Contract and Conveyance Documents-broker Beware
| Publication year | 1982 |
| Pages | 2383 |
1982, September, Pg. 2383. Contract and Conveyance Documents-Broker Beware
In 1957, the Colorado Supreme Court decided that it would not prohibit the preparation of certain limited types of real estate contract and conveyance documents by licensed real estate brokers even though these services constituted the practice of law. The court refused to enjoin licensed real estate brokers from filling in blanks on eight classses of simple, standard and approved printed forms, if the brokers prepared these documents under certain restrictive conditions. These restrictions were that the brokers act at the request of their customers in connection with transactions which the brokers were handling as brokers and that they make no charge for such services other than the usual broker's commission.(fn1) The court found that these services were incidental and necessary to the broker's regular business and that the convenience the public enjoys in being able to choose whether a broker or lawyer will prepare these documents outweighed the possibility of harm from defective conveyances and any advantages of a requirement that only lawyers prepare these documents.(fn2)
The court's opinion restricted broker preparation of contract and conveyance documents to filling in blanks on simple, standard and approved printed forms, but the court did not define what forms were "standard and approved."
The Colorado Real Estate Commission was created by the legislature to administer the Colorado statutes regulating real estate brokers and salespersons.(fn3) Commission Rule F was designed to supply standard and approved forms. Rule F requires licensed brokers to use Commission-approved forms when they prepare contract and conveyance documents. If other forms are used, they must be prepared by an attorney representing one of the parties to the transaction.
In the "Statement of Policy Concerning Rule F," the Commission placed limitations on the printed matter brokers can insert in the blanks on approved forms. Such printed matter must appear in italics and must be limited to routine payment terms; provisions required by FHA and other government agencies; references to special tax districts; itemizations of specific restrictive covenants or deed exceptions, restrictions, encumbrances or reservations of record; and provisions concerning condominium ownership and references to condominium declarations and bylaws. Paragraph 6(f) of Rule F permits only one specific statement regarding legal and professional assistance to be printed in italics in the approved forms:
It is recommended that all parties to this Agreement seek legal or other professional assistance.
Many major real estate firms include this statement to afford their customers the...
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