Written by Ron hilds - Title Insurance | Fidelity National
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On April 5, 2016, the Real Estate Commission held a Rule Making Hearing in an effort to develop more clarity on just what forms a real estate agent could use in his/her real estate pracce. Two years ago, as a result of dis- cussions from the April 1, 2014 meeng of the Commission, we predicted that “…licensees should expect a Real Estate Commission that will now redouble its efforts to re-define and newly restrict the Rule F regulaons that govern the use of non-standard forms.” [See: “Dust-up at the ‘Division’ over Seller Financing”, Fidelity Naonal Title Newsleer, May 2014, see: Dust-Up ] That forecast came to a head on April 5, 2016, during a contenous hearing when the Commission failed to approve the very Rules it had proposed for adopon. At issue is the import of Secon 12-61-803(4) C.R.S. which restricts brokers to compleng “standard forms including those promulgated by the Colorado Real Estate Commission”. Clearly, there are quite a number of Commission approved forms available for the praccing broker to use. What is not so clear, however: What is a “standard form” as that term is used in this secon of the law? Stated differently, if a form has not been designed and approved by the Commission, what makes that form “standard” in the sense it may be used by the broker? That was the “rub” precipitang some three hours of discussion at the April 5th hearing, ending in the tabling of the queson when there was no consensus among the Commissioners. The F-7 Rule, as published and proposed, sought to have aorneys very much involved in the preparaon and/or approval of such forms, with requirements for annual review, record-keeping and regular training of brokers before they would be authorized to use such forms. [For specific details, see: F-7 Rule] The problem sought to be overcome in this hearing was to establish specific criteria for the creaon and maintenance of standard forms available for use by the broker community. Two opposing camps quickly emerged during the tesmony at the hearing: (i) those who favor a liberal interpretaon, giving wide latude for the creaon of forms by real estate boards, trade associaons, etc., on the one hand; and (ii) those who advocated that only aorneys be involved in the creaon of these forms to avoid the missteps of brokers engaging in the unauthorized pracce of law. There was a lot of discussion about the much-heralded Conway-Bogue decision; the landmark Colorado Supreme Court case which held that real estate brokers could engage in the limited pracce of law for the purposes of preparing “standard and approved” forms. A strict reading of that case, however, reveals two important facts: (i) the Court did not define what the term “standard and approved” form means, and (ii) the Court based its enre decision on facts and circumstances which no longer exist in the day-to-day pracce of real estate in Colorado. In an effort to lend some clarity and legimacy to idenfying a “standard form”, the Real Estate Commission had promulgated the new F-7 Rule, which failed to pass, and leaves the broker community with the same degree of uncertainty which has existed for many years. CREC & Real Estate Forms: Some Work – Some Don’t Newsleer - May 2016
Transcript of Written by Ron hilds - Title Insurance | Fidelity National
On April 5, 2016, the Real Estate Commission held a Rule Making Hearing in an effort to develop more clarity on just what forms a real estate agent could use in his/her real estate practice. Two years ago, as a result of dis-cussions from the April 1, 2014 meeting of the Commission, we predicted that “…licensees should expect a Real Estate Commission that will now redouble its efforts to re-define and newly restrict the Rule F regulations that govern the use of non-standard forms.” [See: “Dust-up at the ‘Division’ over Seller Financing”, Fidelity National Title Newsletter, May 2014, see: Dust-Up ] That forecast came to a head on April 5, 2016, during a contentious hearing when the Commission failed to approve the very Rules it had proposed for adoption.
At issue is the import of Section 12-61-803(4) C.R.S. which restricts brokers to completing “standard forms including those promulgated by the Colorado Real Estate Commission”. Clearly, there are quite a number of Commission approved forms available for the practicing broker to use. What is not so clear, however: What is a “standard form” as that term is used in this section of the law? Stated differently, if a form has not been designed and approved by the Commission, what makes that form “standard” in the sense it may be used by the broker? That was the “rub” precipitating some three hours of discussion at the April 5th hearing, ending in the tabling of the question when there was no consensus among the Commissioners.
The F-7 Rule, as published and proposed, sought to have attorneys very much involved in the preparation and/or approval of such forms, with requirements for annual review, record-keeping and regular training of brokers before they would be authorized to use such forms. [For specific details, see: F-7 Rule] The problem sought to be overcome in this hearing was to establish specific criteria for the creation and maintenance of standard forms available for use by the broker community. Two opposing camps quickly emerged during the testimony at the hearing: (i) those who favor a liberal interpretation, giving wide latitude for the creation of forms by real estate boards, trade associations, etc., on the one hand; and (ii) those who advocated that only attorneys be involved in the creation of these forms to avoid the missteps of brokers engaging in the unauthorized practice of law.
There was a lot of discussion about the much-heralded Conway-Bogue decision; the landmark Colorado Supreme Court case which held that real estate brokers could engage in the limited practice of law for the purposes of preparing “standard and approved” forms. A strict reading of that case, however, reveals two important facts: (i) the Court did not define what the term “standard and approved” form means, and (ii) the Court based its entire decision on facts and circumstances which no longer exist in the day-to-day practice of real estate in Colorado. In an effort to lend some clarity and legitimacy to identifying a “standard form”, the Real Estate Commission had promulgated the new F-7 Rule, which failed to pass, and leaves the broker community with the same degree of uncertainty which has existed for many years.
CREC & Real Estate Forms: Some Work – Some Don’t
Newsletter - May 2016
About your Newsletter author, Bruce Jordan, “The Industry Tutor”:• Branch Manager, Cherry Creek Mortgage, Tech Center• Chairman, Board of Mortgage Loan Originators• Member of Division of Real Estate Forms Committee• Regular Instructor of Real Estate Professionals• Retired real estate attorney, NY Bar
CREC & Real Estate Forms: Some Work – Some Don’t
So with that, what comes next? The Commission has a meeting scheduled for June 7th, 2016 at 9:00 AM. Whether the Commissioners will be able to reach a final decision at that meeting remains to be seen. They have been at this for a full two years since the meeting back in April of 2014, and it certainly does not appear that they are at all close to a consensus on what to do now. One thing is certain. This is an issue that has an impact on all those participating in the broker community, whether they be real estate brokers, managing brokers, real estate boards and trade associations, to say nothing of the attorneys who endeavor to represent their varied interests. If the reader, or someone known by the reader, has a stake in the ultimate decision, this may be a time to stand up and be counted, rather than waiting for others to advocate an outcome which may not reflect your own best interests.
