(1) The executive director shall adopt a seal by which all proceedings authorized under parts 2 and 5 of this article 10 shall be authenticated. Copies of records and papers in the office of the commission or department relating to the administration of parts 2 and 5 of this article 10, when duly certified and authenticated by the seal, shall be received as evidence in all courts equally and with like effect as the originals. All records kept in the office of the commission or department, under authority of parts 2 and 5 of this article 10, must be open to public inspection at such time and in such manner as may be prescribed by rules formulated by the commission.
(2) The commission shall not be required to maintain or preserve licensing history records of any person licensed under the provisions of this part 2 for any period of time longer than seven years.
Source: L. 2019: Entire title R&RE with relocations, (HB 19-1172), ch. 136, p. 631, � 1, effective October 1.
Editor's note: This section is similar to former � 12-61-112 as it existed prior to 2019.
12-10-217. Investigation - revocation - actions against licensee or applicant - definition. (1) The commission, upon its own motion, may, and, upon the complaint in writing of any person, shall, investigate the activities of any licensee or any person who assumes to act in the capacity of a licensee within the state, and the commission, after holding a hearing pursuant to section 12-10-219, has the power to impose an administrative fine not to exceed two thousand five hundred dollars for each separate offense and to censure a licensee, to place the licensee on probation and to set the terms of probation, or to temporarily suspend a license, or permanently revoke a license, when the licensee has performed, is performing, or is attempting to perform any of the following acts and is guilty of:
(a) Knowingly making any misrepresentation or knowingly making use of any false or misleading advertising;
(b) Making any promise of a character that influences, persuades, or induces another person when he or she could not or did not intend to keep the promise;
(c) Knowingly misrepresenting or making false promises through agents, advertising, or otherwise;
(d) Violating any provision of the Colorado Consumer Protection Act, article 1 of title 6;
(e) Acting for more than one party in a transaction without the knowledge of all parties thereto;
(f) Representing or attempting to represent a real estate broker other than the licensee's employer without the express knowledge and consent of that employer;
(g) In the case of a broker registered as in the employ of another broker, failing to place, as soon after receipt as is practicably possible, in the custody of that licensed broker-employer any deposit money or other money or fund entrusted to the employee by any person dealing with the employee as the representative of that licensed broker-employer;
(h) Failing to account for or to remit, within a reasonable time, any money coming into the licensee's possession that belongs to others, whether acting as real estate brokers or otherwise, and failing to keep records relative to the money, which records shall contain such information as may be prescribed by the rules of the commission relative thereto and shall be subject to audit by the commission;
(i) Converting funds of others, diverting funds of others without proper authorization, commingling funds of others with the broker's own funds, or failing to keep the funds of others in an escrow or a trustee account with some bank or recognized depository in this state, which account may be any type of checking, demand, passbook, or statement account insured by an agency of the United States government, and to keep records relative to the deposit that contain such information as may be prescribed by the rules of the commission relative thereto, which records shall be subject to audit by the commission;
(j) Failing to provide the purchaser and seller of real estate with a closing statement of the transaction, containing such information as may be prescribed by the rules of the commission or failing to provide a signed duplicate copy of the listing contract and the contract of sale or the preliminary agreement to sell to the parties thereto;
(k) Failing to maintain possession, for future use or inspection by an authorized representative of the commission, for a period of four years, of the documents or records prescribed by the rules of the commission or to produce the documents or records upon reasonable request by the commission or by an authorized representative of the commission;
(l) Paying a commission or valuable consideration for performing any of the functions of a real estate broker, as described in this part 2, to any person not licensed under this part 2; except that a licensed broker may pay a finder's fee or a share of any commission on a cooperative sale when the payment is made to a real estate broker licensed in another state or country. If a country does not license real estate brokers, then the payee must be a citizen or resident of the country and represent that the payee is in the business of selling real estate in the country.
