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The Colorado Real Estate Commission (CREC) recently released revised and new real estate contract forms and addendums. These forms become mandatory Jan.1, 2008, and some real estate agents may have already started using them the first day of this month.
Changes to the forms, and implications of these changes, are included in the newly-released 2008 CREC Update Course that is currently being offered in Colorado. Some of the changes are highlighted in this article.
Foreclosure Property Addendum. The Foreclosure Protection Act has promulgated the use of the Foreclosure Property Addendum. This form was originally required in 2007 for properties that 1) Are in foreclosure; 2) The property is residential; 3) The buyer will not reside in the property for one year. This form is being changed for 2008. It clarifies when a broker can write the contract for a buyer and when an attorney must write the contract. This is form FPA33-8-07.
Changes in foreclosure process. Effective Jan. 1, 2008, the statutory redemption period after the sale for the homeowner will no longer exist. The property sale date will go from 45-60 days after the filing of the NED to 115-125 days after the filing of the NED. If the property is agricultural, the time is 215-230 days after the filing of the NED. This gives the owner an extended time to cure before the sale date.
Mortgage broker regulation. In 2006, Colorado passed legislation requiring all mortgage brokers doing business in Colorado to register with the Division of Real Estate. The 2007 state legislature passed a series of bills which now require mortgage brokers to be licensed. The outcome of the bills also requires a duty of good faith and fair dealing in all transactions with the borrower.
The bill clearly spells out the responsibilities of the lender. This bill has promulgated a new form required for the lenders; this is the Reasonable, Tangible, Net Benefit form.
As of January 2009, the law requires mortgage brokers doing business in Colorado to have completed nine hours of pre-license mortgage fundamentals education. The director of the Division of Real Estate may require more than the minimum number of hours. Mortgage brokers will also be required to pass a licensing exam, and to complete not more than nine hours of continuing education every three years. Mortgage brokers must carry errors and omissions insurance as requirement of the state statue.
Affiliated business arrangements. The law requires each real estate licensee to disclose to the Colorado Division of Real Estate the names and physical locations of all affiliated business arrangements.
Methamphetamine labs. A seller must disclose known prior unremediated meth lab use to the buyer in writing unless the property was cleaned to state standards. The law also says that although a broker does not have to disclose if the property was cleaned to state standards, the Division of Real Estate would expect the broker to give an honest answer if asked.
Source of water disclosure. Effective Jan.1, 2008, the seller is responsible for disclosure of the property’s source of water. This is required for listing contracts and purchase contracts using either the revised Seller’s Property Disclosure (section J) or the new Source of Water Addendum to the Contract to Buy and Sell.
Affidavit of eligibility. All Colorado real estate brokers must submit an Affidavit of Eligibility upon initial licensure and upon renewal and reinstatement of their license.
These changes touch on just some of the numerous changes effective on Jan. 1, 2008. In addition to these changes, there are many in the Buy Sell Agreement.
The 2008 CREC Update Classes are now available, and it is highly recommended that licensees attend these classes as soon as possible in order to be fully informed of the numerous changes. In this way, we can fulfill our responsibility of providing reasonable skill and care to our customers and clients.
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