Unit 2 Section 4 Review of Colorado Contract LawBy the end of .docx

Unit 2 Section 4 Review of Colorado Contract Law
By the end of this unit, you will be able to:
· Describe the Conway-Bogue court case and summarize the
ruling of the Colorado Supreme Court
· Compare and contrast the CO Fair Housing Act and the
Federal Fair Housing Act
· Explain Common-Interest Ownership and its requirements
· Describe CO Statutory Relationships
There are several core case laws and statutes affecting the
practice of real estate in Colorado. They are presented here in
summary format along with the reference for further
investigation.
Click here to read the following section in the Colorado Revised
Statutes:
· CRS 38-10-108
End of Page
Unit 2-4 Conway-Bogue
Conway–Bogue is the shortened name of one of the parties to a
major case law opinion by the Colorado Supreme Court in 1957.
The lawyers in the Denver Bar Association sued the Conway-
Bogue Realty Investment Company to prevent what the lawyers
considered real estate broker infringement on their practice of
law.
The Supreme Court determined that many of the
acts performed by real estate brokers do constitute the
practice of law. This includes preparing deeds, leases,
completing standard and approved contract forms, etc., and
giving explanation or advice as to the legal effect of these
forms.

It also concluded that
licensed real estate brokers may prepare these sale,
loan, and leasing documents (that normally only attorneys-at-
law may prepare)
only for their own customers in transactions in which
they are acting as a real estate broker.
The courts said it reached its decision based on:
1. A scarcity of lawyers in many parts of the state. (
Remember, this was in the 1950’s.)
2. A 50+-year history of the public seeking brokers rather than
lawyers to conduct real estate transactions.
3. No record of any public or lawyer harm from the (then)
current practice.
4. No move by the legislature to stop this “alleged evil”
practice.
The Court found that
to prohibit brokers from this limited practice of law
would “not be in the public interest.”
End of Page
The Colorado Association of REALTORS® legal counsel
cautioned its members that the broker’s activity must be limited
as to:
1. Brokers must be
connected to the transaction as broker.
2. Brokers
may not charge for legal document preparation.
3. Brokers may only prepare “
commonly used, printed, standard and approved forms.”
(Instructor’s Note: This is the precursor to Rule F-7 and the
Commission-approved forms in required use today.)

Clearly, brokers
must NOT prepare:
1. Legal documents as a business, courtesy or favor, whether
paid or not, when not connected to the transaction as a broker.
2. Documents that are not on standard and approved printed
forms.
3. Wills or other legal documents beyond those customary in a
real estate transaction.
C.A.R.’s attorney also warned that it would appear
in the best interests of the public and also in conformity
with the Court’s opinion for brokers to:
1. Always recommend that title be examined.
2. Inform the parties of their right to have legal documents
prepared by their own choice of lawyers.
3. Advise the parties of their right to have a lawyer represent
them at closing.
4. Seek attorney assistance when legal complications are beyond
the broker’s knowledge.
End of Page
SUMMARY: The Colorado Supreme Court ruled that real estate
brokers may prepare certain legal documents by filling in the
blanks on standard, approved printed forms when they are the
broker in the transaction and receive no compensation other
than their commission.
The legal summary issued by C.A.R.'s legal counsel in 1957
ended with the following
caution:
"It is to the interest OF EVERY BROKER (emphasis added) that
these limitations be properly recognized and followed so that
the Supreme Court would not have reason to change its opinion

at a later date."
Those words are as true today as when they were first written.
End of Page
"Standard and Approved" Forms were not defined in the court
opinion, and were not given over to the Real Estate Commission
with the adoption of Rule F until 1971.
(
Instructor's note: Rule F will be covered along with the
forms themselves in a following section of this course.)
The authority to complete standard forms was not codified into
the license law (C.R.S. 12-10-403(4)) until 1993.
End of Page
Unit 2-4
On the same day that Conway-Bogue was decided, the Supreme
Court also settled two related cases in which the Denver and
Colorado Bar Associations had sued to stop two title companies
from preparing legal documents and performing other acts
which, the lawyers claimed, also constituted the unauthorized
practice of law.
The Court issued one decision from the cases taken together. It
held that the title companies:
1. Could prepare papers related to loans made from their own
funds.
2. Could not prepare/charge for legal documents for others.
3. Could not mandate closing or escrow service as a requirement
of selling title insurance.
Today, title companies close most real estate transactions -
instead of brokers. It is important to remember, however, that
the closing service is separate from the issuance of title
insurance. While the title company may charge the buyer and
seller for this closing service (Rule E-37), the buyer and seller
may not pay for preparation of legal documents. The title
company prepares legal documents (deeds, etc.) as the broker's

