Colorado Division of Real Estate
Meeting Notes from Kiplynn Smith, Mountain District Vice President for the Colorado Association of Realtors | October 2026
Presenter: Marcia Waters, Director, Colorado Division of Real Estate
Audience: Aspen and Glenwood Springs Associations of Realtors
Summary
Marcia Waters provided an extensive update on Colorado real estate regulations, legislative changes, Commission-approved contracts, enforcement priorities, and common brokerage compliance issues.
The most significant discussion concerned HB26-1426 and the requirement for written brokerage agreements before performing licensed activities, particularly the distinction between Colorado law and the National Association of REALTORS® settlement requirements.
Waters also emphasized that the Division is working to make its rulemaking and contract revision processes more transparent and accessible to brokers.
Six important takeaways
- Showing property does not, by itself, constitute a licensed activity requiring a brokerage agreement under Colorado law, according to Waters. NAR settlement requirements are separate (they require a written touring agreement).
- Written brokerage agreements are now required for transaction brokers as well as single agents before performing licensed brokerage duties
- Disciplinary penalties are not automatic. The Real Estate Commission considers consumer harm, circumstances, disciplinary history, and other factors when determining sanctions.
- Brokers must respond to Division audits. Failure to respond to a continuing education audit can result in license inactivation. Failure to respond to transaction audits will result in license inactivation. E&O audits are simple for CREC, therefore, audits are conducted annually. You will be moved to inactive if you fail to renew your E&0.
- Material facts must be disclosed, even when a broker has obtained conflicting inspection reports.
- The Division is reviewing additional forms and consent requirements, including the meaning of express written consent and the possibility of nonexclusive brokerage agreements.
1. Colorado Division of Real Estate: Rulemaking and Contract Forms
Waters began by explaining the Division’s regulatory responsibilities and how policies are established.
The Division supports three policymaking boards: the Colorado Real Estate Commission, Board of Real Estate Appraisers, and Board of Mortgage Loan Originators.
The Division prepares proposed regulations and forms, but the AG’s office, boards and commissions determine whether to adopt them.
Rulemaking process
Proposed regulations generally move through the following process:
- The Division drafts proposed regulations. (The Forms Committee was disbanded in 2025 and is now in-house)
- Proposed rules are filed with the Secretary of State.
- Stakeholder engagement meetings provide opportunities for industry feedback.
- A formal rulemaking hearing allows additional written or oral testimony.
- The Commission or applicable board determines whether to adopt the regulations.
- Final regulations undergo additional filing and legal review before taking effect.
Waters encouraged brokers to participate in stakeholder meetings, and joked that the Division welcomes feedback and does not target brokers for audits because they participate in the regulatory process.
Commission-approved contract forms
The Division has moved contract drafting in-house, replacing its previous Forms Committee process with staff drafting and broader stakeholder engagement.
The goal is to make contracts clearer, eliminate ambiguous language, improve consumer understanding, and reduce potential litigation.
During 2026, approximately 61–62 forms were reviewed or modified. About 22 received intellectual property language changes, while others received substantive revisions.
Waters explained that a three-year moratorium generally limits form changes, with exceptions involving legislation, case law, or significant legal issues identified by the Attorney General’s Office.
Looking ahead: The Commission is expected to review its forms priorities at its December 2026 meeting. Topics may include nonexclusive agreements, common-interest-community documentation, and certain listing contract provisions.
2. HB26-1426: Written Brokerage Agreements
This was one of the most important discussions for practicing brokers.
Waters explained that HB26-1426 expanded the existing statutory requirement for written brokerage agreements to include transaction brokers, whereas the requirement previously applied to single agents (Buyer or Seller Agency).
The written agreement must also clearly and conspicuously address compensation.
Colorado law versus the NAR settlement: Please note as per CO State Statute a Buyer Agency form is not required for issues 1 & 2, #3 is an area where you can easily slip into confidential information and you need to advise the buyer of disclosing confidential information or engage in agency by executing the CREC Buyer’s Agency form or documentation provided by your private council, issues 4 & 5 require a written agreement establishing your role as agent or transaction broker.
| Issue | Colorado law, as explained by Waters | NAR settlement requirements, as described |
| Showing a property | Showing alone is not a licensed duty triggering the state agreement requirement | Written agreement is required before touring with a buyer under the applicable NAR policy/settlement |
| Discussing market statistics | Permitted without a brokerage agreement | Subject to applicable NAR policies/settlement |
| Discussing confidential buyer information | Caution – Easily cross into brokerage duties | Confidentiality obligations depend on the relationship customer vs. client |
| Negotiating a transaction | Written brokerage agreement required | Written agreement also required |
| Compensation | Must be clearly disclosed in the written agreement | Must be addressed in the applicable written agreement |
Waters repeatedly emphasized that the two requirements (Colorado State Statute and the NAR Settlement) should not be confused and they are not one of the same.
When does a licensed activity begin?
According to Waters, licensed brokerage duties include bringing parties together and negotiating transaction terms.
A broker can discuss factual market information, such as recent sales, neighborhood prices, and whether market values are increasing or declining, prior to establishing a brokerage relationship.
