COLORADO REAL ESTATE COMMISSION
NOTICE OF PROPOSED RULEMAKING
May 2, 2006
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 to promulgate rules.
The notice proposes to enact a new Rule C-23 concerning unlicensed on-site managers employed by a brokerage firm; and to amend Rule C-24 to define “owner”.
C-23.
Pursuant to 12-61-101(2) and (3) C.R.S., offering to rent or lease real estate or renting or leasing real estate requires a Colorado real estate broker’s license. If a brokerage firm employs an unlicensed on-site manager who prepares leases or rental agreements, the employing broker must:
(1) Actively and diligently supervise all activities of the on-site manager or delegate the supervisory responsibility to a qualified employed broker;
(2) Require the on-site manager to account to and report directly to either the employing broker or the delegated employed broker.
(3) Engage the on-site manager, either as a regularly salaried employee or as an independent contractor, and pay the on-site manager through the real estate brokerage firm. Salary may include rent value or other non-commission income.
(4) Instruct the on-site manager to not negotiate any of the material terms of a lease or rental agreement with a tenant or prospective tenant.
The unlicensed on-site manager may fill in blanks in lease forms provided by the brokerage firm, show prospective tenants available units, and collect security deposits and rents.
C-24.
Pursuant to 12-61-101(4)(l) and (m) C.R.S., the regularly salaried employee of: (a) an owner of an apartment building or complex, or (b) an owner of condominium units, or (c) a homeowner's association, when acting as an on-site manager and performing the customary duties of an on-site manager is exempt from the requirements of 12-61-101(2) and (3). For the purposes of this Rule C-24, the term “owner” includes an entity formed by the owner to manage the apartment building or complex. The customary duties of an on-site manager include maintenance, collecting rents and security deposits for the owner, or owner's licensed broker, showing units to a prospective tenant, and quoting a rental price previously established by the owner or the owner's licensed broker.
To preserve the above-cited exemptions:
(1) The unlicensed on-site manager must account and report directly to the respective owner or homeowner’s association or to an entity licensed as an independent real estate broker; and
(2) The unlicensed on-site manager must be regularly salaried (salary may include rent value) by the owner of the apartment building or complex, the homeowner’s association or the entity formed by the owner to manage the property; and or regularly salaried by the owners association for the complex; and
(3) The unlicensed on-site manager may not negotiate any of the material items terms of a lease or rental agreement with a tenant or prospective tenant or conduct any other real estate activity that requires a real estate license.
The term “owner” includes either a person (or persons) or an entity recognized under Colorado law. If a person (or persons), the owner must have a controlling interest in the entity formed by the owner to manage the apartment building or complex. If the owner is an entity, the ownership entity and the entity formed by the owner to manage the apartment building or complex must be under the control of the same person or persons.
To maintain the license exemption, if the owner’s management entity manages other apartment buildings or complexes, it may only manage those apartment buildings or complexes in which either the owner or the constituents of the owner, if the owner is an entity, has an ownership interest.
A hearing on the above subject matters will be held on Tuesday, May 2, 2006 at 1900 Grant, 3rd floor at 9:00 a.m.
Any interested person may participate in the rulemaking through submission of written data or testimony to the Real Estate Commission. The Commission will consider all submissions.
Please be advised that all rules being considered are subject to further changes and modifications after public comment and formal hearing.
1