§ 38-33.3-207, C.R.S. Allocation of allocated interests +14Colorado · Real Estate · English

The declaration must allocate to each unit interests depending on type: condominium (undivided common element interests, common expenses, votes), cooperative (ownership interest, common expenses, votes), planned community (common expenses, votes). Large planned communities have flexibility.

• ✓Condominium units receive undivided common element interests plus common expenses and votes
• ✓Cooperative units receive an ownership interest in association plus common expenses and votes
• ✓Planned communities allocate common expenses and votes; large planned communities may allocate as set forth in the declaration

The declaration must state formulas for establishing allocations and reallocation upon addition/withdrawal of units. Allocations may not discriminate in favor of declarant-owned units.

• ✓Declaration must state the formulas used to establish allocations
• ✓Allocations may not discriminate in favor of units owned by the declarant or an affiliate
• ✓Declaration must state reallocation formulas if units may be added or withdrawn

The declaration may provide for different vote allocations, cumulative voting (board elections only), class voting on specified issues, and assessments on retail sales (up to 6%) and real estate transfers (up to 3%). Declarants may not evade limits via cumulative/class voting.

• ✓Cumulative voting is permitted only for electing executive board members
• ✓Retail sales/service assessments may not exceed 6%; real estate transfer assessments may not exceed 3%
• ✓Declarant may not use cumulative or class voting to evade article limits, nor may declarant-owned units form a class

The sum of common expense liabilities and undivided common element interests must equal one (or 100%). If a discrepancy exists between allocated interest and formula, the allocated interest prevails. Common elements are not subject to partition; transfers without the unit are void.

• ✓Sum of common expense liabilities and undivided interests must equal one or 100%
• ✓Allocated interest prevails over formula in case of discrepancy
• ✓Transfer of a common element interest without the associated unit is void

The Commission may investigate any licensee on its own motion and MUST investigate upon a written complaint. Serious complaints go before an administrative law judge (appointed by the Department of Personnel and Administration), who issues an initial decision of revocation, suspension, censure, or dismissal, and may mandate education, probation, or fines.

• ✓Commission MUST investigate upon written complaint; MAY investigate on its own motion
• ✓An administrative law judge is appointed by the Department of Personnel and Administration
• ✓ALJ may order revocation, suspension, censure, dismissal, education, probation, or fines

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, modify, or refer the matter for rehearing. The Commission can issue letters of admonishment for minor conduct.

• ✓Initial decision becomes final if no written objections filed within 30 days
• ✓Commission may adopt, modify, or refer the matter for rehearing if objections filed
• ✓Commission may issue letters of admonishment for conduct not warranting formal discipline

The Real Estate Commission and real estate brokers should not be confused with the Colorado Association of REALTORS, a private trade organization affiliated with the National Association of REALTORS. Only its members may use the registered trademark 'REALTOR'.

• ✓The Commission is a government body, distinct from the private REALTOR trade organization
• ✓Only NAR members may use the registered trademark 'REALTOR'

To apply for an initial license, an applicant must complete educational requirements, pass the appropriate exam parts, submit fingerprints to CBI, acquire errors and omissions insurance before obtaining an active license, complete the Commission application with required documentation, and pay the fee.

• ✓E&O insurance must be acquired before obtaining an Active License
• ✓All six steps including exam, fingerprints, and fee must be completed
• ✓Required documentation includes course certificates and certified license history

Every Active Broker, including brokerage firms with more than one broker, must maintain errors and omissions insurance covering all acts requiring a license. Coverage must be at least $100,000 per licensed person per claim with a $300,000 annual aggregate, a deductible not exceeding $1,000 for claims, lock box coverage of at least $25,000, and no deductible for legal defense.

• ✓Minimum $100,000 per claim and $300,000 annual aggregate coverage
• ✓Deductible for claims cannot exceed $1,000; no deductible for legal defense
• ✓Lock box coverage must be at least $25,000 per occurrence

Brokerage Firms need not renew, but the associated Independent or Employing Broker must. Brokers renew on a Calendar Year Cycle and may renew beginning 45 days before expiration by application and payment of the renewal fee. Notification is sent to the email on file. Brokers who never submitted fingerprints for a one-time check must do so before renewing an active license.