However, when the conversation moves toward the buyer’s motivation, financial circumstances, negotiating position, or other confidential information, the broker should recognize that they may be entering an activity requiring a written brokerage agreement.
Practical example from the presentation: A prospective buyer can tour a home and receive factual property information. If the buyer subsequently asks the broker to prepare an offer, a written brokerage agreement must then be established before proceeding. Prepare your agency/TB document, send for signature and then send the offer for review.
Waters also distinguished between a consumer voluntarily revealing personal information and a broker actively soliciting confidential information.
For CAR members, this is particularly important because it clarifies the Division’s interpretation of state licensing requirements. It does not eliminate separate obligations under NAR rules or brokerage policies.
3. HB26-1287: Sunset Review and Licensing Changes
The Division underwent its periodic sunset review, resulting in legislation continuing its regulatory functions and modifying certain licensing requirements.
Colorado General Assembly
Personal investment properties
Waters explained that the Commission’s jurisdiction over brokers managing money outside their licensed brokerage activities has been narrowed.
For example, a broker managing their own personal investment property outside a brokerage relationship generally would not be subject to the same Division audit authority.
A huge thank you to CAR is due as they were able to amend HB 1287 “Sunset Division of Real Estate” from requiring all licensees to have dedicated trust accounts for commingling any non-personal funds (personal investment properties, sports team treasurer, school PTO, etc.) to just trust accounts for funds related to brokerage duties.
However, Waters expressed concern that this limitation could restrict the Commission’s ability to address certain developer-related misconduct involving deposits. She recommended that we advise our buyers to seek counsel. This is consistent with our previous practice as real estate licensees can only practice limited law and this is outside our scope of practice.
Continuing education audits
The Division now has authority to inactivate licenses for certain continuing education compliance failures.
Waters emphasized that the Division initially intends to focus on failure to respond to continuing education audits, rather than automatically inactivating brokers solely for missing coursework.
Financial and transaction audits remain particularly important because failing to respond will result in inactivity and will most likely result in disciplinary proceedings.
Errors and omissions insurance
The Division routinely verifies E&O coverage against licensing records, generally during February and March.
Brokers without required coverage while holding an active license risk having their license placed on inactive status.
4. SB26-054: Post-Closing Occupancy Agreements
Waters discussed changes to security deposit requirements for sellers remaining in their properties after closing.
Under the previous general restriction, residential security deposits were limited to two months of rent. This created complications for post-closing occupancy agreements involving little or no rent but substantial security deposits.
Important effective-date clarification: Although the bill was enacted in 2026, the exception to the security deposit limit does not take effect until January 1, 2027.
Colorado General Assembly
The exception applies to qualifying post-closing occupancy agreements between the buyer and seller.
Waters recommended consulting legal counsel about deposit amounts and landlord-tenant restrictions rather than assuming all deposits and fees are permissible.
She also warned property managers that excessive or improperly characterized fees can attract scrutiny from the Attorney General’s Housing Protection Unit. An example that they have seen are high ($1,300) application fees, that become non-refundable.
5. Brokerage Disclosures and Working Relationships
Waters described how the different disclosure forms fit into a transaction.
The principal documents discussed were the Brokerage Disclosure to Buyer, Definitions of Working Relationships, and written listing agreements.
According to her explanation, the documents required depend partly on whether the brokerage offers both single agency and transaction brokerage.
Where a brokerage offers only one type of relationship, the Definitions of Working Relationships disclosure is necessary to inform consumers about other available relationships.
Waters also stressed that the NAR settlement did not eliminate Colorado’s independent brokerage disclosure requirements.
Practical takeaway: Brokers should not assume that satisfying the NAR touring agreement requirement automatically satisfies Colorado’s brokerage relationship and disclosure requirements. Please seek private counsel to ensure you or your brokerage is adhering to both State and NAR requirements.
6. Express Written Consent and Confidential Information
During the Q&A, a participant asked whether the Commission would produce standardized forms for buyer and seller advisories and express written consent.
Waters explained that the Division is seeking further legal guidance on what constitutes express written consent.
She described the distinction between the prior informed-consent language and the newer express-written-consent requirement as an area that still needs clarification.
The Division is concerned about producing forms that could inadvertently waive consumer rights without sufficient understanding.
She also noted the importance of protecting confidential information within a brokerage, including situations where an employing broker has access to information but cannot use it to a client’s detriment.
Status: Further guidance remains pending, according to the presentation. Brokers should continue consulting their employing brokers and legal counsel regarding appropriate documentation.
7. Enforcement and Disciplinary Penalties
One participant asked whether violations of HB26-1426 automatically result in substantial fines or license revocation.
Waters said no.
The Real Estate Commission retains discretion when determining disciplinary action.
Factors considered include consumer harm, seriousness of the violation, the broker’s licensing history, previous disciplinary actions, mitigating circumstances, and aggravating circumstances.
Waters cited a maximum administrative fine of $2,500 per violation, while emphasizing that multiple violations may accumulate.
She explained that an inadvertent failure to obtain a newly required agreement would not necessarily be treated the same as fraud, document forgery, or intentional consumer harm.
Consumer Protection Act clarification
Waters specifically disputed the interpretation that every violation of the new written brokerage agreement requirement automatically constitutes a Colorado Consumer Protection Act violation
