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Last Updated: 4/1/2012
BROKERAGE ISSUES
Important Changes To Colorado Rules of Civil Procedure The Colorado Rules of Civil Procedure changed effective January 1, 2012, including a Pilot Program in many front range counties that expedites proceedings in E&O and other cases. These changes make it more important than ever that you promptly notify your insurance carrier if you receive a Summons and Complaint, because it will be extremely difficult for your defense counsel to procure an extension of time to file a response. Failure to file a timely response can lead to the entry of a default judgment against you, depriving you of your right to defend against the claims being made against you.
Errors and Omissions Insurance - Limits of Liability We strongly suggest to all brokers that the minimim insurance limits of $100,000/$300,000 required by the Colorado Real Estate Commission are not sufficient to protect you in the event of an E&O claim. Higher limits are normally available, as is excess insurance that may provide broader coverage. E & O claims are stressful enough, but they can cause even greater concern if you have insufficient coverage.
Broker Disclosures Listing brokers: Remember to complete the disclosure section after "End of Contract" on the purchase and sale agreement in order to disclose your relationship with seller.
Mediation and Arbitration
With increasing frequency, the Courts are requiring Alternative Dispute Resolution ("ADR") in litigated matters. Two types of ADR are arbitration and mediation. In arbitration, the parties appear before one or more neutral persons who render a decision on the mertis of the dispute. Mediation is a process for resolving disputes through negotiation. As in arbitration, the mediator is a neutral person selected by the parties. However, unlike an arbitrator, a mediator has no authority to make decisions or issue rulings. He or she is a facilitator who tries to bring the parties together to resolve their dispute. Even if a matter does not settle, mediation can be a useful process for gathering information and helping the parties communicate as to the key issues in their dispute.
CONSUMER REAL ESTATE ISSUES
Carbon Monoxide Detectors For Residential Properties
Pursuant to the Lofgren and Johnson Families Carbon Monoxide Safety Act, it became the responsibility of the seller or landlord to install carbon monoxide detectors in certain residential properties offered for sale or lease on or after July 1, 2009.
Owner-Carries In owner-carry sales transactions, we strongly recommend that the seller consult legal counsel before signing the sales contract. There are serious risks inherent in owner-carries, especially if the seller's lien will be junior to a first lien, and especially if the first loan has a large default interest rate. We also recommend that before signing the sales contract, the seller should read and evaluate the documents that create the senior lien, in order that the seller may evaluate exactly what risks he or she is taking.
Review of Documents
The time to have an attorney review your real estate documents is before you sign them. The cost of hiring an attorney to identify possible problems ahead of time is far less than the cost of litigating a dispute after the fact.
Broker Relationships When buying and selling real estate in Colorado, there are several different legal relationships you can enter into with your real estate broker. He or she will provide you with forms which explain these relationships. We suggest that you read the disclosures carefully and ask enough questions so that you can make an informed decision as to which relationship best suits your needs.
DIVORCE Assignment of Husband's Interest in Closely Held LLC In Coldo v. Conners, 266 P.3d 1110 (Colo. 2011), the Colorado Supreme Court held that an attmpted assignment by Husband to Wife of his interest in a closely-held limited liability company as part of a divorce settlement was unenforceable where the consent of the other members of the LLC was required and such parties refused to give their consent.
Common Law Marriage Contrary to a popular misconception, two persons do not enter into a common law marriage merely by cohabitating for a fixed period of time. What is required is the intention by the parties to enter into a marriage. This intent is generally shown by the parties' own conduct, i.e. whether they hold themselves out to third parties as being married. As the Court stated in Whitenhill v. Kaiser Permanente, "A common law marriage is established by the mutual consent or agreement of the parties to be husband and wife, followed by a mutual and open assumption of a marital relationship... Absent an express agreement, the two factors considered the most reliable in determining whether an intent to be married has been established are cohabitation and a general reputation in the community that the parties hold themselves out as husband and wife."
INSURANCE
No Duty For Brokers to Ensure Complete Protection In Apodaca v. Allstate Insurance Company , 232 P.3d 253, 259 (Colo.App.2009), affirmed on other grounds, 255 P.3d 1099 (Colo. 2001) [an insurer issuing an umbrella policy is not required to offer UM/UIM coverage as part of that policy], the Colorado Court of Appeals reaffirmed the principle that: “...an insurance agent or company does not have a common law duty to ensure complete protection to the policyholder or to recommend higher policy limits, but only has a duty to exercise a reasonable duty of care....Even when an agent represents that he or she is knowledgeable about insurance coverages, and regularly in the course of his or her business, informs, counsels, and advises customers about their insurance needs, the agent does not incur duties beyond those of the standard policyholder-insurance agent relationship. Thus, in most circumstances, an insurance agent does not have a duty to advise of additional and available insurance coverages suitable for the customer's needs.”
DISCLAIMER: All information provided in this web site is informational only and does not constitute an offer or agreement on our part to enter into an attorney/client relationship with any person. If any person desires legal advice from Balaban, Levinson & Costigan, P.C., it is first necessary to establish an attorney/client relationship with us in writing pursuant to our standard written fee agreement. We are not licensed to practice law outside of the State of Colorado. For issues involving the laws of other jurisdictions, consult with an attorney licensed in that jurisdiction. No discussion of any taxation issues in this web site is intended to be used, nor shall be used, by any person: (1) for the purpose of avoiding any taxes owed to, or penalties that may be imposed by, the Internal Revenue Service or any other taxing entity, or (2) to promote, market or recommend to another person any matter addressed herein.
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