Colorado Real Estate Study Guide 2026 — Free Cheat Sheet

In 2007, Colorado passed four mortgage broker bills responding to the foreclosure wave and mortgage fraud epidemic. These established prohibited conduct definitions, appraiser independence protections, a duty of good faith and fair dealing to borrowers, and a licensure program with disciplinary grounds.

• ✓MLOs are prohibited from coercing or intimidating appraisers to influence an appraiser's independent judgment (SB 07-085)
• ✓MLOs have a duty of good faith and fair dealing in all communications and transactions with a borrower (SB 07-216)
• ✓HB 07-1322 established comprehensive definitions of prohibited conduct to prevent mortgage fraud
• ✓SB 07-203 required development of a licensure program and grounds for disciplinary action

The federal S.A.F.E. Mortgage Licensing Act of 2008 (part of the Housing and Economic Recovery Act) set minimum national licensing standards for MLOs and required registration on the Nationwide Mortgage Licensing System and Registry (NMLS). Colorado adopted these provisions through HB 09-1085, effective August 5, 2009.

• ✓The S.A.F.E. Act requires all MLOs to be registered on the Nationwide Mortgage Licensing System and Registry (NMLS)
• ✓The S.A.F.E. Act sets minimum national licensing standards and mandated states align their laws with the federal mandate
• ✓The NMLS allows individuals to be tracked across state lines
• ✓Colorado adopted S.A.F.E. Act provisions via HB 09-1085, effective August 5, 2009
• ✓Licensure was extended to MLOs at non-profits, chattel financing for mobile/manufactured housing, affiliates of depositories, and independent contractor loan processors/underwriters

HB 10-1141, effective August 11, 2010, required mortgage companies to register on the NMLS and established company standards of conduct. It also converted the program from a director-model to a board-model governed by the Board of Mortgage Loan Originators.

• ✓Mortgage companies must be registered on the Nationwide Mortgage Licensing System and Registry (effective August 11, 2010)
• ✓Mortgage company standards of conduct include document retention, advertising standards, and a prohibition on hiring unlicensed MLOs
• ✓The Board of Mortgage Loan Originators consists of five members: three licensed MLOs and two members of the public not engaged in mortgage lending

Under § 12-10-710, C.R.S., a mortgage loan originator owes the borrower a duty of good faith and fair dealing in all communications and transactions. This is a consumer-facing lending standard that governs how MLOs must treat borrowers throughout the loan process. The duty is not limited to the enumerated items but includes specific affirmative obligations regarding suitability, inquiry, and lawful conduct.

• ✓An MLO must have a duty of good faith and fair dealing in all communications and transactions with a borrower
• ✓The listed duties are illustrative, not exhaustive ('includes, but is not limited to')
• ✓The board may adopt rules defining what constitutes a reasonable, tangible net benefit to the borrower

An MLO must not recommend or induce a borrower into a transaction that does not have a reasonable, tangible net benefit to the borrower. This determination considers all circumstances, including the terms of the loan, the cost of the loan, and the borrower's individual circumstances. This anti-steering/suitability standard protects consumers from loans that harm them.

• ✓MLO must not recommend or induce a borrower into a transaction lacking a reasonable, tangible net benefit
• ✓The benefit analysis considers loan terms, loan cost, and the borrower's circumstances
• ✓The board may adopt rules defining a reasonable, tangible net benefit

An MLO must make a reasonable inquiry into the borrower's current and prospective income, existing debts and other obligations, and any other relevant information. After that inquiry, the MLO must use best efforts to recommend, broker, or originate a loan that takes into consideration the information the borrower submitted. However, the MLO is not liable if the borrower conceals or misrepresents relevant information.

• ✓MLO must reasonably inquire about the borrower's income, debts, obligations, and other relevant information
• ✓After inquiry, MLO must use best efforts to recommend/broker/originate a loan considering the borrower's submitted information
• ✓MLO is not deemed to violate the section if the borrower conceals or misrepresents relevant information

Under §38-40-101, any funds paid to a mortgage broker as a fee conditioned on the consummation of a loan secured by real estate (other than funds advanced for actual costs and expenses) must be held in an escrow or trustee account with a bank or recognized depository in Colorado. The account may be any checking, demand, passbook, or statement account insured by a U.S. government agency.

• ✓Fee funds conditioned upon loan consummation must be held in an escrow or trustee account with a Colorado bank or recognized depository
• ✓The account must be insured by an agency of the U.S. government
• ✓Funds advanced for actual costs and expenses to be incurred on behalf of the applicant are exempt from the escrow requirement

It is unlawful for a mortgage broker to misappropriate funds held in escrow or a trustee account. Withdrawing, transferring, using, or converting these funds before the loan is consummated is prima facie evidence of intent to misappropriate. A broker who misappropriates commits theft under §18-4-401, C.R.S.

• ✓Misappropriating escrowed funds is unlawful and constitutes theft under §18-4-401
• ✓Withdrawal, transfer, use, or conversion of escrowed funds before loan consummation is prima facie evidence of intent to violate
• ✓A violating broker is liable to the person for $1,000 plus actual damages, costs, and reasonable attorney fees
• ✓No lender is liable for any act or omission of a mortgage broker under this section

Under §38-40-105, mortgage brokers, originators, lenders, applicants, appraisers, and closing agents are prohibited from: advertising false/misleading/deceptive statements about rates or terms; making false promises or concealing material facts to entice a borrower or creditor; knowingly presenting false information in a loan application with intent to defraud; facilitating an unconscionable mortgage loan; or facilitating a transaction that violates §12-10-713.

• ✓Knowingly advertising false, misleading, or deceptive statements about mortgage rates, terms, or conditions is prohibited
• ✓Making false promises or concealing material facts to entice a borrower or creditor is prohibited
• ✓Knowingly presenting false information in a loan application with intent to defraud is prohibited
• ✓Facilitating an unconscionable mortgage loan or one connected with a violation of §12-10-713 is prohibited

Under §38-40-105(1.7), mortgage brokers/originators must not commit unconscionable practices: equity-stripping (lending based on collateral value without regard to ability to repay), flipping (refinancing with no reasonable tangible net benefit to the consumer), or entering a loan knowing there is no reasonable probability of repayment. Reverse mortgages complying with article 38 of title 11 are exempt from the equity-stripping rule.

