C.R.S. § 12-10-403.5: Broker engagement contracts - residential premises - prohibited terms - unfair or deceptive trade practice - definition.

(1) As used in this section, unless the context otherwise requires, "broker engagement contract" means a written contract in which a seller, buyer, landlord, or tenant of a residential premises becomes the client of a broker or agrees to retain the services of a broker in the future and promises to pay the broker a valuable consideration or agrees that the broker may receive a valuable consideration from another person in exchange for the broker:

(a) Producing a seller, buyer, tenant, or landlord ready, able, and willing to sell, buy, or rent the residential premises; or

(b) Performing other services.

(2) A broker engagement contract must not:

(a) Purport to be a covenant running with the land or to be binding on future owners of interests in the real property;

(b) Allow for assignment of the right to provide service without notice and agreement of the owner of the residential premises; or

(c) Purport to create a recordable lien, encumbrance, or other real property security interest. Any such lien, encumbrance, or other real property security interest is void and unenforceable.

(3) A person that offers to a consumer a broker engagement contract that includes a provision in violation of subsection (2) of this section commits an unfair or deceptive trade practice, as provided in section 6-1-105 (1)(rrr).

(4) This section does not apply to:

(a) A home warranty service contract, as defined in section 12-10-901 (2)(a);

(b) A building warranty or similar product that covers the cost of maintenance of a major housing or building system, such as a plumbing or an electrical system, for a specific period of time after the date on which a house or building is sold;

(c) An insurance contract;

(d) An option to purchase, a put requirement to purchase, a right of first offer, or a right of refusal;

(e) A declaration created in the formation of a common interest community, as defined in section 38-33.3-103 (8), or an amendment to the declaration;

(f) A maintenance or repair agreement entered into by a unit owners' association, as defined in section 38-33.3-103 (3);

(g) A loan or a commitment to make or receive a loan, which loan or commitment is secured by real estate;

(h) A security agreement under the "Uniform Commercial Code" relating to the sale or rental of personal property or fixtures;

(i) Water, sewer, electrical, telephone, cable, or other regulated utility service providers; or

(j) A property management agreement by which the owner of real property contracts with a party to provide management services for the maintenance, ownership, operation, or lease of a residential premises.