partial credit for the full number of course hours, without prior Commission approval.

(h) No challenge exam or equivalency may substitute for the full course outline.

(i) No credit may be earned for remedial education stipulated to between a licensee and the Commission as part of a disciplinary action.

(j) No course offering by a provider will be approved unless the provider has either been granted a certificate of approval by the Colorado Department of Higher Education, Division of Private Occupational Schools, or is exempt from such requirement pursuant to C.R.S.12- 59-104.

B-9. Course approval certification shall be for a period of three years, except that an annual or one-time seminar or conference offering may be approved for a specific date or dates. B-10. Each Colorado licensee is responsible for securing from the provider evidence of course completion in the form of an affidavit, certificate or official transcript of the course. Said documentation must be in sufficient detail to show the course subject, content, duration, date(s) and authentication. Licensees must retain proof of continuing education completion for 4 years, and provide said proof to the Commission upon request.

B-11. Each provider approved under rule B-7 must retain copies of course outlines or syllabi and complete records of attendance for a period of four (4) years. B-12. Course approval application process Continuing education providers required to have Commission course approval must, in accordance with all of the provisions of this Rule B, submit an application form prescribed by the Commission, along with the following information at least 30 days prior to the proposed class dates:

(a) Detailed course outline or syllabus, including the intended learning outcomes, the course objectives and the approximate time allocated for each topic.

(b) A copy of the course exam(s) and instructor answer sheet if applicable. In the absence of an exam, the criteria used in evaluating a person's successful completion of the course objectives.

(c) Copy of instructor teaching credential; if none, a resume showing education and experience which evidence mastery of the material to be presented.

(d) Deleted 10/01/02 (e) A copy of advertising or promotional material used to announce the offering.

(f) Deleted (01/06/00)

(g) Upon Commission request, a copy of textbook, manual, audio or video tapes, or other instructional material.

(h) Deleted 12/7/00.

(i) Effective January 1, 2001, providers of continuing education offered through distance learning must submit evidence in a form prescribed by the real estate commission that the method of delivery and course structure is consistent with acceptable education standards assuring that the desired learning objectives are met. The Commission will approve methods of delivery certified by the Association of Real Estate License Law Officials (ARELLO), or by a substantially equivalent authority and method. B-13. By offering real estate continuing education in Colorado, each provider agrees to comply with relevant statutes and Commission rules and to permit Commission audit of said courses at any time and at no cost.

B-14. The act of submitting an application for renewal, activation or reinstatement of a real estate license shall mean that the licensee attests to compliance with the continuing education requirements of C.R.S. 12-61-110.5 C. Licensing - Office C-1. A broker licensed as an individual or as an individual doing business under a trade name shall be the sole owner of the brokerage business or such brokerage business will be considered as a partnership and the partnership shall apply for a broker's license under 12-61-103(7) C.R.S. C-2. Resident broker required to have office; exceptions Every resident Colorado real estate broker shall maintain and supervise a brokerage practice available to the public, except those brokers registered in the Commission office as in the employ of another broker or those brokers registered as inactive. C-3. Responsible broker availability Any broker licensed as an individual proprietorship or the acting broker for a corporation, partnership or limited liability company must be reasonably available to manage and supervise such brokerage practice during regular business hours.

C-4. Repealed effective 1-1-97 C-5. Repealed effective 1-1-97 C-6. Repealed effective 1-1-97 C-7. Repealed effective 1-1-97 C-8. Repealed effective 1-1-97 C-9. Repealed.

C-10. Repealed.

C-11. Repealed.

C-12. Repealed.

C-13. (a) Repealed (b) Repealed C-14. Employed licensees licensed under a broker doing business under a trade name shall be licensed under the individual broker's name and not under the trade name. C-15. Repealed C-16. No agreement shall be entered into by any licensee whereby an individual licensee lends their name or license for the benefit of another person, partnership, limited liability company or corporation, whereby the provisions of the Colorado Real Estate Broker License Law and Commission Rules relating to licensing are circumvented. C-17. The Commission may refuse to issue a license to a partnership, limited liability company or corporation if the name of said corporation, partnership or limited liability company is the same as that of any person or entity whose license has been suspended or revoked or is so similar as to be easily confused with that of the suspended or revoked person or entity by members of the general public.

C-18. A broker may adopt a trade name according to Colorado law and such trade name will appear on the face of the broker's license, however, pursuant to 12-61-103(10) C.R.S. such broker must conduct brokerage business only under such trade name or conduct brokerage business under the entire name appearing on the face of the license.

C-19. (a) The purpose of this rule is to provide interpretation for Section 12-61-103(10), C.R.S. 1973, as amended.

(b) For the purposes of this rule, the following definitions shall apply:

1. (i) The term “broker” shall mean any sole proprietor, partnership, limited liability company, or corporation licensed by the Real Estate Commission.
2. (ii) The term “trade name” shall include trademark, service mark, trade identification, or, any portion thereof which is recognizable as a trade name, trademark, service mark, or trade identification.

(c) Pursuant to 12-61-103(10) C.R.S., no person shall be licensed under more than one name, and no person shall conduct or promote a real estate brokerage business except under the name under which such person or brokerage business is licensed; however, the use of a trade name with the permission of the owner of such trade name may be used concurrently with the licensed name of the broker in the promotion or conduct of the licensed broker's business.

(d) Repealed.

(e) No broker shall advertise or promote its business in such a manner as to mislead the public as to the identity of the licensed broker: nor shall a portion of the licensed name of any broker be advertised or promoted in a manner which would mislead the public as to the identity of the licensed broker.

(f) Any broker using a trade name, the use of which requires obtaining permission from another who has an existing and continuing right in that trade name by virtue of any state or federal law, in advertising other than of specific properties for sale and in advertising of specific properties for sale jointly with other brokers under a trade name shall cause the following legend to appear in a conspicuous and reasonable manner calculated to attract the attention of the public:

1. “Each (Actual Trade Name) brokerage business is independently owned and operated.” (This legend may be re-phrased if the consent of the Commission is secured.)

(g) Any broker using a trade name owned by another on “for sale” or “for lease” signs on specific property or in advertising specific property for sale in any media shall clearly and unmistakably include said broker's name, as registered with the Commission, in a conspicuous and reasonable manner calculated to attract the attention of the public. The broker's name shall appear where specific property is advertised for sale so that the public may unmistakably identify the broker responsible for the handling of the listing of the specific property.

(h) Any broker using a trade name owned by another on business cards, letterheads, contracts, or other documents relating to real estate transactions, shall clearly and unmistakably include said broker's name as registered with the Commission in a conspicuous and reasonable manner calculated to attract the attention of the public and shall also include the following legend:

1. “Each (Actual Trade Name) brokerage business is independently owned and operated.” (This legend may be re-phrased if the consent of the Commission is secured.)

(i) Any broker using a trade name owned by another on signs displayed at a place of business shall clearly and unmistakably include said broker's name as registered with the Commission on such signs in a conspicuous and reasonable manner calculated to attract the attention of the public and shall also include the following legend: “Each (Actual Trade Name) brokerage business is independently owned and operated.” (This legend may be re-phrased if the consent of the Commission is secured.) C-20. No broker's license will be issued to a broker under a trade name, corporate name, partnership name or limited liability company name which is identical to another licensed broker's trade name, corporate, partnership or limited liability company name. C-21. A broker licensed as an individual proprietorship shall not adopt a trade name which includes the following words: Corporation, Partnership, Limited Liability Company, Limited, Incorporated, or the abbreviations thereof.

C-22. Employing broker qualifications for business entities When a broker applicant submits an application to qualify:

(a) A corporation as a real estate brokerage company, the broker applicant must certify that:

1. 1. The corporation has been properly incorporated with the Colorado Secretary of State or is authorized to do business in Colorado, and is in good standing, proof of which shall be included with the application;
2. 2. If an assumed or trade name is to be used, it has been properly filed with and accepted by the Colorado Secretary of State, proof of which shall be included with the application;
3. 3. The broker applicant has been appointed by the board of directors to act as broker for the corporation;

(b) A partnership as a real estate brokerage company, the broker applicant must certify that:

1. 1. The partnership has been properly registered with the Colorado Department of Revenue or properly filed with the Colorado Secretary of State and is in good standing, proof of which shall be included with the application;
2. 2. If an assumed or trade name is to be used, it has been properly filed with Colorado Department of Revenue or filed and accepted by the Colorado Secretary of State, proof of which shall be included with the application;
3. 3. The broker applicant has been appointed the real estate broker for the partnership by all general partners or managers/officers;

(c) A limited liability company as a real estate brokerage company, the broker applicant must certify that:

1. 1. The limited liability company has been properly registered with the Colorado Secretary of State and is in good standing, proof of which shall be included with the application;
2. 2. If an assumed or trade name is to be used, it has been properly filed with the Colorado Secretary of State, proof of which shall be included with the application;
3. 3. The broker applicant has been appointed the real estate broker for the limited liability company by all managers, or if management has been reserved to the members in the articles of organization, by all members;

C-23. Deleted 10-01-2002 C-24. Pursuant to 12-61-101(4)(l) and (m) C.R.S., the regularly salaried employee of an owner of an apartment building or complex or owner's association acting as an on-site manager and performing the customary duties of an on-site manager, is exempt from the requirements of 12- 61-101. The customary duties of an on-site manager include maintenance, collecting rents for the owner or owner's licensed broker, showing units to a prospective tenant, and quoting a rental price previously established by the owner or the owner's licensed broker. To preserve the above-cited exemptions:

(1) The unlicensed on-site manager must account and report directly to the respective owner or owners association or to an entity licensed as an independent real estate broker; and (2) The unlicensed on-site manager must be regularly salaried (salary may include rent value) by the owner of the apartment building or complex or regularly salaried by the owners association for the complex; and (3) The unlicensed on-site manager may not negotiate any of the material items of a lease or rental agreement with a tenant or prospective tenant or conduct any other real estate activity which requires a real estate license.

C-25. Notice of termination; employing broker The employing broker of a licensed corporation, partnership or limited liability company must immediately notify the Commission, in a manner acceptable to the Commission, of the employing broker's termination of employment with such licensed corporation, partnership or limited liability company, or upon the employing broker's failure to continue to comply with 12-61-103 C.R.S. and applicable rules. Upon such notification, the employing broker and all employed licensees shall be placed on inactive status.

C-26. A broker license may be issued on an inactive status.

D. Renewal, Transfer, Inactive License, Errors and Omissions Insurance D-1. Repealed D-2. A real estate licensee may request that the Commission records show their license inactive until proper request for reactivation has been made.

D-3. A real estate licensee whose license is on inactive status must apply for renewal of such inactive license and pay the regular renewal fees.

D-4. Renewal of all licenses can be effected by use of the renewal application form provided by the Commission or by other methods acceptable to the Real Estate Commission. D-5. Inactive renewal notice to last home address Renewal notice and application for an inactive license will be mailed to the last known residence address of the inactive licensee.

D-6. Active renewal notice to employing broker The renewal notice and application of employed licensees will be mailed only to the employing broker at the broker's recorded business address.

D-7. When a real estate license is on an inactive status or has been transferred to a subsequent employing broker, a licensee may be compensated directly by a previous employing broker for commissions earned during that term of employment.

D-8. Repealed.

D-9. Form and fees required to change license No changes in license status will be made except in a manner acceptable to the Commission to effect such change and upon payment of the statutory fees for such changes. D-10. Repealed.

D-l1. Each broker applicant who qualifies for original licensure will be issued a license expiring December 31st of the same year of issuance and the renewal thereof will be in accordance with 12-61-110 (4)(a), 12-61-110.5 C.R.S. and rule D-13.

D-12. All fees paid for the renewal of a license shall be non-refundable. D-13.

(a) Pursuant to 12-61-110(4)(a) (II) and (III) C.R.S., the regular three-year renewal fee upon which reinstatement fees are based is defined as the total renewal fee less any surcharge, excise tax or Recovery Fund fee.

(b) If an active license is requested upon reinstatement, a license activation (transfer) fee will be required in addition to the reinstatement fee.

D-14. Errors and omissions (E&O) insurance Every active real estate licensee, including licensed real estate companies, shall have in effect a policy of errors and omissions insurance to cover all acts requiring a license.

(a) The Commission shall enter into a contract with a qualified insurance carrier to make available to all licensees and license applicants a group policy of insurance under the following terms and conditions:

(1) The insurance carrier is licensed and authorized by the Colorado division of insurance to write policies of errors and omissions insurance in this state.

(2) The insurance carrier maintains an A.M. Best rating of “B” or better.

(3) The insurance carrier will collect premiums, maintain records and report names of those insured and a record of claims to the commission on a timely basis and at no expense to the state.

(4) The insurance carrier has been selected through a competitive bidding process.

(5) The contract and policy are in conformance with this rule and all relevant Colorado statutory requirements.

(b) The group policy shall provide, at a minimum, the following terms of coverage:

(1) Coverage for all acts for which a real estate license is required, except those illegal, fraudulent or other acts which are normally excluded from such coverage.

(2) Deleted 10/01/03 (3) That the coverage cannot be canceled by the insurance carrier except for non-payment of the premium or in the event a licensee becomes inactive or is revoked or an applicant is denied a license.

(4) Pro-ration of premiums for coverage which is purchased during the course of a calendar year but with no provision for refunds of unused premiums.