• ✓Brokers may renew starting 45 days before expiration
• ✓Renewal notification is sent to the email address on file
• ✓Brokerage Firms are not required to renew but their broker must

Brokers who fail to renew may reinstate an expired license: within 31 days by paying the renewal fee; more than 31 days but within one year by paying the renewal fee plus a reinstatement fee equal to half the renewal fee; more than one year but within three years by paying the renewal fee plus a reinstatement fee equal to the full renewal fee.

• ✓Within 31 days: pay only the renewal fee
• ✓31 days to 1 year: renewal fee plus half renewal fee reinstatement
• ✓1 to 3 years: renewal fee plus full renewal fee reinstatement

If a fee payment is denied, rescinded, or returned invalid, the application is not deemed complete and will be canceled. Applications are reviewed for completeness; if deemed incomplete, applicants receive written notice and have 30 days to correct deficiencies or the application is canceled and the fee forfeited.

• ✓Applicants have 30 days to cure deficiencies or the application is canceled
• ✓Invalid payment causes cancellation until full payment plus reinstatement fee

Applicants with past or pending misdemeanor (excluding traffic) or felony convictions, guilty/nolo pleas, or deferred judgments must submit court dispositions, police reports, a signed explanation attesting no other violations, and (if seeking active status) a signed Employing Broker supervision statement. Supplemental documentation may demonstrate rehabilitation. Failure to provide documents within the timeframe cancels the application.

• ✓Required documentation includes court disposition and signed explanation
• ✓Active status applicants need an Employing Broker supervision statement
• ✓Failure to provide documents cancels application and forfeits fee

Brokers may obtain independent E&O coverage from any qualified carrier (A.M. Best rating A- or better). Independent firm coverage must have per-claim and aggregate limits of at least $1,000,000 and a maximum deductible of $10,000. Applicants failing to maintain certified coverage are placed on Inactive status immediately.

• ✓Insurance carrier must maintain A.M. Best rating of A- or better
• ✓Firm coverage requires $1,000,000 per-claim and aggregate limits
• ✓Failure to maintain certified coverage results in immediate Inactive status

Every Independent Broker or Employing Broker residing in Colorado must maintain a place of business in the state, except for Associate Brokers or brokers registered as Inactive.

• ✓Resident Independent/Employing Brokers must maintain a Colorado place of business
• ✓Associate Brokers and Inactive brokers are exempt from this office requirement

A broker may request Inactive status. Both Employing Broker and Associate Broker have a joint duty to immediately notify the Commission when employment terminates. Status changes require the proper manner and fee. When an Associate Broker transfers firms, the license must be transferred and a fee paid; former employing brokers may still pay commissions earned during prior employment.

• ✓Both parties have a joint duty to notify the Commission of termination
• ✓Status changes and transfers require payment of the applicable fee
• ✓Former Employing Broker may pay commissions earned during prior employment

Before applying, a person may request a preliminary advisory opinion on how prior conduct or criminal convictions may affect a future application. The requester is not an applicant. The opinion is not binding, not appealable, and does not limit the Commission's authority to investigate; a negative opinion does not prohibit future application.

• ✓Advisory opinions are non-binding and not appealable
• ✓A negative opinion does not prohibit submitting a future application
• ✓The requester is not considered an applicant for licensure

A Broker must provide written notification to the Commission within thirty (30) calendar days of specified legal events, including criminal pleas/convictions, fair housing violations, out-of-state discipline, and license suspensions/revocations for dishonesty within the last five years.

• ✓Notification deadline is 30 calendar days from the event
• ✓Must report a guilty plea, nolo contendere plea, or conviction of any crime per section 12-10-217(1)(n), C.R.S.
• ✓Must report violations or aiding/abetting violations of Colorado or federal fair housing laws
• ✓Must report disciplinary action in another jurisdiction if it would violate Commission statutes/rules
• ✓Must report suspension/revocation within the last 5 years for fraud, deceit, material misrepresentation, theft, or breach of fiduciary duty across listed professions

RESPA Section 8(a) prohibits kickbacks for referrals in federally related mortgage loans; Section 8(b) prohibits unearned fee splitting. Violations carry fines up to $10,000, up to one year imprisonment, or both, and are referred to the CFPB.

