[REDLINE Before Hearing and After Hearing]
DEPARTMENT OF REGULATORY AGENCIES
DIVISION OF REAL ESTATE
REAL ESTATE COMMISSION
4 CCR 725-1
April 5, 2016 

RULE F.  USE OF COMMISSION APPROVED FORMS

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 Parts 1 and 8 of Title 12, Article 61, Colorado Revised Statutes, as amended. The specific rulemaking provisions contained therein are sections 12-61-114.5 and 12-61-803(4), C.R.S.
  
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 the proper use of standard and Commission approved forms and ensures compliance with the Colorado Supreme Court Conway-Bogue decision.  

Proposed New, Amended and Repealed Rules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Proposed New, Amended and Repealed Rules

[REDLINE BEFORE HEARING]

Rule F.  USE OF COMMISSION APPROVED FORMS

	F-3.  Addenda
(a)	If a broker originates or initiates the use of a preprinted or prepared addendum that modifies or adds to the terms of a Commission-approved contract form which does not result from the negotiations of the parties, such addendum must be prepared by:
(1)	an attorney representing the broker or brokerage firm; or
(2)	a principal party to the transaction; or
(3)	an attorney representing a principal party.
(b)	An addendum permitted by this Rule F- 3 (a), shall not be included within the body of, or in the “Additional Provisions” section of, a Commission-approved form.
(c)	A broker who is not a principal party to the contract may not insert personal provisions, personal disclaimers or exculpatory language in favor of the broker in an addendum.  A BROKER MAY, AT THE DIRECTION OF A PRINCIPAL, INCLUDE LANGUAGE REGARDING PAYMENT OF THE BROKER’S OR BROKERAGE’S COMMISSION IF THIS IS A TERM OF NEGOTIATION BETWEEN THE PRINCIPAL PARTIES OF THE CONTRACT TO BUY AND SELL.
(d)	If an addendum is prepared by a broker’s attorney, the following disclosure must appear on the first page of the addendum in the same sized type as the size of type used in the addendum: “This addendum has not been approved by the Colorado Real Estate Commission. It was prepared by (insert licensed name of broker or brokerage firm’s) legal counsel, INSERT NAME OF ATTORNEY OR LAW FIRM.” Broker must retain the document prepared by broker’s attorney for FOUR (4) years from the date such addendum was last used by the Broker and provide said document and the name of the attorney or law firm that prepared the addendum to the Commission upon request,
(e)	If an addendum to a listing, tenant or right to buy contract, is prepared by a broker or brokerage firm, the following disclosure must appear on the first page of the addendum in the same sized type as the size of type used in the addendum: “This addendum has not been approved by the Colorado Real Estate Commission. It was prepared by (insert licensed name of broker or brokerage firm).”

[REDLINE AFTER HEARING]
Rule F.  USE OF COMMISSION APPROVED FORMS

	F-3.  Addenda
(a)	If a broker originates or initiates the use of a preprinted or prepared addendum that modifies or adds to the terms of a Commission-approved contract form which does not result from the negotiations of the parties, such addendum must be prepared by:
(1)	an LICENSED COLORADO attorney representing the broker or brokerage firm; or
(2)	a principal party to the transaction; or
(3)	an LICENSED COLORADO attorney representing a principal party.
(b)	An addendum permitted by this Rule F- 3 (a), shall not be included within the body of, or in the “Additional Provisions” section of, a Commission-approved form.
(c)	A broker who is not a principal party to the contract may not insert personal provisions, personal disclaimers or exculpatory language in favor of the broker in an addendum.  A BROKER MAY, AT THE DIRECTION OF A PRINCIPAL, INCLUDE LANGUAGE REGARDING PAYMENT OF THE BROKER’S OR BROKERAGE’S COMMISSION IF THIS IS A TERM OF NEGOTIATION BETWEEN THE PRINCIPAL PARTIES OF THE CONTRACT TO BUY AND SELL.
(d)	If an addendum is prepared by a broker’s OR BROKERAGE FIRM’S LICENSED COLORADO attorney, the following disclosure must appear on the first page of the addendum in the same sized type as the size of type used in the addendum: “This addendum has not been approved by the Colorado Real Estate Commission. It was prepared by (insert licensed name of broker or brokerage firm’s) legal counsel, INSERT NAME OF ATTORNEY OR LAW FIRM.” Broker must retain the document prepared by broker’s OR BROKERAGE FIRM’S LICENSED COLORADO attorney for FOUR (4) years from the date such addendum was last used by the Broker OR THE BROKERAGE FIRM and provide said document and the name of the attorney or law firm that prepared the addendum to the Commission upon request.
(e)	If an addendum to a listing, tenant or right to buy contract, is prepared by a broker or brokerage firm, the following disclosure must appear on the first page of the addendum in the same sized type as the size of type used in the addendum: “This addendum has not been approved by the Colorado Real Estate Commission. It was prepared by (insert licensed name of broker or brokerage firm).”