• ✓Lending based predominantly on collateral foreclosure value without regard to ability to repay is unconscionable (equity stripping)
• ✓'Flipping' a residential mortgage loan—refinancing with no reasonable tangible net benefit to the consumer—is unconscionable
• ✓Entering a loan knowing there is no reasonable probability of repayment is unconscionable
• ✓Only original parties (or the AG/DA) may sue; no action lies against a purchaser or assignee

Colorado treats fraud in the mortgage lending process as theft by deception under § 18-4-401, C.R.S. When a theft conviction (or guilty/nolo plea) involves the mortgage lending process, a mandatory minimum fine equal to the pecuniary harm applies in addition to other penalties. A court cannot accept a plea to another offense unless the plea agreement includes restitution compensating the victim. District attorneys and the attorney general share concurrent jurisdiction to investigate and prosecute these violations, especially those involving false statements or documents with material omissions relied upon by others.

• ✓Theft by deception involving the mortgage lending process carries a mandatory minimum fine equal to the pecuniary harm plus any other penalty
• ✓A court cannot accept a plea to another offense without a restitution order compensating the victim
• ✓District attorneys and the attorney general have concurrent jurisdiction to investigate and prosecute these violations

Under § 18-5-208, C.R.S., it is a class 2 misdemeanor to knowingly make, issue, deliver, or receive dual contracts for the purchase or sale of real property. Dual contracts (written or oral) are two separate contracts on the same parcel—one stating the true purchase price and one stating an inflated price—used to induce a lender to make a loan based on the inflated value.

• ✓Making, issuing, delivering, or receiving dual contracts is a class 2 misdemeanor
• ✓Dual contracts are two contracts on the same property, one showing the true price and one showing an inflated price used to induce a loan
• ✓Dual contracts may be written or oral

Loan fraud is one of the largest areas of white-collar crime and is a recurring subject of Commission disciplinary actions. It includes falsified loan applications, fictitious income/employment/deposit verifications, false occupancy claims, and undisclosed buyer rebates or credits. Because nearly all loan programs are tied to the federal government, consequences can include HUD debarment from all federal programs, large fines, and federal prosecution, potentially ending a career in real estate, appraisal, or lending.

• ✓Loan fraud includes falsified applications, fictitious verifications, false occupancy claims, and undisclosed buyer rebates or credits
• ✓Loan fraud is a recurring subject of Real Estate Commission disciplinary actions
• ✓Consequences can include HUD debarment from all federal programs, large fines, and federal prosecution

The Subdivision Developer's Act requires registration with the Real Estate Commission before offering, negotiating, or agreeing to sell, lease, or transfer any portion of certain subdivisions located within or offered for sale in Colorado. Four categories trigger registration, each keyed to the threshold of twenty (20) interests/units.

• ✓Any division of real property into 20 or more interests intended solely for residential use, each interest comprising 35 or more acres, offered for sale/lease/transfer must be registered
• ✓Subdivisions of 20 or more timeshare interests must be registered (deeded or non-deeded interests)
• ✓Subdivisions of 20 or more residential units created by converting an existing structure (e.g., condominium conversions) must be registered
• ✓Subdivisions created by cooperative housing corporations with 20 or more shareholders holding proprietary leases must be registered, whether completed or not

Certain transactions and property types are exempt from registration under the Act (§12-10-501(3)(b)(II)). The most heavily tested exemption is for developed lots that already have improved roads, utilities, and a feasible water/sewage plan.

• ✓Selling memberships in campgrounds and bulk sales/transfers between developers are exempt
• ✓Property with residential buildings not previously occupied where the purchase price includes the cost of the buildings is exempt (does NOT apply to conversions, timeshare, or cooperative housing)
• ✓Lots on improved streets/roads with feasible potable water and sewage plans, and adequate installed telephone/electricity facilities that comply with local laws are exempt
• ✓Subdivisions approved after September 1, 1972 by a regional, county, or municipal planning authority under Article 28 of Title 30 or Article 23 of Title 31 are exempt
• ✓Sales by public officials in the official conduct of their duties are exempt

The Act grants purchasers a mandatory five-day cancellation period after execution of a contract for any regulated subdivision. This right cannot be waived, and developers may not use contracts that waive it. The Consumer Agreement must disclose the rescission right in bold print immediately before the signature line.

• ✓A 5-day cancellation period runs until midnight on the fifth day following execution of the contract and cannot be waived
• ✓No developer may employ a contract containing any provision waiving the buyer's cancellation right
• ✓A cancellation request is valid if made within 5 calendar days: by electronic mail when sent, by mail when postmarked, or by hand delivery when delivered to the seller's place of business
• ✓A bold-print statement disclosing the non-waivable rescission right must appear immediately prior to the purchaser's signature line on the Consumer Agreement

Failure to register as a developer is a class 6 felony. Any sale or lease agreement for a subdivision is voidable by the purchaser and unenforceable by the developer unless the developer was duly registered when the contract was made.

• ✓Failing to register as a developer in violation of the Act is a class 6 felony
• ✓Any agreement or contract for the sale or lease of a subdivision is voidable by the purchaser and unenforceable by the developer unless the developer was duly registered when the agreement was made

Before contracting with the public, a developer must disclose specified information in the Consumer Agreement or a separate written document, including developer/subdivision identity, ownership type, amenities, judgments, taxes/assessments, and the requirement that sales be made by licensed Colorado brokers.

• ✓Disclosures must include name/address of developer and subdivision, type of ownership offered, description of facilities/amenities, and any taxes or assessments the purchaser may be subject to
• ✓Sales must be made by Colorado-licensed brokers unless exempt under §12-10-201(6)(b), and the Consumer Agreement must name the brokerage firm and broker
• ✓When disclosures are made in a separate document, it must state in bold on the first page: 'The Colorado Real Estate Commission has not prepared or issued this document nor has it passed on the merits of the subdivision described herein.'
• ✓Failure to disclose availability of legal access, sewage disposal, and utilities in an uncompleted subdivision is a violation of §12-10-505(1)(b)

A real estate licensee cannot be expected to know all county and municipal planning laws, ordinances, and zoning requirements, but must be aware of their existence to avoid misrepresenting property through ignorance. If uninformed, the licensee should seek information from the proper source before making representations, or refer clients to the proper source. Certain facts should be known through reading or logic: dividing a seller's land into two parcels creates a subdivision requiring approval; suitability for duplex/four-plex conversion does not mean the conversion is legal; zoning for horses does not guarantee adequate acreage; and home-business zoning may still prohibit employees. Representations about future services or zoning variances may endanger the public and the licensee.

• ✓A licensee must be aware of the existence of planning, zoning, and subdivision laws and must not misrepresent property through ignorance
• ✓When uninformed, the licensee must seek information from the proper source or refer clients there before making representations
• ✓Dividing a portion of a seller's land into two parcels creates a subdivision that must be approved by proper authorities
• ✓Zoning for a use (horses, home business) does not guarantee compliance with all requirements such as acreage or employee prohibitions

Converting an existing building into a common interest community complex, or dividing a single condominium unit into 'time shares' or 'interval estates,' may be a subdivision under county planning laws. These are subdivisions as defined in § 12-10-501(3), C.R.S., and are subject to the registration requirements of §§ 12-10-501, et seq., C.R.S.

