A Colorado real estate broker is representing a buyer purchasing a newly constructed home in a master-planned community governed by a metropolitan district. The buyer is surprised to learn that the effective property tax rate appears much higher than neighboring properties in the same county that are not within the metropolitan district. Which of the following best explains this discrepancy and what the broker's obligation is?

Correct Answer

A) The metropolitan district levies additional mill levies on top of county and school district levies, and the broker must ensure the buyer understands the total mill levy before contract execution

Metropolitan districts in Colorado are special districts authorized under C.R.S. § 32-1-101 et seq. to levy mill levies on properties within their boundaries to fund infrastructure bonds and ongoing services. Properties within a metropolitan district are subject to the county mill levy, school district mill levy, AND the metropolitan district's mill levy — resulting in a substantially higher total effective tax rate than comparable properties outside the district. Colorado law requires that buyers be informed about metropolitan district membership and its financial obligations. The CREC-approved Contract to Buy and Sell Real Estate includes provisions for metropolitan district disclosure, and brokers have an obligation to ensure buyers understand this material information before executing a contract.