§ 7-128-401 to 403, C.R.S. Standards of Conduct and Liability +18Colorado · Real Estate · English

Directors and officers must discharge their duties in good faith, with the care of an ordinarily prudent person in a like position, and in a manner reasonably believed to be in the corporation's best interests. They may rely on information from competent officers, legal counsel, accountants, and committees.

• ✓Directors/officers must act in good faith, with ordinary prudent care, and in the corporation's best interests
• ✓A director/officer may rely on information from reliable officers, legal counsel, accountants, or committees they reasonably trust
• ✓Reliance is not in good faith if the director/officer has knowledge making the reliance unwarranted

Articles of incorporation may eliminate or limit a director's personal liability for monetary damages for breach of fiduciary duty, except for breach of loyalty, bad faith, intentional misconduct, unlawful distributions, or improper personal benefit. Directors/officers are not personally liable for an employee's tort unless personally involved.

• ✓Liability limitation cannot cover breach of loyalty, acts not in good faith, intentional misconduct, or improper personal benefit
• ✓No director/officer is personally liable for an employee's tort unless personally involved or committing a criminal offense
• ✓A director who votes for an unlawful distribution is personally liable for the excess amount

Every licensee must maintain errors and omissions insurance covering all Part 7 activities, except inactive MLOs and attorney licensees with equivalent malpractice coverage. The division makes group E&O coverage available via competitive bid, and licensees may obtain coverage independently if it meets minimum requirements.

• ✓Every active licensee must maintain E&O insurance covering Part 7 activities
• ✓Exceptions: inactive MLOs and attorneys with equivalent malpractice coverage
• ✓Division provides group policy; group insurer cannot cancel a licensee
• ✓Licensee may obtain coverage independently if it meets minimum requirements
• ✓Licensee must file a certificate of coverage by the annual renewal date

The board may reimburse members for expenses attending Colorado-specific governance education. The association must provide free owner education at least annually on operations and the rights/responsibilities of owners, the association, and the board.

• ✓Board education content must be Colorado-specific and reference applicable article sections
• ✓Association must provide free owner education at least annually on operations and legal rights and responsibilities
• ✓Owner education does not apply to associations that include time-share units

Sections 12-10-602 to 12-10-623 were enacted pursuant to the Real Estate Appraisal Reform Amendments (Title XI of FIRREA), 12 U.S.C. secs. 3331 to 3351. They are intended to implement federal law in the least burdensome manner to appraisers and AMCs. Licensed ad valorem appraisers are not regulated by the federal Real Estate Appraisal Reform Amendments.

• ✓The statutes implement Title XI of FIRREA in the least burdensome manner
• ✓Licensed ad valorem appraisers are not regulated by the federal amendments

Pursuant to section 24-4-105(11), a Petitioner may petition the Board for a declaratory order to terminate controversies or remove uncertainties about the applicability of a statute, rule, or order. The petition must state the Petitioner's name/address, the statute/rule/order at issue, a concise statement of facts and law showing the nature of the controversy, and optionally a concise statement of the proposed order.

• ✓A Petitioner may seek a declaratory order to terminate controversies or remove uncertainties
• ✓The petition must identify the statute/rule/order and state the facts showing the nature of the controversy

The Board may determine in its sole discretion whether to rule on a petition, considering factors such as whether it will terminate a controversy, whether the matter is under investigation, whether it is a hypothetical question, or whether an adequate legal remedy exists. A decision NOT to rule is not final agency action subject to judicial review, but a declaratory order that is issued does constitute agency action subject to judicial review under section 24-4-106.

• ✓A Board decision not to rule on a petition is not subject to judicial review
• ✓An issued declaratory order constitutes agency action subject to judicial review
• ✓The Board considers factors such as pending investigations and hypothetical questions in deciding whether to rule

Licensees must give immediate notice of any change of business location or employment. A change without notification automatically inactivates the license. The employing broker holds control and custody of the employed broker's license, and only one employer may be shown at a time.

• ✓Change of business location/employment without notice automatically inactivates the license
• ✓The employing broker holds control and custody of the employed broker's license
• ✓Only one employer may be shown for a broker at a time

Licenses must be renewed on or before December 31 of every third year (initial licenses issued on/after April 23, 2018 expire Dec 31 of the year issued). Renewal requires fulfilling continuing education per 12-10-213. Renewal applications are accepted 30 days before January 1.