"scrivener" (writer), and the broker normally pays this nominal
fee. Finally, even though title companies routinely conduct
closings, Commission Rule E-5 holds the broker responsible for
the proper closing of a Colorado real estate transaction.
End of Page
Unit 2-4 Statute of Frauds
You will recall from the Law and Practice course that most
states have a statute of frauds designed to protect the public
from oral trickery - claims that can only be backed up by "he
said, she said" types of arguments.
Colorado's statute is found in the
Contracts Chapter of the Real Estate Manual. The law
is
C.R.S. 38-10-108 which says:
"Every contract for a leasing of more than one year, or for the
sale of any lands or any interest in land is
void unless the contract or some note or memorandum
thereof expressing the consideration is in writing, and
subscribed (signed) by the party by whom the lease or sale is to
be made."
Note that such a contract is
void (never legally existed) rather than voidable (valid
until challenged).
On a related note, and for the same reason as above, remember
that a Colorado broker may not claim an earned commission
based on an oral
agency listing/employment agreement. Such an
agreement must be in writing.
End of Page

Unit 2-4 Statute of Frauds
You will recall from the Law and Practice course that most
states have a statute of frauds designed to protect the public
from oral trickery - claims that can only be backed up by "he
said, she said" types of arguments.
Colorado's statute is found in the
Contracts Chapter of the Real Estate Manual. The law
is
C.R.S. 38-10-108 which says:
"Every contract for a leasing of more than one year, or for the
sale of any lands or any interest in land is
void unless the contract or some note or memorandum
thereof expressing the consideration is in writing, and
subscribed (signed) by the party by whom the lease or sale is to
be made."
Note that such a contract is
void (never legally existed) rather than voidable (valid
until challenged).
On a related note, and for the same reason as above, remember
that a Colorado broker may not claim an earned commission
based on an oral
agency listing/employment agreement. Such an
agreement must be in writing.
End of Page
Unit 2-4 Electronic Duplication
You have previously learned that Commission Rule E-6 permits
transaction documents to be electronic as long as they are
readily retrievable by the Commission upon request and as long
as all parties agree. This permission is implemented by client

choice in the Commission-approved Contract to Buy and Sell
Real Estate (Paragraph 28).
End of Page
Unit 2-4 Subdivisions
SUBDIVISIONS, CONVERSIONS, AND TIME SHARING
Chapter 1 of this course covered Part 4 of the License law
concerning Subdivision development. Here we will review
briefly Commission Rule S, and some of the pertinent points of
subdivision regulation. Since a developer must register with the
Commission, but is not necessarily required to have a broker
license, much of this section of the law and Commission rule
will not apply. The material that is included here, however, is
subject to testing on the broker licensing examination. Both Part
4 and Rule S are in a separate Chapter of the Real Estate
Manual along with information on Common Interest
Communities (those governed by Homeowners Associations).
End of Page
SUBDIVISIONS, CONVERSIONS, AND TIME SHARING
Chapter 1 of this course covered Part 4 of the License law
concerning Subdivision development. Here we will review
briefly Commission Rule S, and some of the pertinent points of
subdivision regulation. Since a developer must register with the
Commission, but is not necessarily required to have a broker
license, much of this section of the law and Commission rule
will not apply. The material that is included here, however, is
subject to testing on the broker licensing examination. Both Part
4 and Rule S are in a separate Chapter of the Real Estate
Manual along with information on Common Interest
Communities (those governed by Homeowners Associations).
End of Page