• ✓Conversion of an existing building into a common interest community and division of a unit into time shares/interval estates are subdivisions under § 12-10-501(3), C.R.S.
• ✓Such conversions and timeshares are subject to the registration requirements of §§ 12-10-501, et seq., C.R.S.

A stock cooperative or cooperative housing corporation is considered a subdivision of real estate in Colorado. Sale of these 'apartments' is accomplished by transfer of a stock certificate together with a proprietary lease. In most states this would be treated as the sale of a security under the division of securities, but in Colorado such sales are exempt from the Securities Act and are declared to be real estate (§§ 38-33.5-101, et seq., C.R.S.). Therefore cooperatives must be registered as subdivisions, and the sale of the stock and proprietary leases must be performed by licensed real estate brokers. Commercial banks and savings and loan associations may make a first mortgage loan on the stock and proprietary lease of each apartment owner.

• ✓A stock cooperative/cooperative housing corporation is a subdivision of real estate in Colorado and must be registered as a subdivision
• ✓Sale occurs by transfer of a stock certificate together with a proprietary lease and must be performed by licensed real estate brokers
• ✓In Colorado these sales are exempt from the Securities Act and declared to be real estate under §§ 38-33.5-101, et seq., C.R.S.
• ✓Banks and savings and loan associations may make a first mortgage loan on the stock and proprietary lease of each apartment owner

County commissioners have authority to enact zoning law for unincorporated areas, and developers/licensees should contact the county planning and zoning department for compliance before surveying and offering subdivided property. Under §§ 30-28-101 through -209, C.R.S., a subdivision is any parcel divided into two or more parcels, separate interests, or interests in common. 'Interests' means surface land or air-space above the surface but excludes sub-surface interests. Divisions creating parcels of 35 acres or more, none intended for use by multiple owners, are exempt. Condominiums, apartments, and multiple dwellings are included unless previously included in a filing with substantially the same density.

• ✓County commissioners may enact zoning for unincorporated areas under §§ 30-28-101 through -209, C.R.S.
• ✓A county subdivision is a parcel divided into two or more parcels, separate interests, or interests in common (surface/air, not sub-surface)
• ✓Divisions creating parcels of 35 acres or more, none for multiple-owner use, are exempt from the subdivision definition
• ✓Condominiums, apartments, and multiple dwellings are included unless previously filed at substantially the same density

The county commissioners must approve a final plat before it can be filed and recorded. Violations by a subdivider or agent are punishable by a fine of up to $1,000 for each parcel sold or offered for sale. A sale made before final plat approval is prima facie evidence of a fraudulent sale and is grounds for the purchaser to void the sale. County commissioners may also bring an action to enjoin a subdivider from offering to sell undivided land before a final plat has been approved.

• ✓County commissioners must approve a final plat before it can be filed and recorded
• ✓Violations are punishable by a fine of up to $1,000 for each parcel sold or offered for sale
• ✓A sale before final plat approval is prima facie evidence of a fraudulent sale and grounds for the purchaser to void the sale
• ✓County commissioners may bring an action to enjoin sale of undivided land before final plat approval

Colorado uses a three-tier broker licensing system. An Associate Broker holds an Associate Broker level license and works under the supervision of an Employing Broker. An Independent Broker acts as their own brokerage/sole proprietor and does not employ or supervise Associate Brokers. An Employing Broker supervises Associate Brokers. Note that a broker may hold an Independent or Employing Broker level license while still acting as an Associate Broker under supervision.

• ✓Associate Broker works under supervision of an Employing Broker
• ✓Independent Broker acts as own firm and does NOT supervise Associate Brokers
• ✓Employing Broker supervises Associate Brokers; all firms employing Associate Brokers must have an Active Employing Broker
• ✓'Broker' includes all license levels: Associate, Independent, and Employing

An Active license is current and valid, allowing engagement in Real Estate Brokerage Services. An Inactive broker holds a valid license but is not permitted to engage in brokerage services and must continue renewing to maintain licensure. An Expired license was not renewed by the last day of the cycle and is no longer valid; expired persons cannot hold themselves out as brokers and expired entities cannot advertise as brokerage firms.

• ✓Inactive brokers cannot engage in brokerage services but must still renew to maintain licensure
• ✓Expired licensees cannot perform any brokerage services or hold themselves out as brokers
• ✓Active status is required to engage in Real Estate Brokerage Services

A Trust or Escrow Account is any checking, demand, passbook, or statement account that: is separate and contains only Money Belonging to Others; is custodial and fiduciary; has all funds available on demand; and is held with a Recognized Depository. A Recognized Depository is a bank, savings and loan, or credit union insured by FDIC or NCUA. Money Belonging to Others includes rent, security deposits, earnest money, guest deposits, and more.

• ✓Trust/escrow account must be separate and contain ONLY Money Belonging to Others
• ✓Account must be custodial, fiduciary, with all funds available on demand, held at a Recognized Depository
• ✓Recognized Depository must be FDIC- or NCUA-insured

The reconciled trust or escrow bank account cash balance must equal the sum total of the individual ledger balance for each owner at any given point in time. This is the fundamental reconciliation principle for trust accounting.

• ✓Reconciled bank cash balance must equal the sum of all individual owner ledger balances at any point in time

To obtain an Associate Broker level license, an applicant must complete a real estate degree OR 168 hours of instruction: Real Estate Law and Practice (48 hrs), Colorado Real Estate Contracts (48 hrs), Real Estate Closings (min 24 hrs), Trust Accounts and Record Keeping (min 8 hrs), Current Legal Issues (min 8 hrs), and Practical Application (min 32 hrs).

• ✓168 total hours required: Law/Practice 48, Contracts 48, Closings 24, Trust Accounts 8, Legal Issues 8, Practical Application 32
• ✓A real estate degree from an accredited college/university satisfies the education requirement as an alternative

The Real Estate Licensing Examination has two parts: national and Colorado. Educational requirements must be completed before taking the exam. A passing score is valid for one year. Applicants must submit fingerprints to the Colorado Bureau of Investigation for a criminal history check before applying. Applicants licensed in another jurisdiction must submit a certified license history dated within 90 days of application.

