COLORADO REAL ESTATE LAW
The specific duties of real estate practitioners in the State of Colorado are defined the Colorado Real Estate License Law [C.R.S. Title 12, Article 61, as amended]. The State of Colorado Real Estate Commission has statutory authority to create, adopt, and promulgate standard real estate forms and mandate compulsory use for all Licensees. We are permitted to insert clearly differentiated provisions in the blank spaces that are transaction-specific terms or acknowledgements that result from negotiations or the instruction(s) of the party(ies) to the transactions.
As Colorado Licensees, we must make meaningful, timely written disclosures of brokerage relationships to Buyers (BD 24-10-06 Brokerage Disclosure to Buyer) and Sellers (BDD 56-10-05 Brokerage Duties Disclosure to Seller).
Depending on the brokerage relationship, our statutory duties include, but are not limited to:
- Disclose known adverse material facts.
- Advise consumer to obtain third part expert advice.
- Act with honesty and in good faith.
- Use reasonable skill and care.
- Maintain confidentiality.
- Account for monies and property.
- Act in the best interest of the client.
- Follow lawful instructions of the client.
- Timely present all offers.
- Seek best price and terms.
In addition, a real estate Licensee must have the ability to:
- Discharge duties by using third party experts.
- Rely upon statements of others.
- Perform a limited duty to inspect, if any.
Limited duties include:
- Investigate conditions affecting the property.
- Standard of care as measured by the degree of knowledge required to obtain the real estate license.
Colorado Law requires a Licensee to disclose to any prospective Buyer all adverse material facts actually known by Licensee including, but not limited to:
- adverse material facts pertaining to the title to the Property and the physical condition of the Property,
- any material defects in the Property, and
- any environmental hazards affecting the Property, which are required by law to be disclosed.
These types of disclosure may include such matters as structural defects, soil conditions, violations of health, zoning or building laws, and nonconforming uses and zoning variances. A Seller must agree to allow a Buyer to have the Property and Inclusions inspected and authorize the Licensee to disclose any facts actually known by the Licensee about the Property.
For Sellers, we have an Exclusive Right-To-Sell Listing Contract (LC50-10-06) for all types of properties that specifies duties of the Licensee.
Whether acting as a Transaction-Broker or Seller’s Agent, the Licensee has no duty to conduct an independent inspection of the Property for the benefit of a Buyer and has not duty to independently verify the accuracy or completeness of statements made by Seller or independent inspectors.
A Seller in Colorado does not have to provide a written disclosure of adverse matters regarding the Property. However, law requires disclosure of known material latent (not obvious) defects. If the Seller agrees to provide a Seller’s Property Disclosure form, it must be completed to the best of the Seller’s current, actual knowledge.
Other statutory disclosures in the connection with the conveyance of residential real property include, but are not limited to the following:
- Methamphetamine laboratory use [CRS 38-35.7-103].
- Liability [CRS 38-35.7-103].
- Requirement for architectural approval [CRS 38-57.7-102].
- Special districts, general obligation indebtedness [CRS 38-35.7-101].
Colorado Real Estate License Law [CRS 12-61-101 et seq]
Report of the Legislative Working Group to the Risk Management Committee (April 25, 2000),
State of Colorado Real Estate Commission [www.dora.state.co.us/real-estate]