The first step in subdivision development is
registration.
This must be done before any negotiating, selling or
transferring to the public takes place. Registration requires
volumes of data on both the developer and the land to be
subdivided. Registration certificates expire December 31 of the
year in which issued and must be renewed annually.
Sales of subdivision lots and time-shares are subject to
cancellation by the purchaser for any reason up to
midnight of the 5th day following execution of the contract.
End of Page
The Real Estate Commission realizes that subdivision expertise,
including planning and zoning laws, etc., is likely beyond the
realm of most licensee's expertise. Nonetheless, every licensee
has the responsibility to seek information from, or refer clients
to, expert sources.
Some
facts that should be known to a licensee through reading
or logic include:
1. The sale of a portion of a property divides the land into two
parcels that may be subject to subdivision regulation by other
than the real estate commission.
2. Just because a building is suitable for conversion into a
duplex or four-plex, does not mean that such a conversion does
not violate the law.
3. An area zoned as horse property does not automatically mean
the parcel is large enough to keep horses.
4. Even if an area is zoned for home business, there may be

prohibitions against parking, employees, customer traffic or
other.
End of Page
Unit 2-4 Colorado Fair Housing
COLORADO FAIR HOUSING ACT
Colorado was the first state (1959) to enact laws protecting
private property transactions from discrimination against
protected classes.
Federal Fair Housing law will prevail for most practical
applications with the following distinctions:
1. Colorado law adds four protected classes in addition to those
in Federal law. They are:
·
Creed (This can be a belief system not necessarily
related to religion, such as socialism.)
·
Ancestry (National origin is where a person comes
from. Ancestry is who your parents are. For example, a violent,
nationally-recognized death row inmate.)
·
Marital status (In Colorado, one may not discriminate
against single, married or divorced persons
except that municipalities or counties may do so by
zoning.)
·
Sexual orientation.
2. Colorado law covers
commercial property.
3. Unlike Title VIII, Colorado law does not exempt single-
family homes or owner-occupied 1-4 unit homes.

4. Colorado Administrative Law Judges may levy fines for a
larger scope of violations than their federal counterparts.
5. Colorado law permits restriction in the sale, rental or
development of housing intended for persons with disabilities.
Some local ordinances also protect
age as a class. Consult your broker or city officials.
End of Page
Unit 2-4 Colorado Fair Housing
An aggrieved person may file a complaint with the state Civil
Rights Commission or HUD up to one year after occurrence.
Complainants may choose to file directly in state or federal
court up to two years after the alleged discrimination.
The Colorado attorney general may, on its own motion,
intervene in any complaint considered to be of general public
importance, or initiate complaints up to 18 months after
occurrence.
Penalties for proven violations are virtually unlimited in dollar
terms, in addition to injunction, affirmative action. The one that
should concern most licensees is revocation of the real estate
license.
End of Page
Unit 2-4 Appraiser Licensing
APPRAISER LICENSING was covered in Unit 2-1 under
Colorado license law Part 7, and in Unit 2-3 Commission
Position Statements.
Appraisers are administratively located with the Colorado
Division of Real Estate, but have their own
Board of Real Estate Appraisers that provides direct
regulation of the industry.

End of Page
Unit 2-4 Colorado Common-Interest Ownership
COLORADO COMMON-INTEREST OWNERSHIP ACT
(CCIOA)
A common interest community is defined as one in which
owners are obligated to pay some fees for common areas, such
as taxes, insurance, maintenance or improvement. It is a
condominium, townhouse, subdivision or co-op community
subject to the
payment of dues to a Homeowners Association (HOA).
An entire chapter in the 2018 Colorado Real Estate Manual has
been devoted to Common Interest Communities and Community
Association Manager Licensing Program.
End of Page
Unit 2-4 Colorado Common-Interest Ownership
CCIOA was originally passed to provide HOA's with an
effective means of organizational transfer of control from the
developer to owners' administration. It gave HOA's the power to
file liens to collect delinquent dues and fees from homeowners.
In 2006, in response to HOA over restriction, the Colorado
legislature updated CCIOA to even the balance of power and
rights between unit owners and the HOA. Unit owners, for
instance, must be given notice of HOA meetings, Board member
changes, and may even collectively force audits of HOA funds
in some situations.
End of Page
Unit 2-4 Colorado Statutory Relationships
The Colorado Real Estate Commission Course Outline for this
topic takes it through the entire Section 8 of Title 12, Article 61
of Colorado statute. We have covered that in exhaustive detail
in Section 1, License Law of this Contracts and Regulations