• ✓Exam has a national part and a Colorado part; passing scores valid for one (1) year
• ✓Education must be completed and proof filed before taking the exam
• ✓Fingerprints must be submitted to CBI before applying
• ✓Certified license history must be dated within 90 days of application submission

Every Active Broker, including firms with more than one broker, must carry errors and omissions (E&O) insurance covering all acts requiring a license. Minimum coverage is $100,000 per licensed person/entity per covered claim, with a $300,000 annual aggregate. Deductible cannot exceed $1,000 per occurrence with no deductible for legal defense. Lock box coverage must be at least $25,000 per occurrence. Firms with independent coverage need $1,000,000 per claim/aggregate limits.

• ✓Every Active Broker must carry E&O insurance covering all licensed acts
• ✓Minimum $100,000 per covered claim with $300,000 annual aggregate
• ✓Failure to maintain E&O results in placement on Inactive status
• ✓Independent firm coverage requires $1,000,000 per claim and aggregate limits

Brokers renew on a three-year Calendar Year Cycle (Jan 1 of year one to Dec 31 of year three). Brokerage Firms do not renew, but their Independent/Employing Broker must renew. Brokers may renew (Active or Inactive) beginning 45 days before expiration by application and paying the fee. Renewal notices are sent to the electronic mail address on file. An Initial License expires December 31 of the year of issuance.

• ✓Brokers renew on a three-year Calendar Year Cycle ending December 31
• ✓Renewal window opens 45 days before expiration
• ✓Brokerage Firms do not renew, but their associated broker must
• ✓Initial License expires December 31 of the year of issuance

An expired license may be reinstated: within 31 days by paying the renewal fee; more than 31 days but within 1 year by paying renewal fee plus a reinstatement fee equal to one-half the renewal fee; more than 1 year but within 3 years by paying renewal fee plus a reinstatement fee equal to the full renewal fee. After 3 years, the reinstatement right is lost.

• ✓Within 31 days: pay renewal fee only
• ✓31 days to 1 year: renewal fee plus one-half renewal fee reinstatement
• ✓1 to 3 years: renewal fee plus full renewal fee reinstatement
• ✓Reinstated licenses issued with a 3-year expiration from the prior expiration date

Brokers must complete the continuing education (CE) requirement for a licensing cycle before applying to renew an Active License, activate an Inactive License, or Reinstate an Expired License to Active status. The recognized licensing cycles are Anniversary Year, Calendar Year, and Transition Period.

• ✓CE must be satisfied prior to renewal, activation, or reinstatement to Active status
• ✓Licensing cycles include Anniversary Year, Calendar Year, and Transition Period
• ✓Brokers renewing a license that expires December 31 of the year first issued are NOT subject to the CE requirement (section 12-10-213(4), C.R.S.)

The total CE requirement is 24 hours per licensing cycle. Brokers may satisfy it by: (1) completing 12 credit hours of Annual Commission Update (in 4-hour annual increments) plus 12 hours of electives; (2) during the Transition Period, completing two different versions of the Annual Commission Update for 8 hours plus 16 hours of electives; (3) completing the 24-hour Broker Reactivation Course (only under specified conditions); (4) passing the Colorado portion of the Real Estate Licensing Exam; or (5) completing 72 total hours of the pre-licensing educational requirements.

• ✓Total CE requirement is 24 hours per licensing cycle
• ✓Standard method: 12 hours Annual Commission Update (4-hour annual increments) + 12 hours electives
• ✓A Broker may not take the same version of the Annual Commission Update more than once
• ✓If a Broker cannot satisfy CE via options A.1-A.3, they must comply via option A.4 (pass CO exam) or A.5 (72 hours education) before activating/reinstating to Active status

Rule 6.3 requires Employing Brokers to exercise authority, direction, and supervision over Associate Brokers and all unlicensed employees. Employing Brokers must maintain trust accounts and transaction records, develop written policies, provide reasonable-level supervision to all Associate Brokers, high-level supervision to new Associate Brokers, take reasonable steps to prevent violations, and supervise all branch offices. A complaint against an Associate Broker may trigger investigation of the Employing Broker under 12-10-217(1)(r).

• ✓Employing Brokers must exercise authority, direction, and supervision over Associate Brokers per sections 12-10-203(5)(c)(I), 12-10-217(1)(r), and 12-10-222, C.R.S.
• ✓Employing Brokers must also supervise all unlicensed employees, including Unlicensed On-Site Managers, secretaries, bookkeepers, and personal assistants
• ✓Employing Brokers must maintain trust/escrow accounts, transaction records, written policies, and provide adequate supervision of all branches

Rule 6.3 C and D distinguish two supervision tiers. Reasonable-Level of Supervision applies to all Associate Brokers and requires maintaining a signed Office Policy Manual available for Commission inspection, reviewing executed contracts for competent preparation, and reviewing transaction files for required documents. High-Level of Supervision applies additionally to New Associate Brokers and includes specific training, availability for consultation, contract preparation assistance, monitoring transactions to closing, and closing attendance by the Employing Broker or an experienced Associate Broker with over two years' active licensure.

• ✓Reasonable-Level of Supervision requires a signed Office Policy Manual, review of executed contracts, and review of transaction files for all Associate Brokers
• ✓High-Level of Supervision for New Associate Brokers adds training, consultation availability, contract assistance, transaction monitoring, document review, and closing attendance
• ✓Closings with a New Associate Broker must have the Employing Broker or an experienced Associate Broker (over 2 years active licensure) attend or be available

Rule 6.4 requires an Employing or Independent Broker to adopt a written brokerage relationship policy before providing services, and to designate in writing who serves as Single Agent or Transaction-Broker. The Office Policy Manual must be given to and signed by each Associate Broker, identify designation procedures, and provide for protection of confidential information. Firms must also implement a written policy for destroying/disposing of Personal Identifying Information per section 6-1-713, C.R.S.

• ✓An Employing or Independent Broker must adopt a written office policy describing brokerage relationships before providing services per sections 12-10-403 and 12-10-408, C.R.S.
• ✓The Office Policy Manual must apply to all Associate Brokers and be given to and signed by each
• ✓Confidential information includes that a seller will accept less, a buyer will pay more, party motivations, financing flexibility, and facts that psychologically stigmatize a property
• ✓A written policy for destruction/disposal of Personal Identifying Information satisfying section 6-1-713, C.R.S. is required

Rule 6.5 requires written brokerage relationship disclosures under section 12-10-408, C.R.S. before eliciting or discussing confidential information from a Consumer. Preliminary conversations or 'small talk' about price range, location, property styles, or general factual questions about advertised properties do not trigger the disclosure requirement.

