New rules muddy real estate sales
Two real estate lawyers poured cold water on an already chilly room packed with about 200 members of the Grand Junction Area Realtors Association on Thursday, by reviewing new state and federal regulations that promise to complicate their business.
Colorado Real Estate Commissioner and local attorney Rich Krohn discussed the Dodd-Frank Act that is making dramatic changes to real estate financing in Grand Junction and across the country.
New rules that took effect in January prohibit Realtors from engaging in seller-carry transactions without also being licensed as a mortgage loan originator, said Linda Todd, chairwoman of the association.
Todd, who occasionally makes personal mortgage loans to clients unable to qualify for traditional financing, said the new rule threatened to terminate 20 percent of her real estate business. Depending on the terms of the mortgage, the new federal rules also will limit to no more than three the number of loans Todd and others like her can make in a year.
When a seller can be excluded from coverage as a mortgage originator under the Dodd-Frank Act, an attorney can handle seller-carry loan negotiations and document drafting without being licensed as a mortgage loan originator, Krohn said.
As far as state regulations are concerned, community association managers, management companies and executives of management companies who directly supervise Home Owner Association managers will be required to be licensed in Colorado, starting July 1.
Denver lawyer Gary Kujawski, an HOA information officer with the Colorado Division of Real Estate, said there is no exemption for real estate brokers and property managers.
All must procure a separate community association manager license and fulfill the educational and testing requirements in order to manage an HOA, Kujawski said.
The new rule covers members of HOA boards who are paid for their services. The law does not apply to volunteer boards, he said.