• ✓RESPA 8(a) prohibits kickbacks for referrals; 8(b) prohibits unearned fee splitting
• ✓Penalties: fines up to $10,000, imprisonment up to 1 year, or both
• ✓Division must refer RESPA matters to the CFPB per 12-10-217(10)
• ✓Colorado referral fees require both RESPA compliance and reasonable cause

Regulation X exempts business-purpose loans, temporary financing, vacant land, assumptions without lender approval, loan conversions, and secondary market transactions. For exempt transactions, a broker may pay/receive referral fees with written disclosure. MSAs paying for referrals are prohibited; MSAs paying for actual marketing services may be permitted.

• ✓RESPA Section 8 does not apply to certain exempt transactions (business-purpose, vacant land, etc.)
• ✓Exempt-transaction referral fees require prior written disclosure per Rule 6.21.B.2
• ✓MSAs for referrals are prohibited; MSAs for actual marketing may be permitted

A transaction broker represents neither party as an agent but must not disclose specified confidential information without the informed consent of ALL parties, since the transaction broker assists all parties.

• ✓Cannot disclose that buyer/tenant is willing to pay more than the offered price/lease rate without informed consent of all parties
• ✓Cannot disclose that seller/landlord will accept less than asking price/lease rate
• ✓Cannot disclose motivating factors for any party buying, selling, or leasing
• ✓Cannot disclose that any party will agree to financing terms other than those offered
• ✓Cannot disclose facts/suspicions that may psychologically impact or stigmatize property under § 38-35.5-101
• ✓Cannot disclose material information about the other party unless required by law or nondisclosure would constitute fraud or dishonest dealing

Unless exempt, a developer must register before engaging in any subdivision sale, lease, or transfer activities.

• ✓Unless exempt under section 12-10-501(3), developer must register before selling, leasing, transferring, or agreeing/negotiating to do so, directly or indirectly
• ✓Registration is pursuant to Part 5

Once registered, a developer may enter binding purchase contracts and accept earnest money, generally requiring third-party trust holding, with an exception for accredited investors in timeshare estates.

• ✓Upon registration approval, developer may enter binding purchase contracts and accept earnest money deposits
• ✓Earnest money deposit must generally be held in trust by an independent third party
• ✓Accredited investor exception: developer may use funds toward development if the contract/disclosure states to whom funds go, when delivery occurs, how funds are used, and any restrictions
• ✓Developer receiving accredited investor deposits under these conditions need not post a bond or other security
• ✓This earnest money provision applies only if the subdivision is a time share estate under section 38-33-110(5)

An applicant developer may offer reservations while the registration application is pending under specific fund-protection conditions.

• ✓Developer who applied under section 12-10-503 may offer reservations during application pendency upon Commission approval
• ✓Reservation fees must be held in trust by an independent third party
• ✓Reservation fees must be fully refundable

An incorporated or LLC association has a statutory lien on a unit for assessments and fines. Fees, late charges, attorney fees, fines, and interest may be part of the lien but are not subject to foreclosure. If payable in installments, legal action requires at least three missed monthly installments.

• ✓Association (incorporated or LLC) has a statutory lien for assessments and fines
• ✓Fees, charges, fines, and interest are subject to lien but NOT to foreclosure
• ✓Cannot pursue legal action for installments until owner fails to pay at least three monthly installments

An assessment lien is generally prior to other liens except pre-declaration liens, first security interests recorded before delinquency, and real estate tax liens. However, the lien is prior to a first mortgage to the extent of six months of common expense assessments preceding foreclosure institution (for liens created after June 30, 1992).

• ✓Assessment lien has priority except for pre-declaration liens, senior security interests, and tax liens
• ✓Super-lien priority over first mortgages extends to 6 months of assessments preceding foreclosure
• ✓Priority applies only if the other lien/encumbrance was created after June 30, 1992

Associations may recover reasonable attorney fees in enforcement actions, but not fees incurred before complying with notice requirements. Upon written request, the association must furnish a statement of unpaid assessments within 14 calendar days; failure to do so bars asserting a lien for those amounts.

