Colorado § 12-10-407 - Transaction-broker.

§ 12-10-407. Transaction-broker.

(1) A broker engaged as a transaction-broker is not an agent for either party.

(2) A transaction-broker shall have the following obligations and responsibilities:

(a) To perform the terms of any written or oral agreement made with any party to the transaction;

(b) To exercise reasonable skill and care as a transaction-broker, including, but not limited to:

(I) Presenting all offers and counteroffers in a timely manner regardless of whether the property is subject to a contract for sale or lease or letter of intent;

(II) Advising the parties regarding the transaction and suggesting that the parties obtain expert advice as to material matters about which the transaction-broker knows but the specifics of which are beyond the expertise of the broker;

(III) Accounting in a timely manner for all money and property received;

(IV) Keeping the parties fully informed regarding the transaction;

(V) Assisting the parties in complying with the terms and conditions of any contract including closing the transaction;

(VI) Disclosing to all prospective buyers or tenants any adverse material facts actually known by the broker including but not limited to adverse material facts pertaining to the title, the physical condition of the property, any defects in the property, and any environmental hazards affecting the property required by law to be disclosed;

(VII) Disclosing to any prospective seller or landlord all adverse material facts actually known by the broker including but not limited to adverse material facts pertaining to the buyer's or tenant's financial ability to perform the terms of the transaction and the buyer's intent to occupy the property as a principal residence; and

(VIII) Informing the parties that as seller and buyer or as landlord and tenant they shall not be vicariously liable for any acts of the transaction-broker;

(c) To comply with all requirements of this article 10 and any rules promulgated pursuant to this article 10; and

(d) To comply with any applicable federal, state, or local laws, rules, regulations, or ordinances including fair housing and civil rights statutes or regulations.

(3) Except as described in section 12-10-403 (9), a transaction-broker shall not disclose the following information without the express written consent of all parties:

(a) That a buyer or tenant is willing to pay more than the purchase price or lease rate offered for the property;

(b) That a seller or landlord is willing to accept less than the asking price or lease rate for the property;

(c) What the motivating factors are for any party buying, selling, or leasing the property;

(d) That a seller, buyer, landlord, or tenant will agree to financing terms other than those offered;

(e) Any facts or suspicions regarding circumstances that may psychologically impact or stigmatize any real property pursuant to section 38-35.5-101; or

(f) Any material information about the other party unless disclosure is required by law or failure to disclose the information would constitute fraud or dishonest dealing.

(4) A transaction-broker has no duty to conduct an independent inspection of the property for the benefit of the buyer or tenant and has no duty to independently verify the accuracy or completeness of statements made by the seller, landlord, or independent inspectors.

(5) A transaction-broker has no duty to conduct an independent investigation of the buyer's or tenant's financial condition or to verify the accuracy or completeness of any statement made by the buyer or tenant.

(6) A transaction-broker may do the following without breaching any obligation or responsibility:

(a) Show alternative properties not owned by the seller or landlord to a prospective buyer or tenant;

(b) List competing properties for sale or lease;

(c) Show properties in which the buyer or tenant is interested to other prospective buyers or tenants; and

(d) Serve as a single agent or transaction-broker for the same or for different parties in other real estate transactions.

(7) There shall be no imputation of knowledge or information between any party and the transaction-broker or among persons within an entity engaged as a transaction-broker.

(8) A transaction-broker may cooperate with other brokers but shall not engage or create any subagents.

Source: L. 2019: Entire title R&RE with relocations, (HB 19-1172), ch. 136, p. 650, § 1, effective October 1. L. 2026: IP(3) amended, (HB 26-1287), ch. 386, p. 2423, § 24, effective August 12.

Editor's note: This section is similar to former § 12-61-807 as it existed prior to 2019.

ANNOTATION

Law reviews. For article, "Disclosure of Adverse Material Facts and Latent Defects in Real Estate Transactions", see 53 Colo. Law. 40 (July-Aug. 2024).

Annotator's note. The following annotations include cases decided under former provisions similar to this section.

A transaction-broker has certain statutory obligations and responsibilities as expressed in subsections (2) and (3). Hoff & Leigh, Inc. v. Byler, 62 P.3d 1077 (Colo. App. 2002).

A transaction-broker is required to provide all the services listed in subsection (2) and may not enter into a contract that disclaims responsibility for these statutorily required services. To enter into such a contract is a violation of former § 12-61-113 (1)(k) and (1)(n) (now § 12-10-217 (1)(m) and (1)(q)). Colo. Real Estate Comm'n v. Vizzi, 2019 COA 33, 488 P.3d 470 (decided under former § 12-61-807).

Subsection (2)(b)(I) requires that transaction-brokers communicate all offers and counteroffers directly to the seller of real estate. Mullin v. Hyatt Residential Group, Inc., 82 F. Supp. 3d 1248 (D. Colo. 2015).

Although the statute enumerates the obligations and responsibilities of a transaction-broker, it does not prescribe a remedy for nonperformance of these obligations. Hoff & Leigh, Inc. v. Byler, 62 P.3d 1077 (Colo. App. 2002).

A transaction-broker has no duty to investigate whether an assertion is true. The statute clearly states that a transaction-broker is under no duty to independently verify the accuracy or completeness of statements made by the seller or independent inspectors for the benefit of the buyer. Barfield v. Hall Realty, Inc., 232 P.3d 286 (Colo. App. 2010).