• ✓Licenses renew on or before December 31 every third year
• ✓Renewal is conditioned on completing continuing education per 12-10-213
• ✓Renewal applications accepted 30 days prior to January 1

A license not renewed by January 1 may be reinstated: within 31 days by paying the regular renewal fee; more than 31 days but within 1 year by paying renewal fee plus one-half renewal fee; more than 1 year but within 3 years by paying renewal fee plus a reinstatement fee equal to the renewal fee. After 3 years, the person is treated as a new applicant.

• ✓Within 31 days: pay regular renewal fee
• ✓31 days to 1 year: renewal fee plus half the renewal fee
• ✓1 to 3 years: renewal fee plus a reinstatement fee equal to the renewal fee
• ✓After 3 years: treated as a new applicant

When a licensee is discharged or terminates employment, both parties have a joint duty to immediately notify the Commission. It is unlawful for a terminated licensee to perform licensed acts after termination.

• ✓Both parties must immediately notify the Commission on termination
• ✓Terminated licensees may not perform licensed acts after the termination date

Fees are charged for exams, original applications, renewals, changes of name/address/employing broker, and new entity broker applications. The fee accompanies each application and is non-refundable. Failure to file the broker application within one year of passing the exam cancels the passing score.

• ✓License fees are non-refundable
• ✓Broker application must be filed within one year of passing the exam or the passing score is cancelled

The suspension, expiration, or revocation of a broker's license automatically inactivates every license of brokers shown in Commission records as employed by that broker, pending notification of a change of employment.

• ✓Loss of employing broker's license automatically inactivates employed brokers' licenses
• ✓Employed brokers must notify the Commission of a change of employment to reactivate

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 form by striking through in a legible manner without obscuring what was deleted.

• ✓Deletions/modifications to printed body must result from negotiations or a party's instruction
• ✓Deletions must be made by legibly striking through without obscuring the deleted portion
• ✓A broker must explain all modifications, deletions, omissions, insertions, and addenda and recommend expert advice

Brokers may add firm identifying information, initial lines at page bottoms, signature lines/labels, and may lengthen/shorten blank spaces. Inserted provisions must use a font clearly different from the form's language, and modifications must be legible.

• ✓May add the firm's name, trade name, address, phone, email, trademark, or other identifying info
• ✓May add initial lines at the bottom of a page and add signature lines/labels
• ✓Blank spaces may be lengthened or shortened; inserted text must use a differentiating font style
• ✓All forms and modifications must be legible; electronic forms must be protected against inadvertent/prohibited changes

A broker may delete inapplicable provisions from the 'Contract to Buy and Sell Real Estate' (and Counterproposal/Amend-Extend). When deleted, the caption/heading must remain unaltered followed by 'omitted-not applicable'. Deletable sections include Inclusions, Exclusions, Water Rights, Financing, Appraisal, Owners' Association, Due Diligence, and proration items.

• ✓Only inapplicable provisions may be deleted, and the caption/heading must remain followed by 'omitted-not applicable'
• ✓Applies to enumerated CBS sections even if renumbered, plus corresponding provisions in other approved forms
• ✓In the Counterproposal, Section 4 Purchase Price and Terms may be deleted along with Section 3 Dates and Deadlines Table

Per 12-10-221, a broker may not accept commission for brokerage services except from the broker's Brokerage Firm. The firm may allocate earned commission among its brokers per compensation agreements and Office Policy Manual.

• ✓Broker may accept commission only from their own Brokerage Firm (12-10-221)
• ✓Firm allocates commission per compensation agreements/Office Policy Manual

A firm may pay earned commissions to an entity wholly owned by the broker (or brokers acting as a Team) if the broker assigns all interest to the entity. This does not relieve supervision duties or personal civil responsibility.

• ✓Payment to a broker-owned entity allowed if wholly owned and interest assigned
• ✓Brokers cannot be licensed as an entity (12-10-203(8))
• ✓Assignment to an entity does not relieve civil responsibility or supervision duties

The Commission has no authority to render monetary judgments or arbitrate broker/firm compensation disputes; failure to pay is not a license law violation. Such disputes go to civil courts or arbitration. A broker is an 'employee' of the firm under license law.

• ✓Commission does not arbitrate or adjudicate compensation disputes
• ✓Firm failure to pay broker is not a license law violation
• ✓A broker is an employee of the firm under license law

Failing to register as a developer is a criminal offense and renders contracts vulnerable.

