Colorado Contracts Flashcards
(179 cards)
1
Q
Being given the power to sign on ones behalf would be an example of what?
A
An Attorney in Fact is the limited power of attorney to sign on ones behalf.
2
Q
When is a Real Estate License not required?
A
When serving as an attorney-in-fact under a power of attorney
3
Q
What entity appoints members to the Colorado Real Estate Commission?
A
The Governor
4
Q
What is an action that may violate Real Estate License Law in Colorado?
A
Using multiple names for conducting real estate business
5
Q
How long do members of the Real Estate Commission hold office?
A
3 years
6
Q
What is the consequence of failing to file the appropriate broker’s application within one year of passing the examination?
A
Automatic cancellation of the examination results
7
Q
In the event of termination of employment, who is responsible for notifying the commission?
A
Both the licensee and the broker
8
Q
How long does a licensee have to notify the commission of a change of employment or business location?
A
Immediately
9
Q
How long does a person have to apply for reinstatement after the expiration of a license before being treated as a new applicant?
A
3 years
10
Q
What is the consequence of failing to renew a license before January 1st of the succeeding year following expiration of your license?
A
Inactivation of your license
11
Q
What happens to every real estate broker’s license if the employing broker’s license is suspended, expired, or revoked?
A
They are automatically suspended pending notification
12
Q
What type of payment is allowed under affiliated business arrangements (ABA) regulations?
A
A fee to an attorney for services rendered
13
Q
How long do I have to keep CE requirements?
A
4 years
14
Q
What must a broker provide to both the purchaser and seller of real estate?
A
A closing statement of the transaction
15
Q
Under what condition can a real estate broker be disciplined for the unlawful acts of their employees?
A
If the broker was negligent in supervising employees
16
Q
When can a real estate agent or broker claim a commission if the transaction is not consummated?
A
When the owner refuses or neglects to consummate the transaction as agreed upon
17
Q
From whom can a real estate broker employed by another broker legally accept a commission or valuable consideration?
A
The broker’s employer, who is a licensed real estate broker
18
Q
What must an agent or broker do to ensure the owner corrects title defects?
A
Secure an enforceable contract from the purchaser
19
Q
What is a real estate broker’s liability for the unlawful acts of an employee?
A
The broker is liable if they had actual knowledge of the act or were negligent in supervision
20
Q
What must a broker disclose in writing before engaging in any activities as a transaction broker?
A
That they are not acting as an agent for the party
21
Q
What is a “designated broker”?
A
A broker designated to serve as a single agent or transaction-broker
22
Q
What does “Broker,” “employing real estate broker,” or “employing broker” mean?
A
A broker who employs or engages another broker
23
Q
What happens if the fees accompanying any application to the Commission are paid with a check that is not immediately paid upon presentment to the bank?
A
The application will be canceled
24
Q
What is required for a temporary broker’s license to be issued to a corporation, partnership, or limited liability company?
A
The designated individual must be a Colorado real estate broker with two years of active license experience
25
Who is responsible for the maintenance of all trust accounts when a broker is employed by another broker?
The employing broker
26
What must a broker do with earnest money received under an executory sales contract for new construction?
Deposit it in a trust account and not use it for construction without written consent
27
What is prohibited under diversion/conversion rules?
Using one beneficiary's money for the benefit of another beneficiary
28
What is required if a branch office maintains a separate trust account?
What is required if a branch office maintains a separate trust account?
29
What must a holdover agreement provision refer to?
Properties or persons negotiated with during the term of the agreement
30
What must a broker do if they deliver earnest money to a lawyer or closing entity?
Obtain a dated and signed receipt from the person or transaction file
31
Who is responsible for the proper closing of a transaction?
The individual licensee who established the brokerage relationship with the buyer or seller
32
What are real estate brokers required to use according to Rule F?
Commission-approved forms as appropriate to a transaction or circumstance
33
What is the significance of the printed portions of the form, except differentiated additions?