Course.
Therefore, this section will review and try to distill Colorado's
sometimes confusing Brokerage Relationships statutes from a
more simple perspective without repeating Section 8 of the
license law.
End of Page
In much of the rest of the United States, if you list a house for a
seller, you are the
seller's agent. As an agent, you owe fiduciary duties to
your seller - meaning you will advocate getting the best price
and terms for the seller. When a licensee from another company
shows your listing and brings an offer for your seller, that
licensee is on the same team as the listing agent. He or she acts
as the listing broker's
subagent - assisting the buyer, even though owing a
fiduciary through the listing agent to the seller.
End of Page
In the same example above, the listing agent and the subagent
were most likely salespersons - the vast majority of licensees
still are - working for a single boss - their Broker.
Finally, all of the players above were considered to have
something called "
imputed knowledge." This means that since all were on
the same side, all knew, or should have known, all client
confidential information. The
brokerage relationship as agent extended to everyone -
the firm as an entity, all licensed salespersons in the firm and

the employing broker. They were all agents of the seller.
End of Page
Four basic changes have taken place since the late 1980s to
make the above scenario completely obsolete. Three have been
intentional changes enacted in Colorado license law, and one
started out of a few brokers and has grown into a nationwide
trend - buyer brokerage.
While it is true that isolated pockets of buyer representation
occurred earlier, the
buyer brokerage movement was largely local until the
1980s. As buyers became more sophisticated they realized that
they were not truly represented in a real estate transaction
because everyone was aligned with the seller. Early buyer
brokers elected to become agents and advocate for the interests
of the buyers.
This was not a congenial transition. Many brokers refused to
accept offers from or denied commission splits to buyer agents.
Over several years, this animosity lessened as traditional
brokers realized that this kind of divisiveness was harmful to
their ability to sell their listings, and therefore put them in
violation of the fiduciary owed to the seller.
End of Page
The first recognition of buyer agency in Colorado's license law
in 1993 also introduced the now familiar neutral, non-advocate
assistant known as the
Transaction-Broker (T-B).
T-B also introduced much trepidation and confusion into the

industry. This was such a radical concept that some brokers
suggested it would collapse the industry, or would never last.
To this day, the concept is often misunderstood by even some
Colorado brokers to mean a lessening of liability for the risks in
a transaction. This is not true, as we will discuss shortly, when
considering
universal duties. Those duties now enshrined in
Colorado's commission-approved contract forms are owed to the
client regardless of brokerage relationship.
End of Page
The second major statutory change came in 1997 in the form of
single licensing.
Single licensing is the concept of educating all new
applicants – you – to the broker level from day one. Colorado
had a multi-year transition to allow all then licensed
salespersons to upgrade their licenses to those of a broker.
Single licensing stemmed from realization of changes in the
public and the real estate market.
1. Buyers and sellers don’t differentiate (or even understand the
difference) between a salesperson and a broker. All they want is
a competent results-driven licensee.
2. Complexity in real estate transactions is not reserved for
those with two years of active licensed experience. The most
complex transaction of your career could occur in the first
month of being licensed.
3. Growth of the Internet and other technologies enabled
salespersons to act more independently. Licensees were less
dependent on the computer and resources located in the main
office.
4. Salespersons with years of experience would defend against
disciplinary action by the Commission with the salesperson
defense, i.e. “I’ve been a salesperson for a hundred years but I

don’t know anything about that since I’m not a broker.”
End of Page
The final - and in some way the biggest change - came in 2003
in the form of
Designated Brokerage.
Designated Brokerage is the overarching method or
infrastructure for every licensed real estate transaction in
Colorado. It requires the employing broker to appoint a
designated broker in writing for every side of every transaction.
Every broker is a designated broker before, and in addition to,
being either an agent or a transaction-broker.
It is NOT a brokerage relationship. In fact, it precedes
establishment of a brokerage relationship.
It severs the individual "designated broker" who enters a
brokerage relationship from any connection to the employing
broker, the firm or any other licensees employed in the firm. To
be sure, the employing broker and firm still own the listing or
employment agreement as you will learn when we review the
contracts, but there is nobody besides the client and the
designated broker in the brokerage relationship.
It eliminates the concept of "imputed knowledge" - meaning
that the individual designated broker is the
only protector or guardian of confidential client
information. No longer is everyone in the firm assumed to know
or expected to have access to all the details about each client or
property in the firm.
While the designation must be made in writing, Rule E-38
allows an employing broker to write an office policy
establishing automatic designation for brokers who sign certain
listing or disclosure forms.
Later on, the Commission passed Rule E-45, and altered all the

