Johnson Law represents Coloradans in claims against real estate agents, real estate brokers, and Realtors involved in their real estate purchase or sale. In Colorado, all real estate agents are called brokers, whether or not they own the real estate brokerage or not. A Realtor is a real estate broker that also belongs to the National Association of Realtors and subscribes to the NAR’s code of ethics.

Most claims involving real estate brokers in Colorado arise out of the failure to disclose or adequately inform a home purchaser about material facts about a home that was sold. Real estate brokers are paid when deals close and they have a financial disincentive to disclose problems that could kill the deal. Johnson Law attorneys have investigated and/or brought claims and cases against dozens of real estate agents for their failure to disclose construction defects and other adverse material facts, including but not limited to:

  • Expansive soil problems
  • Foundation defects and problems
  • Defective stucco
  • Floor slab problems
  • Framing defects
  • Leaky windows
  • Water intrusion
  • Insufficient water well production
  • Methamphetamine use and/or production within the home
  • Use of the home as a pornographic film studio
  • Construction without permits
  • Construction in violation of building codes
  • Construction in violation of zoning codes
  • Construction in violation of fire codes

Many of the specific things that a real estate broker must do for you in a transaction are listed in the standard contracts signed by real estate agents and homeowners. In addition to the contracts, if you hire a real estate broker as either your selling broker or buying broker (as opposed to a transaction broker that technically represents neither buyer nor seller), the real estate broker owes you a fiduciary duty. A fiduciary duty means the obligation to work in the best interest of the client. A breach of the fiduciary duty not only leads to damages as a result of the wrongdoing by the broker, but also a refund of any commission made on the purchase or sale. Most claims against real estate brokers in the state of Colorado are based on contracts that allow the winning party to get their attorney fees and costs paid by the losing party.

Under Colorado law, if you hire a broker as a buyer’s agent or a seller’s agent, the broker owes you (the client) the following duties and obligations:

(1) To perform the terms of the written agreement made with the client;

(2) To exercise reasonable skill and care for the client;

(3) To promote the interests of the client with the utmost good faith, loyalty, and fidelity, including, but not limited to:

(I) Seeking a price and terms that are acceptable to the client with limited exceptions; 
(II) Presenting all offers to and from the client in a timely manner regardless of whether the client is already a party to a contract;
(III) Disclosing to all parties to the transaction any adverse material facts actually known by the broker. Adverse material facts may include but are not limited to adverse material facts pertaining to the title and the physical condition of the property, any material defects in the property, and any environmental hazards affecting the property that are required by law to be disclosed. Adverse material facts do not include 
(IV) Counseling the client as to any material benefits or risks of a transaction that are actually known by the broker;
(V) Advising the client to obtain expert advice as to material matters about which the broker knows but the specifics of which are beyond the expertise of the broker;
(VI) Accounting in a timely manner for all money and property received; and
(VII) Informing the client that the client shall not be vicariously liable for the acts of the agent that are not approved, directed, or ratified by the client; 

(4) other duties to comply with other Colorado laws relating to real estate brokers and fair housing.

This page does not include all wrongdoings of real estate brokers and agents that could lead to legal liability.  If you have any questions about real estate broker duties or wish to discuss if you have a potential claim or case, please contact Johnson Law for a free case evaluation.