Revisions to Colorado's Standard Forms
 

Author(s): Richard K. "Dick" Clark
Published: 06/16/2010

The Forms Committee of the Colorado Real Estate Commission has been reworking the standard, approved real estate forms, including the contract. The Commission will consider the revisions at a rule-making hearing currently scheduled for August 3, 2010. Although there are several proposed revisions to the forms, three things may be of special interest to you:

  1. For several years, the contract form has been a uniform general contract to be used in several types of real estate transactions. The proposed revisions create separate contracts for use in certain types of transactions. The Commission will decide whether the revised contract forms benefit consumers.
  2. Paragraph 4.3 of the approved contract (Form of Funds; Time of Payment; Funds Available) has been the subject of much discussion among brokers, lawyers, and title companies over the past couple of years. One of the repercussions of the current version of ¶ 4.3 is if the lender fails to fund the loan by closing, the buyer is in default and the contract fails. The proposed revision provides the parties with an alternative funding provision which extends the contract for an agreed upon time if the buyer pays an agreed upon delay fee. The inclusion of this provision in the contract, if acceptable to the parties, establishes an extension mechanism at the time of contracting as opposed to the current practice of asking the parties to sign an addendum near the end of the contract when the buyer discovers the lender will be late in funding.
  3. Colorado's new Broker Lien Law for brokers engaged in leasing commercial properties requires brokers to serve and record certain notices and documents to perfect their lien rights. See article on p. 2 "Colorado Adopts Broker Lien Law". The Forms Committee does not intend to prepare these forms because they do not fall within the purview of the Committee from the Real Estate Commission. Commercial brokers should consult an attorney to draft the documents required by the new statute. Such forms are available through our firm.

If you are interested in any of the proposed forms and revisions, you may attend the public hearing at the Commission currently scheduled on August 3, 2010.

Dick Clark is a senior partner at RJ&L, working in its Denver office. Since 1991, he and the firm have served as legal counsel for the Colorado Association of REALTORS ® and to the National Association of REALTORS® on select matters. Mr. Clark can be reached at 303-628-9531 or by email at rclark@rothgerber.com.