(5) Not less than $100,000 coverage for each licensed individual and entity per covered claim regardless of the number of licensees or entities to which a settlement or claim may apply.

(6) An annual aggregate limit of not less than $300,000 per licensed individual or entity.

(7) A deductible amount for each occurrence of not more than $1,000 for claims and no deductible for legal expenses and defense.

(8) The obligation of the insurance carrier to defend all covered claims and the ability of the insured licensee to select counsel of choice subject to the written permission of the carrier, which shall not be unreasonably withheld.

(9) Coverage of a licensee's use of lock boxes, which coverage shall not be less than $25,000 per occurrence.

(10) The ability of a licensee, upon payment of an additional premium, to obtain higher or excess coverage or to purchase additional coverages from the group carrier as maybe determined by the carrier.

(11) that coverage is individual and license specific and will cover the licensee regardless of changes in employing broker.

1. (12) The ability of a licensee, upon payment of an additional premium, to obtain an extended reporting period of not less than 365 days.
2. (13) A conformity endorsement allowing a colorado resident licensee to meet the errors and omissions insurance requirement for an active license in another group mandated state without the need to purchase separate coverage in that state.

(c) Licensees or applicants may obtain errors and omissions coverage independent of the group plan from any insurance carrier subject to the following terms and conditions:

1. (1) The insurance carrier is licensed and authorized by the Colorado division of insurance to write policies of errors and omissions insurance in this state and is in conformance with all Colorado statutes.
2. (2) The insurance provider maintains an A.M. Best rating of “B” or better (3) The policy, at a minimum, complies with all relevant conditions set forth in this rule and the insurance carrier so certifies in an affidavit issued to the insured licensee or applicant in a form or manner specified by the Commission and agrees to immediately notify the Commission of any cancellation or lapse in coverage. Independent coverage must provide, at a minimum, the following:
   1. (i) The contract and policy are in conformance with all relevant Colorado statutory requirements.
   2. (ii) Coverage includes all acts for which a real estate license is required, except those illegal, fraudulent or other acts which are normally excluded from such coverage.
   3. (iii) Coverage cannot be canceled by the insurance provider, except pursuant to and in conformance with 10-4-109.7 CRS (iv) Coverage is for not less than $100,000 for each licensed individual and entity per covered claim, regardless of the number of licensees or entities to which a settlement or claim may apply, with an annual aggregate limit of not less than $300,000 per licensed individual and entity.
   4. (v) Payment of claims by the provider shall be on a first dollar basis and the provider shall look to the insured for payment of any deductible.
   5. (vi) The ability of a licensee, upon payment of an additional premium, to obtain an extended reporting period of not less than 365 days.
   6. (vii) That the provider of the independent policy has executed an affidavit in a form or manner specified by the commission attesting that the independent policy is in force and, at a minimum, complies with all relevant conditions set forth herein and that the provider will immediately notify the commission in writing of any cancellation or lapse in coverage of any independent policy. The commission will make no independent determination of whether individual policies meet the requirements of this rule.
   7. (viii) Coverage of a licensee's use of lock boxes, which coverage shall not be less than $25,000 per occurrence.

(d) Applicants for licensure, activation, renewal and reinstatement shall certify compliance with this rule and 12-61-103.6 C.R.S. on forms or in a manner prescribed by the Commission. Any active licensee who so certifies and fails to obtain errors and omissions coverage or to provide proof of continuous coverage, either through the group carrier or directly to the Commission, shall be placed on inactive status:

1. (1) immediately, if certification of current insurance coverage is not provided to the Commission; or, (2) immediately upon the expiration of any current insurance when certification of continued coverage is not provided.

15. Each broker and salesman applicant who qualifies for original licensure will be issued a license expiring December 31st of the same year of issuance and the renewal thereof will be in accordance with Rule D-14.

16. All fees paid for the renewal of a broker or salesman license shall be non-refundable.

E. Separate Accounts - Records - Accountings - Investigations E-1. Trust accounts; requirements and purposes All “money belonging to others” accepted by a resident or non-resident broker doing business in this state shall be deposited in one or more accounts separate from other money belonging to the broker or brokerage entity. The broker shall identify the fiduciary nature of each separate account in the deposit agreement with the recognized bank or institution by the use of the word “trust” or “escrow” and a label identifying the purpose/type of such account, i.e., “sales escrow”, “rental escrow”, “security deposit escrow”, “owners association escrow”, or other abbreviated form defined in the deposit agreement. Unless otherwise permitted by other subsections of this rule, all money belonging to others shall be deposited according to the purpose of the transaction in separate types of escrow accounts. The broker shall retain a copy of each account deposit agreement executed for inspection by an authorized representative of the Commission.

(a) Such separate trust accounts must be maintained in the name of the licensed broker or if the licensed broker is a partnership, corporation or limited liability company, such account shall be maintained in the name of the broker acting for such partnership, corporation or limited liability company and in the name of the licensed partnership, limited liability company or corporation. The licensed broker must be able to withdraw money from such separate account, but may authorize other licensed or unlicensed co-signers. However, such authorization shall not relieve the broker of any responsibility under the licensing act.

(b) Repealed (effective 1-1-96)

(c) When a broker is registered in the office of the Real Estate Commission as in the employ of another broker the responsibility for the maintenance of a separate account shall be the responsibility of the employing broker.

(d) Money belonging to others shall not be invested in any type of account or security or certificate of deposit which has a fixed term for maturity or imposes any fee or penalty for withdrawal prior to maturity unless the written consent of all parties to the transaction has been secured.

(e) Repealed (effective 1-1-96)

(f) A broker's personal funds shall not be commingled with money belonging to others except that an arrangement may be made with a depository to deposit a sufficient amount of the broker's funds to maintain such account. One or more separate escrow or trust bank accounts may be maintained by a broker pursuant to the following duties and limitations:

1. (1) Money held in an escrow or trust account which is due and payable to the broker shall be withdrawn promptly.
2. (2) An escrow or trust account shall not be used as a depository for money belonging to licensees employed by a broker except pursuant to an executory sales contract, nor shall it be used for money the broker owes their licensees, or for bonuses or investment plans for the benefit of their licensees.
3. (3) Collections for insurance premiums and/or IRS employee's withholding funds shall not be deposited in a separate trust account established pursuant to 12-61- 113(g) and (g.5) C.R.S.
4. (4) Money advanced by a broker for the benefit of an other may be placed in the trust account and identified as an advance but may be withdrawn by the broker only on behalf of such person. Any amount advanced to an escrow or trust account must be identified and recorded in the escrow journal, the beneficiary's ledger and disclosed in periodic accounting to the beneficiary.
5. (5) Funds of others received by a broker relating to real estate partnerships, joint ventures and syndications in which the broker has an ownership interest and also receives compensation for selling or leasing the property shall be maintained in a trust account separate from any other trust account maintained by such broker.
6. (6) In the absence of a specific written agreement to the contrary, commissions, fees and other charges collected by a broker for performing any service on behalf of another are considered “earned” and available for use by the broker only after all contracted services have been performed, and there is no remaining right of recall for such money. The broker shall identify and record all commissions, fees, or other charges withdrawn from a trust or escrow account on the account journal and individual ledgers of those against whom the fees or commissions are charged. If a single disbursement of fees or commissions includes more than one transaction, rental period or occupancy or includes withdrawals from the account of more than one trust or escrow account beneficiary, the broker, upon request, shall produce for inspection by an authorized representative of the real estate commission a schedule which details (1) the individual components of all amounts included in the sum of such disbursement and (2) specifically identifies the affected beneficiary or property ledgers. Ledger entries must detail such disbursements in accordance with rule E-1 (p)(2), including the date or time period for each individual transaction, rental or occupancy.

(g) Money belonging to others which is received by the broker includes but is not limited to money received in connection with: property management contracts; partnerships; limited liability companies; syndications; rent or lease contracts; advance fee contracts; guest deposits for short term rentals; escrow contracts; collection contracts; earnest money contracts; or, money belonging to others received by the broker for future investment or other purpose.

(h) If a broker who is also acting as a builder receives deposit money under an executory sales contract which provides for the construction of a house, the deposit money must be placed in the trust account and not used for construction purposes unless the written consent of the purchaser is secured.

(i) A broker who manages less than seven (7) single family residential units may deposit rental receipts and security deposits and disburse money collected for such purposes in the “sales escrow” account.

(j) Repealed (effective 1-1-96)

(k) If a conveyance is made by an installment contract for a deed and if such contract contains a provision whereby the broker signs the installment contract as the receipting broker, the broker must escrow the receipted money pursuant to Rule E-1 until the owner signs acceptance of the contract and a copy of the fully executed contract is delivered to the purchaser.

(l) When a sales contract or an installment contract for the sale of an interest in real estate is signed by the parties to the transaction and the purchaser also executes a promissory note and/or a mortgage or trust deed encumbering such property before the seller delivers the deed, then all payments received by the broker pursuant to such contract shall be deposited in a trust account in a recognized depository until delivery of such deed to the purchaser unless the broker receives specific written consent from all parties concerning disposition of such funds. This rule shall apply whether or not the broker and seller are one and the same.

(m) Checks received as earnest money under an earnest money contract must be identified as a check in the contract and may be withheld from presentment for payment only if so disclosed in the contract or pursuant to the written instructions of the seller. If a note is received as earnest money under an earnest money contract, the seller must be informed by identifying the note in the contract and by informing the seller of the date such note becomes due by stating the due date in the contract or attaching a copy of the note to the contract. The broker must present the note or check for payment in a timely manner and if payment is not made, the broker shall promptly notify the seller.

(n) Except as provided in Rule E-1(o), all money belonging to others which is received by a broker as a property manager shall be deposited in such broker's escrow or trust account not later than five business days following receipt. All other money belonging to others which is received by a broker shall be deposited in such broker's escrow or trust account not later than the first business day following receipt.

(o) Except as otherwise agreed to in writing, in any real estate transaction in which one broker holds a listing contract on a property and where the selling broker receipts for earnest money under a contract, the selling broker shall deliver the contract and the earnest money to the listing broker who shall deposit the earnest money in the broker's escrow or trustee account in a recognized depository not later than the first business day following the day on which the broker receives notice of acceptance of such contract. If such selling broker receipts for a promissory note, or thing of value, such note or thing of value shall be delivered with the contract to the listing broker. Any check or note shall be payable to, or assigned to, the listing broker.

1. (1) The broker receipting for the earnest money deposit, if instructed in writing by the parties to the contract, shall deliver the earnest money to a third party or entity so identified in writing. If the broker is instructed in writing by the parties to the contract to deliver an earnest money deposit to such third party or entity, the broker shall retain in the office transaction file a copy of the earnest money check, note or other thing of value, including any endorsement, and obtain a dated and signed receipt from the person or entity to whom the broker has been instructed to deliver the deposit.

(p) A broker shall supervise and maintain, at the broker's licensed place of business, a record keeping system, subject to subsection (7) of this rule, consisting of at least the following elements for each required escrow or trust account:

1. (1) A record called an “escrow or trust account journal” or an equivalent accounting system which records in chronological sequence all money belonging to others which is received or disbursed by the broker. For funds received, the records maintained in the system must include the date of receipt and deposit, the name of the person who is giving the money, the name of the person and property for which the money was received, the purpose of the receipt, the amount, and a resulting cash balance for the account. For funds disbursed, the records maintained in the system must include the date of payment, the check number, the name of the payee, a reference to vendor documentation or other physical records verifying purpose for payment, the amount paid, and a resulting cash balance for the account.
2. (2) A record collectively called a “ledger” or an equivalent component of an accounting system which records in chronological sequence all money which is received or disbursed by the broker on behalf of each particular beneficiary of a trust account. This record must show the monetary transactions affecting each individual beneficiary and must segregate such transactions from those pertaining to other beneficiaries of the trust account. The ledger record for each beneficiary must contain the same transactional information as is prescribed in subsection (1). No ledger may ever be allowed to have a negative cash balance and the sum of all ledger balances must at all times agree with the corresponding cash balance in the journal after each transaction has been posted.
3. (3) A written monthly record called the “bank reconciliation worksheet” which proves agreement, on the date of reconciliation, between (1) the cash balance shown in the account journal; (2) the sum of the cash balances for all ledgers; and (3) the corresponding bank account balance. This worksheet must be maintained in hard copy form for later inspection and list each beneficiary's ledger balance on the date of reconciliation. The broker is not required to reconcile any trust account when no money belonging to others has been received or no banking activity has occurred.
4. (4) When managing property, if summary totals are reported to others, the broker must maintain supporting records which accurately detail all cash received and disbursed under the terms of the management and rental agreements. Such summary totals must be reconcilable to detailed supporting records. Any accounting report furnished to others must be prepared and delivered according to the terms of the management agreement or, in the absence of a provision in the written management agreement to the contrary, within thirty (30) days after the end of the month in which funds were either received or disbursed.
5. (5) If a broker has on deposit personal funds sufficient to maintain the trust account pursuant to Rule E-1(f), an entry showing such money shall be made in the journal and on a “broker's ledger record” per subsections (1) and (2). Such money shall be included in the bank reconciliation worksheet.
6. (6) All deposits of funds into an escrow or trust account must be documented (i.e. bank deposits), including confirmation of electronic and telephonic transfers or on detailed schedules attached to the deposit slips or confirmations. The documentation must identify each person tendering funds to the broker for deposit, the amount of funds tendered, types of funds received from each person and the property address affected.
   1. All disbursements of funds from an escrow or trust account must be supported by a record of the basis for such disbursal such as bids, invoices, contracts, etc., together with cancelled checks (or front and back copies) or hardcopy confirmations of electronic or telephonic transfers that identifies the payees, property addresses affected and amount of funds transferred for each property.
7. (7) In the absence of a written agreement to the contrary, the “cash basis” of accounting shall be used for maintaining all required escrow or trust accounts and records. If the “accrual basis” of accounting is requested by the beneficiary of funds entrusted to a broker, such request must be in writing and the broker shall maintain separate accrual basis accounts and sets of records for each person or entity affected; such accounts and records shall be separate from other accounts and records maintained on the cash basis.
8. (8) Pursuant to C.R.S. 12-61-113(1)(c.5),(q) and 6-1-105, the broker must obtain prior written consent to assess and receive mark-ups and/or other compensation for services performed by any third party or affiliated business entity. The broker must retain accurate on-going office records which verify disclosure and consent, and which fully account for the amounts or percentage of compensation assessed or received.