(m) Disregarding or violating any provision of this part 2 or part 4 of this article 10, violating any reasonable rule promulgated by the commission in the interests of the public and in conformance with the provisions of this part 2 or part 4 of this article 10; violating any lawful commission orders; or aiding and abetting a violation of any rule, commission order, or provision of this part 2 or part 4 of this article 10;
(n) (I) Conviction of, entering a plea of guilty to, or entering a plea of nolo contendere to any crime in article 3 of title 18; parts 1, 2, 3, and 4 of article 4 of title 18; part 1, 2, 3, 4, 5, 7, 8, or 9 of article 5 of title 18; article 5.5 of title 18; parts 3, 4, 6, 7, and 8 of article 6 of title 18; parts 1, 3, 4, 5, 6, 7, and 8 of article 7 of title 18; part 3 of article 8 of title 18; article 15 of title 18; article 17 of title 18; section 18-18-404, 18-18-405, 18-18-406, 18-18-411, 18-18-412.5, 18-18-412.7, 18-18-412.8, 18-18-415, 18-18-416, 18-18-422, or 18-18-423; or any other like crime under Colorado law, federal law, or the laws of other states. A certified copy of the judgment of a court of competent jurisdiction of the conviction or other official record indicating that the plea was entered shall be conclusive evidence of the conviction or plea in any hearing under this part 2.
(II) As used in this subsection (1)(n), conviction includes the imposition of a deferred judgment or deferred sentence.
(o) Violating or aiding and abetting in the violation of the Colorado or federal fair housing laws;
(p) Failing to immediately notify the commission in writing of a conviction, plea, or violation pursuant to subsection (1)(n) or (1)(o) of this section;
(q) Having demonstrated unworthiness or incompetency to act as a real estate broker by conducting business in such a manner as to endanger the interest of the public;
(r) In the case of a broker licensee, failing to exercise reasonable supervision over the activities of licensed employees;
(s) Procuring, or attempting to procure, a real estate broker's license or renewing, reinstating, or reactivating, or attempting to renew, reinstate, or reactivate, a real estate broker's license by fraud, misrepresentation, or deceit or by making a material misstatement of fact in an application for the license;
(t) Claiming, arranging for, or taking any secret or undisclosed amount of compensation, commission, or profit or failing to reveal to the licensee's principal or employer the full amount of the licensee's compensation, commission, or profit in connection with any acts for which a license is required under this part 2;
(u) Using any provision allowing the licensee an option to purchase in any agreement authorizing or employing the licensee to sell, buy, or exchange real estate for compensation or commission, except when the licensee, prior to or coincident with election to exercise the option to purchase, reveals in writing to the licensee's principal or employer the full amount of the licensee's profit and obtains the written consent of the principal or employer approving the amount of the profit;
(v) Effective on and after August 26, 2013, fraud, misrepresentation, deceit, or conversion of trust funds that results in the entry of a civil judgment for damages;
(w) Any other conduct, whether of the same or a different character than specified in this subsection (1), that constitutes dishonest dealing;
(x) Having had a real estate broker's or a subdivision developer's license suspended or revoked in any jurisdiction, or having had any disciplinary action taken against the broker or subdivision developer in any other jurisdiction if the broker's or subdivision developer's action would constitute a violation of this subsection (1). A certified copy of the order of disciplinary action shall be prima facie evidence of the disciplinary action.
(y) Failing to keep records documenting proof of completion of the continuing education requirements in accordance with section 12-10-213 for a period of four years from the date of compliance with the section;
(z) (I) Violating any provision of section 12-10-218.
(II) In addition to any other remedies available to the commission pursuant to this article 10, after notice and a hearing pursuant to section 24-4-105, the commission may assess a penalty for a violation of section 12-10-218 or of any rule promulgated pursuant to section 12-10-218. The penalty shall be the amount of remuneration improperly paid and shall be transmitted to the state treasurer and credited to the general fund.
(aa) Within the last five years, having a license, registration, or certification issued by Colorado or another state revoked or suspended for fraud, deceit, material misrepresentation, theft, or the breach of a fiduciary duty, and such discipline denied the person authorization to practice as:
(I) A mortgage broker or mortgage loan originator;
(II) A real estate broker or salesperson;
(III) A real estate appraiser, as defined by section 12-10-602 (9);
(IV) An insurance producer, as defined by section 10-2-103 (6);
(V) An attorney;
(VI) A securities broker-dealer, as defined by section 11-51-201 (2);
(VII) A securities sales representative, as defined by section 11-51-201 (14);
(VIII) An investment advisor, as defined by section 11-51-201 (9.5); or
(IX) An investment advisor representative, as defined by section 11-51-201 (9.6).
(2) Every person licensed pursuant to section 12-10-201 (6)(a)(X) shall give a prospective tenant a contract or receipt; and the contract or receipt shall include the address and telephone number of the commission in prominent letters and shall state that the regulation of rental location agents is under the purview of the commission.
