A Colorado broker associate has been working under a listing agreement with a seller for three months. The seller unexpectedly passes away before the property is sold. Under Colorado law, what is the effect on the listing agreement?
Correct Answer
A) The listing agreement is automatically terminated by operation of law upon the seller's death.
Under Colorado agency law, an agency relationship — including a listing agreement — is terminated by operation of law upon the death of the principal (the seller). Death is one of the recognized events that automatically terminates an agency, along with incapacity of the principal, destruction of the subject property, bankruptcy, or expiration of the agreement's term. The broker's authority to act on behalf of the seller ceases immediately upon the seller's death, and no further acts can be taken under that agreement without authorization from the estate's personal representative under a new agreement.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A non-agency relationship where the broker facilitates a real estate transaction without representing either party, owing limited duties of honesty, fairness, and competence to both.
The legal principle that holds a broker responsible for the actions of their agents and employees performed within the scope of the agency relationship.
An agency relationship created when a principal's actions or words lead a third party to reasonably believe that an agent has authority, and the principal fails to correct this belief.
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