• ✓Written disclosures must be made to a Consumer before eliciting or discussing confidential information per section 12-10-408, C.R.S.
• ✓Preliminary 'small talk' about price range, location, styles, or general factual questions about advertised properties does not require disclosure

Rule 6.7 prohibits a Broker or Team from being a Single Agent for one Consumer and a Single Agent or Transaction-Broker for the other in the same transaction. With proper written disclosure, a Broker working both sides may act as Transaction-Broker for both, Transaction-Broker for one and treat the other as a Customer, or Single Agent for one and treat the other as a Customer.

• ✓A Broker/Team cannot be a Single Agent for one Consumer and a Single Agent or Transaction-Broker for the other in the same transaction
• ✓With written disclosure, a Broker may be Transaction-Broker for both, or Single Agent/Transaction-Broker for one while treating the other as a Customer

Rule 6.10 A requires all advertising to be done clearly and conspicuously in the name of the Broker's Brokerage Firm, and no broker may work under more than one firm. A Broker advertising their own property not listed with their firm is exempt from using the firm name. Firms may use a filed Trade Name and a Trademark (with owner permission), but only one Trade Name. Third-party trade names/trademarks require an 'independently owned and operated' disclaimer. Professional designations require good standing and verifiability.

• ✓All advertising must be clear, conspicuous, and in the name of the Broker's Brokerage Firm, and cannot mislead about identity
• ✓A Broker advertising their own property not listed with their firm is exempt from advertising in the firm's name
• ✓A firm may use only one Trade Name (which must be filed with the Commission) but may use Trademarks with owner permission
• ✓Third-party Trade Names/Trademarks require an 'independently owned and operated' disclaimer

Rule 6.14 C-E requires all seller and landlord Listing Contracts to be in writing before performing services, and all such contracts must have a definite termination date per section 12-10-409(1)(b), C.R.S. Holdover provisions entitling a firm to a post-expiration commission must apply only to persons/properties negotiated during the term and whose names were submitted in writing to the Consumer during the term.

• ✓All seller and landlord Listing Contracts must be in writing prior to performing any Real Estate Brokerage Services
• ✓All Listing Contracts must have a definite termination date per section 12-10-409(1)(b), C.R.S.
• ✓Holdover commission provisions apply only to persons/properties negotiated during the term whose names were submitted in writing to the Consumer

Rule 6.17 imposes a continuing duty on firms and Brokers to disclose in writing any known Conflict of Interest in a transaction. A Broker buying, selling, or leasing on their own account must disclose their licensed status in the contracting instrument or a concurrent writing. Property management firms/brokers must disclose in writing any ownership, financial, or familial interest in vendors selected for lease transactions.

• ✓Firms and Brokers have a continuing duty to disclose in writing any known Conflict of Interest in a transaction
• ✓A Broker acting on their own account must disclose in writing that they are a licensed Broker
• ✓Property management brokers must disclose any ownership, financial, or familial interest in a selected vendor/business

Rule 6.19 makes the Broker with a brokerage relationship responsible for proper closing, ensuring the Consumer receives an accurate, complete, signed closing statement, and delivering closing documents to the firm immediately. If the Broker prepares/closes documents, they are responsible for accuracy. A Broker must review documents and attend closing or be reasonably available; a designated substitute assumes joint responsibility. Funds must not be disbursed until collected and available for immediate withdrawal per section 38-35-125, C.R.S.

• ✓The Broker with a brokerage relationship is responsible for proper closing and must ensure the Consumer receives an accurate, complete, signed closing statement per section 12-10-217(1)(j), C.R.S.
• ✓A Broker must review closing documents and attend closing or be reasonably available; a designated substitute Broker assumes joint responsibility
• ✓A Broker/firm must not disburse funds until received and available for immediate withdrawal per section 38-35-125, C.R.S. (good funds)

Rule 6.20 requires both Brokers and Brokerage Firms to retain transaction files for four years from the consummation date or the expiration date of non-consummated Listing Contracts. Required documents follow the Commission's Transaction File Checklist. Brokers need not retain copies of existing public records, title commitments, loan applications, lender-required disclosures, or related affirmations from third-party closing entities after closing.

• ✓Both a Broker and a Brokerage Firm must retain transaction files for four (4) years from consummation or the Listing Contract expiration date
• ✓Required documents are designated in the Commission's Transaction File Checklist
• ✓Brokers need not retain existing public records, title commitments, loan applications, or lender-required disclosures after closing

Rule 6.21 prohibits paying/receiving referral fees except in accordance with RESPA and with reasonable cause. In federally related residential mortgage transactions, no Thing of Value may be given/received for referrals (bona fide compensation for services or ownership returns in an ABA is allowed). In non-federally-related transactions, referral compensation is allowed only with prior written disclosure to the referred party. Only Colorado-licensed firms may receive commissions on Colorado real estate, though out-of-jurisdiction referral fees are permitted under specified conditions.

• ✓Referral fees must comply with RESPA and require reasonable cause per section 12-10-304(1), C.R.S.
• ✓In federally related residential mortgage transactions, no incentive/fee/Thing of Value may be given or received for referral of business
• ✓In non-federally-related transactions, referral compensation requires prior written disclosure to the referred party
• ✓Only Colorado-licensed firms may receive commissions on Colorado real estate; out-of-jurisdiction firms may receive referral fees under specified conditions

Under section 12-10-403(4), C.R.S., a Broker may complete Standard Forms for a real estate transaction, including forms conveying personal property as part of the transaction, when performing licensed activities as either a Single Agent or Transaction-Broker. Use of forms must be appropriate for the transaction. Brokers must advise parties that Standard Forms have important legal consequences and recommend consultation with legal counsel before signing.

• ✓A Broker may only complete Standard Forms when acting as a Single Agent or Transaction-Broker performing licensed activities
• ✓The Broker's use of Standard Forms must be appropriate for the transaction and circumstances
• ✓The Broker must advise parties that forms have important legal consequences and to consult legal counsel before signing

A 'Commission-Approved Form' is a form promulgated by the Commission for current use by Brokers. A Broker must use a Commission-Approved Form whenever such a form exists and is appropriate for the transaction. Brokers may advise parties as to the effects of the form and obtain forms from the Division's website.

• ✓A Broker MUST use a Commission-Approved Form when one exists and is appropriate for the transaction
• ✓A Broker may advise the parties as to the effects of the form

Any deletion or modification to the printed body of a Commission-Approved Form must result from negotiations or a party's instruction. Deletions must be made directly on the printed body by striking through the deleted portion legibly without obscuring it. Provisions inserted into blank spaces must use a font style/type that clearly differentiates them from the pre-printed form language.

