Rules for Realtors may change
A new rule being considered by the Colorado Division of Real Estate would make forgery grounds for revoking a real estate license, a top state regulator said Thursday.
Marcia Waters, division director, told more than 200 members of the Grand Junction Area Realtors Association that the new rule was necessary because at least one real estate broker submits forged documents each year during the division’s quarterly audits.
Colorado real estate laws already prohibit untruthful or dishonest acts, but the regular submission of forgeries persuaded the Colorado Real Estate Commission that a more specific rule was needed.
Commissioners directed the division to craft the new rule in October “to deal with some of our really creative licensees,” Waters said.
Just like doctors must carry malpractice insurance and lawyers must carry professional liability insurance, real estate brokers must carry errors and omissions coverage to maintain their license. The insurance pays for a legal defense and damages when a broker is accused of acting negligently.
During her first year as director, Waters said one broker tried to forge an errors and omissions insurance policy in response to a division audit — insulting the intelligence of regulators who review hundreds of such policies each year.
When the obvious forgery was revealed, the broker’s license was suspended for six months and he was required to pay a $2,500 fine. The penalty was easily avoided, she said.
“If you don’t have (errors and omissions insurance coverage) when you go through one of these audits, we slate you over to inactive status,” she said. “All you need to do is acquire an (errors and omissions) policy, pay a $50 fee to us to reactivate you and then you just go on your merry way and practice away.”
“We could give out Darwin Awards for some of these,” Waters said.
The state’s top real estate regulator discussed more than 20 other enacted or planned changes during a wide-ranging talk at Two Rivers Convention Center.
For instance, the Real Estate Commission imposed a two-year moratorium on changes to standard form contracts used to conduct real estate transactions in the state, drawing applause from local professionals.