• ✓Statement of unpaid assessments must be furnished within 14 calendar days of request
• ✓Failure to furnish the statement bars asserting a lien for amounts due as of the request date
• ✓Attorney fees not recoverable if incurred before complying with §38-33.3-209.5 notice requirements

At least 30 days before initiating foreclosure, associations must notify owners of the right to credit counseling and the right to mediation. Notices must explain foreclosure consequences, credit impact, and options to retain the unit. Owners must respond within 30 days to initiate mediation.

• ✓30-day written and electronic notice required informing owner of right to credit counseling
• ✓30-day notice required informing owner of right to mediation before litigation
• ✓Owner must respond within 30 days to initiate mediation

To foreclose, the association must have obtained a personal judgment (with exceptions for owner death, service failure, or bankruptcy) for owner-occupied principal residences. The lien may only be foreclosed if the balance equals six months of assessments AND the board formally votes by recorded vote to authorize the specific action.

• ✓Foreclosure requires balance equaling or exceeding six months of common expense assessments
• ✓Board must formally authorize the specific foreclosure by a recorded vote (non-delegable)
• ✓Actions filed without evidence of the recorded vote must be dismissed with no fees assessable to owner
• ✓Personal judgment required for owner-occupied principal residences (with limited exceptions)

Recording the declaration constitutes record notice and perfection; no separate lien recording is required. A lien is extinguished unless enforcement proceedings begin within six years after the full assessment amount becomes due.

• ✓Recording the declaration perfects the lien; no separate lien filing required
• ✓Lien is extinguished unless enforcement begins within six years after amounts become due

Before foreclosing, the association must send a notice of intent to foreclose by certified mail plus at least two additional means (phone, text, email, or regular mail). The notice must inform the owner of the lawsuit, potential equity loss, and rights to counseling and mediation.

• ✓Notice of intent to foreclose must be sent by certified mail plus at least two additional means
• ✓Notice must inform owner of possible loss of equity and rights to counseling/mediation
• ✓Notice sent in owner's preferred language if requested; does not apply to time share units

Board members, management company employees, law firm employees representing the association, their immediate family, and the management company itself cannot purchase a foreclosed unit. This prohibition extends to persons/entities affiliated within the prior five years.

• ✓Board members, association law firm/management employees, and management companies cannot buy foreclosed units
• ✓Prohibition includes affiliated persons/entities during the five-year period before the sale
• ✓A foreclosure purchaser takes the unit subject to existing covenants and use limitations

Colorado law establishes four levels of licensure. A license or certification is issued when an individual meets the education, examination, and experience requirements. The level of licensure determines what properties an appraiser, if competent, may appraise. Colorado does not have trainee or supervisory appraiser classifications.

• ✓There are four levels of appraiser licensure in Colorado
• ✓Licensure requires meeting education, examination, and experience requirements
• ✓Colorado has no trainee or supervisory appraiser classifications

The Licensed Ad Valorem Appraiser level is only for appraiser employees of county tax assessment offices. The Licensed Appraiser credential allows appraisal of non-complex 1-4 unit residential properties with a transaction value less than $1 million and complex 1-4 unit residential properties with a transaction value less than $400,000.

• ✓Licensed Ad Valorem Appraiser is only for county tax assessment office employees
• ✓Licensed Appraiser: non-complex 1-4 unit residential under $1 million transaction value
• ✓Licensed Appraiser: complex 1-4 unit residential under $400,000 transaction value

The Certified Residential credential allows appraisal of 1-4 unit residential properties without regard to transaction value or complexity, including vacant land used for 1-4 residential units, but not subdivisions requiring development analysis. The Certified General credential allows appraisal of all types of real property.

• ✓Certified Residential: 1-4 unit residential without regard to value or complexity
• ✓Certified Residential excludes subdivisions requiring development analysis
• ✓Certified General allows appraisal of all types of real property

Continuing education begins after issuance of the initial license. MLOs must complete at least 8 hours of NMLS-approved continuing education each calendar year prior to renewal or reinstatement. Completing the 20 hours of pre-licensing education in the same year the initial license was approved satisfies the CE requirement for that year. The Board may audit CE courses at any time and at no cost.

