| Legal Ideas and Information - January 2005 |
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Real Estate Finance Conference January 24-25, 2005
Our very own, Jon Goodman, Esq., will be a Program Co-Chair at CLE International's new Conference on Real Estate Finance. In addition, Jay Cope, Esq., also with our firm, will be speaking at this Conference. The conference will be held January 24-25 at the Adam's Mark Hotel in Denver. This Conference satisfies the requirements for 14 credit hours for the Colorado Division of Real Estate and 14 hours MCLE Credit, including one hour of ethics. Join your colleagues to hear our distinguished faculty discuss Land Use Issues for Lenders, Foreclosure Investing, Debtor-In-Possession Financing, Buying and Financing Contaminated Properties, and much more! There will also be ample time to network with the other professionals in attendance. On behalf of Frascona, Joiner, Goodman and Greenstein, we would like to extend to you a $100 discount on the full tuition of $595 for this Conference. Please take a few moments to click on http://www.cle.com/upcoming/PDFs/DENREF052.pdf which contains all of the details on the program and speakers. To hold your place, you can register in a variety of ways:
Please mention this email to receive your tuition discount, which is exclusive to any other discount offer. Please feel free to call me with any additional questions at (303) 377-6600, or send me an email at bo@cle.com. We look forward to seeing you at the Conference! Beneficiary Deeds in Colorado
Colorado's new beneficiary deed law became effective on August 4, 2004. The law applies to beneficiary deeds recorded by owners who die after that date, and governs not only beneficiary deeds created after that date under the new statutory guidelines, but also to the older "transfer on death" deeds previously authorized in Colorado. The new law answers many of the questions about these deeds left open by the general "transfer on death" law, paving the way for increased use of the beneficiary deed in Colorado. Beneficiary deeds can help avoid the need to probate smaller estates. Colorado's probate code allows successors to an estate to collect the estate assets by affidavit, rather than a full probate procedure, if the estate consists only of personal property with a value not exceeding $50,000.00. No such procedure is available in Colorado to clear title to real property at death. However, the new beneficiary deed law now provides Colorado practitioners with extensive guidance for use of the beneficiary deed to pass marketable title to a "grantee-beneficiary" at death, without the need for probate administration. This publication is intended to provide accurate and authoritative information on the subject matter covered. It is distributed with the understanding that the publisher and distributor are not rendering legal, accounting or other professional service, and assume no liability in connection with its use. Copyright © 2005. This is an advertisement. |
IN THIS ISSUE
Disclosure Doesn't Force Relationship
Question: I am the only broker involved in a transaction. Our company agency policy says that I become a transaction-broker. My listing agreement with the seller says I become a transaction-broker. My Exclusive Right-to-Buy Agreement with the buyer says I become a transaction-broker. If I make a mistake and check the box at the end of the buy/sell contract incorrectly indicating that I am a Seller's Agent, does that make me a seller's agent? Response: A lot can ride on whether you are an agent or a transaction-broker. If you act as an agent, you owe your client fiduciary duties. If you breach this duty, you forfeit the right to all compensation, regardless of your client's damages [Moore & Company v. T A L L, Inc., 792 P2d 794 (Colo. 1990)]. However, if you are a transaction-broker, and you breach a duty to the seller, you do not automatically lose the commission. The broker is liable only for the client's damages [Hoff & Leigh, Inc., 62 P.3d 1079]. Damages to the client may be substantially less than the amount of commission the seller owes the broker. In a recent order in Stearns v. McGuire, No. 02-RB-1912(OES) (D. Colo., July 26, 2004), the court answered the above question "no," holding that a unilateral disclosure after the end of a contract did not establish an agency relationship in a real estate transaction under Colorado law. Parties must have a written agreement to establish a single party agency relationship, and a unilateral disclosure does not qualify as such a written agreement. Colorado law states that a real estate broker is a transaction-broker and not an agent for either party in a real estate transaction unless the parties establish a single agency relationship through a written agreement [C.R.S. §12-61-803(2)]. Although a broker may act as an agent for either party, the law presumes that a real estate broker is a transaction-broker unless the parties have a written agreement to the contrary [Sussman v. Stoner, 143 F.Supp. 2d 1232 (D. Colo. 2001)]. A transaction-broker assists one or more parties throughout a real estate transaction with communication, advisement, negotiation, interposition, contract terms, and closing without being an agent for the interests of either party [C.R.S. §12-61-802(6)]. Since the transaction broker is not an agent for either party, he or she does not owe a fiduciary duty to either party [Hoff & Leigh, Inc. v. Byler, 62 P.3d 1077, 1078-1079 (Colo. App. 2002)]. In Stearns, the seller asserted that the broker was the seller's agent. The seller alleged that the broker had breached the duty of disclosure he owed to the seller so the broker should forfeit his entire commission. The broker claimed that he acted as a transaction-broker at all times because the parties did not have a written agreement establishing a single party agency relationship. The buyer and seller entered into the Colorado Real Estate Commission approved contract that included the following disclosure at the end of the form:
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