They are approved by the Colorado Real Estate Commission
34
Which of the following brokerage relationships are available?
Buyer agency, seller agency, or transaction-brokerage
35
What happens if more than one individual is designated as a broker in a multiple-person firm?
The references in the Seller Listing Contract include all designated persons
36
Is a broker obligated to seek additional offers while the property is under contract for sale?
No, never
37
What are additional duties of a Seller’s Agent?
Promoting the interests of the seller with the utmost good faith, loyalty, and fidelity
38
What must a Transaction-Broker do
Facilitate sales transactions without being an advocate or agent for either party
39
What must the Listing Period have?
A definite start and end date
40
What change occurs if a broker delivers a written Change of Status to the Seller?
The broker works with both the Seller and buyer as a Transaction Broker
41
What is required for a broker to earn a commission on a sale after the listing period has expired?
The broker must have submitted the buyer's name in writing during the listing period
42
What must happen for a commission to be earned during a holdover period?
The broker must submit the buyer's name in writing
43
What is Colorado Withholding?
If the seller is not exempt, the Colorado Department of Revenue may require a portion of the seller’s proceeds to be withheld after closing when seller with not be a Colorado resident after closing.
44
What may the Colorado Department of Revenue require if the Seller is not exempt?
A portion of the Seller’s proceeds to be withheld after Closing
45
What is the Brokerage Firm authorized to do with the earnest money deposit?
Deliver it to the closing agent at or before the closing
46
When is withholding not required by the Colorado Department of Revenue?
When the selling price of the property is not more than $100,000
47
Under what circumstances does the Brokerage Firm need to handle the earnest money deposit?
Pursuant to a proposed contract for the Sale of the Property
48
If a check is received as earnest money under contract, what must be done with it according to the contract?
It must be identified as a check in the contract and presented for payment in a timely manner
49
What must be done for a fixture to be excluded from the sale?
It must be listed as an exclusion in the contract
50
What are trade fixtures?
Improvements made by a tenant to facilitate business operations
51
Which items are included in the property if they are attached on the date of the Seller Listing Contract?
Lighting, heating, and air conditioning units
52
Which of the following is typically included in the property if attached?
Inside telephone wiring and connecting blocks/jacks
53
Which type of deed provides the most comprehensive guarantee of title?
General Warranty Deed
54
What should the Seller's Property Disclosure Form reflect?
The seller's current, actual knowledge of the property's condition
55
In what condition will the property be conveyed unless otherwise agreed in writing?
As-is condition existing as of the date of the contract for Sale or Lease
56
Who can agree to any repairs or other work to be performed on the property prior to sale?
The seller, at the seller's sole option, in writing
57
What must a Seller disclose to any prospective buyer under Colorado law?
All adverse material facts actually known by the Seller
58
What must a real estate licensee recommend before the closing of a real estate transaction?
An examination of title and the use of legal counsel
59
What is required if a licensee sells, buys, or leases real property on their own account?
They must disclose any known conflict of interest and their license status in the contracting instrument or in a separate concurrent writing
60
Under what condition can a Colorado broker pay a commission to an out-of-state broker?
If the out-of-state broker resides and maintains an office in another state or country
61
What is required for funds to be considered "Good Funds" at closing?
They must be available for immediate withdrawal from the financial institution
62
What must a broker do if they change their status from an agent to a transaction broker in a transaction?
Check the box for “Transaction Broker” and “This is a Change of Status” in the Commission-approved form
63
When must a broker disclose a change from acting as a party’s agent to a transaction broker?
At the time the broker begins to assist as a transaction broker, but not later than the time the party signs the contract
64
How must an office brokerage relationship policy be provided to licensees?
In a written document that is read, agreed to, and signed by each licensee
65
What is the obligation of a licensee regarding the preparation of legal documents in a real estate transaction?
There is no obligation to prepare legal documents, and no separate fee can be charged for their preparation
66
What must a broker determine before engaging in real estate brokerage activities?