(q) Money belonging to one beneficiary of a separate trust or escrow account shall not be used for the benefit of another beneficiary of a trust or escrow account.

(r) Any instrument or equity or thing of value taken in lieu of cash shall be held by the broker except as otherwise agreed.

(s) In the event a branch office maintains a trust account, separate from the trust account(s) maintained by the main office, a separate record keeping system must be maintained in the branch office.

(t) Repealed (effective 1-1-96)

(u) A broker is not limited as to the number of separate accounts which may be maintained for money belonging to others and if the broker is not in possession of money belonging to others, there is no obligation to maintain a separate account. E-2. When money is collected by a broker for the performance of specific services or for the expenses of performing such services, or for any other expense including but not limited to advertising expenses in regard to the sale or management of real property, or a business opportunity, and such money is collected before the advertising or other services have been performed, the broker shall deposit such money in an escrow or trust account pursuant to 12-61-113(1)(g.5) C.R.S. No money may be withdrawn from such person's funds, except for actual authorized expenses paid to perform the service, or on behalf of that person, until the broker has fully performed the services agreed upon. A full and itemized accounting must be furnished the person within 30 days of any withdrawal of funds from the escrow or trust account. Nothing in this section shall prohibit a licensee from taking a non-refundable retainer which need not be deposited into an escrow or trust account provided this is specifically agreed to in writing between the licensee and the person paying the retainer.

E-3. A real estate licensee shall produce for inspection by an authorized representative of the Real Estate Commission any document or record as may be reasonably necessary for investigation or audit in the enforcement of Title 12 Article 61 and in enforcement of the rules and regulations of the Real Estate Commission. Failure to submit such documents or records within the time set by the Commission in its notification shall be grounds for disciplinary action unless the Commission has granted an extension of time for such production. However, a broker who is also acting as a manager for an owners association shall turn all association management records and supporting documentation over to the association at the end of the broker's term of management. Such records are the property of the owners association and if the broker wishes to maintain copies for the broker's own files these must be made at the broker's expense. E-4. Document preparation and duplicates A real estate broker shall immediately deliver a duplicate of the original of any instrument (except deeds, notes and trust deeds or mortgages, prepared by and for the benefit of third party lenders) to all parties executing the same when such instrument has been prepared by the broker or the broker's employed licensee or closing entity and relates to the employment or engagement of the broker or pertains to the consummation of the leasing, purchase, sale or exchange of real property in which the broker may participate as a broker. For purposes of this rule, duplicate shall mean legible photocopy, carbon copy, facsimile, or electronic copies which contain a digital or electronic signature as defined in 24-71-101(1) C.R.S. Such broker shall retain a copy of the duplicate instruments for future use or inspection by an authorized representative of the Real Estate Commission. If a broker or the broker's agent prepares a mortgage or trust deed for the benefit of a buyer or seller, an unsigned duplicate of such security instrument, together with a copy of the note, unsigned or prominently marked “copy,” shall be furnished to the purchaser; copies shall also be retained in such broker's office for further use or inspection by an authorized representative of the Real Estate Commission. Cooperating brokers, including brokers acting as agents for buyers in a specific real estate transaction, shall have the same requirements for retention of copies as stated above, except that a cooperating broker who is not a party to the listing contract need not retain a copy of the listing contract or the seller's settlement statement. Pursuant to Rule E-3, a broker is not required to obtain and retain copies of existing public records, title commitments, loan applications, lender required disclosures or related affirmations from independent third party closing entities after the settlement date. E-5. Pursuant to 12-61-113 (1)(h), at time of closing, the individual licensee who has established a brokerage relationship with the buyer or seller or who works with the buyer or seller as a customer, either personally or on behalf of an employing broker, shall be responsible for the proper closing of the transaction and shall provide, sign and be responsible for an accurate, complete and detailed closing statement as it applies to the party with whom the brokerage relationship has been established. If signed by an employed licensee, closing statements shall be delivered to the employing broker immediately following closing. Nothing in this rule shall relieve an employing broker of the responsibility for fulfilling supervisory responsibilities pursuant to 12- 61-103 (6)(c), 12-61-113(1)(o), 12-61-118 C.R.S and Rules E-31 and E-32.

(a) Subject to Rule E-4, an employing or independent broker with whom a brokerage relationship has been established, either personally or through an employed licensee, shall retain a copy of all closing statements approved by the respective buyers or sellers for future use or for inspection by an authorized representative of the Real Estate Commission.

(b) The closing statement or statements of all real estate or business opportunity transactions in which a real estate broker participates shall show the date of closing, the total purchase price of the property, itemization of all adjustments, money, or things of value received or paid showing to whom each item is credited and/or to whom each item is debited, the dates of the adjustments shall be shown if not the same as the date of the closing, also shown shall be the balances due from the respective parties to the transaction, and the names of the payees, makers and assignees, of all notes paid or made or assumed; the statements furnished to each party to the transaction shall contain an itemization of such credits and such debits as pertain to each respective party. THE CREDITS AND DEBITS CONCERNING THE SALE OF A PREOWNED HOME WARRANTY SERVICE CONTRACT SHALL BE DISCLOSED ON THE CLOSING STATEMENTS.

(c) Closing statements shall be provided to the respective parties at the time of the delivery and acceptance of the title whether such delivery and acceptance be effected by bill of sale, deed or by an installment contract to give a deed at a future date.

(d) If closing documents and statements are prepared by, and the closing is conducted by, an employing broker's company such broker is primarily responsible for the accuracy and completeness of the settlement statements and documents.

(e) If a licensee with whom a brokerage relationship has been established is unable to attend a closing or review closing documents, another licensee may agree or be designated by an employing broker to review and sign a closing statement and will assume joint responsibility with the absent licensee for its accuracy, completeness and delivery.

(f) A broker may transfer funds pertinent to a real estate transaction from a trust or escrow account to a lawyer or a closing entity acting on behalf of the broker at or before closing or final settlement. The broker will not be relieved of responsibilities in regard thereto. The broker delivering the earnest money deposit to a lawyer or a closing entity providing settlement services shall obtain a dated and signed receipt from the person or entity providing settlement services and retain a copy of the receipt in the office transaction file. The settlement statements prepared by the lawyer or closing entity shall bear the names of the licensee who signs the statement and the employing broker if applicable. E-6. Electronic Records Records as required under Title 12, Article 61, Parts 1-8 C.R.S. and rules promulgated by the Commission, may be maintained in electronic format. An electronic record as defined in 24-71.7- 103 C.R.S. means a record generated, communicated, received, or stored by electronic means. Such electronic records shall be produced upon request by the Commission and must be in a format that has the continued capability to be retrieved and legibly printed. Upon request of the Commission, or by any principal party to a transaction, printed records shall be produced. E-7. Repealed (Effective February 1, 2001)

E-8. A real estate licensee who performs any act requiring a license, including advertising services or advertising property belonging to another, shall do so in the name of the employing broker; except that a licensed employee may advertise property owned by such employee without complying with this rule if the property is not listed for sale with the employing broker. General advertising which recaps sales activity over a period of time in a given subdivision or geographical area shall cite the source of the data and include a disclaimer that all reported sales were not necessarily listed or sold by the licensee and are intended only to show trends in the area or shall separately identify the licensee's own sales activity.

E-9. Repealed effective 1-1-97 E-10. A broker license is non transferable. No licensee shall, and no broker shall permit, employed licensees to present or to hold themselves out to the public as an employing or independent real estate broker.

E-11. When a licensee secures a written agreement to perform activities requiring a license, a definite date for termination shall be included therein.

E-12. When a written agreement contains a provision entitling the broker to a commission on a sale or purchase made after the expiration of the agreement, such provision must refer only to those persons or properties with whom or on which the broker negotiated during the term of the agreement, and whose names or addresses were submitted in writing to the seller or buyer during the term of the agreement, including any extension thereof. E-13. A real estate licensee shall not negotiate a sale, exchange, lease or listing contract of real property directly with an owner for compensation from such owner if such licensee knows that such owner has a written unexpired contract in connection with such property which grants to another licensee an exclusive right to sell or lease or which grants an exclusive agency right to sell or lease.

However, when a licensee is contacted by an owner regarding the sale, exchange, lease or listing of property that is exclusively listed with another broker, and the licensee has not initiated the discussion, the licensee may negotiate the terms upon which to take a future listing or, alternatively, may take a listing to become effective upon expiration of any existing exclusive listing.

Additionally, a real estate licensee shall not negotiate a purchase, exchange, lease or exclusive right to buy contract with a buyer if such licensee knows that such buyer has a written, unexpired contract which grants to another licensee an exclusive right to buy. However, when a licensee is contacted by a buyer regarding the purchase, exchange or lease of property, and the licensee has not initiated the discussion, the licensee may enter into or negotiate the terms upon which to enter into a future exclusive right to buy contract to become effective upon expiration of any existing exclusive right to buy contract. E-14. A real estate licensee shall recommend, before the closing of a real estate transaction, the examination of title and shall advise the use of legal counsel. E-15. When for any reason the owner fails, refuses, neglects or is unable to consummate the transaction as provided for in the contract, and through no fault or neglect of the purchaser the real estate transaction cannot be completed, the broker has no right to any portion of the deposit money which was deposited by the purchaser, even though the commission is earned, and such deposit should be returned to the purchaser at once and the broker should look to the owner for compensation.

E-16. A broker receipting for security deposits shall not deliver such deposits to an owner without the tenant's written authorization in a lease or unless written notice has been given to the tenant by first class mail. Such notice must be given in a manner so that the tenant will know who is holding the security deposit and the specific requirements for the procedure in which the tenant may request return of the deposit. If a security deposit is delivered to an owner, the management agreement must place financial responsibility on the owner for its return, and in the event of a dispute over ownership of the deposit, must authorize disclosure by the broker to the tenant of the owner's true name and current mailing address. The broker shall not contract with the tenant to use the security deposit for the broker's own benefit.

E-17. Upon request of the Commission, when any real estate licensee is a party to any suit or proceeding, either civil or criminal, arising out of any transaction involving the sale or exchange of any interest in real property or out of any transaction involving a leasehold interest in the real property, and when involved in such transaction as a licensee, it shall be the duty of said licensee to supply to the Commission a copy of the complaint, indictment, information or other initiating pleading, the answer filed, if any, and to advise the Commission of the disposition of the case and of the nature and amount of any judgment, verdict, finding or sentence which may be made, entered or imposed therein.

E-18. Fees from mortgage lenders; prior approval required A licensee shall not accept, directly or indirectly, a placement fee, commission or other valuable consideration for placing a loan with a mortgage lender or its representative in any real estate transaction in which the licensee, directly or indirectly, receives, or is entitled to receive a commission as a result of the sale of property in such transaction unless the licensee fully informs any party with whom they have established a brokerage relationship or worked with as a customer, and obtains prior written consent of such party. E-19. A licensee shall not accept a commission, fee, or other valuable consideration from an abstract or title insurance company or its representative in any real estate transaction in which the licensee, directly or indirectly, receives, or is entitled to receive, a real estate commission as a result of the sale of property in such transaction. (Statement of Basis and Purpose as adopted by the Real Estate Commission on October 5, 1988.)

E-20. The licensee shall not submit or advertise property without authority, and, in any offering, the price quoted should not be other than that agreed upon with the owners as the offering price. E-21. Pursuant to 12-61-113 C.R.S., when a licensee has received written notification from the Commission that a complaint has been filed against the licensee or that an audit has identified record keeping or trust account deficiencies, such licensee shall submit to the Commission a written answer. Failure to submit a written answer within the time set by the Commission in its notification shall be grounds for disciplinary action unless the Commission has granted an extension of time for the answer.

E-22. 1. Pursuant to C.R.S. 12-61-113.2, a licensee shall not directly or indirectly give or receive or attempt to give or receive any incentive, remuneration, Commission, fee or other valuable consideration, or impose any disincentive or penalty, to or from any other person for the purpose of influencing the referral of title insurance business to a particular title insurance company, title insurance agent or title insurance agency. Such incentives or disincentives include, but are not limited to the following:

1. (a) Giving anything of value to a person, including, but not limited to money, marketing expenses, advertising, bonuses and raises;
2. (b) Varying the nature or extent of anything of value given to a person, including, but not limited to, money, marketing expenses, advertising, bonuses and raises;
3. (c) Varying any fee, or the due date of any fee charged to any person, including, but not limited to desk fees, equipment fees, marketing fees, or lease and rental fees.

