At the June 7, 2016 public meeting of the Real Estate Commission (the “Commission”), the Commission considered two disciplinary cases involving allegations of sign crossing. Colorado Real Estate Commission rule E-13 prohibits a real estate broker from negotiating the sale, exchange, lease or purchase with a consumer that has a written unexpired exclusive right to sell, lease or buy contract with another broker for a specific property or property type.
The only exception is when a consumer initiates the discussion with the broker about a future listing agreement, i.e. a listing after the current contract expires. The broker is allowed to negotiate the terms of the future listing in this instance. Brokers should not be advising consumers to cancel their listing agreements in order to work directly with a different broker. Such behavior could result in the Commission imposing discipline against one’s license.
The sign crossing cases presented to the Commission in June resulted in a unanimous vote to require 12 hours of remedial education in brokerage relationships and ethics, public censure and the payment of a $2,500.00 fine in each case.
As a best practice, brokers in Colorado are encouraged to perform some research before agreeing to perform licensed duties for a consumer who indicates that they have an expired or canceled listing contract. The broker should contact the broker who had the prior listing contract or ask the consumer to see the prior listing agreement and any agreements to amend or extend the original listing agreement. Brokers should be aware that the submission of sign crossing complaints is not restricted to consumers. Brokers may also file these complaints. As an additional reference on sign crossing, please see Commission Position Statement 3.
From the Division of Real Estate Summer newsletter.
Written and Published by: VanEd