(3) In the event a firm, partnership, limited liability company, association, or corporation operating under the license of a broker designated and licensed as representative of the firm, partnership, limited liability company, association, or corporation is guilty of any of the foregoing acts, the commission may suspend or revoke the right of the firm, partnership, limited liability company, association, or corporation to conduct its business under the license of the broker, whether or not the designated broker had personal knowledge thereof and whether or not the commission suspends or revokes the individual license of the broker.
(4) Upon request of the commission, when any real estate broker is a party to any suit or proceeding, either civil or criminal, arising out of any transaction involving the sale or exchange of any interest in real property or out of any transaction involving a leasehold interest in the real property and when the broker is involved in the transaction in such capacity as a licensed broker, it shall be the duty of the broker to supply to the commission a copy of the complaint, indictment, information, or other initiating pleading and the answer filed, if any, and to advise the commission of the disposition of the case and of the nature and amount of any judgment, verdict, finding, or sentence that may be made, entered, or imposed therein.
(5) This part 2 shall not be construed to relieve any person from civil liability or criminal prosecution under the laws of this state.
(6) Complaints of record in the office of the commission and commission investigations, including commission investigative files, are closed to public inspection. Stipulations and final agency orders are public records subject to sections 24-72-203 and 24-72-204.
(7) When a complaint or an investigation discloses an instance of misconduct that, in the opinion of the commission, does not warrant formal action by the commission but that should not be dismissed as being without merit, the commission may send a letter of admonition by certified mail, return receipt requested, to the licensee against whom a complaint was made and a copy thereof to the person making the complaint, but the letter shall advise the licensee that the licensee has the right to request in writing, within twenty days after proven receipt, that formal disciplinary proceedings be initiated to adjudicate the propriety of the conduct upon which the letter of admonition is based. If the request is timely made, the letter of admonition shall be deemed vacated, and the matter shall be processed by means of formal disciplinary proceedings.
(8) All administrative fines collected pursuant to this section shall be transmitted to the state treasurer, who shall credit the same to the division of real estate cash fund.
(9) Any application for licensure from a person whose license has been revoked shall not be considered until the passage of one year from the date of revocation.
(10) When the division becomes aware of facts or circumstances that fall within the jurisdiction of a criminal justice or other law enforcement authority upon investigation of the activities of a licensee, the division shall, in addition to the exercise of its authority under this part 2, refer and transmit the information, which may include originals or copies of documents and materials, to one or more criminal justice or other law enforcement authorities for investigation and prosecution as authorized by law.
Source: L. 2019: Entire title R&RE with relocations, (HB 19-1172), ch. 136, p. 631, � 1, effective October 1.
Editor's note: This section is similar to former � 12-61-113 as it existed prior to 2019.
Cross references: For alternative disciplinary actions for persons licensed pursuant to this part 2, see � 24-34-106.
12-10-218. Affiliated business arrangements - definitions - disclosures - enforcement and penalties - reporting - rules - investigation information shared with the division of insurance. (1) As used in this section, unless the context otherwise requires:
(a) Affiliated business arrangement means an arrangement in which:
(I) A provider of settlement services or an associate of a provider of settlement services has either an affiliate relationship with or a direct beneficial ownership interest of more than one percent in another provider of settlement services; and
(II) A provider of settlement services or the associate of a provider directly or indirectly refers settlement service business to another provider of settlement services or affirmatively influences the selection of another provider of settlement services.
(b) Associate means a person who has one or more of the following relationships with a person in a position to refer settlement service business:
(I) A spouse, parent, or child of the person;
(II) A corporation or business entity that controls, is controlled by, or is under common control with the person;
(III) An employer, officer, director, partner, franchiser, or franchisee of the person, including a broker acting as an independent contractor; or
(IV) Anyone who has an agreement, arrangement, or understanding with the person, the purpose or substantial effect of which is to enable the person in a position to refer settlement service business to benefit financially from referrals of the business.
