A Colorado broker, acting as a transaction broker, is helping a buyer purchase a condominium. The HOA board informs the broker that the association has an unwritten policy of discouraging unmarried couples from purchasing units. The broker does not inform the buyer of this policy and proceeds to close the transaction. Which of the following best describes the broker's legal exposure?
Correct Answer
B) The broker may face CREC discipline and CADA liability for failing to disclose a discriminatory HOA policy that affects the buyer.
Even as a transaction broker, a Colorado licensee has a duty of honest dealing and disclosure of known adverse material facts under C.R.S. § 12-10-403. A discriminatory HOA policy targeting unmarried couples violates CADA's marital status protections (C.R.S. § 24-34-502) and constitutes an adverse material fact affecting the buyer. Failing to disclose it exposes the broker to CREC disciplinary action and potential CADA liability for facilitating a discriminatory transaction.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Commingling is the illegal act of mixing client trust funds with a broker's personal or business operating funds; conversion is the misappropriation of those funds.
Continuing education (CE) refers to the ongoing coursework that licensed real estate professionals must complete during each renewal cycle to maintain an active license. CE ensures agents stay current with changes in laws, regulations, and industry practices.
The National Do Not Call Registry is a federal program administered by the FTC that allows consumers to opt out of receiving unsolicited telemarketing calls, including calls from real estate agents soliciting business.
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