1. (1) As used in this section, unless the context otherwise requires, broker engagement contract means a written contract in which a seller, buyer, landlord, or tenant of a residential premises becomes the client of a broker or agrees to retain the services of a broker in the future and promises to pay the broker a valuable consideration or agrees that the broker may receive a valuable consideration from another person in exchange for the broker:

   1. (a) Producing a seller, buyer, tenant, or landlord ready, able, and willing to sell, buy, or rent the residential premises; or
   2. (b) Performing other services.

2. (2) A broker engagement contract must not:

   1. (a) Purport to be a covenant running with the land or to be binding on future owners of interests in the real property;
   2. (b) Allow for assignment of the right to provide service without notice and agreement of the owner of the residential premises; or
   3. (c) Purport to create a recordable lien, encumbrance, or other real property security interest. Any such lien, encumbrance, or other real property security interest is void and unenforceable.
3. (3) A person who offers to a consumer a broker engagement contract that includes a provision in violation of subsection (2) of this section commits an unfair or deceptive trade practice, as provided in section 6-1-105 (1)(uuu).

4. (4) This section does not apply to:

   1. (a) A home warranty service contract, as defined in section 12-10-901 (2)(a);
   2. (b) A building warranty or similar product that covers the cost of maintenance of a major housing or building system, such as a plumbing or an electrical system, for a specific period of time after the date on which a house or building is sold;
   3. (c) An insurance contract;
   4. (d) An option to purchase, a put requirement to purchase, a right of first offer, or a right of refusal;
   5. (e) A declaration created in the formation of a common interest community, as defined in section 38-33.3-103 (8), or an amendment to the declaration;
   6. (f) A maintenance or repair agreement entered into by a unit owners' association, as defined in section 38-33.3-103 (3);
   7. (g) A loan or a commitment to make or receive a loan, which loan or commitment is secured by real estate;
   8. (h) A security agreement under the Uniform Commercial Code relating to the sale or rental of personal property or fixtures;
   9. (i) Water, sewer, electrical, telephone, cable, or other regulated utility service providers; or
   10. (j) A property management agreement by which the owner of real property contracts with a party to provide management services for the maintenance, ownership, operation, or lease of a residential premises.

Source: L. 2023: Entire section added, (SB 23-077), ch. 50, p. 179, § 1, effective August 7.

Cross references: For the Uniform Commercial Code, see title 4.