2. No person or entity shall be in violation of this rule solely by reason of ownership in a title insurance company, or title insurance agency as defined in C.R.S. 10-11-102, and regulations promulgated thereunder wherein such person or entity receives bona fide dividends, returns on equity or capital distributions by reason of such ownership not otherwise proscribed by C.R.S. 10-11-108. In addition, this rule shall not prohibit the payment to any person of a bona fide salary or compensation or other payment for services actually performed for the business of the title insurance company or title insurance agency not otherwise proscribed by C.R.S. 10-11-108, et seq. and regulations promulgated thereunder.

3. Nothing in this rule shall prohibit a licensee from making a bona fide business decision as to which title insurance company, agent or agency business shall be referred so long as this rule is not being violated.

4. Pursuant to C.R.S. 12-61-113.2 (1)(b), if a real estate licensee refers a buyer or seller to a title insurance company or title insurance agency in which the real estate licensee or the licensee's employing broker has a financial interest, the licensee shall disclose such financial interest, in writing, upon the signing of a listing agreement or the disclosure of a brokerage relationship.

1. (a) Compliance with the disclosure requirements set forth in the real estate settlement procedures act of 1974, 12 USC 2607 (c)(4)(a), shall be deemed compliance with the disclosure requirements of this rule.
2. (b) In instances in which the disclosure is from the listing company to a selling company and buyer, such disclosure shall be given at or prior to the signing of the contract to buy and sell real estate.

5. Violations of this rule shall be enforced pursuant to and in compliance with applicable sections of C.R.S. 12-61-113 (investigations) and 114 (hearings). [This Rule shall also apply to payment made to citizens of a country which does not license real estate brokers if the payee represents that he is in the business of selling real estate in said country.] E-23. A licensed Colorado broker who cooperates with a broker who is licensed in another state or country but is not licensed in Colorado may pay such out-of-state broker a finders fee or share of the commission under these circumstances:

(a) The broker licensed in the other state or country must reside and maintain an office in the other state or country.

(b) All advertising, negotiations, contracting and conveyancing done in Colorado must be performed in the name of the licensed Colorado broker.

(c) All money collected from the parties to the transaction prior to closing shall be deposited in the name of the licensed Colorado broker according to Commission rules. This rule shall also apply to payment made to citizens or residents of a country which does not license real estate brokers if the payee represents that they are in the business of selling real estate in said country.

E-24. A real estate licensee who procures or attempts to procure a real estate license by fraud, misrepresentation, deceit or by making a material misstatement of fact in an application for such license, will be subject to disciplinary action pursuant to 12-61-113, C.R.S., as amended. E-25. When acting in a licensed capacity or when a licensee sells, buys or leases real property on the licensee's own account, such licensee shall have a continuing duty to disclose any known conflict of interest that may arise in the course of the transaction. In addition, when a licensee sells, buys or leases real property on the licensee's own account, such licensee shall disclose in the contracting instrument, or in a separate concurrent writing, that they are a real estate licensee. E-26. Repealed.

E-27. No licensee shall make misrepresentations regarding future availability or costs of services, utilities, character and/or use of real property for sale or lease of the surrounding area. E-28. A licensee shall not accept directly or indirectly a fee, commission or other valuable consideration from a preowned home warranty service company or its affiliate for services rendered in connection with the sale of a preowned home warranty service contract, unless the purchaser of the preowned home warranty service contract has given written consent prior to the sale of the preowned home warranty service contract.

E-29. The terms “employment”, in the employ of”, “employed”, “employing”, “placed under contract”, or “engaged”, as used in the licensing statutes (12-61-101 C.R.S. et seq.) and Commission Rules, shall refer to any contractual relationship by or between a real estate broker and another licensee, which may be with or without limitation as to the time, place, or manner of performance of the licensee's activities, but which shall not relieve the real estate broker from the statutory requirement that the real estate broker shall exercise authority, direction and control over licensee's conformance to the licensing statutes and Commission Rules in the performance of such licensee's activities pursuant to 12-61-103 (6)(c)(I) C.R.S., 12-61-113 (1) (o) C.R.S., 12-61- 118 C.R.S., and Commission Rules. Whenever a complaint is filed with the Real Estate Commission against an employed licensee, the Commission shall cause an investigation to be made to ascertain whether there may have been a violation of 12-61-113(1)(o) C.R.S. by the employing real estate broker in failing to exercise a reasonable or high level of supervision over such licensee's activities with reference to the licensing statutes and Commission Rules. Such supervision, pursuant to 12-61-118 C.R.S. shall include all broker employees, including but not limited to secretaries, bookkeepers and personal assistants of licensed employees. E-30. To ensure compliance with commission statutes and rules regarding supervision, employing brokers shall have the following responsibilities:

(a) Maintain all trust accounts and trust account records;

(b) Maintain all transaction records;

(c) Develop an office policy manual and periodically review office policies with all employees;

(d) Provide for a high level of supervision of newly licensed persons pursuant to rule E-32;

(e) Provide for a reasonable level of supervision for experienced licensees pursuant to rule E-31;

(f) Take reasonable steps to ensure that violations of statutes, rules and office policies do not occur or reoccur;

(g) Provide for adequate supervision of all offices operated by the broker, whether managed by licensed or unlicensed persons.

E-31. Reasonable supervision Pursuant to section 12-61-113(1)(o), C.R.S., and in addition to the requirements of Commission Rule E-30 “reasonable supervision” of licensees with two or more years of experience shall include, but not be limited to, compliance with the following:

(a) Maintaining a written office policy describing the duties and responsibilities of licensees employed by the broker. A copy of the written policy shall:

1. (1) be given to, read and signed by each licensee;
2. (2) be available for inspection, upon request, by any authorized representative of the Commission.

(b) Reviewing all executed contracts in order to maintain assurance of competent preparation.

(c) Reviewing transaction files to ensure that required documents exist.

(d) Nothing in this rule shall prohibit an employing broker from delegating supervisory authority to other experienced licensees.

1. (1) Employed licensees who accept supervisory authority from an employing broker shall bear responsibility with the employing broker for ensuring compliance with the Commission statutes and rules by all supervised licensees.
2. (2) Any such delegation of authority shall be in writing and signed by the employed licensee to whom such authority is delegated. A copy of such delegation shall be maintained by the employing broker for inspection, upon request, by any authorized Commission representative.
3. (3) An employing broker shall not contract with any employed licensee so as to circumvent the requirement that the broker supervise employed licensees. E-32. In addition to the requirements of Rule E-31 and pursuant to section 12-61-103 (6)(c)(I) C.R.S., an employing broker shall provide a “high level of supervision” for licensed persons with less than two years experience as follows:

(a) Provide specific training in office policies and procedures;

(b) Be reasonably available for consultation;

(c) Provide assistance in preparing contracts;

(d) Monitor transactions from contracting to closing;

(e) Review documents in preparation for closing;

(f) Ensure that the employing broker or an experienced licensee attends closings or is available for assistance.

(g) Nothing in this rule shall prohibit an employing broker from delegating supervisory authority to other experienced licensees.

1. (1) Employed licensees who accept supervisory authority from an employing broker shall bear responsibility with the employing broker for ensuring compliance with the Commission statutes and rules by all supervised licensees.
2. (2) Any such delegation of authority shall be in writing and signed by the employed licensee to whom such authority is delegated. A copy of such delegation shall be maintained by the employing broker for inspection, upon request, by any authorized Commission representative.

E-33. Following proper disclosure pursuant to 12-61-808 C.R.S., a broker engaged as a single agent for one party to a transaction may assist the other party by performing such ministerial tasks as showing a property, preparing and conveying written offers and counteroffers, making known the availability of financing alternatives and providing information related to professional, governmental and community services which will contribute to completion of the transaction and successful fulfillment of the agency. Performing such ministerial tasks shall not of themselves violate the terms of an agency relationship between a broker and a buyer, seller, tenant or landlord and shall not create an agency or transaction-broker relationship with the person being assisted.

E-34. A licensee must present all offers to purchase or lease to the owner's listing broker only if such owner has a written unexpired contract in connection with the sale or lease of real property which grants to the owner's listing broker an exclusive right to sell or lease. E-35. Written disclosures pursuant to C.R.S. 12-61-808 shall be made to a buyer or tenant prior to engaging in activities enumerated in C.R.S. 12-61-101 (2) and (3).

a. For purposes of this rule, such activities occur when a licensee elicits or accepts confidential information from a buyer or tenant concerning the buyer's or tenant's real estate needs, motivation, or financial qualifications.

b. Such activities do not include a bona fide “open house” showing, preliminary conversations or “small talk” concerning price range, location and property styles, or responding to general factual questions from a potential buyer or tenant concerning properties which have been advertised for sale or lease.

E-36. Pursuant to 38-35-125, a real estate licensee who provides closing services shall not disburse funds or instruct an agent to disburse funds until those funds have been received and are either:

(1) available for immediate withdrawal as a matter of right from the financial institution in which the funds have been deposited or (2) available for immediate withdrawal as a consequence of an agreement of a financial institution in which the funds are to be deposited or a financial institution upon which the funds are to be drawn. Such agreement with a financial institution must be for the benefit of the licensee providing the closing service. If the agreement contains contingencies or reservations no disbursements can be made until these are satisfied. (Statement of Basis and Purpose as adopted by the Real Estate Commission on October 5, 1988.) E-37. There is no obligation for a licensee to prepare any legal documents as part of a real estate transaction. However, if a licensee or the licensee's agent prepares any legal document, the licensee or the licensee's agent may not charge a separate fee for preparation of such documents. A licensee shall not be responsible for fees charged for the preparation of legal documents where they are prepared by an attorney representing the purchaser or seller. Costs of closing not related to preparation of legal documents may be paid by the licensee or by any other person. A broker who closes transactions and charges separately for costs of closing not related to the preparation of legal documents must specify the costs and obtain the written consent of the parties to be charged.

E-38. Office Policy Contains Designation of Brokerage Relationship For purposes of this rule, seller shall include landlord and buyer shall include tenant. Pursuant to CRS 12-61-802(1.5), an employing broker or employed broker must be designated in writing by the employing broker to serve as a single agent or transaction-broker for the seller or buyer. Employing brokers comply with the statute if they make such written designation, as appropriate to the broker's business, in an office policy that states:

1. listing contracts by single individual: that the individual broker entering into the listing contract is the seller's designated agent or designated transaction-broker, whichever is appropriate.

2. right to buy or tenant contracts by individual: that the individual broker entering into the right to buy or tenant contract is the buyer's designated agent or transaction broker, whichever is appropriate.

3. listing contracts by teams: that the individual team member(s) entering into the listing contract is the seller's designated agent or transaction-broker, whichever is appropriate, in which case that designation and brokerage relationship shall apply to all members of the team.

4. right to buy or tenant contracts by teams: that the individual team member(s) entering into the right to buy or tenant contract is the buyer's designated agent or transaction-broker, whichever is appropriate, in which case that designation and brokerage relationship shall apply to all members of the team.

5. individuals or teams working with both buyer and seller:

1. (a) that the individual(s) or team is a transaction-broker for both buyer and seller, or, (b) that the individual(s) or team is a single agent for the seller or buyer, and that the other party is a customer.

6. substitute or additional brokers: that the employing broker reserves the right to substitute or add other designated brokers, as appropriate, which shall be disclosed to the buyer or seller.

7. transaction broker - written disclosure: that the broker working with a buyer or seller as a Transaction-Broker as a result of a written disclosure, is the designated broker for that buyer or seller.

E-39. Office brokerage relationship policy must be written Pursuant to 12-61-803 and 808 C.R.S., a broker shall adopt a written office policy which identifies and describes the relationships in which such broker and any employed licensee may engage with any seller, landlord, buyer or tenant as part of any real estate brokerage activities. A broker may adopt any policy suitable to the broker's business, subject to the following:

a. An office policy shall apply to all licensees in the office;

b. An office policy shall be given and explained to each licensee and shall be read, agreed to and signed by each licensee;

c. An office policy shall, in a manner compliant with Commission Rule E-38, identify the procedures for the designation of brokers who are to work with a seller, landlord, buyer or tenant pursuant to 12-61-803(6), C.R.S., except office policies of real estate brokerage firms that consist of only one licensed natural person.

d. An office policy shall identify and provide adequate means and procedures for the maintenance and protection of confidential information that:

1. (1) The seller or landlord is willing to accept less;
2. (2) The buyer or tenant is willing to pay more;
3. (3) Information regarding motivating factors for the parties;
4. (4) Information that a party will agree to other financing terms;
5. (5) Material information about a party not required by law to be disclosed;
6. (6) Facts or suspicions which may psychologically impact or stigmatize a property;
7. (7) All information required to be kept confidential pursuant to sections 12-61-804(2), 12- 61-804(2), 12-61 805(2) and 12-61-807(3), C.R.S.

e. An office policy may permit an employing broker to supervise a transaction and to participate in the same transaction as a designated broker.