• ✓MLOs must complete at least 8 hours of NMLS-approved CE each calendar year prior to renewal
• ✓Completing 20 hours of pre-licensing education in the initial license year satisfies CE for that year
• ✓The Board may audit CE courses at any time and at no cost

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

• ✓CAM licensing program ended June 30, 2019
• ✓The Division no longer has jurisdiction over community association managers

The declaration must specify which unit(s) each limited common element is allocated to, and allocation cannot be altered without affected unit owner consent. Reallocation between units requires an application to the executive board and its approval.

• ✓Allocation of a limited common element may not be altered without consent of affected unit owners
• ✓Reallocation requires an application executed by the affected unit owners with a proposed amendment and fee deposit
• ✓No reallocation is effective without executive board approval; costs and attorney fees are the applicants' sole obligation

Qualifying Education must be taken from Board-approved providers meeting content, instructor, examination, and class-hour standards. Approved providers include accredited colleges/universities, professional organizations, government agencies, proprietary schools with valid certificates, providers approved by Title XI-compliant jurisdictions, and CAP-approved providers.

• ✓Courses must include an examination measuring information learned
• ✓Providers must maintain records for five (5) years from the last course offering
• ✓Approved providers include colleges, professional organizations, government agencies, and CAP-approved providers
• ✓Course content must be developed by qualified persons and be current

A class hour must be 60 minutes with at least 50 minutes of instruction attended by the student. Synchronous courses must be offered by approved providers. Asynchronous courses require active student engagement, content approval, and delivery mechanism approval. College credit conversion: semester credits x 15 = hours; quarter credits x 10 = hours.

• ✓A class hour = 60 minutes with at least 50 minutes of instruction
• ✓Semester Credits x 15.00 = Hours; Quarter Credits x 10.00 = Hours
• ✓Each Qualifying Education course must be at least 15 hours (except 8-hour Valuation Bias course)
• ✓Asynchronous courses require active student engagement, not simple reading/viewing/listening

All USPAP Qualifying Education must use the most recent edition of the National USPAP Course, except courses begun in the three months preceding a new edition may use the succeeding version. USPAP courses begun after January 1, 2003 must be taught by an AQB-certified instructor who is also a state certified appraiser.

• ✓USPAP courses must use the most recent edition of the National USPAP Course
• ✓USPAP instructors must be AQB-certified and a state certified appraiser
• ✓Three-month transition window before a new USPAP edition takes effect

Hours of Qualifying Education used for one license level may be applied to another level and need not be repeated, but applicants must demonstrate coverage of required topics. Courses that substantially repeat or duplicate other coursework will not be accepted.

• ✓Qualifying Education may transfer between license levels without repetition
• ✓Duplicate or substantially repeated courses will not be accepted
• ✓Applicants are responsible for demonstrating required topic coverage

The Board of Mortgage Loan Originators is created in the Division of Real Estate with five members appointed by the governor with Senate consent. Three must be licensed MLOs and two must be public members. Terms are four years, staggered so no more than three expire in the same year.

• ✓Five members appointed by governor with consent of the senate
• ✓Three must be licensed MLOs; two must be public members not in mortgage lending
• ✓Terms are four years, staggered
• ✓Governor fills vacancies and may remove members for misconduct, neglect, or incompetence

The Board is a type 1 entity that exercises all rule-making, enforcement, and administrative authority of the director. It may delegate authority to the director only as specifically written. A majority constitutes a quorum, and actions require a majority vote of members present.

• ✓Board is a type 1 entity under section 24-1-105
• ✓Board exercises all rule-making, enforcement, and administrative authority
• ✓A majority of the board constitutes a quorum
• ✓Actions require a majority vote of members present
• ✓Members, consultants, and expert witnesses have immunity for good-faith official acts

A director may waive notice of a meeting before or after the meeting. Written waiver must be signed and delivered for filing, though filing is not a condition of effectiveness. Attendance waives notice unless the director objects.

• ✓A written waiver of notice must be signed by the director entitled to notice
• ✓Attendance or participation waives required notice unless the director promptly objects to lack of/defective notice and does not vote for the action
• ✓If special notice of a purpose was required, objecting to that purpose preserves the notice objection