listing/employment contracts to provide client approval
allowing a designated broker to share confidential information
with a "supervising" broker without extending the agency or T-
B brokerage relationship to that supervising broker or the firm.
These changes recognized the need for inexperienced brokers to
obtain assistance or counsel when necessary.
End of Page
Now, let's go back and consider the example sales scenario
introduced at the beginning of this section with all four of the
changes in place.
End of Page
In Colorado, when you list a seller's house for sale, the
employing broker must first designate you to that seller. When
you sign the listing agreement, you will enter an individual
brokerage relationship as either the seller agent or transaction-
broker, depending on the employing broker's office policy. If
you are the seller's agent, you will advocate for that seller. If
you are a transaction-broker, you are neutral and will assist the
seller in marketing the home and putting the transaction
together.
If a broker from another firm shows your listing and brings an
offer for your seller, he or she must advise you before the
showing - whether acting as an agent or transaction-broker for
the buyer - as permitted by his or her employing broker's
written office policy. Neither of you will exchange confidential
information about your respective clients.
End of Page
The broker working with the buyer will be a broker, not a
salesperson, and will never be your subagent. There will be no
imputed knowledge to the other associate brokers in your firm,
or to the firm itself or the employing broker.

End of Page
Now that you have seen an illustration - however simplified - it
is time to go back and review the Brokerage Relationships
license law Section 12-10-401 to 12-10-411 in Chapter 1 of this
course. Don't skip doing this because you think you've been
there already. The complex Colorado structuring of brokerage
designation and brokerage relationship sets the foundation for
all of the transactions you will ever do. You must also master
brokerage relationships in order to grasp the next section of the
course that involves completing Commission-approved contract
listing/employment agreements. The importance of
understanding brokerage relationships is far greater than
material needed to pass the broker-licensing exam.
When you have finished your review of the brokerage
relationships license law, come back here to learn about the
Commission rule on forms.
End of Page
Unit 2-4 Rule F
RULE F - USE OF COMMISSION-APPROVED FORMS
The Real Estate Commission has had the authority to
promulgate standard and approved printed forms for nearly 40
years. The Commission maintains a standing forms committee
composed of brokers, attorneys, and other interested parties
who meet monthly to update forms on an as-needed basis.
Commission Rule F sets the guidelines for the use of these
forms. Remember we have paraphrased these rules for clarity
and space.
End of Page
Unit 2-4 Rule F
Rule F-1. Permitted Modifications
a. Brokers may not modify Commission-approved forms except
as allowed in this Rule F.
b. A broker(age) may

pre-print its firm name, address, telephone, e-mail
address, trademark or other
identifying information on forms.
c. Initial lines may be added at the bottom of pages.
d. Deletions or insertions amending commission-approved
language must originate from
negotiations or instructions of party(ies) to the
transaction. Deletions must be struck through on the actual form
in a manner that leaves the original language legible.
e.
Blank spaces may be lengthened or shortened as
needed.
(
Instructor's note: Forms software programs do this
automatically, expanding as you enter data.)
f. Filled-in blanks or insertions must be in a
typeface or font that is clearly recognizable as different
from the font on the pre-printed form.
g. Provisions of the Contract may be deleted but the provision’s
caption or heading must remain unaltered on the form followed
by the word “omitted – not applicable.”
h. One or more pages may be added that contains the dates and
deadlines set forth in Section 3, arranged in chronological date
sequence.
i. Dates and Deadlines table and Purchase Price and Terms of
the Counterproposal and Amend/Extend may be deleted so long
as the provision’s caption or heading remains unaltered on the
form followed by the word “omitted – not applicable.”
j. The term “Landlord” may be substituted for the term “Seller”
and the term “Tenant” for the term “Buyer” in the Brokerage
Disclosure To Buyer, Brokerage Disclosure to Seller and
Definitions of Working Relationships forms.
k. Signature lines may be added along with identifying labels