• ✓Any deletion/modification must result from negotiations or the instruction of a party to the transaction
• ✓Deletions must be made by striking through the deleted portion legibly without obscuring it
• ✓Inserted provisions must be printed in a font style/type that clearly differs from the form's pre-printed language

Every unit owners' association must register annually with the Director of the Division of Real Estate under § 38-33.3-401, C.R.S. The association must complete an initial registration, renew annually, and update relevant information within ninety (90) days of any change. Registration includes submitting basic association information and a fee set by the Director. Associations indicate during registration whether they collect over $5,000 in annual revenue.

• ✓Every unit owners' association must register annually with the Director of the Division of Real Estate
• ✓Associations must update relevant information within 90 days of any change
• ✓Registration is required per § 38-33.3-401, C.R.S.

As part of the registration process, associations indicate whether they collect over $5,000. Associations collecting greater than $5,000 in annual revenue must pay the annual registration fee. Associations that are not authorized to make assessments and have no revenue, or that collect $5,000 or less in annual revenue, are NOT required to pay the fee — but they are still required to register. The fee exemption does not absolve any association from the registration requirement.

• ✓Associations collecting more than $5,000 in annual revenue must pay the registration fee
• ✓Associations collecting $5,000 or less, or with no revenue and no assessment authority, are exempt from the fee
• ✓Fee exemption does NOT exempt an association from the duty to register

If an association fails to register or its registration expires, its right to impose or enforce a lien for assessments under § 38-33.3-316, C.R.S., or to pursue an action or use an enforcement mechanism under § 38-33.3-123, C.R.S., is suspended until validly registered. A lien for assessments recorded during a valid registration period (or before registration was required) is NOT extinguished by expiration; however, pending enforcement proceedings are suspended and applicable time limits are delayed until the association is validly registered. Suspended rights are revived without penalty once registration is valid.

• ✓Failure to register suspends the association's right to impose/enforce assessment liens and pursue enforcement actions
• ✓A previously recorded valid lien is NOT extinguished by registration expiration
• ✓Pending enforcement and time limits are delayed until the association is validly registered
• ✓Suspended rights revive without penalty upon valid registration

The Community Association Manager (CAM) licensing program ended at the Division of Real Estate on June 30, 2019. The Division no longer has any jurisdiction over community association managers and has ceased enforcing licensing, investigations, insurance, and continuing education requirements for CAMs.

• ✓The CAM licensing program ended June 30, 2019
• ✓The Division of Real Estate no longer has jurisdiction over community association managers
• ✓No CAM licensing, insurance, or continuing education requirements are enforced by the Division

Colorado recognizes condominium ownership, which consists of a separate estate in an individual air space unit together with an undivided interest in the common elements. The separate estate and the appurtenant common ownership are inseparable during the period of ownership prescribed by the recorded declaration.

• ✓A condominium unit = an individual air space unit plus an undivided interest in the common elements appurtenant to it
• ✓The separate estate and common element ownership are inseparable and cannot be conveyed separately
• ✓Condominium ownership may exist on land owned in fee simple or held under an estate for years

The Act defines core terms candidates must know: declaration, general common elements, limited common elements, individual air space unit, and condominium unit. General common elements include structural components, grounds, and shared systems; limited common elements are reserved for fewer than all owners.

• ✓'Declaration' is the recorded instrument defining the character, duration, rights, obligations, and limitations of condominium ownership
• ✓'General common elements' include land, foundations, roofs, halls, parking areas, and shared central services, unless the declaration provides otherwise
• ✓'Limited common elements' are common elements designated in the declaration for use by fewer than all unit owners
• ✓'Individual air space unit' is enclosed room(s) used for residential, professional, commercial, or industrial purposes with access to a public street

The Colorado Common Interest Ownership Act (CCIOA) establishes a uniform framework for creation and operation of common interest communities, strengthens HOAs financially, and grants developers flexible development rights during transition to owner control.

• ✓CCIOA is codified at §38-33.3-101 et seq., C.R.S.
• ✓It creates statutory assessment liens and grants associations power to collect delinquent assessments, fines, and enforcement costs
• ✓Provides six months' lien priority to associations

CCIOA recognizes three forms of common interest communities: condominiums, cooperatives, and planned communities. Each has distinct ownership structures of units and common elements.

• ✓A condominium requires undivided interests in common elements vested in the unit owners
• ✓A cooperative has real property owned by the association with members entitled to exclusive possession via proprietary lease
• ✓A planned community is any common interest community that is not a condominium or cooperative; a condo or coop may be part of a planned community

Candidates must know core CCIOA terms: declarant, declaration, common elements, limited common elements, allocated interests, unit, unit owner, and special declarant rights.

• ✓A 'declarant' is any person/group who as part of a common promotional plan offers to dispose of an unsold unit interest or reserves/succeeds to special declarant rights
• ✓'Allocated interests' means the undivided interest in common elements (condo), common expense liability, and votes in the association
• ✓A 'limited common element' is a portion of common elements allocated for exclusive use of one or more units but fewer than all units
• ✓'Purchaser' excludes a declarant, dealer, leasehold of less than 40 years, or a security interest holder

Associations cannot prohibit certain owner activities regardless of declaration provisions, including flags, signs, religious symbols, emergency vehicle parking, fire mitigation, disability modifications, xeriscape, rain barrels, family child care, home-based business, renewable energy, and fire-hardened materials.

• ✓Associations may not prohibit display of U.S. flag, service flags, political/religious signs, but may adopt reasonable content-neutral size/number rules and prohibit commercial messages
• ✓Associations shall not effectively prohibit renewable energy generation devices or require flammable roofing materials like cedar shakes
• ✓Provisions prohibiting fire-hardened building materials are void and unenforceable on/after March 12, 2024
• ✓Associations must allow xeriscape/drought-tolerant landscaping, rain barrels, family child care homes, and home-based businesses subject to reasonable regulation

A common interest community is created only by recording a declaration; no community exists until the plat or map is recorded. The declaration must contain specified content including unit boundaries, allocated interests, and declarant rights.

• ✓A community is created only by recording a declaration executed like a deed and recorded in every county where located
• ✓No community is created until the plat or map is recorded
• ✓The declaration must state community name/type, unit descriptions, maximum number of units, development rights, and allocation of allocated interests
• ✓In a horizontal-boundary community, a certificate of substantial completion by an engineer/surveyor/architect is required

A unit owners' association must be organized no later than conveyance of the first unit and holds broad powers to govern the community, adopt budgets, collect assessments, and enforce rules.

