2021 Colorado Code
Title 12 - Professions and Occupations
Article 10 - Real Estate
Part 2 - Brokers and Salespersons
§ 12-10-202. License Required

It is unlawful for any person, firm, partnership, limited liability company, association, or corporation to engage in the business or capacity of real estate broker in this state without first having obtained a license from the commission. No person shall be granted a license until the person establishes compliance with the provisions of this part 2 concerning education, experience, and testing; truthfulness and honesty and otherwise good moral character; and, in addition to any other requirements of this section, competency to transact the business of a real estate broker in such manner as to safeguard the interest of the public and only after satisfactory proof of the qualifications, together with the application for the license, is filed in the office of the commission. In determining the person's character, the commission shall be governed by section 24-5-101 .

History. Source: L. 2019: Entire title R&RE with relocations,(HB 19-1172), ch. 136, p. 618, § 1, effective October 1.

This section is similar to former § 12-61-102 as it existed prior to 2019.

Law reviews. For note, “One Year Review of Contracts”, see 41 Den. L. Ctr. J. 89 (1964). For note, “Rural Poverty and the Law in Southern Colorado”, see 47 Den. L.J. 82 (1970).

Annotator's note. The following annotations include cases decided under former provisions similar to this section.

This section requires one engaged in the business of real estate broker to obtain a license. Cary v. Borden Co., 153 Colo. 344 , 386 P.2d 585 (1963).

The purpose of the state real estate broker and salesman license law envisions an employer-employee relationship because it clothes the broker not only with the right to control his salesmen but it also charges him with a duty to do so, and it is the right, duty, and power to control that are important factors in distinguishing a servant or employee from a contractor. Faith Realty & Dev. Co. v. Indus. Comm'n, 170 Colo. 215 , 460 P.2d 228 (1969).

Although the real estate licensing statutes have undergone revision, its provisions are still reflective of an employer-employee relationship between a licensed real estate broker and his licensed salesmen. Olsen v. Bounderant and Co., 759 P.2d 861 (Colo. App. 1988).

The licensing statute is penal in nature because of the criminal penalties involved in violation of its terms. Lemler v. Real Estate Comm'n, 38 Colo. App. 489, 558 P.2d 591 (1976).

The provisions of the real estate broker's licensing statute are not to be extended by implication. Bamford v. Cope, 31 Colo. App. 161, 499 P.2d 639 (1972).

The fact that many real estate brokers arrange loans secured by deeds of trust on real property does not mean that only licensed real estate brokers can perform such services. Bamford v. Cope, 31 Colo. App. 161, 499 P.2d 639 (1972).

The preparation of simple real estate instruments, done without separate charge therefor by licensed real estate brokers only in connection with their established business and in behalf of their customers and in connection with a bona fide real estate transaction which they are handling as brokers, should not be enjoined as unauthorized practices of law. Conway-Bogue Realty Inv. Co. v. Denver Bar Ass'n, 135 Colo. 398 , 312 P.2d 998 (1957).

Where services are performed by an unlicensed person in violation of the Colorado licensing statutes, the agreement for the services is illegal and unenforceable. Manufacturer's Nat'l Bank v. Hartmeister, 411 F.2d 173 (10th Cir. 1969).

Furthermore, in construing the act, courts have held that a sale of realty made by one who acts in the capacity of a broker without a license disentitles him to compensation for his services. Cary v. Borden Co., 153 Colo. 344 , 386 P.2d 585 (1963).

One who functions as a real estate broker without obtaining the necessary license cannot recover compensation for his services. Brakhage v. Georgetown Assocs., 33 Colo. App. 385, 523 P.2d 145 (1974).

Where a person who was not a licensed real estate broker nor engaged in the selling of real estate undertook and did sell certain farm lands owned by the seller, he was not allowed to recover the agreed-upon compensation from the seller. Benham v. Heyde, 122 Colo. 233 , 221 P.2d 1078 (1950).

Nonlicensed broker precluded from seeking judicial assistance to enforce contract. Since plaintiff was not licensed as a broker or real estate salesman pursuant to this statute, an agreement between owner of mining claims, plaintiff, and defendant regarding the sale of such claims constituted an illegal contract, so that plaintiff was precluded from seeking judicial assistance to enforce the contract. Reed v. Bailey, 34 Colo. App. 20, 524 P.2d 80 (1974).

One who renders services in connection with the sale of a going business and who does not have a real estate broker's license where realty comprises a part of the assets of such going business may recover a commission. Cary v. Borden Co., 153 Colo. 344 , 386 P.2d 585 (1963).

Although an employee was not a licensed real estate broker, but he acted only as an agent for employer and only with reference to property owned by employer or by corporations wholly owned by him, those activities as an employee were not subject to the real estate broker licensing requirements, and the agreement lawfully entitled the employee to the five percent commission on the property sales. Manufacturer's Nat'l Bank v. Hartmeister, 411 F.2d 173 (10th Cir. 1969).

Formerly under this section, one who engaged in the business, irrespective of actual transactions, must have had a license or incurred the prescribed penalty, but one not in the business needed no license for his protection, though engaging irregularly in isolated transactions. Schwartz v. Weiner, 94 Colo. 251 , 30 P.2d 1110 (1934).

There is no requirement that real estate or a leasehold be transferred from one legal entity to another to trigger the licensure requirement. Lieff v. Medco Prof'l Servs., 973 P.2d 1276 (Colo. App. 1998).

Protection of the public is the primary purpose of the commission and to further this purpose agents must use the commission's standardized forms. Albright v. McDermond, 14 P.3d 318 (Colo. 2000).

Applied in Broughall v. Black Forest Dev. Co., 196 Colo. 503 , 593 P.2d 314 (1978); Backus v. Apishapa Land & Cattle Co., 44 Colo. App. 59, 615 P.2d 42 (1980); Holter v. Moore & Co., 702 F.2d 854 (10th Cir. 1983); Am. W. Motel Brokers, Inc. v. Wu, 697 P.2d 34 (Colo. 1985).