Whether they possess the necessary experience, training, and knowledge
67
What must a supervising broker have to receive confidential information from a designated broker?
Informed consent from the party the designated broker is assisting
68
What must a licensee advise a buyer and seller if exact square footage is a concern?
To independently measure the property
69
What must be disclosed to the buyer and seller if the square footage information is provided from another source?
The date of issuance of the measurement
70
What must a licensee disclose when disseminating information about the square footage of a property?
The methodology or manner in which the measurement was taken
71
What must a broker do if they delete part or all of a provision in a Commission-approved form?
Retain the provision’s caption or heading followed by the words “omitted-not applicable”
72
What is a broker required to ensure when using transaction-specific clauses drafted by their licensed Colorado attorney?
The broker understands the clauses and uses them appropriately
73
How must provisions inserted into blank spaces on Commission-approved forms be printed?
In a style or type that clearly differentiates from the original form
74
What type of disciplinary actions taken in another jurisdiction must be reported to the commission?
Actions that would constitute a violation of the real estate license law in Colorado
75
What must be included in any form drafted by a licensed Colorado attorney representing the broker, the employing broker, or the brokerage firm?
The language “This form has not been approved by the Colorado Real Estate Commission” and the name of the attorney or law firm
76
What is required in the written notice when a broker prepares an estimate of value or evaluation?
A statement that the preparer is not a licensed or certified real estate appraiser
76
What must a broker do if they receive earnest money in a real estate transaction?
Retain it in a trust account until the transaction is consummated, defeated, or settlement has occurred
77
Under what circumstances does Rule F-7 require the use of the Licensee Buyout Addendum?
When a licensee enters into a contract to purchase a property concurrent with the listing of such property
78
What does the Brokerage Relationships Act require of agents?
To promote the interests of their buyers or sellers with the utmost good faith
79
What must be included in the written notice to tenants when a security deposit is transferred to a new broker or landlord?
The specific requirements for the procedure in which the tenant may request return of the deposit
80
Within how many business days must a broker deposit money belonging to others received while acting as a property manager?
5 business days
81
What does the subdivision improvement contract need to be accompanied by?
Collateral sufficient to ensure completion of the improvements
82
What happens if a developer sells land from an unapproved subdivision?
They are subject to a financial penalty and the sale may be enjoined by the zoning commission
83
What types of subdivisions must be registered with the Real Estate Commission in Colorado?
Any division of real property into twenty or more interests intended solely for residential use
84
What is the concern with "coming soon" listings according to the Commission?
They provide limited exposure of the property on the open market
85
In what year did the legislature give the Colorado Real Estate Commission statutory authority to promulgate standard forms for use by real estate licensees?
1993
86
What must a broker's office be connected with to legally prepare documents according to the Colorado Supreme Court?
The transaction
87
According to the summary by John E. Gorsuch, what should a broker always recommend to the purchaser?
Examining the title
88
What happens to property owned by a person who dies without leaving a will or heirs?
It is taken by the state through escheat
89
When is a broker required to transfer a tenant's security deposit?
When the broker no longer manages the property
90
Which type of easement attaches to and benefits the land owned by the easement holder?
Appurtenant easement
91
In "tenancy in common," what happens to the decedent's interest?
It passes according to the decedent's will or state law
92
What is a key characteristic of "joint tenancy"?
The title is vested equally in all joint tenants
93
Which term describes a common-interest community where portions of the real estate are designated for separate ownership, and the remainder is commonly owned?
Condominium
94
What is NOT a characteristic of a planned community?
It is exclusively owned by individual unit or lot owners as tenants in common
95
Does a deed need to be notarized and recorded to be valid?
No
96
What is the main purpose of recording a deed?
To provide constructive notice
97
What does an owner’s title insurance policy protect?
An owner’s title insurance policy protects the owner’s financial interest in the property, covering potential defects or issues with the title that could affect the owner’s right to the property.
98
By when did Colorado law require that the source of potable water be disclosed in residential real estate contracts?