E-40. A broker shall not enter into a brokerage relationship with one party as an agent and the other party as a transaction broker. A broker who works with both the buyer and seller in the same real estate transaction may do so as (1) a Transaction-Broker for both buyer and seller (2) a single agent for the seller, treating the buyer as a customer or (3) a single agent for the buyer, treating the seller as a customer. These options shall be disclosed and made a part of the agreement between the parties to the listing contract, right to buy contract or tenant contract, whichever is appropriate. E-41. Change of Status disclosure in writing A broker engaged as an agent by both the buyer and seller in the same real estate transaction shall provide the written “Change of Status (Transaction-Brokerage Disclosure)” to both the Seller and Buyer, at the time the broker begins assisting the parties. For purposes of this rule, seller shall include landlord, and buyer shall include tenant. E-42. When a real estate licensee prepares a competitive market analysis (cma) for any reason other than the anticipated sale or purchase of the property, the licensee must include a notice stating: “The preparer of this evaluation is not registered, licensed or certified as a real estate appraiser by the state of Colorado”.

E-43 This rule applies to residential transactions when a licensee personally measures real estate or provides information from another source of measurement. The licensee listing property is responsible for accurately representing any source of square footage.

(a) Licensee measurement. A licensee is not required to measure the square footage of a property. If the licensee takes an actual measurement it does not have to be exact, however, the licensee's objective must be to measure accurately and calculate competently in a manner that is not misleading, and:

1. i. The standard, methodology or manner in which the measurement was taken must be disclosed;
2. ii. The buyer and seller must be advised that the measurement is for purposes of marketing and is not a measurement for loan, valuation or any other purpose; and iii. The buyer and seller must be advised that if exact square footage is a concern, the property should be independently measured.

(b) Other sources of square footage. If a buyer or seller is provided information from another source for square footage, that source (whether an actual measurement, building plans, prior appraisals, assessors office, etc.) must be disclosed in writing by the licensee, in a timely manner, including date of issuance. Such disclosure must advise the recipient to verify the information. A licensee may not provide information to a person from a source known to be unreliable and is responsible for indications pointing to obvious mismeasurement by others.

(c) A licensee working with a buyer may rely on a representation of square footage by a listing broker, however, such licensee is responsible for indications of obvious mismeasurement by others.

E-44. Upon suspension, revocation, expiration or transfer of inactive status of a real estate license, the licensee is responsible for immediate compliance with the following:

1) Cease any activities requiring a license.

2) Return the license and pocket card to the Commission. If an employing broker, return the licenses of all employed licensees and inform such licensees of the action taken.

3) Cease all advertising, including but not limited to use of office signs, yard signs, billboards, newspapers, magazines, the internet, direct mailings, and multiple listing services.

4) Inform all owners, buyers and tenants of the action taken. If an employing broker, release all principals from any listings, management agreements, or other contractual obligations which require a license.

5) If an employing broker, ensure that all entrusted funds have been properly accounted for and/or that all closings are properly completed.

6) Commissions or fees may be received by licensees only for transactions where the commission or fees was earned prior to the suspension, revocation, expiration or transfer to inactive status.

F. Use of Commission Approved Forms F-1. A real estate broker shall use one of the standard forms of listing contracts approved by the Real Estate Commission and dated January 1, 2003. In instances where the Commission has not developed an approved form and other forms are used, they must be prepared by the principal parties or an attorney engaged by one of the principal parties in each transaction. F-2. In connection with the sale of real estate, a real estate broker shall use as the initial contract between buyer and seller one of the standard forms approved by the Real Estate Commission and dated September 1, 1999. If the transaction involves the sale of property within a common interest community, the broker shall use either the form approved by the Commission entitled: “Common Interest Community Addendum To Contract To Buy And Sell Real Estate (Commercial or Vacant Land- Farm - Ranch)”, effective September 1, 1999 or the form entitled: “Contract to Buy and Sell Real Estate (Residential)”, effective September 1, 1999. In instances where the Commission has not developed an approved form and other forms are used, they must be prepared by the principal parties or an attorney engaged by one of the principal parties in each transaction.

A real estate broker, with the agreement of the parties may omit part or all of the following provisions of the “Contract to Buy and Sell Real Estate (Residential)” or corresponding provision in the other forms of contract, if such provisions are inapplicable to the transaction:

1. 1. Subsection 3 (a)(3) and (4)
2. 2. Subsection 4 (b), (c) and (d)
3. 3. Section 5 4. Subsection 7 (c)
4. 5. Subsection 8 (e)
5. 6. Section 9 7. Section 15 (c)

In the event any provision is omitted, its heading or caption must appear, followed by the words “Omitted as inapplicable.”

F-3. In connection with the exchange or trade of all real estate, and as appropriate to the type of transaction, a real estate broker shall use the Contract to Exchange Real Estate (Simultaneous Exchanges) dated September 1, 1999 or the Exchange Addendum to Contract to Buy and Sell Real Estate as approved by the Real Estate Commission and dated January 1,1997. In instances where the Commission has not developed an approved form and other forms are used, they must be prepared by the principal parties or an attorney engaged by one of the principal parties in each transaction.

F-4. When it is appropriate for a real estate broker to prepare a counterproposal, the real estate broker shall use that form which has been approved by the Real Estate Commission effective January 1, 1994.

When it is appropriate for a real estate broker to prepare an extension of or amendment to an existing sales contract, the real estate broker shall use that form which has been approved by the Real Estate Commission effective September 1, 2000. When it is appropriate for a real estate broker to prepare an agreement to amend/extend contract with broker, the real estate broker shall use the form approved by the Commission, effective July 1, 1996.

In instances where the Commission has not developed an approved form and other forms are used, they must be prepared by the principal parties or an attorney engaged by one of the principal parties in each transaction.

F-5. In connection with the Contracts to Buy and Sell Real Estate and with reference to Section 10, “Property Disclosure and Inspection”, a real estate broker shall use the inspection notice, dated September 1, 1999.

F-6. Where the broker prepares the settlement sheet in connection with the closing of a real estate transaction, the broker shall use the form “Statement of Settlement” approved by the Real Estate Commission or use a statement of settlement that is in full compliance with Commission Rule E- 5.

F-7. All listing contract forms referred to in Rule F-1 and all exchange contract forms referred to in Rule F-3, refer to the standard forms approved by the Commission and are dated respectively January 1, 2003 and January 1, 1997/September 1, 1999 and not to forms dated previously. The statement “NOTE: DIFFERENT BROKERAGE RELATIONSHIPS ARE AVAILABLE WHICH INCLUDE SELLER AGENCY, BUYER AGENCY, OR TRANSACTION-BROKERAGE” shall be in bold print, capitalized and be not smaller than 80% of the size of the contract title. F-8. When a licensee personally measures residential real estate or provides information from another source of measurement, the licensee shall use the standard form captioned “Square Footage Disclosure (Residential)” approved by the Commission and dated February 1, 2001. F-9. When it is appropriate for a real estate broker to prepare a promissory note secured by a deed of trust, on behalf of such broker's principal and in connection with the closing of a residential real estate transaction, the broker shall use one of the most current forms of promissory notes and one of the forms of deed of trust approved by the Commission, effective July 1, 1996. In instances where the Commission has not developed an approved form and other forms are used, they must be prepared by the principal parties or an attorney engaged by one of the principal parties in each transaction.

F-10. Effective January 1, 1982, when it is appropriate for a real estate broker to accept an unsecured promissory note as earnest money on a real estate sales contract, such broker shall use the form of earnest money promissory note approved by the Commission. In instances where the Commission has not developed an approved form and other forms are used, they must be prepared by the principal parties or an attorney engaged by one of the principal parties in each transaction.

F-11. When a licensee enters into a contract to purchase a property: (1) concurrent with the listing of such property; (2) as an inducement or to facilitate the property owner's purchase of another property; or (3) continues to market that property on behalf of the owner under an existing listing contract such licensee shall use the forms approved by the Commission entitled, “Licensee Buy Out Addendum to Contract to Buy and Sell Real Estate”, effective September 1, 2000. In instances where the Commission has not developed an approved form and other forms are used, they must be prepared by the principal parties or an attorney engaged by one of the principal parties in each transaction.

F-12. A real estate broker shall use as the employment agreement with a prospective purchaser, the standard forms entitled “Exclusive Right to Buy Contract (Buyer Agency)” or “Exclusive Right to Buy Contract (Transaction-Broker)” approved by the Commission and dated January 1, 2003. A real estate broker shall use as the employment agreement with a prospective tenant one of the standard forms entitled “Exclusive Tenant Contract (Tenant Agency) or (Transaction-Broker)” approved by the commission and dated January 1, 2003. In instances where the Commission has not developed an approved form and other forms are used, they must be prepared by the principal parties or an attorney engaged by one of the principal parties in each transaction. The statement “NOTE: DIFFERENT BROKERAGE RELATIONSHIPS ARE AVAILABLE WHICH INCLUDE SELLER AGENCY, BUYER AGENCY, OR TRANSACTION-BROKER” shall be in bold print, capitalized and be not smaller than 80% of the size of the contract title. F-13. When a real estate broker prepares, supplies or requires a form disclosing the physical condition of a seller's residential property said broker shall use the “Sellers Property Disclosure (Residential)” form approved by the Commission and dated January 1, 2003. In instances where the Commission has not developed an approved form and other forms are used, they must be prepared by the principal parties or an attorney engaged by one of the principal parties in each transaction. This rule shall not be construed to require the use of any disclosure form in a real estate transaction nor to prevent the seller from selling property “as is”. When a real estate broker prepares, supplies or requires a form disclosing the physical condition of a seller's vacant land property said broker shall use the “Sellers Property Disclosure (Vacant Land)” form approved by the Commission and dated January 1, 2003. In instances where the Commission has not developed an approved form and other forms are used, they must be prepared by the principal parties or an attorney engaged by one of the principal parties in each transaction.

This rule shall not be construed to require the use of any disclosure form in a real estate transaction nor to prevent the seller from selling property “as is”. F-14. A real estate broker shall use the disclosure language approved by the Real Estate Commission in compliance with the requirements of C.R.S. 12-61-803 and 808. With respect to the disclosure document, “Definitions of Working Relationships”, a broker shall use the form dated January 1, 2003. It shall be permissible to use the language in a format approved by the Real Estate Commission and dated January 1, 2003, or in a format applicable to the broker's written office policy. In addition, when using the disclosure language approved by the Commission and captioned “Brokerage Disclosure to Buyer, a real estate broker shall use that language approved by the Commission effective January 1, 2003. The statement “NOTE: DIFFERENT BROKERAGE RELATIONSHIPS ARE AVAILABLE WHICH INCLUDE SELLER AGENCY, BUYER AGENCY, OR TRANSACTION-BROKERAGE” shall be in bold print, capitalized and be not smaller than 80% of the size of the contract title. F-15. A broker engaged as an agent by both the buyer and seller in the same real estate transaction shall, when required, use the form “Change of Status (Transaction - Brokerage Disclosure)” approved by the Commission and dated January 1, 2003.

For purposes of this rule, seller shall include landlord, and buyer shall include tenant. F-17. When it is appropriate for a broker to prepare closing instructions in connection with the closing of a real estate transaction, the broker shall use the form captioned “Closing Instructions”, effective September 1, 1995.

F-18. Repealed (effective 3-4-99)

F-19. (a) Effective January 1, 1997 a real estate broker shall use, as applicable, (1) the form captioned “LEAD-BASED PAINT DISCLOSURE (SALES)” or (2) the form captioned “LEAD-BASED PAINT DISCLOSURE (RENTALS)”. Said forms shall be used in any real estate transaction requiring compliance with federal lead-based paint disclosure laws. In addition, a broker may use the forms captioned “LEAD-BASED PAINT OBLIGATIONS OF SELLER” or “LEAD-BASED PAINT OBLIGATIONS OF LANDLORD” in connection with said disclosure forms.

(b) It is permissible to include the following language in the additional provisions section of all contracts to buy and sell real estate: “unless exempt, if the improvements on the property include one or more residential dwelling(s) built prior to 1978, this contract is expressly conditioned upon the execution of a completed lead-based paint disclosure(sales) form by seller and the required real estate licensee(s), which must occur prior to or concurrent with buyer signing such form as an attachment to this contract. All parties must sign such form no later than the acceptance deadline. Until so signed, buyer is not obligated under the contract.”

Statement of Policy Concerning Rule F Construction contracts or contracts for the sale of newly constructed houses containing warranties do not fall within the purview of Commission Rule F.

Contracts prepared by a subdivision developer or an attorney representing a subdivision developer and subject to C.R.S. 12-61-403(3.5) do not fall within the purview of Commission Rule F. If any portion of the printed body of the approved form is struck or crossed out during negotiations between the parties of a transaction, the deletion should be made so as not to obscure the language, in order that the parties will know specifically what has been deleted. If farms or ranches are sold as a commercial investment, the approved form for commercial listings and sales may be used instead of the approved forms for the listings and sales of farms and ranches. Brokers printing approved forms must comply with the following:

1. Except as provided for in this policy statement, there shall be no alterations, additions or deletions in the printing of the approved language within the body of the form, except that: (a) with respect to contracts approved pursuant to Rule F-2, licensees may omit those provisions inapplicable to the transaction as set forth in Rule F-2.