(c) Settlement service means any service provided in connection with a real estate settlement including, but not limited to, the following:
(I) Title searches;
(II) Title examinations;
(III) The provision of title certificates;
(IV) Title insurance;
(V) Services rendered by an attorney;
(VI) The preparation of title documents;
(VII) Property surveys;
(VIII) The rendering of credit reports or appraisals;
(IX) Real estate appraisal services;
(X) Home inspection services;
(XI) Services rendered by a real estate broker;
(XII) Pest and fungus inspections;
(XIII) The origination of a loan;
(XIV) The taking of a loan application;
(XV) The processing of a loan;
(XVI) Underwriting and funding of a loan;
(XVII) Escrow handling services;
(XVIII) The handling of the processing; and
(XIX) Closing of settlement.
(2) (a) An affiliated business arrangement is permitted where the person referring business to the affiliated business arrangement receives payment only in the form of a return on an investment and where it does not violate the provisions of section 12-10-217.
(b) If a licensee or the employing broker of a licensee is part of an affiliated business arrangement when an offer to purchase real property is fully executed, the licensee shall disclose to all parties to the real estate transaction the existence of the arrangement. The disclosure shall be written, shall be signed by all parties to the real estate transaction, and shall comply with the federal Real Estate Settlement Procedures Act of 1974, as amended, 12 U.S.C. sec. 2601 et seq.
(c) A licensee shall not require the use of an affiliated business arrangement or a particular provider of settlement services as a condition of obtaining services from that licensee for any settlement service. For the purposes of this subsection (2)(c), require the use shall have the same meaning as required use in 24 CFR 3500.2 (b).
(d) No licensee shall give or accept any fee, kickback, or other thing of value pursuant to any agreement or understanding, oral or otherwise, that business incident to or part of a settlement service involving an affiliated business arrangement shall be referred to any provider of settlement services.
(e) Nothing in this section shall be construed to prohibit payment of a fee to:
(I) An attorney for services actually rendered;
(II) A title insurance company to its duly appointed agent for services actually performed in the issuance of a policy of title insurance;
(III) A lender to its duly appointed agent for services actually performed in the making of a loan.
(f) Nothing in this section shall be construed to prohibit payment to any person of:
(I) A bona fide salary or compensation or other payment for goods or facilities actually furnished or for services actually performed;
(II) A fee pursuant to cooperative brokerage and referral arrangements or agreements between real estate brokers.
(g) It shall not be a violation of this section for an affiliated business arrangement:
(I) To require a buyer, borrower, or seller to pay for the services of any attorney, credit reporting agency, or real estate appraiser chosen by the lender to represent the lender's interest in a real estate transaction; or
(II) If an attorney or law firm represents a client in a real estate transaction and issues or arranges for the issuance of a policy of title insurance in the transaction directly as agent or through a separate corporate title insurance agency that may be established by that attorney or law firm and operated as an adjunct to his or her law practice.
(h) No person shall be liable for a violation of this section if the person proves by a preponderance of the evidence that the violation was not intentional and resulted from a bona fide error notwithstanding maintenance of procedures that are reasonably adopted to avoid the error.
(3) On and after July 1, 2006, a licensee shall disclose at the time the licensee enters into or changes an affiliated business arrangement, in a form and manner acceptable to the commission, the names of all affiliated business arrangements to which the licensee is a party. The disclosure shall include the physical locations of the affiliated businesses.
(4) On and after July 1, 2006, an employing broker, in a form and manner acceptable to the commission, shall at least annually disclose the names of all affiliated business arrangements to which the employing broker is a party. The disclosure shall include the physical locations of the affiliated businesses.
(5) The commission may promulgate rules concerning the creation and conduct of an affiliated business arrangement, including, but not limited to, rules defining what constitutes a sham affiliated business arrangement. The commission shall adopt the rules, policies, or guidelines issued by the United States department of housing and urban development concerning the federal Real Estate Settlement Procedures Act of 1974, as amended, 12 U.S.C. sec. 2601 et seq. Rules adopted by the commission shall be at least as stringent as the federal rules and shall ensure that consumers are adequately informed about affiliated business arrangements. The commission shall consult with the insurance commissioner pursuant to section 10-11-124 (2), concerning rules, policies, or guidelines the insurance commissioner adopts concerning affiliated business arrangements. Neither the rules promulgated by the insurance commissioner nor the commission may create a conflicting regulatory burden on an affiliated business arrangement.
(6) The division of real estate may share information gathered during an investigation of an affiliated business arrangement with the division of insurance.
Source: L. 2019: Entire title R&RE with relocations, (HB 19-1172), ch. 136, p. 636, � 1, effective October 1.
Editor's note: This section is similar to former � 12-61-113.2 as it existed prior to 2019.