Current through Register Vol. 47, No. 17, September 10, 2024
7.1. Standard
Forms
Pursuant to section
12-10-403(4),
C.R.S., a Broker is authorized to complete Standard Forms for use in a real
estate transaction, including Standard Forms intended to convey personal
property as part of the real estate transaction, when a Broker is performing
the activities for which a License is required and the Broker is acting as
either a Single Agent or Transaction-Broker. The Broker's use of Standard Forms
must be appropriate for the transaction and the circumstances in which they are
used. The Broker must advise the parties that Standard Forms have important
legal consequences and that the parties should consult legal counsel before
signing such forms. A Standard Form is:
A. Commission-Approved Form
A "Commission-Approved Form" is a form promulgated by the
Commission for current use by Brokers. A Broker must use a Commission-Approved
Form when such form exists and is appropriate for the transaction. The Broker
may advise the parties as to the effects thereof. To obtain the forms
promulgated by the Commission, visit the Division's website.
B. Attorney Form
An "Attorney Form" is a form drafted by a licensed Colorado
attorney representing the Broker, the Employing Broker, or the Brokerage Firm.
A Broker may only use an Attorney Form if a Commission-Approved Form does not
exist or is not appropriate for the transaction. The form must contain the
language that says: "This form has not been approved by the Colorado Real
Estate Commission". The form must also include: the name of the attorney or law
firm that prepared the Attorney Form and the name of the Broker, Employing
Broker, or the Brokerage Firm for whom the form was prepared. The form may not
be altered by the Broker other than by completing any blank spaces in the form.
The Broker may advise the parties as to the effects thereof.
C. Client Form
A "Client Form" is a form provided by a party to the
transaction if the Broker is acting in the transaction as either a Single Agent
or Transaction-Broker for the party providing the form. The Broker must retain
written confirmation that the form was provided by said party to the
transaction. A Broker's use of such form is limited to inserting
transaction-specific information within the form.
D. Government/ Lender Form
A "Government/Lender Form" is a form prescribed by a
governmental agency, a quasi-government agency, or a lender regulated by state
or federal law and the use of the form is mandated by such agency or lender. A
Broker's use of such form is limited to inserting transaction-specific
information within the form.
E. Colorado Bar Association Form
A "Colorado Bar Association Form" is a form used with the
written approval of the Colorado Bar Association, or its successor
organization, and specifically designated for use by Brokers in Colorado.
Brokers may only use the form when a Commission-Approved Form does not exist or
is not appropriate for the transaction. A Broker must use the form within any
guidelines or conditions specified by the Colorado Bar Association or its
successor organization. The form may not be altered by the Broker other than by
completing any blank spaces in the form. A Broker may not use any forms
published or distributed by the Colorado Bar Association unless such form
contains the following language that says: "This form has been approved by the
Colorado Bar Association for use by Real Estate Brokers in Colorado in
accordance with the guidelines provided with this form". The Broker may advise
the parties as to the effects thereof.
F. Disclosure Form
A "Disclosure Form" is a form used for disclosure purposes
only and the disclosure does not claim to waive or create any legal rights or
obligations affecting any party to the transaction. The form must contain the
language that says: "This form has not been approved by the Colorado Real
Estate Commission". The Broker may advise the parties as to the effects
thereof. The form may only provide information concerning:
1. The real estate involved in the
transaction specifically; or
2. The
geographic area in which the real estate is located generally.
G. Title Company Form
A "Title Company Form" is a form prescribed and completed by
a title company that is providing closing services in a transaction. The Broker
may advise the parties as to the effects thereof.
H. Letter of Intent
A "Letter of Intent" is created or prepared by a Broker,
Employing Broker, or Brokerage Firm. The Letter of Intent must state on its
face that it is nonbinding and creates no legal rights or obligations. The form
must contain the language that says: "This form has not been approved by the
Colorado Real Estate Commission". The Broker may advise the parties as to the
effects thereof.
7.2. Permitted and Prohibited Modifications
and Form Reproduction of Commission-Approved Forms as set forth in Rule 7.1.A.
A. A Broker or Brokerage Firm may add the
Brokerage Firm's name, Trade Name, address, telephone, e-mail, Trademark or
other identifying information on a Commission-Approved Form.
B. A Broker or Brokerage Firm may add initial
lines at the bottom of a page of any Commission-Approved Form.
C. Any deletion or modification to the
printed body of a Commission-Approved Form must result from negotiations or the
instruction(s) of a party to the transaction. Any deletion must be made
directly on the printed body of the form by striking through the deleted
portion in a legible manner that does not obscure the deletion that has been
made.
