As used in this part 4, unless the context otherwise requires:
(1) Broker shall have the same meaning as set forth in section 12-10-201 (6), except as otherwise specified in this part 4.
(2) Customer means a party to a real estate transaction with whom the broker has no brokerage relationship because the party has not engaged or employed a broker.
(3) (a) Designated broker means an employing broker or employed broker who is designated in writing by an employing broker to serve as a single agent or transaction-broker for a seller, landlord, buyer, or tenant in a real estate transaction.
(b) Designated broker does not include a real estate brokerage firm that consists of only one licensed natural person.
(4) Dual agent means a broker who, with the written informed consent of all parties to a contemplated real estate transaction, is engaged as a limited agent for both the seller and buyer or both the landlord and tenant.
(5) Limited agent means an agent whose duties and obligations to a principal are only those set forth in section 12-10-404 or 12-10-405, with any additional duties and obligations agreed to pursuant to section 12-10-403 (5).
(6) Single agent means a broker who is engaged by and represents only one party in a real estate transaction. A single agent includes the following:
(a) Buyer's agent, which means a broker who is engaged by and represents the buyer in a real estate transaction;
(b) Landlord's agent, which means a broker who is engaged by and represents the landlord in a leasing transaction;
(c) Seller's agent, which means a broker who is engaged by and represents the seller in a real estate transaction; and
(d) Tenant's agent, which means a broker who is engaged by and represents the tenant in a leasing transaction.
(7) Subagent means a broker engaged to act for another broker in performing brokerage tasks for a principal. The subagent owes the same obligations and responsibilities to the principal as does the principal's broker.
(8) Transaction-broker means a broker who assists one or more parties throughout a contemplated real estate transaction with communication, interposition, advisement, negotiation, contract terms, and the closing of the real estate transaction without being an agent or advocate for the interests of any party to the transaction. Upon agreement in writing pursuant to section 12-10-403 (2) or a written disclosure pursuant to section 12-10-408 (2)(c), a transaction-broker may become a single agent.
Source: L. 2019: Entire title R&RE with relocations, (HB 19-1172), ch. 136, p. 643, � 1, effective October 1.
Editor's note: This section is similar to former � 12-61-802 as it existed prior to 2019.
12-10-403. Relationships between brokers and the public - definition - rules. (1) When engaged in any of the activities enumerated in section 12-10-201 (6), a broker may act in any transaction as a single agent or transaction-broker. The broker's general duties and obligations arising from that relationship shall be disclosed to the seller and the buyer or to the landlord and the tenant pursuant to section 12-10-408.
(2) A broker shall be considered a transaction-broker unless a single agency relationship is established through a written agreement between the broker and the party or parties to be represented by the broker.
(3) A broker may work with a single party in separate transactions pursuant to different relationships including, but not limited to, selling one property as a seller's agent and working with that seller in buying another property as a transaction-broker or buyer's agent, but only if the broker complies with this part 4 in establishing the relationships for each transaction.
(4) (a) A broker licensed pursuant to part 2 of this article 10, whether acting as a single agent or transaction-broker, may complete standard forms for use in a real estate transaction, including standard forms intended to convey personal property as part of the real estate transaction, when a broker is performing the activities enumerated or referred to in section 12-10-201 (6) in the transaction.
(b) As used in this subsection (4), standard form means:
(I) A form promulgated by the real estate commission for current use by brokers, also referred to in this section as a commission-approved form;
(II) A form drafted by a licensed Colorado attorney representing the broker, employing broker, or brokerage firm, so long as the name of the attorney or law firm and the name of the broker, employing broker, or brokerage firm for whom the form is prepared are included on the form itself;
(III) A form provided by a party to the transaction if the broker is acting in the transaction as either a transaction-broker or as a single agent for the party providing the form to the broker, so long as the broker retains written confirmation that the form was provided by a party to the transaction;
(IV) A form prescribed by a governmental agency, a quasi-governmental agency, or a lender regulated by state or federal law, if use of the form is mandated by the agency or lender;
(V) A form issued with the written approval of the Colorado Bar Association or its successor organization and specifically designated for use by brokers in Colorado, so long as the form is used within any guidelines or conditions specified by the Colorado Bar Association or successor organization in connection with the use of the form;
(VI) A form used for disclosure purposes only, if the disclosure does not purport to waive or create any legal rights or obligations affecting any party to the transaction and if the form provides only information concerning either:
(A) The real estate involved in the transaction specifically; or
(B) The geographic area in which the real estate is located generally;
(VII) A form prescribed by a title company that is providing closing services in a transaction for which the broker is acting either as a transaction-broker or as a single agent for a party to the transaction; or
(VIII) A letter of intent created or prepared by a broker, employing broker, or brokerage firm, so long as the letter of intent states on its face that it is nonbinding and creates no legal rights or obligations.