• ✓Failure to register as a developer is a class 6 felony, punishable under section 18-1.3-401
• ✓Any sale/lease contract is voidable by purchaser and unenforceable by developer unless developer was duly registered when made

Part 5 is subject to statutory repeal and review.

• ✓Part 5 is repealed effective September 1, 2026
• ✓Part 5 is scheduled for review under section 24-34-104 before repeal

A 'real estate appraiser' provides an estimate of the nature, quality, value, or utility of real estate and possesses necessary qualifications. Exclusions include: personal property appraisers; brokers giving opinions not represented as appraisals and not for financing; CPAs; corporations valuing their own property; water/mineral rights appraisers; right-of-way acquisition agents making waiver valuations; certain financial institution employees; and tax protest advocates.

• ✓Brokers giving opinions not represented as appraisals and not for financing are excluded
• ✓Personal property, water rights, and mineral rights appraisers are excluded
• ✓Corporations valuing property they own or may buy/sell are excluded
• ✓Tax or valuation protest advocates under title 39 are excluded

An 'appraisal' means a written or oral analysis, opinion, or conclusion relating to the nature, quality, value, or utility of specified interests in identified real estate transmitted to a client upon completion of an assignment. It includes a valuation (opinion of value) and an analysis (general study). It excludes internal-use-only work by financial institution employees and federally authorized waiver valuations.

• ✓An appraisal includes both a valuation (opinion of value) and an analysis (general study)
• ✓Appraisals may be written or oral
• ✓Internal-use financial institution work and waiver valuations are excluded
• ✓Unlicensed financial institution preparers must include written notice they are not licensed

An AMC is an external third party authorized by a creditor or secondary market underwriter that oversees an appraiser panel to recruit/select/retain appraisers, contract with appraisers, manage the appraisal process, or review and verify appraiser work. It excludes entities that directly perform appraisals, entities that only distribute orders to client-selected panels, and mortgage companies managing their own panels.

• ✓An AMC oversees an appraiser panel and manages the appraisal process
• ✓AMC excludes entities that directly perform appraisal services
• ✓AMC excludes mortgage companies managing panels for their own loans

'Consulting services' are appraiser services that don't fall within the independent appraisal definition, including marketing, feasibility studies, and tax appeal advocacy; if the appraiser acts as a disinterested third party, the work is an independent appraisal. 'Evaluation' is an opinion of market value under the 2010 Interagency Guidelines for transactions not requiring an appraisal. 'Independent appraisal' means acting as a disinterested third party rendering an unbiased opinion.

• ✓Consulting services performed as a disinterested third party are deemed independent appraisals
• ✓An evaluation is provided to a financial institution when an appraisal is not required
• ✓Independent appraisal requires the appraiser to act as a disinterested third party

Notwithstanding declaration/bylaws/rules, associations cannot prohibit: flag displays (content-neutral rules allowed), sign displays, religious items/symbols on entry doors (up to 36 square inches), certain emergency worker vehicle parking, use of public rights-of-way, fire mitigation defensible space, disability accommodations, xeriscape/drought-tolerant landscaping, rain barrels, family child care homes, and home-based businesses.

• ✓Associations cannot prohibit flag or sign displays but may prohibit commercial messages and adopt content-neutral rules
• ✓Religious items/symbols on entry doors up to 36 square inches cannot be prohibited
• ✓Associations cannot prohibit reasonable disability modifications under the federal Fair Housing Act
• ✓Associations cannot prohibit xeriscape, drought-tolerant landscaping, or rain barrels (with reasonable aesthetic rules allowed)

Associations shall not effectively prohibit renewable energy generation devices, require flammable roofing materials like cedar shakes, or prohibit fire-hardened building materials. On/after March 12, 2024, provisions prohibiting fire-hardened materials are void; associations may impose reasonable fencing restrictions not increasing cost more than 10% or requiring over 60-day review.

• ✓Associations cannot effectively prohibit renewable energy generation devices
• ✓Associations cannot require cedar shakes or other flammable roofing materials
• ✓Provisions prohibiting fire-hardened building materials are void on/after March 12, 2024
• ✓Fire-hardened fencing restrictions cannot increase cost more than 10% or require over 60-day review

In subject/ADU-supportive jurisdictions, provisions restricting ADU creation on single-unit detached dwellings adopted before or after May 13, 2024 are void (reasonable restrictions excepted). In transit/neighborhood centers, provisions restricting housing more than local law are void. For declarations/rules on or after July 1, 2024, associations cannot prohibit ADUs or middle housing (2-4 units) where zoning allows.

