Chapter 2: Colorado Real Estate Commission Rules Flashcards

Chapter 2: Colorado Real Estate Commission Rules Flashcards

A-25If your application, renewal, or any other fee is paid for by a check that bounces, the application is cancelled. It may be reinstated at the Commission's discretion only if made good, plus payment of whatever penalty administrative fee that may be imposed.Rule E-19In a transaction in which a licensee will earn a commission, a licensee may never accept a fee or incentive of any kind from a title insurance company.COMMISSION RULE C - LICENSING - OFFICEC-1 A broker licensed as an individual proprietorship must be the sole owner of the brokerage.C-17The commission may refuse to issue a license that duplicates (or is similar to) the name on a license that has been suspended or revoked.Rule E-21If the commission sends written notice of a complaint against you, or that you have been selected for an audit, or that recordkeeping problems were discovered in an audit, you must respond in writing within the time allowed,

including:Full response to the allegation or complaint.Full

response to any additional questions in the notice.Any requested documents or records.Any additional pertinent explanation or material.Rule E-14In every transaction, before closing the licensee must recommend a.) Examination of title and b.) Use of legal counsel.Rule E-1(p)Money belonging to one beneficiary of an escrow account may never be used for the benefit of another beneficiary.(Such a "borrowing," even accidentally, is a likely cause of a negative ledger balance.) Rule E-1(j)Money received under an installment land contract must be held in an escrow account until the land contract is signed by the seller and a copy of the signed contract is delivered to the buyer.Rule E-4A broker must deliver a duplicate of any broker-prepared document that pertains to the employment agreement or property transaction, and must retain a copy of such duplicate for inspection by the real estate commission.If such documents are finance-related (e.g. note, deed of trust, etc.) they should be unsigned or prominently marked "Copy", as the originals are negotiable as real money.Brokers working with buyers have the same duplicate delivery and record retention requirements as

above. A buyer broker is not required to maintain a copy of the listing contract nor of the seller's settlement statement.Rule E-23A Colorado broker may pay a finder's fee or share a

commission with an out-of-state broker if:The out-of-state

licensed broker must have a domicile and office elsewhere.All advertising, negotiating, contracting and conveyance done in Colorado must be in the name of the Colorado broker.All pre-closing funds are deposited in the Colorado broker's name according to Colorado Commission rules.

D-12License renewal fees are non-refundable.B-14When you submit an application for license renewal, activation or reinstatement, you are automatically attesting that you are in compliance with any applicable continuing education requirement.The employing or independent broker must retain a signed copy of all settlement statements for future use or inspection by the real estate commission.Settlement

statement(s) must show:

Date of closing.Purchase price.Itemization of adjustments, money or things of value debited or credited to the pertinent party.Date of adjustments, if not the same as closing date.Balance(s) due from respective parties to the contract.Payees, Makers and Assignees of any notes paid, made or assumed.Debit and Credit of any pre-owned home warranty service contract.Rule E-1(m)Property management funds must be deposited within 5 business days following receipt.Rule E-31REASONABLE Supervision of experienced licensees

means:Maintain written office policy detailing licensed

employee duties and responsibilities. Such policies shall be given to, read and signed by each licensee and be available for Commission inspection.Review all executed contracts to ensure competent preparation.Review transaction files to ensure inclusion of all pertinent documents.Employed broker may delegate supervisory authority to other experienced licensees

provided:Delegated licensee bears joint responsibility

withEmploying Broker for compliance.Delegation must be in writing, signed by the delegate and available for Commission inspection.Employing broker may never contract to delegate responsibility for broker supervision.Rule E-1(q)Anything of value received in lieu of cash shall be held by the broker unless otherwise agreed. (So try not to accept a sailboat as earnest money. It's not only costly to store, but frustrating to not be able to enjoy it on the water.) Rule E-5A broker must sign and provide an accurate, complete and detailed settlement statement at the time of closing to his or her client or customer. If signed by the employed licensee, settlement statements must be delivered to the employing broker immediately after closing. This rule places the closing responsibility on the designated broker, but does not relieve the employing broker's supervisory responsibilities.Rule E-1(o). Recordkeeping Requirements. Cont'd Ledger, a chronological log of all deposits/disbursements made on behalf of each beneficiary (seller, buyer, tenant or landlord) to a transaction. Each ledger entry must contain the same information as above for journal entries. No individual ledger may EVER have a negative (less than

zero dollars) balance.Bank Reconciliation Worksheet, Brokers must reconcile each escrow account monthly (unless no banking activity occurred in the account).Reconciliation is satisfactory when the journal cash balance exactly matches the sum of all ledgers and then exactly matches the balance on the monthly statement from the bank.Rule E-1(a)Trust accounts must be in the name of the licensed individual broker, or if the brokerage is licensed as an entity, in the name of the individual employing broker AND the entity. The individual broker must always be able to