for the parties signatures.
l. Language may be modified, stricken or deleted as the
Commission may from time to time so authorize.
End of Page
Unit 2-4 Rule F
Rule F-1 (g). A broker may omit printing part or all of the
following sections of the
Contract to Buy and Sell Real Estate, (or corresponding
sections of other forms) if they are not used. If omitted, the
paragraph heading must remain pre-printed along with the word
"OMITTED."
Section 2.5, Inclusions
Section 2.6 Exclusions
Section 4.2, 4.4, Seller Concessions
Section 4.5, New Loan
Section 4.6, Assumption
Section 4.7, Seller Financing
(Instructor's note: Each of these sections is multiple paragraphs
long. It is easy to see why leaving out the paragraphs for loan
assumption and seller financing when not applicable makes for
a much shorter, and therefore clearer, contract form.)
Section 5, Financing Conditions and Obligations
Section 6, Appraisal Provisions
Section 7, Common Interest Community Governing Documents
Section 8.5, Special Taxing Districts
Section 8.6, Right of First Refusal or Approval
Section 10.8, Source of Potable Water
Section 10.6, Due Diligence
Section 10.8 – 10.12, Existing Leases
Section 11, Tenant Estoppel
Section 15.3, Status and Transfer Letter Fees
Section 15.4, Local Transfer Tax
Section 15.5, Private Transfer Fee

Section 15.7, Sales and Use Tax
Section 16.2, Rents
Section 16.3, Association Assessments
Unit 2-4 Rule F
Rule F-1
h. A broker may add a separate page duplicating the front page
“Dates and Deadlines” information arranged in chronological
order to the following three forms:
·
Contract to Buy and Sell Real Estate
·
Counterproposal
·
Agreement to Amend/Extend Contract
i. If not required:
· A broker may omit pre-printing the “Dates and Deadlines”
table and “Purchase Price and Terms” on the
Counterproposal form; and
· The “Dates and Deadlines” table on the
· If omitted, the paragraph heading must remain pre-printed
along with the word “OMITTED.”
i. A broker conducting a lease transaction may substitute
“Landlord” for “Seller,” and “Tenant for “Buyer” on the
following three forms:
·
Brokerage Disclosure to Buyer/Tenant
·
Brokerage Disclosure to Seller
·
Definitions of Working Relationships
Unit 2-4 Rule F
Rule F-2 Additional Provisions

a. This section of the contract forms must contain only
transaction-specific terms or acknowledgments that result from
negotiations or instructions of the parties.
(
Instructor's note: Note that the broker IS a party to the
listing/employment contract and may negotiate additional
provision entries thereto.)
b. A broker is not a party to a buy/sell or lease contract, and
therefore may never insert self-serving personal provisions,
disclaimers or exculpatory ("I'm not responsible") language.
End of Page
Unit 2-4 Rule F
Rule F-3 Addenda
a. A pre-printed, broker-developed addenda which modifies or
adds to the terms of a Commission-approved contract form not
resulting from negotiations of the parties must be prepared by:
· A principal to the contract.
· The broker’s attorney.
· A principal party’s attorney.
b. Such addendum MAY NOT be prepared by the broker or
brokers for the parties.
c. Broker must retain the addendum for four (4) years from the
last date the addendum was used.
d. Broker must be able to provide the Commission with the
name of the attorney or law firm that prepared the addendum
upon request.
End of Page
Unit 2-4 Rule F
1. If such an addendum is used, it must be attached to the
contract - not inserted in "Additional Provisions" or any other
part of the body of the contract.
2. If a broker who is not a party to the contract uses such an
addendum, it may not contain self-serving personal provisions,

disclaimers or exculpatory ("I'm not responsible") language.
3. If such an addendum is prepared by the broker's attorney, it
must state on each page (in same type size as the addendum):
4. "This addendum has not been approved by the Colorado Real
Estate Commission. It was prepared by (insert licensed name of
broker or brokerage firm's) legal counsel."
5. If a broker(age)-developed addendum is attached to listing,
tenant or right-to-buy contract, it must state on each page (in
same type size as the addendum):"This addendum has not been
approved by the Colorado Real Estate Commission. It was
prepared by (insert licensed name of broker or brokerage
firm)."
End of Page
Unit 2-4 Rule F
Rule F-4 Prohibited Provisions. No contract provision or
modification may override the license law or Commission rule.
(Repeats Rule E-12) Any holdover provision applies only to
persons or properties negotiated during the term of the contract
and whose names (listings) or addresses (buyer/tenant
agreements) were submitted to the client prior to the expiration
of the agreement.
End of PageUnit 2-4 Rule F
Rule F-5 Explanation of Permitted Modifications. A broker
must explain all modifications, deletions, omissions, insertions,
additional provisions and addenda to the client or customer and
must recommend the parties obtain expert advice on matters
beyond the broker's expertise.
Unit 2-4 Rule F
Rule F-6 Commission Approved Form Reproduction. Forms and
modifications must be legible. Forms software must protect
against inadvertent alteration.