January 1, 2008
99
What are the dates and deadlines section in a real estate contract considered?
Contingencies
100
What are common contingencies in a contract?
Appraisal, Inspection, Title, New Loan Availability, Financing, Insurance, HOA
101
Which of the following must the seller provide to the buyer concerning water rights?
Well Permit #
102
If a seller defaults by not signing the Earnest Money Release Form, what can the buyer do?
Claim the seller is in default and seek legal remedy
103
Can the buyer get earnest money back if they were in a special taxing district (more taxes due than most people pay)
Yes
104
Why might special taxing districts increase mill levies and taxes?
To support the servicing of debt
105
What should buyers do to investigate special taxing districts?
Contact the county treasurer and review the certificate of taxes due
106
What is the primary purpose of title insurance in a real estate transaction?
To ensure clear ownership and protect against title defects
107
When is a title considered "marketable"?
When it is free from significant liens and encumbrances
108
What right does the Buyer have if the Buyer discovers an adverse material fact after the contract date?
The right to terminate the contract
109
When does the Buyer's right to terminate based inspection end?
Five days after the Buyer's receipt of the new disclosure and before the specified inspection termination deadline
110
What is the contract conditional upon in the "Conditional Upon Sale of Property" clause?
Sale and closing of a property owned by the Buyer
111
What must the Seller do if withholding is required under FIRPTA?
Authorize the Closing Company to withhold the amount from Seller’s proceeds
112
What could happen if required withholding for a foreign Seller does not occur?
The Buyer could be held liable for the amount of the Seller’s tax, interest, and penalties
113
What should the Seller do to determine if Colorado withholding applies or if an exemption exists?
Consult with Seller’s tax advisor
114
Who is responsible for verifying the Seller’s status regarding Colorado withholding?
The Seller
115
When will possession of the Property and Inclusions be delivered to the Buyer?
On Possession Date at Possession Time specified in the dates & deadlines section of the contract
116
What does the term "Good Funds" refer to?
Any form of payment agreed upon by Buyer and Seller
117
What happens if any payment due, including Earnest Money, is not paid on time?
The non-defaulting party can cancel the contract
118
What happens if Seller fails to timely execute and return the Earnest Money Release Form?
Failure to return the Earnest Money Release Form puts the Seller in default and liable for potential damages to the Buyer.
119
What does an Exclusive Right-to-Buy Contract entail?
The broker assists the buyer as a transaction-broker or represents them as an agent.
120
121
What is required for an agreement to be considered legally binding and enforceable?
Consideration
122
What must be present for a valid contract to exist?
Mutual Assent
123
What law requires certain agreements to be in writing to be enforceable?
Statute of Frauds
124
What is the term for a promise by one party to act in a certain manner provided the other party acts as requested?
Offer
125
What is the purpose of the Parol Evidence Rule?
To prevent earlier oral or written statements from varying the terms of a written contract
126
What legal concept protects parties against agreements obtained through fraud, misrepresentation, or duress?
Reality of Consent
127
Who are the individuals presumed to have legal capacity to enter into contracts?
All parties, except those with certain disabilities
128
What does a buy-sell contract determine in a real estate transaction?
The type of title to be conveyed and the manner of payment
129
Under what condition can a lender call the entire balance of the loan due?
If the subject property is conveyed without the lender's consent
130
What must the consideration statement in a deed of trust or mortgage include?
The debt being secured, including the loan amount and terms, providing clarity on the obligations of the borrower.
mount
131
Which lien is a general lien
Federal Tax Lien
132
What types of liens are specific liens?
Mechanic, Judgment, Mortgage
133
What must a property owner do to redeem their property after a tax sale?
Pay the delinquent taxes and interest
134
What type of lien is created when a seller does not receive the full purchase price from the buyer?
Vendor's lien
135
What is the priority of federal tax liens among other liens or encumbrances?
Based on the date filed
136
What type of lien may arise if a decedent's personal property is insufficient to pay debts?