However, licensees may only print the provisions approved by the Commission. The same policy shall also apply to computer-generated contracts.

2. Brokers may add firm name, address, phone, trademark and other identifying data.

3. Listing information may be added outside the body of the approved form.

4. The blank spaces provided may be enlarged or contracted to a size that is convenient to the broker.

5. The statement of Commission approval shall appear on the first page of the form and shall read as follows:

1. The printed portions of this form have been approved by the Colorado Real Estate Commission (Insert Form No.)

With respect to any language included in the “Additional Provisions” section of any Commission approved contract, the following statement shall appear immediately after the caption: The Language of these additional provisions has not been approved by the Colorado Real Estate Commission.

The “Additional Provisions” section must contain only those terms or acknowledgments which are transaction specific, resulting from negotiations by the parties.

6. If a broker uses a preprinted or prepared addendum modifying or adding to the terms of a Commission approved contract form, such addendum must be prepared by (a) an attorney representing the broker or (b) in the case of a listing contract, or Exclusive Right to Buy Contract, by the broker, or (c) one of the parties to the transaction. Subject to paragraph 9, an addendum to any contract to buy and sell may be prepared by a broker's attorney after consultation with the broker as to specific needs and requirements. The addendum may be used for one or more transactions, as appropriate and agreed to.

7. Pursuant to paragraph 6 above, if an addendum is prepared by a broker or a broker's attorney, a disclaimer statement must appear on each separate page of the addendum in a type size no smaller than that used in the body of the addendum, and shall read as follows: This addendum has not been approved by the Colorado Real Estate Commission. It was prepared by legal counsel for use by (insert company name): or This addendum has not been approved by the Colorado Real Estate Commission. It was prepared by (insert company name):

8. Brokers generating contract forms by use of a computer shall comply with the following:

(a) Commission approved language must be reproduced exactly as is. Brokers must proof each program to be certain that this occurs.

(b) There shall be software program security capability to prevent basic language from being inadvertently changed or deleted by the computer user in day to day operation.

(c) The print must be easily readable.

(d) Negotiated contract terms to be inserted into the blank spaces on the computer generated form must be printed in italics or in a style of type which clearly differentiates such insertions from the style of type used for the commission approved contract language. The statement of commission approval must appear on each separate page of the form and must illustrate the type of italicized or DIFFERENTIATED type to be used: The printed portions of this form, except the (italicized) or (DIFFERENTIATED) insertions, have been approved by the Colorado Real Estate Commission. (insert form no.) (e) No blank spaces in the form may be filled in prior to negotiations between principal parties to the transaction. (While it would be permissible to develop optional phraseology to be inserted in the blank spaces, this could not be inserted prior to negotiations.) In addition, such insertions must again be distinguishable from Commission approved language.

(f) Contract provisions developed for computer generated forms must be contained in a properly identified addendum and not within “Additional Provisions” unless they are transaction specific.

9. Only terms and conditions between principal parties to a Contract to Buy and Sell Real Estate may be included in “Additional Provisions” or addenda. Real estate licensees shall not include personal provisions or disclaimers in any contract to which they are not a party. In the event personal provisions or disclaimers are used, they must either be (1) discussed and agreed to if attached to a listing or right to buy contract or (2) discussed and acknowledged as a separate disclosure at the time a listing or right to buy contract is executed.

G. Brokers acting under 12-61-101(2)(j) C.R.S.

G-1. Repealed (1-6-00)

[(a) The funds may be withdrawn from the trust fund account at any time for the purpose of returning the funds to the payor thereof in accordance with the terms of the contract or receipt.

(b) The funds may be withdrawn from the trust or escrow fund account when and if the broker reasonably believes the evidence available that said tenant has obtained a rental through information supplied by or on behalf of the broker.] G-2. Pursuant to 12-61-113(1.5) C.R.S., every person licensed acting under 12-61-101(2)(j) C.R.S. shall give a prospective tenant a contract or receipt. At the time of acceptance of an advance fee from a prospective tenant, a broker shall provide the prospective tenant with a written contract or receipt which shall include at least the following:

(a) Name, business address and telephone number of the brokerage company.

(b) Acknowledgment of receipt of advance fee.

(c) A description of the services to be performed by the broker, including significant conditions, restrictions and limitations where applicable, and hours of operation.

(d) The prospective tenant's specifications for the rental property, including but not limited to:

1. (1) Type of structure, e.g., detached single family, apartment, duplex, condominium, mobile home, et cetera.
2. (2) Location by commonly accepted residential area name, by designation of boundary streets and municipality or in any other manner affording a reasonable means of identifying acceptable locations.
3. (3) Furnished or unfurnished.
4. (4) Number of bedrooms.
5. (5) Earliest occupancy date desired.
6. (6) Maximum acceptable monthly rental.
7. (7) Pets.
8. (8) Garage, carport or off-street parking.

(e) Contract expiration date.

(f) Date of execution.

(g) Signatures of the prospective tenant, the broker, and if negotiated by a licensee in the employ of a broker, then the employed licensee shall sign on behalf of the employing broker.

(h) The address and the phone number of the Real Estate Commission in prominent letters.

(i) A statement that the regulation of rental location services is under the jurisdiction of the Real Estate Commission.

(j) Recital in bold face and capitals that:

1. IF THE INFORMATION CONCERNING RENTAL FURNISHED BY THE BROKER IS SHOWN TO BE NOT CURRENT OR ACCURATE IN REGARD TO THE TYPE OF RENTAL DESIRED, THE FULL FEE SHALL BE REPAID OR REFUNDED TO THE PROSPECTIVE TENANT UPON WRITTEN DEMAND. CURRENT RENTALS HAVE BEEN VERIFIED AS TO AVAILABILITY WITHIN THE PAST FOUR BUSINESS DAYS. G-3. Whenever the prospective tenant visits the broker's office, a list of all addresses given to the prospective tenant shall be prepared in duplicate. A copy shall be given to the prospective tenant and the original shall be retained by the broker for a period of 90 days and either affixed to the client's contract or receipt or be placed in the client's file if a separate file is kept. The list shall clearly indicate the following:

(a) The date the addresses were furnished to the prospective tenant.

(b) The type of unit, e.g., detached single family residence, apartment, duplex, condominium, mobile home, etc.

(c) Whether the unit is furnished or unfurnished.

(d) The date when the unit will be available for occupancy.

(e) The date when the unit was most recently entered on the agency's listing records.

(f) The date when the housing accommodation was last verified by the agency to be available for rent.

(g) The address and municipality of the housing accommodation.

(h) The name and address of the property owner or their authorized agent and the telephone number, if available.

(i) The monthly rent required by the landlord.

(j) The number of bedrooms and total number of rooms.

(k) Whether a written lease is required and, if so, the minimum lease term required by the landlord.

(l) Any lawful restrictions as to pets, children, furnishings, occupants or activities imposed by the landlord.

G-4. Repealed effective 1-1-97 G-5. Where addresses are furnished to the prospective tenant by telephone or any other manner not requiring the prospective tenant's presence at the broker's office, the addresses shall be noted on the broker's copy of the list. The list shall indicate by which broker or employee of the broker the addresses were furnished and the broker's copy shall be retained for a period of one year. G-6. Each broker engaged in locating or assisting in locating rental properties for an advance fee shall abide by the following regulations regarding advertising practices:

(a) Licensee shall make written registries, posted in a conspicuous place or otherwise disclosed to fee payors, of all advertisements or other publications published or caused to be published by the broker, together with address of each property advertised, the name of the party who offered the property for rent and his or her telephone, if any.

(b) No property shall be advertised which has not been verified for availability four business days or less before said advertisement shall be printed.

(c) Each property advertised for rent or lease through the use of any media form shall be assigned a code (and one code only) in accordance with a uniform coding system adopted by the broker, which code shall also appear in any media advertising placed by said broker. Coding of municipalities shall be included within the uniform system so as to be accurately reflected in media advertising.

(d) A copy of all advertising submitted to any media group for publication (including television, radio, newspaper and mimeographed sheets), together with the name of the person submitting the same, shall be maintained by a broker for a period of one year after publication.

(e) No licensee acting under 12-61-101(2)(j) C.R.S. shall advertise or furnish a prospective tenant with the address of a prospective rental unless such licensee has received specific authorization to list said property from the owner or owner's authorized agent. Specific authorization may be by writing, signed by the owner or owner's agent, or orally, if the broker notes the name of the owner or owner's agent, the date of authorization, and the telephone number of the person so authorizing.

G-7. Pursuant to 12-61-113(1)(n) C.R.S., a licensee acting under 12-16-101(2)(j) C.R.S. shall be considered unworthy or incompetent in the conduct of their business where:

(a) The licensee violates Rule G-6.

(b) With particular respect to media advertising:

1. (1) The property is not actually located in the area represented.
2. (2) The rental price shown is less than that asked by the owner of the available property.
3. (3) The property is non-existent or cannot be verified as currently for rent by the licensee.
4. (4) The specifics of the property advertised differ materially from the property as it exists.
5. (5) A property is advertised in such a way or under such a heading as to indicate the property is of a different type than it actually is. The word “type” refers to such designations as: single family detached residence, duplex, apartment, condominium, townhouse, or mobile home.

(c) The licensee fails or refuses to abide by the terms of the contract or receipt between himself and a prospective purchaser.

(d) The broker fails or refuses to refund money pursuant to the terms of the contract or receipt.

(e) The broker has failed to keep accurate records as specified in these rules or has failed to retain said records for the prescribed time periods.

1. ******** THE STATEMENT OF BASIS AND PURPOSE FOR THESE RULES AS ADOPTED IS INCORPORATED HEREIN BY REFERENCE AND IS AVAILABLE FOR INSPECTION IN THE OFFICE OF THE COLORADO REAL ESTATE COMMISSION.

Rules H-1 Through H-26. Repealed.

I. Declaratory Orders.

1. Any person*1 may petition the Commission for a declaratory order to terminate controversies or to remove uncertainties as to the applicability to the petitioner of any statutory provision or of any rule or order of the Commission.

*1refers to existing definition of “person” in APA, rule or statute, if any.

2. The Commission will determine, in its discretion and without prior notice to the petitioner, whether to rule upon any such petition. If the Commission determines it will not rule upon such a petition, the Commission shall issue its written order disposing of the same, stating therein its reasons for such action. A copy of such order shall forthwith be transmitted to the petitioner.

3. In determining whether to rule upon a petition filed pursuant to this rule, the Commission will consider the following matters, among others:

(a) whether a ruling on the petition will terminate a controversy or remove uncertainties as to the applicability to petitioner of any statutory provision or rule or order of the Commission;

(b) whether the petition involves any subject, question or issue which is the subject of a formal or informal matter or investigation currently pending before the Commission or a court involving one or more of the petitioners which will terminate the controversy or remove the uncertainties as to the applicability to the petitioner of any statutory provision or of any rule or order of the Commission, which matter or investigation shall be specified by the Commission;

(c) whether the petition involves any subject, question or issue which is the subject of a formal matter or investigation currently pending before the Commission or a court but not involving any petitioner which will terminate the controversy or remove the uncertainties as to the applicability to the petitioner of any statutory provision or of any rule or order of the Commission, which matter or investigation shall be specified by the Commission and in which petitioner may intervene;

(d) whether the petition seeks a ruling on a moot or hypothetical question and will result in merely an advisory ruling or opinion;

(e) whether the petitioner has some other adequate legal remedy, other than an action for declaratory relief pursuant to rule 57, Colo. R. Civ. P., which will terminate the controversy or remove any uncertainty as to the applicability to the petitioner of the statute, rule or order in question.

4. Any petition filed pursuant to this rule shall set forth the following:

(a) the name and address of the petitioner and whether the petitioner is licensed pursuant to C.R.S. 1973, 12-61-101, et seq.

(b) the statute, rule or order to which the petition relates;

(c) a concise statement of all the facts necessary to show the nature of the controversy or undertainty and the manner in which the statute, rule or order in question applies or potentially applies to the petitioner.

5. If the Commission determines that it will rule on the petition, the following procedures shall apply:

(a) the Commission may rule upon the petition based solely upon the facts presented in the petition. In such a case:

1. (1) any ruling of the Commission will apply only to the extent of the facts presented in the petition and any amendment to the petition;
2. (2) the Commission may order the petitioner to file a written brief, memorandum or statement of position;
3. (3) the Commission may set the petition, upon due notice to petitioner, for a non- evidentiary hearing;
4. (4) the Commission may dispose of the petition on the sole basis of the matters set forth in the petition;
5. (5) the Commission may request the petitioner to submit additional facts in writing. In such event, such additional facts will be considered as an amendment to the petition;
6. (6) the Commission may take administrative notice of facts pursuant to the Administrative Procedure Act (C.R.S. 1973, 24-4-105(8)) and utilize its experience, technical competence and specialized knowledge in the disposition of the petition;
7. (7) if the Commission rules upon the petition without a hearing, it shall issue its written order, stating therein its basis for the order. A copy of such order shall forthwith be transmitted to the petitioner.

(b) The Commission may, in its discretion, set the petition for hearing, upon due notice to the petitioner, for the purpose of obtaining additional facts or information or to determine the truth of any fact set forth in the petition or to hear oral argument on the petition. Notice to the petitioner setting such hearing shall set forth, to the extent known, the factual or other matters into which the Commission intends to inquire. For the purpose of such a hearing, to the extent necessary, the petitioner shall have the burden of proving ail of the facts stated in the petition, all of the facts necessary to show the nature of the controversy or uncertainty and the manner in which the statute, rule or order in question applies or potentially applies to petitioner and any other facts the petitioner desires the Commission to consider.

