Colorado Real Estate Broker Exam — All Questions

In Colorado, when a licensee prepares a standard purchase contract for residential real estate, the licensee generally must use:

• a.Any contract form the broker prefers to draft
• b.The current Colorado Real Estate Commission-approved standard form✓
• c.A form supplied only by the buyer's lender
• d.A National Association of Realtors national form

Colorado licensees are required to use current Colorado Real Estate Commission-approved standard forms, such as the Contract to Buy and Sell Real Estate, when acting within the scope of their license. This protects consumers and keeps licensees from the unauthorized practice of law. Licensees generally may not draft their own contract provisions except by filling in the approved blanks.

A licensee in Colorado wants to add a complex, non-standard legal clause that materially changes a party's rights and is not covered by the Commission-approved form. The proper course is to:

• a.Draft the clause personally to save the client legal fees
• b.Copy language from an out-of-state contract
• c.Leave the issue out of the contract entirely
• d.Advise the party to have the clause prepared or reviewed by an attorney✓

Colorado licensees may complete Commission-approved forms but may not draft complex or non-standard legal provisions, because doing so is the unauthorized practice of law. When a client needs special language that goes beyond the standard form, the licensee should recommend that an attorney prepare or review it. This protects both the consumer and the licensee.