D. Blank spaces on a
Commission-Approved Form may be lengthened or shortened to accommodate the
relevant data or information.
E.
Provisions that are inserted into blank spaces must be printed in a font style
or type that clearly differentiates such insertions from the font style or type
used for the Commission-Approved Form language.
F. A Broker may delete part or all of the
following provisions of the Commission-Approved "Contract to Buy and Sell Real
Estate" Forms (even if the provision has since been changed to a different
section number) or corresponding provisions in other Commission-Approved Forms,
if such provisions do not apply to the transaction. In the event any provision
is deleted, the provision's caption or heading must remain unaltered on the
form followed by the words "omitted-not applicable".
1. Section 2.5. Inclusions
2. Section 2.6. Exclusions
3. Section 2.7. Water Rights/Well
Rights
4. Section 4.2. Seller
Concession
5. Section 4.5. New
Loan
6. Section 4.6.
Assumption
7. Section 4.7 . Seller
or Private Financing
8. Section 5.
Financing Conditions and Obligations
9. Section 6. Appraisal Provisions
10. Section 7. Owners' Association
11. Section 8.6 . Right of First Refusal or
Contract Approval
12. Section 9.
New ILC, New Survey
13. Section
10.6. Due Diligence
14. Section
10.8 . Source of Potable Water (CBS1, CBS2, CBS4, CBSF1)
15. Section 10.9 . Existing Leases;
Modification of Existing Leases; New Leases (CBS2, CBS3, CBS4)
16. Section 11. Estoppel Statements (CBS2,
CBS3, CBS4)
17. Section 15.3 .
Status Letter and Record Change Fees
18. Section 15.4. Local Transfer
Tax
19. Section 15.5. Private
Transfer Fee
20. Section 15.7.
Sales and Use Tax
21. Section 16.2.
Rents
22. Section 16.3. Association
Assessments
G. A Broker
may delete part or all of the following provisions of the "Counterproposal" and
the "Agreement to Amend/Extend Contract" if such provisions do not apply to the
transaction. In the event any provision is deleted, the provision's caption or
heading must remain unaltered on the form followed by the words "omitted-not
applicable".
1. Section 3. Dates and Deadlines
Table
2. Section 4. Purchase Price
and Terms [in the Counterproposal only]
H. A Broker or Brokerage Firm may add
signature lines and identifying labels for the parties' signatures on a
Commission-Approved Form.
I. A
Broker or Brokerage Firm may modify, strike, or delete such language on a
Commission-Approved Form as the Commission may from time to time authorize the
language to be modified, stricken, or deleted.
J. A Broker must explain all permitted
modifications, deletions, omissions, insertions, additional provisions, and
addenda to the principal party and must recommend that the parties obtain
expert advice as to the material matters that are beyond the expertise of the
Broker.
K. Commission-Approved
Forms used by a Broker, including permitted modifications made by a Broker,
must be legible.
L. Brokers or
Brokerage Firms generating Commission-Approved Forms in an electronic format
must ensure that the forms are protected so as to prevent inadvertent changes
or prohibited modifications of Commission-Approved Forms by the Broker or
recipient.
7.3.
Additional Provisions
A. Any "Additional
Provision" which by its terms serves to delete or modify portions of a Standard
Form as set forth in Rule 7.1 . must result from negotiations or the
instruction(s) of a party to the transaction.
B. A Broker who uses a transaction-specific
clause or clauses drafted by the Broker's, Employing Broker's, or Brokerage
Firm's licensed Colorado attorney must ensure that the Broker understands the
clause, and the clause is used and completed appropriately. The Broker must
retain the clause(s) prepared by the Broker's, Employing Broker's, or Brokerage
Firm's licensed Colorado attorney for four (4) years from the date that the
clause was last used by the Broker. The Broker must provide those clause(s) and
the name of the licensed Colorado attorney or law firm that prepared the
clause(s) upon request by the Commission.
7.4. Prohibited Provisions
A. No contract provision, including
modifications or additional provisions permitted as set forth in Rules 7.2 .
and 7.3 ., will relieve a Broker, Employing Broker, or Brokerage Firm from
compliance with section
12-10-201, C.R.S., et seq., or
these Rules.
B. A Broker who is not
a principal party to the contract may not have personal provisions, personal
disclaimers, or exculpatory language in favor of the Broker, Employing Broker,
or Brokerage Firm inserted into a Standard Form. A Broker may, at the direction
of a principal party, include language regarding the payment of the Broker's or
Brokerage Firm's commission if this is a negotiated term between the principal
parties of the Commission-Approved "Contract to Buy and Sell Real Estate"
Form.