Estate Lien
137
What must a tenant provide before filing a legal action for wrongful withholding of a security deposit?
Seven days' notice to the landlord
138
What must a landlord provide if there is actual cause for retaining any portion of the security deposit?
A written statement listing exact reasons
139
What is the landlord's burden of proof in any court action brought by a tenant under the security deposit regulations?
That the withholding was not wrongful
139
What is considered "normal wear and tear" in the context of security deposits?
Deterioration based on intended use without abuse
140
Which type of lease does not require notice for termination?
Tenancy at will (because there is a fixed date, no notice is required to terminate it)
141
What is a lease?
Both a contract and a conveyance
142
What is a ground lease?
A tenancy for years for unimproved land
143
Is it discrimination if someone can't get a loan because they are on public assistance?
No, not if they don't have the funds for the loan.
144
What does the term "familial status" mean under Colorado Fair Housing law?
The presence of one or more individuals under 18 years of age
145
When did Colorado include physical handicap as a protected class in the Fair Housing Act?
1977
146
Under Colorado law, which of the following is not considered a material fact subject to disclosure in a real estate transaction?
That an occupant was suspected of having HIV
147
What additional protections does the Colorado Fair Housing Act provide compared to the federal Fair Housing Act?
Protections against discrimination based on ancestry and marital status
148
When did Colorado include physical handicap as a protected class in the Fair Housing Act?
1977
149
Time, possession, interest and title relate to:
Joint Tenancy
150
Which lines run east to west?
Tier, correction, base lines all run east to west
151
Can a life estate be passed by a will?
No. But it can be mortgaged, leased or sold.
152
Sole Ownership of Land Is what type of Holding?
Ownership in Severalty
153
What is police power?
Zoning and Planning are considered examples of police power.
154
In Colorado when a property is sold for unpaid property tax, the purchaser, at the time of purchase, receives:
A certificate of purchase
155
What is the maximum amount of time a lessor can hold a security deposit in Colorado after termination of a lease?
60 days regardless of time of the lease.
156
The lenders margin is:
An amount added to the Index Rate on an adjustable mortgage.
157
What is the protection clause in a listing?
Protects the seller (and the broker) and future commissions for a sale in the future.
158
How long does a broker need to retain settlement statements after a closing?
4-7 years
159
how many square feet is an acre?
43,560
160
What is the difference between an easement in gross and an appurtenant easement?
An easement in gross benefits the person (not tied to the land) while an appurtenant easement is tied to the land.
161
Whether or not an FHA loan is a qualified or unqualified assumption depends on:
The date of the loan. If before 1989 it can largely be assumed freely.
162
Damages to a property caused by a life tenant over and above ordinary use and wear are called:
Waste
163
First Right of Rescission typically doesn't apply to which type of loan?
First Mortgage on a first home.
164
Sole ownership of land is what type of ownership?
Ownership in Severalty - exclusive rights to the property and the simplest form of ownership.
165
What are the two primary actions involved in a real estate closing?
Transfer of title and payment of the purchase price
166
What is meant by "delivery and acceptance" in real estate transactions?
Seller signs the deed and buyer takes possession of the deed
167
What is the Covenant of Seisin?
Assurance that the grantor has the legal right to convey the property
168
What does the Covenant of Quiet Enjoyment guarantee?
Undisturbed possession and use of the property
169
Which covenant ensures that the property is free from any undisclosed encumbrances or liens?
Covenant Against Encumbrances
170
Which covenant obligates the grantor to defend the title against any claims or challenges in the future?
Covenant of Further Assurance
171
171
What is included in the payoff statement provided by the seller's lender?
The unpaid principal, accrued interest, and fees
172
What does the buyer's lender require from the seller before the closing?
A title commitment or abstract
173
What is Form 1099-S used for in real estate transactions?
Reporting the sale or exchange of real estate
174
What action must be taken if funds are not immediately available for withdrawal on the settlement date?
No disbursements may be made until funds are available
175
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