Rule F-7 Forms Index. Since Commission-approved forms may
be updated at any time, a current index here would tend to be
always out-of-date. Remember that brokers are required to use a
Commission-approved form when one has been
developed/published that is pertinent to the intended use. When
the Commission does not promulgate a needed form (e.g.
installment land contract), an attorney or a party other than the
broker should provide the form. The most current version of
applicable forms are available at
https://www.colorado.gov/pacific/dora/division-real-
estate-contracts-and-forms
End of Page
Summary
This concludes Chapter 4. Below is a brief summary which you
can review before taking your quiz.
Conway-Bogue - The Colorado Supreme Court ruled that
brokers may prepare legal documents by filling in the blanks on
standard, approved printed forms when they are the broker in
the transaction and receive no compensation other than their
commission.
The title companies:
· Could prepare papers related to loans made from their own
funds.
· Could not prepare/charge for legal documents for others.
· Could not mandate closing or escrow service as a requirement
of selling title insurance.
Colorado's
Statute of Frauds is found in the
Contracts Chapter of the Real Estate Manual. A broker
may never sign any documents in place of the client without
a written
Power of Attorney.
Transaction documents may be
electronic if retrievable and all parties agree.

A
subdivision is any Colorado real property divided into
20 or more residential parcels.
· A subdivision is not campground memberships nor bulk sales
or transfers between developers.
· The first step in subdivision development is
registration.
· Subject to
cancellation up to midnight of the 5th following day.
· Every licensee shall seek information from, or refer clients to,
expert sources.
Colorado Fair Housing Act
Four protected classes:
1.
Creed
2.
Ancestry
3.
Marital status
4.
Sexual orientation
Colorado law:
·
Covers
commercial property.
· Does
not exempt single-family homes or owner-occupied 1-4
unit homes.
· Judges may levy fines for a larger scope of violations than
their federal counterparts.

· Permits restriction in the sale, rental or development of
housing intended for persons with disabilities.
An aggrieved person may file a
complaint with the state Civil Rights Commission or
HUD up to one year after occurrence.
Penalties for proven violations are virtually unlimited in dollar
terms.
Common interest community - owners are obligated to pay some
fees for common areas. Subject to the payment of dues to a
Homeowners Association (HOA).
Colorado Statutory Relationships
Single licensing stemmed from realization of changes in the
public and the real estate market.
· Buyers and sellers don’t differentiate between a salesperson
and a broker.
· Complexity in real estate transactions is not reserved for those
with two years of active licensed experience.
· Growth of the Internet and other technologies enabled
salespersons to act more independently.
· Salespersons with years of experience would defend against
disciplinary action.
Designated Brokerage
· Requires the employing broker to appoint a designated broker
in writing for every side of every transaction.
· Not a brokerage relationship.
· The individual designated broker is the only protector of
confidential client information.
The broker working with the buyer will be a broker, not a
salesperson, and will never be your subagent.
Rule F - Use of Commission-approved Forms
· A broker may
pre-print its identifying information on forms.

· Deletions or insertions amending commission-approved
language must originate from
negotiations or instructions of parties to the transaction.
·
Blank spaces may be lengthened or shortened as
needed.
· Filled-in blanks or insertions must be in a
typeface or font that is clearly recognizable as different
from the font on the pre-printed form.
A broker may add a separate page duplicating the front page
“Dates and Deadlines” information arranged in chronological
order to the following three forms:
1.
Contract to Buy and Sell Real Estate
2.
Counterproposal
3.
If not required:
· A broker may omit pre-printing the “Dates and Deadlines”
table and “Purchase Price and Terms” on the
Counterproposal form;
· The “Dates and Deadlines” table on the
Agreement to Amend/Extend Contract form.
A broker may never insert self-serving personal provisions,
disclaimers or exculpatory language.
A pre-printed, broker-developed
addenda must be prepared by:
· A principal to the contract.

· The broker’s attorney.
· A principal party’s attorney.
It must be retained for four years.
No contract provision or modification may override the license
law or Commission rule.
A broker must explain all modifications and addenda to the
client and recommend the parties obtain expert advice on
matters beyond the broker's expertise.
Click here if you would like to open this summary as a pdf,
which you can then print or save to your device:
Chapter 4 Summary
End of Page
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