• ✓Provisions restricting ADU creation in supportive jurisdictions are void as public policy
• ✓Provisions restricting housing more than local law in transit/neighborhood centers are void
• ✓Associations cannot prohibit ADUs or middle housing where zoning allows (declarations on/after July 1, 2024)

To exercise a reserved development right, the declarant must record an amendment to the declaration, comply with plat/map requirements, assign identifying numbers to new units, and reallocate allocated interests. The declarant owns any units created.

• ✓Declarant must prepare, execute, and record an amendment and comply with plat/map requirements
• ✓Amendment must assign identifying numbers to new units and reallocate allocated interests
• ✓Declarant is the unit owner of any units thereby created

Real estate subject to withdrawal may not be withdrawn after a unit in that portion is conveyed to a purchaser. Development rights lapse if not exercised within the time limit unless the association agrees to an extension.

• ✓Withdrawable real estate cannot be withdrawn after a unit in that portion is conveyed to a purchaser
• ✓Development rights lapse if not exercised within time limits unless the association agrees to an extension
• ✓Extension/reinstatement must be included in an amendment executed by the declarant and association

Nonprofit corporations have perpetual duration and broad powers like an individual, including contracting, holding property, and imposing dues/assessments on members. They may NOT lend money to or guarantee obligations of directors/officers, and generally may not issue stock.

• ✓Nonprofit corporation may not lend money to or guarantee the obligation of a director or officer
• ✓Nonprofit may impose dues, assessments, admission, and transfer fees upon its members
• ✓Directors, officers, employees, and members are not personally liable for corporate obligations

Key definitions include 'member,' 'voting member' (one who on more than one occasion has the right to vote for directors), 'board of directors,' 'bylaws,' and 'distribution.' HOAs subject to CCIOA are expressly excluded from 'residential nonprofit corporation.'

• ✓A 'voting member' has the right on more than one occasion to vote for the election of directors
• ✓CCIOA-governed associations are excluded from the definition of 'residential nonprofit corporation'

Articles of incorporation must state the entity name, registered agent, principal office, incorporator names/addresses, whether there are voting members, and asset distribution on dissolution. A nonprofit is incorporated when articles are filed by the Secretary of State.

• ✓Articles must state whether the corporation will have voting members and asset distribution on dissolution
• ✓Incorporation occurs when the Secretary of State files the articles
• ✓Persons acting without authority and without good-faith belief are jointly and severally liable

A conflicting interest transaction involves the corporation and a director, a party related to a director, or an entity in which a director has an interest. Such transactions are not automatically void if properly disclosed and approved, and no loans may be made to directors or officers.

• ✓No loans may be made by a corporation to its directors or officers; any director/officer participating is liable for the loan amount
• ✓A conflicting interest transaction is not void if material facts are disclosed and approved by disinterested directors or members, or if it is fair to the corporation
• ✓A 'party related to a director' includes spouse, descendants, ancestors, siblings, and entities in which they hold an interest

A person cannot apply for a new license of the same type if an expired license may be reinstated; they must reinstate it under section 12-10-610(1). Reinstatement requires completing CE requirements and paying appropriate fees. A license expired more than two (2) years is not eligible for reinstatement and requires a new application.

• ✓Must reinstate rather than reapply if the expired license may be reinstated
• ✓License expired more than two (2) years cannot be reinstated; requires new application
• ✓Reinstatement requires CE completion and fee payment

Active and Inactive licensees must provide a current mailing address, phone number, email, and other required contact information. Licensees must notify the Board within ten (10) calendar days of any change. The mailing address is the address of record; failing to notify the Board of an address change results in Inactivation.

• ✓Must notify the Board within ten (10) calendar days of contact information changes
• ✓Mailing address is the official address of record
• ✓Failure to update mailing address results in Inactivation

A surrendered license may be deemed permanently relinquished; relinquishment does not remove the holder from Board jurisdiction for prior acts. A license relinquished during an investigation is reported to the National Registry as surrendered in lieu of discipline. Upon inactivation/revocation/surrender/expiration, the holder must cease all licensed activities and stop representing themselves as licensed.