6. The parties to any proceeding pursuant to this rule shall be the Commission and the petitioner. Any other person may seek leave of the Commission to intervene in such a proceeding, and leave to intervene will be granted at the sole discretion of the Commission. A petition to intervene shall set forth the same matters as required by section 4 of this rule. Any reference to a “petitioner” in this rule also refers to any person who has been granted leave to invervene by the Commission.

7. Any declaratory order or other order disposing of a petition pursuant to this rule shall constitute agency action subject to judicial review pursuant to C.R.S. 1973, 21-4-106. *1 refers to existing definition of “person” in APA, rule or statute, if any.

J. Repealed For Subdivision Developers Approved by the Attorney General and the Executive Director of the Department of Regulatory Agencies.

ln pursuance of and in compliance with Title 12, Article 61. C.R.S. 1973, as amended, and in pursuance of and in compliance with Title 24, Article 4, C.R.S. 1973. as amended. S-1. The Registration and Certification of Subdivision Developers under Title 12, Article 61, Part 4, C.R.S. does not exempt the subdivision developer from the requirements for the licensing of real estate brokers and salespersons under Title 12, Article 61, Part 1, C.R.S. Exemptions from the licensing of real estate brokers and salespersons are made only under 12-61-101(4) C.R.S. S-2. The person, firm, partnership, joint venture, limited liability company, association, corporation or other legal entity, or combination thereof, who will sign as seller or lessor in any contract of sale, lease or on any deed purporting to convey any site, tract, lot or divided or undivided interest from a subdivision, as defined in 12-61-401(3) C.R.S., must secure a Subdivision Developer's Certificate before negotiating or agreeing to sell, lease or transfer and before any sale, lease or transfer is made. If such person is acting only as a trustee, the beneficial owner of the Subdivision must secure a Subdivision Developer's Certificate.

S-3. If an applicant is a corporation, the individual applying on behalf of the corporation shall foe an officer or director authorized to apply on behalf of said corporation. S-4. If the applicant is a partnership, one of the general partners of the partnership shall apply on behalf of the partnership.

S-5. If the applicant is a joint owner of the subdivision, such applicant may apply on behalf of all Joint owners of such subdivision.

S-6. If the applicant is a limited liability company, one of the managers or member-managers shall apply on behalf of the company.

S-7. The Real Estate Commission shall issue a certificate, refuse certification or demand further information within sixty (60) days from the date or receipt of the application by the Commission.

S-8. It additional information is required by the Real Estate Commission, the Commission shall give written notice in detail of the information so required and shall allow an additional sixty (60) days to present such material before cancellation of the application, which period may be extended only upon showing of good cause. Rule S-9. Repealed.

Rule S-10. Repealed.

S-11. Notification must be made to the Real Estate Commission within 10 days of any change in the principal office address of the developer or the natural person. S-12. Pursuant to 12-61-405 C.R.S., any subdivision developer who has received written notification from the Commission that a complaint has been filed against the developer, shall submit a written answer to the Commission within a reasonable time set by the Commission. S-13. Repealed.

S-14. Failure to submit any written response required by S-13 shall be grounds for disciplinary action unless the Commission has granted an extension of time or, unless such answer would subject such person to a criminal penalty.

S-15. Records as required under Title 12, Article 61, Parts 1-8 C.R.S. and rules promulgated by the Commission, may be maintained in electronic format. An electronic record as defined in 24-71.7- 103 C.R.S. means a record generated, communicated, received, or stored by electronic means. Such electronic records must be in a format that has the continued capability to be retrieved and legibly printed. Upon request of the Commission, or by any principal party to a transaction, printed records shall be produced.

S-16. Repealed.

S-17. In compliance with 12-61-403 the applicant for a subdivision developer's certificate shall provide the Commission with the following information concerning the subdivision(s) to be registered:

(a) The address or actual physical location of each subdivision from which sales are intended to be made.

(b) Copies of a recorded deed or other documents evidencing the title or other interest in the subdivision and a title commitment, policy or report, abstract and opinion, or other evidence acceptable to the Commission documenting the condition of such title or interest.

(c) Sample copies of contracts of sale, notes, deeds and other legal documents prepared by the developer or an attorney representing the developer which are to be used to effectuate the sale or lease. The commission may disapprove the form of the documents submitted and may deny an application for registration until such time as the applicant submits such documents in a form that is satisfactory to the commission.

(d) In compliance with 12-61-403(3)(e) C.R.S., a subdivision developer of time share use projects shall submit to the Commission a “Nondisturbance Agreement” by which the holder of a blanket encumbrance against the project agrees that its rights in the time share use project shall be subordinate to the rights of the purchasers. From and after the recording of a nondisturbance agreement, the person executing the same, such person's successors and assigns, and any person who acquires the property through foreclosure or by deed in lieu of foreclosure of the blanket encumbrance, shall take the time share use project subject to the rights of purchasers. Every nondisturbance agreement shall contain the covenant of the holder of the blanket encumbrance that such person or any other person acquiring through such blanket encumbrance shall not use or cause the time share use project to be used in a manner which would prevent the purchasers from using and occupying the time share use project in a manner contemplated by the time share use plan. Any other “trust” or “escrow” arrangement which fully protects the purchasers' interest in the project as contemplated by 12-61-403(3)(e) C.R.S. will be approved by the Real Estate Commission.

(e) If the developer of a subdivision is other than a natural person, proof of registration in accordance with state and local requirements shall accompany the application.

(f) Copies of the recorded declaration, covenants, filed articles of incorporation and bylaws of any owners association.

S-18. Repealed (1-1-95)

S-19. Repealed (1-1-95)

S-20. Pursuant to 12-61-403(3)(e) C.R.S. where a subdivision developer receives cash or receivables from a purchaser for an uncompleted project, the Commission will register such developer only after:

(a) The developer establishes an escrow account, with an independent escrow agent, of all funds and receivables received from purchasers: or, (b) The developer obtains a letter of credit or bond payable to an independent escrow agent or any other financial arrangement, the purpose of which is to ensure completion of accommodations and facilities and to protect the purchaser's interest in the accommodations and facilities.

S-21. A subdivision developer shall furnish to the Commission such additional information as the Commission shall from time to time deem necessary for the enforcement of Title 12, Article 61, Part four C.R.S.

S-22. Renewal of the registration and certification as a subdivision developer can be executed only on the renewal application provided by the Commission accompanied by the proper fees by December 31st of each year.

S-23. Pursuant to 12-61-406(2.5)(a) and 12-61-406(3) C.R.S., subdivision developers shall supply the following information to the Commission in addition to the requirement of 12-61-403C.R.S. and 404(4) C.R.S. and prior to contracting with the public shall disclose to prospective purchasers in the sales contract or in a separate written disclosure document, the following:

(a) The name and address of the developer and of the subdivision lots or units;

(b) An explanation of the type of ownership or occupancy rights being offered;

(c) A general description of all amenities and accommodations. The description must include the specific amenities promised, ownership of such amenities, the projected completion date of any amenities to be constructed, and a statement setting forth the type of financial arrangements established in compliance with Rule S-20;

(d) In compliance with 12-61-405(1)(i), a statement in bold print immediately prior to the purchaser's signature line on the sales contract disclosing the rescission right available to purchasers and that the rescission right cannot be waived; the minimum allowable rescission period in Colorado is five days;

(e) A general description of all judgments and administrative orders issued against the seller, developer, homeowners association or managing entity which are material to the subdivision plan;

(f) Any taxes or assessments, existing or proposed, to which the purchaser may be subject or which are unpaid at the time of contracting, including obligations to special taxing authorities or districts;

(g) A statement that sales will be made by brokers and salesmen licensed by the State of Colorado unless specifically exempted pursuant to C.R.S. 12-61-101(4) and the sales contract shall disclose the name of the real estate brokerage firm and the sales agent acting for the developer;

(h) When a separate document is used to make any of the disclosures required in this Rule S-23, this statement must appear in bold print on the first page of the document and preceding the disclosure: The State of Colorado has not prepared or issued this document nor has it passed on the merits of the subdivision described herein;

(i) A statement that all funds paid by the purchaser prior to delivery of deed will be held in trust by the licensed real estate broker named in the contract or a clear statement specifically setting forth who such funds shall be delivered to, when such delivery will occur, the use of said funds and whether or not there is any restriction on the use of such funds (This must be disclosed in contract);

(j) A statement that immediately following the date of closing, the purchaser's deed will be delivered to the Clerk and Recorder's office for recording or a clear statement specifically setting forth when such delivery will occur; for the purposes of this Rule, the date of closing is defined as the date the purchaser has either paid the full cash purchase price or has made partial cash payment and executed a promissory note or other evidence of indebtedness for the balance (See Rule S-30) (This must be disclosed in the contract);

(k) A statement that a title insurance policy, at no expense to the purchaser, will be delivered within sixty days following recording of deed unless specifically agreed to the contrary in the contracting instrument (See Rule S-31) (This must be disclosed in contract);

(1) Where an installment contract is used:

1. (i.) Whether or not the purchaser's deed is escrowed with an independent escrow agent and if so the name and address of the escrow agent (This must be disclosed in contract);

   (ii.) The amount of any existing encumbrance(s), the name and address of the encumbrancer, and the conditions, if any, under which a purchaser may cure a default caused by non-payment;

   (iii.) A clear statement that a default on any underlying encumbrance(s) could result in the loss of the purchaser's entire interest in the property; and (iv.) A clear statement advising the purchaser to record the installment contract.

2. (v) Pursuant to 12-61-403(3)(e) C.R.S., an agreement by which the holder of any blanket encumbrance against the project agrees that its rights and the rights of its successors or assigns in the project shall be subordinate to the rights of purchasers, or any other “trust”, “escrow” or release arrangement which fully protects the purchasers' interest in the project.

(m) The provisions for and availability of legal access, roads, sewage disposal, public utilities, including water, electricity, gas, telephone and other promised facilities in the subdivision, and whether these are to be an expense of the developer, the purchaser or a third party;

(n) If the subdivision has a homeowners or similar association: (i.) Whether membership in such association is mandatory; (ii.) An estimate of association dues and fees which are the responsibility respectively of the purchaser and the developer;

1. (iii.) A description of the services provided by the association; (iv.) Whether the developer has voting control of the association and the manner in which such control can or will be transferred; and (v.) Whether the developer has any financial interest in or will potentially derive any income or profit from such association, including the developer's right to borrow or authorize borrowing from the association.

(o) In addition to the disclosures in (a) through (n) above, if sales are to be made from a time share project as defined in 12-61-401(4):

1. (i.) A description of the time share units including the number of time share units, the length and number of time share interests in each unit, and the time share periods constituting the time share plan;

   (ii.) The name and business address of the managing entity under the time share plan, a description of the services that the managing entity will provide, and a statement as to whether the developer has any financial interest in or will potentially derive any income or profit from such managing entity, and the manner, if any, by which the purchaser or developer may change the managing entity or transfer the control of the managing entity;

   (iii.) An estimate of the dues, maintenance fees, real property taxes and similar periodic expenses which are the responsibility respectively of the purchaser and the developer and a general statement of the conditions under which future changes or additions may be imposed. Such estimate will include a statement as to whether a maintenance reserve fund has been or will be established; the manner in which such reserve fund is financed if not cash funded; an accounting of any outstanding obligations either in favor of or against the fund; the developer's right to borrow or authorize borrowing from the fund; and the method of periodic accounting which will be provided to the purchaser;

   (iv.) A description of any insurance coverage provided for the benefit of purchasers; and (v.) That mechanic's liens law may authorize enforcement of the lien by selling the entire time share unit.

(p) In addition to the disclosures in (a) through (o) above, if sales are to be made from a time share use project as defined in 12-61-401(4):

1. (i.) The specific term of the contract to use and what will happen to a purchaser's interest upon termination of said contract;

   (ii.) A statement as to the effect a voluntary sale, by the developer to a third party, will have on the contractual rights of time share owners;

   (iii.) A statement that an involuntary transfer by bankruptcy of the developer may have a negative effect on the rights of the time share owners; and (iv.) A statement that a Federal tax lien could be enforced against the developer by compelling the sale of the entire time share project.

