Brokerage Relationships
Colorado has a distinctive framework for how licensees may work with consumers. This chapter explains single agency, transaction-brokerage, and designated brokerage, and why Colorado does not permit dual agency. Because the default relationship is transaction-broker, licensees must know how to establish and disclose each relationship.
Transaction-Broker as the Default
In Colorado, a licensee is a transaction-broker by default unless the parties agree in writing to a single agency relationship. A transaction-broker assists a party in a transaction without being that party's advocate. Duties include honesty, disclosure of material facts, reasonable skill and care, and accounting for money. This neutral role lets a broker help complete a transaction without owing full fiduciary loyalty to one side.
Single Agency and Fiduciary Duties
A single agent represents one party, either the buyer or the seller, and owes full fiduciary duties such as loyalty, confidentiality, and counsel. Establishing single agency requires a written agreement because it is not the default. A single agent advocates for the client, including advising on price and negotiating strategy. Clients who want an advocate must specifically agree to single agency in writing.
Designated Brokerage and No Dual Agency
Colorado uses designated brokerage, where an employing broker may designate individual brokers to represent different parties in the same transaction. Colorado does not permit dual agency, so a single licensee cannot represent both sides as a fiduciary. Required disclosures, such as the Definitions of Working Relationships, help consumers understand their options. These rules keep representation clear and reduce conflicts of interest.