• ✓An association must be organized no later than the date the first unit is conveyed to a purchaser
• ✓The association may adopt bylaws/rules, adopt budgets, collect assessments, hire agents, and levy reasonable fines after notice and hearing
• ✓The association may not levy fines for failure to water landscaping when water restrictions are in place and the owner complies
• ✓A managing agent contract must be terminable for cause without penalty

Until the association makes an assessment, the declarant pays all common expenses. Assessments are levied at least annually based on the declaration's allocation formulas, with interest capped at eight percent.

• ✓Until the association makes an assessment, the declarant pays all common expenses
• ✓Past-due common expense assessments bear interest at the rate set by the association not to exceed 8% per year
• ✓No owner may be exempt from assessment liability by waiving use of common elements or abandoning the unit
• ✓Limited common element expenses may be assessed against the benefited units per the declaration

An incorporated association has a statutory lien on a unit for assessments and fines. The lien has a six-month super-priority over first security interests. Recording the declaration perfects the lien.

• ✓An association has a statutory lien for assessments; fines/fees/attorney fees may be liened but are not subject to foreclosure
• ✓The lien has super-priority over a first mortgage/deed of trust for up to 6 months of common expense assessments
• ✓Recording the declaration constitutes record notice and perfection; no further recordation of a claim is required
• ✓A lien for unpaid assessments is extinguished unless enforcement proceedings begin within 6 years after the amount becomes due

Before foreclosing an assessment lien, associations must follow strict notice, contact, credit-counseling, mediation, and repayment-plan requirements. Foreclosure requires a six-month delinquency and a recorded board vote.

• ✓Associations may foreclose only if the balance equals or exceeds 6 months of common expense assessments AND the board formally authorizes it by recorded vote
• ✓Associations must offer an 18-month repayment plan (minimum $25/month) before initiating judicial foreclosure
• ✓Associations must not foreclose on a lien consisting only of fines or fine-related collection costs/fees
• ✓Associations must provide notices of intent to foreclose, credit counseling rights, and mediation rights at least 30 days in advance

Every unit owners' association must register annually with the Division of Real Estate. Failure to register suspends the right to enforce assessment liens or pursue enforcement actions.

• ✓Every unit owners' association must register annually with the director of the Division of Real Estate
• ✓A registration is valid for one year
• ✓An unregistered/expired association's right to impose or enforce assessment liens (§316) or pursue enforcement (§123) is suspended until validly registered
• ✓Associations with annual revenues of $5,000 or less, or with no assessment authority/revenue, are exempt from the fee but not the registration requirement

The Division of Real Estate has a five-member Commission that meets bi-monthly. It consists of three real estate brokers with at least five years' experience in Colorado (one with substantial property management experience) and two representatives of the public at large. Members serve three-year terms.

• ✓The Commission has five members: three brokers and two public members
• ✓Broker members must have at least 5 years' Colorado real estate experience
• ✓One broker member must have substantial property management experience
• ✓Commission members hold office for three-year terms
• ✓The Commission meets bi-monthly

The Licensing section maintains nearly 90,000 records and screens all applications for required qualifications, including education, experience, examinations, errors & omissions (E&O) insurance, and criminal history background checks. It also issues license histories for licensees proving credentials in other jurisdictions.

• ✓Applications are screened for education, experience, exams, E&O insurance, and criminal background checks
• ✓E&O insurance is a required qualification for licensure
• ✓Licensing issues license histories for use in other jurisdictions

Both preliminary advisory applicants and license applicants are subject to pre-licensing investigations and fingerprinting to safeguard the statutory mandate for truthfulness, honesty, good moral character, and general fitness. Applications disclosing civil/criminal violations or prior license discipline in any jurisdiction are thoroughly reviewed and investigated.

• ✓Applicants are subject to pre-licensing investigations and fingerprinting
• ✓Applicants must demonstrate truthfulness, honesty, good moral character, and general fitness
• ✓Disclosed civil/criminal violations or prior discipline in any jurisdiction trigger thorough investigation

The Real Estate Commission may investigate any licensee's real estate activities on its own motion. When a written complaint alleging a potential license law violation is filed, the office is compelled to investigate.

• ✓The Commission may investigate a licensee on its own motion
• ✓The office must investigate any written complaint alleging a license law violation

Serious complaints may result in a hearing before an administrative law judge (ALJ), appointed by the Department of Personnel and Administration. The ALJ makes an initial decision of revocation, suspension, censure, or dismissal; education courses, probation, and fines may also be mandated.

• ✓Serious complaints are heard by an administrative law judge appointed by the Department of Personnel and Administration
• ✓The ALJ may order revocation, suspension, censure, or dismissal
• ✓Education courses, probation, and fines may also be mandated

If written objections are not filed with the Commission within 30 days, the ALJ's initial decision becomes final. If objections are filed, the Commission may adopt the findings, modify the disciplinary action, or refer the matter back for rehearing. The Commission may also issue letters of admonishment for conduct not warranting formal disciplinary proceedings.

• ✓The initial decision becomes final if no written objections are filed within 30 days
• ✓If objections are filed, the Commission may adopt, modify, or refer the matter for rehearing
• ✓The Commission may issue letters of admonishment for minor conduct

A real estate broker is any person or entity that, for compensation or with intent to receive compensation, engages in or offers to engage in listing, selling, buying, exchanging, renting, leasing, negotiating, auctioning, or dealing in options on real estate, either by a continuing course of conduct or a single transaction. The activity requiring a license is triggered by compensation and performing any enumerated act.

• ✓A license is required if a person performs any brokerage act for compensation, even a single act or transaction
• ✓Acting as an 'option dealer' or dealing in options on real estate requires a license
• ✓Soliciting a fee from a prospective tenant for rental availability information constitutes brokerage; soliciting from someone other than a prospective tenant is exempt

It is unlawful to engage in the business of real estate broker in Colorado without first obtaining a license from the Commission. Applicants must prove compliance with education, experience, and testing requirements, plus truthfulness, honesty, good moral character, and competency to protect the public.

• ✓No person may act as a broker without first obtaining a license from the Commission
• ✓The Commission is governed by section 24-5-101 in determining an applicant's character
• ✓Applicant must establish education, experience, testing, and good moral character before licensure

Brokers renewing a three-year license must complete 24 hours of CE, including 12 hours of Commission-developed Annual Update credits (or pass the Colorado exam portion). CE covers current statutes and rules plus approved real estate subjects. Records must be kept four years.

• ✓A three-year license renewal requires 24 CE hours, 12 of which must be Commission-developed update credits
• ✓CE credit subjects include real estate law, contracts, finance, appraisal, closing, ethics, agency, and property management
• ✓A license expiring December 31 of the year issued has no CE requirement
• ✓CE records must be kept for four years from the date of compliance

The Commission may investigate and, after a hearing, impose an administrative fine up to $2,500 per offense, censure, probation, suspend, or revoke a license for misconduct such as misrepresentation, commingling, conversion, failure to account for funds, acting for multiple parties without knowledge, failure to supervise, and dishonest dealing.