(q) If time shares, as defined in 12-61-401(4), are to be sold from a subdivision which: (1) contains two or more component sites situated at different geographic locations or governed by separate sets of declarations, by-laws or equivalent documents; and (2) does not include, subject to agreed upon rules and conditions, a guaranteed, recurring right of use or occupancy at a single component site:

1. (i) For each component site, the information and disclosures required by Rule S-23(a) through (p);
2. (ii) A general description of the subdivision;
3. (iii) For each term of usage or interest offered for sale, the total annual number of available daily use periods within the entire subdivision and within each component site for that term, regardless of whether such use periods are offered to a purchaser by days, weeks, points or otherwise, and a calculation represented on a chart or grid showing each component site's annual daily use periods as a percentage of the entire subdivision's annual daily use periods;
4. (iv) A clear description in the sales contract of the interest and term of usage being purchased and a definite date of termination of the purchaser's interest in the subdivision, which date will be not later than the termination date of the subdivision's interest in a specifically identified component site;
5. (v) A clear disclosure and description of any component site which is not legally guaranteed to be available for the purchaser's use, subject to the by-laws and rules of the subdivision, for the full term of the purchaser's usage interest;
6. (vi) The system and method in place to assure maintenance of no more than a one-to- one ratio of purchasers' use rights to the number of total use rights in the subdivision for each term of usage being offered for sale, including provisions for compensation to purchasers resulting from destruction of a component site or loss of use rights to any component site;
7. (vii) Whether the developer maintains any type of casualty insurance for the component sites in addition to that maintained by the site owners association or other interested parties, including the manner of disposition of any proceeds of such insurance resulting from the destruction or loss of use rights to any component site;
8. (viii) A description of the system or program by which a purchaser obtains a recurring right to use and occupy accommodations and facilities in any component site through use of a reservation system or otherwise, including any restrictions on such rights or any method by which a purchaser is denied an equal right with all other users to obtain the use of any accommodation in the subdivision;
9. (ix) A description of the management and ownership of such reservation system or program, whether through the developer, an owners association, a club or otherwise, including the purchaser's direct or indirect ownership interest or rights of control in such reservation system;
10. (x) Whether the developer, club or association which controls the reservation system or any other person has or is granted any interest in unsold, non-reserved or unused use rights and whether the developer, club, association or other person may employ such rights to compete with purchasers for use of accommodations in the subdivision or any component site and, if so, the nature and specifics of those rights, including the circumstances under which they may be employed;
11. (xi) The method and frequency of accounting for any income derived from unsold, non- reserved or unused use rights in which the purchaser, either directly or indirectly, has an interest;
12. (xii) The system and method in place, including business interruption insurance or bonding, to provide secure back-up or replacement of the reservation system in the event of interruption, discontinuance or failure;
13. (xiii) The amount and details of any component site, reservation system or other periodic expense required to be paid by a purchaser, the name of the person or entity to which such payments shall be made, and the method by which the purchaser shall receive a regular periodic accounting for such payments;
14. (xiv) If component site expenses are included in those periodic payments made by a purchaser, a statement for each component site from the owners association or other responsible agency acknowledging that payment of such expenses as taxes, insurance, dues and assessments are current and are being made in the name of the subdivision;
15. (xv) Evidence that an escrow system with an independent escrow agent is in place for receipt and disbursement of all moneys collected from purchasers that are necessary to pay such expenses as taxes, insurance and common expenses and assessments owing to component site owners associations or others or a clear description of the method by which such funds will be paid, collected, held, disbursed and accounted for;
16. (xvi) A clear statement in the sales contract as to whether a purchaser's rights, interests or terms of usage for any component site within the subdivision can subsequently be modified from those terms originally represented and a description of the method by which such modification may occur;
17. (xvii) If the subdivision documents allow additions or substitutions of accommodations or component sites, a clear description of the purchaser's rights and obligations concerning such additions or substitutions and the method by which such additions or substitutions will comply with the provisions of this rule; (xviii) A clear description of any existing incidental benefits or amenities which are available to the purchaser at the time of sale but to which the purchaser has no guaranteed right of recurring use or enjoyment during the purchaser's full term of interest in the subdivision.

S-24. A time share developer shall disclose to the public whether or not a time share plan involves an exchange program and, if so, shall disclose and deliver to prospective purchasers, a separate written document, which may be provided by an exchange company if the document discloses the following information:

(a) The name and the business address of the exchange company;

(b) Whether the purchaser's contract with the exchange program is separate and distinct from the purchaser's contract with the time share developer;

(c) Whether the purchaser's participation in the exchange program is dependent upon the time share developer's continued affiliation with the exchange program;

(d) Whether or not the purchaser's participation in the exchange program is voluntary;

(e) The specific terms and conditions of the purchaser's contractual relationship with the exchange program and the procedure by which changes, if any, may be made in the terms and conditions of such contractual relationship;

(f) The procedure of applying for and effecting changes;

(g) A complete description of all limitations, restrictions, accrual rights, or priorities employed in the operation of the exchange program, including but not limited to limitations on exchanges based on seasonability, unit size, or levels of occupancy; and if the limitations, restrictions or priorities are not applied uniformly by the exchange program, a complete description of the manner of their application;

(h) Whether exchanges are arranged on a space-available basis or whether quarantees of fulfillment of specific requests for exchanges are made by the exchanging company;

(i) Whether and under what conditions, a purchaser may, in dealing with the exchange program, lose the use and occupancy of the time share period in any properly applied for exchange without being offered substitute accommodations by the exchange program;

(j) The fees for participation in the exchange program, whether the fees may be altered and the method of any altering;

(k) The name and location of each accommodation or facility, including the time sharing plans participating in the exchange program.

S-25. All approvals for the use of reservation agreements issued pursuant to 12-61-402(2) C.R.S. shall expire on December 31 following the date of issuance. Approval shall be renewed, except as provided in section 12-61-405C.R.S., by payment of a renewal fee established pursuant to section 12-61-111.5 and completion of a renewal application. S-26. Upon request of the Commission pursuant to an investigation, a subdivision developer shall file with the Real Estate Commission an audited financial statement in conformity with accepted accounting principles, and sworn to by the developer as an accurate reflection of the financial condition of the developer and/or the owners association controlled by the developer. S-27. (NEW) Any adverse order, judgment, or decree entered in connection with the subdivided lands by any regulatory authority or by any court of appropriate jurisdiction shall be filed with the Real Estate Commission by the developer within thirty (30) days of such order, judgment or decree being final.

S-28. Each subdivision developer shall have a continuing duty to disclose to the Real Estate Commission any new blanket encumbrance on a subdivision registered in the office of the Real Estate Commission and any change in the documents submitted pursuant to Rule S-17 within ten (10) days after its creation which shall require commission approval prior to use. Further, each subdivision developer shall have a continuing duty to disclose any lis pendens or lawsuit filed against the subdivision developer within ten (10) days after its recording or service of process. S-29. (NEW) No subdivision developer shall make misrepresentations regarding future availability or costs of services, utilities, character and/or use of real property for sale or lease of the surrounding area.

Rule S-30 . (a) Unless sale is by means of an installment contract the delivery of deed shall be made within sixty days after closing. For the purposes of this Rule, the date of closing is defined as the date the purchaser has either paid the full cash purchase price or has made partial cash payment and executed a promissory note or other evidence of indebtedness for the balance (This must be disclosed in the contract).

(b) If sale is by means of an installment contract, the delivery of deed shall be made within sixty days after completion of payments. A contract which requires the execution of a promissory note or other evidence of indebtedness that accrues interest and/or requires payments prior to the recording of a deed shall be deemed to be an installment contract pursuant to 12-61-403(3)(g) C.R.S. and Commission S-23. NEW Rule S-31 . An abstract of title or title insurance policy shall be delivered within a reasonable time after completion of payments by a purchaser. Any period of time exceeding sixty days shall be deemed unreasonable for purposes of this rule. The parties may contract to eliminate this requirement, but such waiver must be in writing and in a conspicuous manner and/or print. The presence of waiver on the back of a contract shall not be deemed conspicuous for purposes of this rule.

Rule S-32 . All developers shall provide a title insurance commitment or other evidence of title approved by the Commission within a reasonable time after execution of any contract to purchase. Any period of time in excess of ninety (90) days shall be deemed unreasonable for purposes of this rule. This requirement may be waived by the parties in writing if the waiver is made in a conspicuous manner and/or print. The presence of the waiver on the back of a contract shall not be deemed conspicuous for purposes of this rule.

1. ******** THE STATEMENT OF BASIS AND PURPOSE FOR THESE RULES AS ADOPTED IS INCORPORATED HEREIN BY REFERENCE AND IS AVAILABLE FOR INSPECTION IN THE OFFICE OF THE COLORADO REAL ESTATE COMMISSION.

S-33 . Declaratory Orders 1. Any person *1 may petition the Commission for a declaratory order to terminate controversies or to remove uncertainties as to the applicability to the petitioner of any statutory provision or of any rule or order of the Commission.

*1refers to existing definition of “person” in APA, rule or statute, if any.

2. The Commission will determine, in its discretion and without prior notice to the petitioner, whether to rule upon any such petition. If the Commission determines it will not rule upon such a petition, the Commission shall issue its written order disposing of the same, stating therein its reasons for such action. A copy of such order shall forthwith be transmitted to the petitioner.

3. In determining whether to rule upon a petition filed pursuant to this rule, the Commission will consider the following matters, among others:

(a) whether a ruling on the petition will terminate a controversy or remove uncertainties as to the applicability to petitioner of any statutory provision or rule or order of the Commission;

(b) whether the petition involves any subject, question or issue which is the subject of a formal or informal matter or investigation currently pending before the Commission or a court involving one or more of the petitioners which will terminate the controversy or remove the uncertainties as to the applicability to the petitioner of any statutory provision or of any rule or order of the Commission, which matter or investigation shall be specified by the Commission;

(c) whether the petition involves any subject, question or issue which is the subject of a formal matter or investigation currently pending before the Commission or a court but not involving any petitioner which will terminate the controversy or remove the uncertainties as to the applicability to the petitioner of any statutory provision or of any rule or order of the Commission, which matter or investigation shall be specified by the Commission and in which petitioner may intervene;

(d) whether the petition seeks aruling on a moot or hypothetical question and will result in merely an advisory ruling or opinion;

(e) whether the petitioner has some other adequate legal remedy, other than an action for declaratory relief pursuant to rule 57, Colo. R. Civ. P., which will terminate the controversy or remove any uncertainty as to the applicability to the petitioner of the statute, rule or order in question.

4. Any petition filed pursuant to this rule shall set forth the following:

(a) the name and address of the petitioner and whether the petitioner is licensed pursuant to C.R.S. 1973, 12-61-401, et seq.

(b) the statute, rule or order to which the petition relates;

(c) a concise statement of all the facts necessary to show the nature of the controversy or uncertainty and the manner in which the statute, rule or order in question applies or potentially applies to the petitioner.

5. If the Commission determines that it will rule on the petition, the following procedures shall apply:

(a) the Commission may rule upon the petition based solely upon the facts presented in the petition. In such a case:

1. (1) any ruling of the Commission will apply only to the extent of the facts presented in the petition and any amendment to the petition;
2. (2) the Commission may order the petitioner to file a written brief, memorandum or statement of position;
3. (3) the Commission may set the petition, upon due notice to petitioner, for a non- evidentiary hearing;
4. (4) the Commission may dispose of the petition on the sole basis of the matters set forth in the petition;
5. (5) the Commission may request the petitioner to submit additional facts in writing. In such event, such additional facts will be considered as an amendment to the petition;
6. (6) the Commission may take administrative notice of facts pursuant to the Administrative Procedure Act (C.R.S. 1973, 24-4-105(8)) and utilize its experience, technical competence and specialized knowledge in the disposition of the petition;
7. (7) if the Commission rules upon the petition without a hearing, it shall issue its written order, stating therein its basis for the order. A copy of such order shall forthwith be transmitted to the petitioner.

(b) The Commission may, in its discretion, set the petition for hearing, upon due notice to the petitioner, for the purpose of obtaining additional facts or information or to determine the truth of any fact set forth in the petition or to hear oral argument on the petition. Notice to the petitioner setting such hearing shall set forth, to the extent known, the factual or other matters into which the Commission intends to inquire. For the purpose of such a hearing, to the extent necessary, the petitioner shall have the burden of proving all of the facts stated in the petition, all of the facts necessary to show the nature of the controversy or uncertainty and the manner in which the statute, rule or order in question applies or potentially applies to petitioner and any other facts the petitioner desires the Commission to consider.

6. The parties to any proceeding pursuant to this rule shall be the Commission and the petitioner. Any other person may seek leave of the Commission to intervene in such a proceeding, and leave to intervene will be granted at the sole discretion of the Commission. A petition to intervene shall set forth the same matters as required by section 4 of this rule. Any reference to a “petitioner” in this rule also refers to any person who has been granted leave to intervene by the Commission.

7. Any declaratory order or other order disposing of a petition pursuant to this rule shall constitute agency action subject to judicial review pursuant to C.R.S. 1973, 24-4-106. Rule S-34. Repealed.

Rule S-35. Failure to disclose to subdivision purchasers the availability of legal access, sewage disposal, public utilities, including water, electricity, gas and telephone facilities in the subdivision and at whose expense, when proven, is a violation of C.R.S. 12- 61-405(1) (b). (Statement of Basis and Purpose as adopted by the Real Estate Commission on October 5, 1988.)

S-36. Pursuant to 12-61-405(1)(e) C.R.S., 12-61-406(2.5) (b) C.R.S. and 12-61-406(4) C.R.S., a developer shall maintain in a Colorado place of business, and produce for inspection upon reasonable request by an authorized representative of the Commission, copies of the following documents and business records:

(1) The sales contract, transfer or lease agreement, installment sale agreement, financing agreement, buyer and seller settlement statement, title policy or commitment, trust deed, escrow agreement, and other documents executed by the parties or on behalf of the developer in the sale, lease or transfer of any interest in a subdivision.

(2) Records showing the receipt and disbursement of any money or assets received or paid on behalf of any homeowner or similar association managed or controlled by a developer.