[THIS PAGE NOT FOR PUBLICATION IN THE CODE OF COLORADO REGULATIONS]
DEPARTMENT OF REGULATORY AGENCIES
DIVISION OF REAL ESTATE
REAL ESTATE COMMISSION
4 CCR 725-1

RULE E.  SEPARATE ACCOUNTS – RECORDS – ACCOUNTINGS – INVESTIGATIONS

Pursuant to and in compliance with Title 12, Article 61 and Title 24, Article 4, C.R.S. as amended, notice of proposed rulemaking is hereby given, including notice to the Attorney General of the State of Colorado and to all persons who have requested to be advised of the intention of the Colorado Real Estate Commission (the “Commission”) to promulgate rules, or to amend, repeal or repeal and re-enact the present rules of the Commission.  

STATEMENT OF BASIS

The statutory basis for the rules titled Rules of the Colorado Real Estate Commission is Part 1 of Title 12, Article 61, Colorado Revised Statutes, as amended.
  
STATEMENT OF PURPOSE

The purpose of this rule is to effectuate the legislative directive to promulgate necessary and appropriate rules in conformity with the state statutes of the real estate practice act.

SPECIFIC PURPOSE OF THIS RULEMAKING

The specific purpose of this rule is to amend or repeal existing rules with respect to trust accounts maintained by real estate brokers, record keeping requirements and practice requirements of real estate brokers. 

Proposed New, Amended and Repealed Rules

Deleted material shown struck through, new material shown ALL CAPS. Rules, or portions of rules, which are unaffected are reproduced.  

Proposed New, Amended and Repealed Rules

Rule E.  Separate Accounts – Records – Accountings – Investigations

[PUBLICATION INSTRUCTIONS: E-1 thru E-21, E-23 thru E-27, E-29 thru E-45, E-48 and E-49 IN EFFECT UNCHANGED]

E-22. Inducements for settlement services prohibited
Pursuant to 12-61-113.2, C.R.S and the Federal Real Estate Settlement and Procedures Act, 12 U.S.C. Sec. 2601 et. seq., a real estate broker, whether engaged in an affiliated business arrangement or not, shall not accept or give any incentive, disincentive, remuneration, commission, fee or other thing of value to or from a settlement service provider for the referral of business in a real estate transaction involving a federally related mortgage loan.  Real estate brokers are allowed to pay a referral fee to another licensed real estate broker if reasonable cause exists as set forth in 12-61-203.5, C.R.S.  nothing in this rule shall prohibit a person or entity from receiving a bona fide salary, commission or other compensation for services rendered or as a return on their ownership interest in an affiliated business.  

E-28. REPEALED.

E-46. Affiliated Business Arrangement Disclosures
Pursuant to 12-61-113.2(2)(b), C.R.S., a broker shall make the following disclosures:
1.	Disclose in writing the existence of an affiliated business arrangement to the party they are referring at the time the referral is made.  The disclosure shall be in a format consistent with the affiliated business arrangement disclosure promulgated by HUD pursuant to the Real Estate Settlement and Procedures Act.  
2.	At the time the contract to buy and sell is executed by the buyer and seller, the existence of an affiliated business arrangement with the broker or the employing broker shall be disclosed in writing to all parties to the transaction.
3.	A broker is required to make the following disclosures to the Commission. 
a.	At the time a broker enters into or changes an affiliated business arrangement, the broker shall disclose the names of all affiliated business arrangements to which the broker is a party.  The written disclosure shall include the physical location of the affiliated businesses.
b.	On an annual basis, each employing broker shall disclose the names of all affiliated business arrangements to which the employing broker is a party.  The written disclosure shall include the physical location of the affiliated businesses.  
The Commission prefers that the written disclosures to the Commission be made through the Colorado Affiliated Business Online Services database which is accessible through the Division of Real Estate’s website.