• ✓Administrative fines may not exceed $2,500 per separate offense
• ✓Commingling or converting others' funds, or failing to keep them in an escrow/trust account, is a disciplinary violation
• ✓Failing to exercise reasonable supervision over licensed employees is a violation
• ✓Records must be maintained for four years and produced upon reasonable Commission request

Under § 12-10-301, a broker is not entitled to a commission for finding a ready, willing, and able purchaser until the sale is actually consummated OR is defeated by the refusal or neglect of the owner to complete the transaction as agreed. This protects brokers when the seller backs out but limits commission claims when the deal simply fails.

• ✓No commission is earned merely for producing a ready, willing, and able buyer until the transaction is consummated
• ✓A broker IS entitled to commission if the sale is defeated by the owner's own refusal or neglect to consummate as agreed

Under § 12-10-403(6), if a brokerage firm has more than one licensed person, an employing or employed broker is designated to work with a party. The designated broker's relationship does not extend to the employing broker, other non-designated brokers, or the firm. Designated brokers can represent both sides of a transaction as single agents without creating dual agency for the firm, and knowledge is not imputed to non-designated brokers.

• ✓A designated broker's brokerage relationship does not extend to the employing broker, other non-designated brokers, or the firm entity
• ✓Designated brokers may act as single agents for both seller and buyer in the same transaction without creating dual agency for the employing broker
• ✓One individual broker may NOT be a single agent for both parties in the same transaction
• ✓There is no imputation of knowledge to non-designated brokers when a designated broker serves as a single agent
• ✓This does not shield the employing broker/firm from its duty to supervise or from vicarious liability

Under § 12-10-404, a seller's or landlord's agent is a limited agent owing utmost good faith, loyalty, and fidelity. Duties include seeking acceptable price/terms, presenting all offers timely, disclosing known adverse material facts, counseling on risks/benefits, advising to seek expert advice, and accounting for money/property. Certain confidential information cannot be disclosed without consent.

• ✓A seller's/landlord's agent must promote the client's interests with utmost good faith, loyalty, and fidelity
• ✓Must present all offers in a timely manner even when the property is under contract
• ✓Must disclose to any buyer or tenant all adverse material facts actually known by the broker
• ✓Must NOT disclose without consent that the seller will accept less, the seller's motivations, or that the seller will accept other financing terms
• ✓Owes no duty to conduct independent inspection or verify statements for the buyer's benefit
• ✓A designated seller's/landlord's agent may cooperate with other brokers but may not create subagents

Under § 12-10-405, a buyer's or tenant's agent is a limited agent owing utmost good faith, loyalty, and fidelity, with duties paralleling the seller's agent. The agent must disclose to any seller/landlord adverse material facts known, including the buyer's financial ability to perform and intent to occupy as a principal residence. Certain buyer confidential information may not be disclosed without consent.

• ✓A buyer's/tenant's agent must promote the client's interests with utmost good faith, loyalty, and fidelity and present all offers timely
• ✓Must disclose to a prospective seller/landlord adverse material facts including the buyer's financial ability to perform and intent to occupy as a principal residence
• ✓Must NOT disclose without consent that the buyer will pay more, buyer's motivations, or that the buyer will accept other financing terms
• ✓May show the same property to competing buyers and assist competing buyers without breaching duty
• ✓May cooperate with other brokers but may not create subagents

Under § 12-10-406, a broker shall NOT establish dual agency with any seller, landlord, buyer, or tenant. Colorado law prohibits dual agency entirely; a broker cannot serve as a single agent for both sides of the same transaction.

• ✓Dual agency is prohibited in Colorado
• ✓A broker may not establish dual agency with any seller, landlord, buyer, or tenant

Under § 12-10-407, a transaction-broker is not an agent for either party but assists them in the transaction. Duties include exercising reasonable skill/care, presenting all offers timely, keeping parties informed, accounting for money, and disclosing adverse material facts. Certain confidential information cannot be disclosed without informed consent of all parties. There is no imputation of knowledge, and the transaction-broker may not create subagents.

• ✓A transaction-broker is NOT an agent for either party
• ✓Must disclose to buyers/tenants adverse material facts about the property, and to sellers/landlords facts about the buyer's financial ability and intent to occupy
• ✓Must NOT disclose without all parties' consent that a buyer will pay more, a seller will accept less, party motivations, or willingness to accept other financing terms
• ✓There is no imputation of knowledge between parties and the transaction-broker or within the entity
• ✓May cooperate with other brokers but may not create subagents

• A. The property manager may continue managing the property for up to 90 days while seeking to reactivate their license
• B. The property manager may continue to collect rents but may not sign new leases until reactivation
• C. The property manager must immediately cease all property management activities requiring a license ✓ Answer
• D. The property manager may continue managing the property provided the employing broker cosigns all documents

• A. Immediately notify the Commission in writing of the diversion of trust funds ✓ Answer
• B. Report the shortage on the brokerage's next license renewal or trust account questionnaire
• C. Notify the Commission in writing within 30 days, the same deadline that applies to reporting a criminal conviction
• D. Nothing is required as long as the broker restores the missing funds from the operating account within 3 business days

• A. 72 hours
• B. 24 hours ✓ Answer
• C. 48 hours
• D. 96 hours

• A. Rent for the remainder of the lease term or until the unit is re-rented, whichever occurs first
• B. One month's rent following her vacating the premises, payable within 90 days after she vacates ✓ Answer
• C. No further rent; the tenant is released from all financial obligations as of the date of her written notice
• D. Two months' rent as an early termination fee, which the firm may deduct directly from the security deposit

• A. The broker may allow the account to go negative temporarily, provided it is corrected within 30 days.
• B. Bank fees charged to a trust account are automatically absorbed by the state's real estate recovery fund.
• C. The broker must promptly deposit personal or operating funds into the trust account in an amount sufficient to cover only the specific bank fee, to prevent the trust account from going negative. ✓ Answer
• D. The broker must close the trust account and open a new one at a different institution to avoid future fees.

• A. Disburse the earnest money to the estate immediately, because the heir is the successor to all seller rights.
• B. Return the earnest money to the buyer immediately because the seller is deceased and cannot perform.
• C. Continue to hold the funds and not disburse to any party without either a written mutual release signed by the authorized representative of both parties or a court order, and consult legal counsel. ✓ Answer
• D. Deposit the earnest money with the Colorado Division of Real Estate pending appointment of an estate representative.