• ✓Surrender/relinquishment does not remove Board jurisdiction over prior acts
• ✓Relinquishment during investigation reported as surrender in lieu of discipline
• ✓Must immediately cease all activities requiring licensure upon any loss of licensure
• ✓Relinquished license cannot be reinstated; must reapply as Initial Licensure

To activate an Inactive license, the licensee must complete all CE hours that would have been required if on Active status for the entire inactivation period, including the most recent National USPAP CE Course. Licensed Ad Valorem Appraisers who leave qualifying employment are placed Inactive and must recertify employment to reactivate.

• ✓Activation requires all CE that would have been required during the entire inactivation period
• ✓Must include the most recent National USPAP CE Course to activate
• ✓Ad Valorem appraisers who leave qualifying employment must notify the Board within three (3) business days

To renew, an MLO must continue to meet minimum standards, satisfy annual continuing education requirements, and pay renewal fees. Failure to satisfy these causes the license to expire, and the board adopts rules for reinstatement consistent with NMLS standards.

• ✓Must continue to meet minimum standards for licensure
• ✓Must satisfy annual CE requirements per section 12-10-704(10)
• ✓Must pay applicable renewal fees
• ✓Failure to renew causes the license to expire

An MLO may challenge information entered into NMLS by the Division. The challenge must be in writing with supporting evidence and is limited to the factual accuracy of the MLO's own license record; it cannot be used to appeal the underlying grounds for a disciplinary action. The Director reviews the challenge, and if information is factually incorrect, the Division corrects it. The MLO may appeal the Director's decision to the Board within 30 calendar days, and the Board's decision is subject to judicial review by the court of appeals.

• ✓An NMLS challenge is limited to the factual accuracy of the MLO's own license record
• ✓A challenge cannot be used to appeal the underlying grounds for a disciplinary action
• ✓An MLO may appeal the Director's challenge decision to the Board within 30 calendar days

All Mortgage Companies must submit the NMLS Mortgage Call Report on a calendar quarterly basis. The quarterly report is due within 45 calendar days of the end of the calendar quarter, and the financial condition report is due annually within 90 calendar days from the company's fiscal year end. Failure to properly submit a timely Call Report prevents the Mortgage Company from renewing its NMLS registration.

• ✓The quarterly NMLS Mortgage Call Report is due within 45 calendar days of the end of the quarter
• ✓The annual financial condition report is due within 90 calendar days from fiscal year end
• ✓Failure to timely submit a Call Report prevents renewal of the NMLS registration

For a three-year license renewal, a licensee must pass the Colorado exam portion within the previous three years OR complete a minimum of 24 hours of credit, 12 of which must be the Commission-developed Annual Update credits. Shorter license periods require 24 hours with at least 8 Commission credits.

• ✓Three-year renewal requires 24 hours of CE, including 12 Commission-developed update credits
• ✓The Commission develops 12 hours of update credits on current statutes and rules

CE credits (other than the Commission update) must be from Commission-approved courses contributing to professional competence, in subjects like real estate law, contracts, finance, appraisal, closings, ethics, property management, agency, and others. Credits must be from accredited Colorado institutions and require passing a written exam.

• ✓CE credits must come from Commission-approved courses in listed subject areas
• ✓Successful completion requires passing a written examination
• ✓Credits must be from accredited Colorado colleges, community colleges, or approved schools

A licensee renewing a license that expires December 31 of the same year it was issued is not subject to the continuing education requirements.

• ✓Licensees renewing a same-year-issued license are exempt from CE requirements

No contract provision (including permitted modifications/additions) can relieve a broker or firm from complying with section 12-10-201, C.R.S. et seq. or the Rules. A non-principal broker cannot insert personal provisions, disclaimers, or exculpatory language favoring the broker/firm, though commission-payment language may be added at a principal party's direction.

• ✓No provision can relieve a broker/firm from compliance with statute or rules
• ✓A non-principal broker cannot insert personal provisions, disclaimers, or exculpatory language favoring the broker/firm
• ✓Commission-payment language may be included at a principal party's direction if a negotiated term of the CBS form

Additional Provisions that delete or modify a Standard Form must result from negotiations or a party's instruction. A broker using attorney-drafted transaction-specific clauses must understand and use them properly, retain them for 4 years from last use, and produce them and the attorney's name upon Commission request.

• ✓Additional Provisions that alter a Standard Form must result from negotiation or a party's instruction
• ✓Attorney-drafted clauses must be retained for 4 years from the date last used
• ✓Broker must provide clauses and preparing attorney/law firm name upon Commission request