(c) A broker shall use a commission-approved form when such a form exists and is appropriate for the transaction. A broker's use of any standard form described in subsection (4)(b)(III) or (4)(b)(IV) of this section must be limited to inserting transaction-specific information within the form. In using standard forms described in subsection (4)(b)(II), (4)(b)(V), (4)(b)(VI), (4)(b)(VII), or (4)(b)(VIII) of this section, the broker may also advise the parties as to effects thereof, and the broker's use of those standard forms must be appropriate for the transaction and the circumstances in which they are used. In any transaction described in this subsection (4), the broker shall advise the parties that the forms have important legal consequences and that the parties should consult legal counsel before signing the forms.
(5) Nothing contained in this section shall prohibit the public from entering into written contracts with any broker that contain duties, obligations, or responsibilities that are in addition to those specified in this part 4.
(6) (a) If a real estate brokerage firm has more than one licensed natural person, the employing broker or an individual broker employed or engaged by that employing broker shall be designated to work with the seller, landlord, buyer, or tenant as a designated broker. The employing broker may designate more than one of its individual brokers to work with a seller, landlord, buyer, or tenant.
(b) The brokerage relationship established between the seller, landlord, buyer, or tenant and a designated broker, including the duties, obligations, and responsibilities of that relationship, shall not extend to the employing broker nor to any other broker employed or engaged by that employing broker who has not been so designated and shall not extend to the firm, partnership, limited liability company, association, corporation, or other entity that employs the broker.
(c) A real estate broker may have designated brokers working as single agents for a seller or landlord and a buyer or tenant in the same real estate transaction without creating dual agency for the employing real estate broker, or any broker employed or engaged by that employing real estate broker.
(d) An individual broker may be designated to work for both a seller or landlord and a buyer or tenant in the same transaction as a transaction-broker for both, as a single agent for the seller or landlord treating the buyer or tenant as a customer, or as a single agent for a buyer or tenant treating the seller or landlord as a customer, but not as a single agent for both. The applicable designated broker relationship shall be disclosed in writing to the seller or landlord and buyer or tenant in a timely manner pursuant to rules promulgated by the real estate commission.
(e) A designated broker may work with a seller or landlord in one transaction and work with a buyer or tenant in another transaction.
(f) When a designated broker serves as a single agent pursuant to section 12-10-404 or 12-10-405, there shall be no imputation of knowledge to the employing or employed broker who has not been so designated.
(g) The extent and limitations of the brokerage relationship with the designated broker shall be disclosed to the seller, landlord, buyer, or tenant working with that designated broker pursuant to section 12-10-408.
(7) No seller, buyer, landlord, or tenant shall be vicariously liable for a broker's acts or omissions that have not been approved, directed, or ratified by the seller, buyer, landlord, or tenant.
(8) Nothing in this section shall be construed to limit the employing broker's or firm's responsibility to supervise licensees employed by the broker or firm nor to shield the broker or firm from vicarious liability.
Source: L. 2019: Entire title R&RE with relocations, (HB 19-1172), ch. 136, p. 644, � 1, effective October 1.
Editor's note: This section is similar to former � 12-61-803 as it existed prior to 2019.
12-10-403.5. Broker engagement contracts - residential premises - prohibited terms - definition. (1) As used in this section, unless the context otherwise requires, broker engagement contract means a written contract in which a seller, buyer, landlord, or tenant of a residential premises becomes the client of a broker or agrees to retain the services of a broker in the future and promises to pay the broker a valuable consideration or agrees that the broker may receive a valuable consideration from another person in exchange for the broker:
(a) Producing a seller, buyer, tenant, or landlord ready, able, and willing to sell, buy, or rent the residential premises; or
(b) Performing other services.
(2) A broker engagement contract must not:
(a) Purport to be a covenant running with the land or to be binding on future owners of interests in the real property;
(b) Allow for assignment of the right to provide service without notice and agreement of the owner of the residential premises; or
(c) Purport to create a recordable lien, encumbrance, or other real property security interest. Any such lien, encumbrance, or other real property security interest is void and unenforceable.
(3) A person who offers to a consumer a broker engagement contract that includes a provision in violation of subsection (2) of this section commits an unfair or deceptive trade practice, as provided in section 6-1-105 (1)(uuu).
(4) This section does not apply to:
(a) A home warranty service contract, as defined in section 12-10-901 (2)(a);
(b) A building warranty or similar product that covers the cost of maintenance of a major housing or building system, such as a plumbing or an electrical system, for a specific period of time after the date on which a house or building is sold;
(c) An insurance contract;
(d) An option to purchase, a put requirement to purchase, a right of first offer, or a right of refusal;
(e) A declaration created in the formation of a common interest community, as defined in section 38-33.3-103 (8), or an amendment to the declaration;
(f) A maintenance or repair agreement entered into by a unit owners' association, as defined in section 38-33.3-103 (3);
(g) A loan or a commitment to make or receive a loan, which loan or commitment is secured by real estate;
(h) A security agreement under the Uniform Commercial Code relating to the sale or rental of personal property or fixtures;
(i) Water, sewer, electrical, telephone, cable, or other regulated utility service providers; or
(j) A property management agreement by which the owner of real property contracts with a party to provide management services for the maintenance, ownership, operation, or lease of a residential premises.
Source: L. 2023: Entire section added, (SB 23-077), ch. 50, p. 179, � 1, effective August 7.
Cross references: For the Uniform Commercial Code, see title 4.