Home » BROKERAGE FIRM POLICIES REQUIRED UPDATES 2020

BROKERAGE FIRM POLICIES REQUIRED UPDATES 2020

FREQUENTLY ASKED QUESTIONS

Different laws and regulations require different business models to address different issues. To help guide you about what you need to change, and what you do not need to change, below are answers to frequently asked questions.

Q: If I am a one person brokerage firm, or one independent broker operating without a brokerage firm, do I need an independent contractor agreement?
A: No, you do not have any independent contractors.

Q: Does the Colorado Division of Real Estate require all brokerage firms with employed agents to have an Independent Contractor Agreement?
A: No, however Independent Contractor Agreements are necessary to satisfy certain I.R.S. safe havens and help manage other significant risks faced by brokerage firms.

Q: Must all Colorado brokerages, even one person operations, have Data Protection Policies?
A: Yes.

Q: Did the law firm update its Data Protection Policy form system in 2020?
A: No, because the “DPPs” that have come from the law firm’s original Data Protection Policy systems remain current.

Q: Must all Colorado brokerage firms, even one person operations, have a Brokerage Relationship Policy (also known as an “Agency” Policy)?
A: Yes, it is required by statute.

Q: Does your law firm’s general office policy cover the brokerage relationship issues?
A: The law firm’s general office policy manual does not address the brokerage relationship issues for the following reasons: (1) The obligation to have a general and massive office policy manual comes from a brokerage firm’s obligation to supervise employed agents (See CREC Rule 6.3.C.1.). One person brokerage operations do not have licensees to supervise. One person brokerage firms do not need to bear the expense of addressing all of the issues mentioned in Colorado Real Estate Commission Position on Office Policy Manuals (CP-12). One person brokerage firms, however, must have a brokerage relationship policy and must have a data protection policy due to statutes that impose burdens on all brokerage operations. (2) Brokerage relationship issues are complex. The integration of brokerage relationship issues into the general Office Policy would make for a document that would exhaust the stamina of virtually all readers and (3) Separating brokerage relationship and data protection issues in our modular fashion from the massive general office policy allows us to more surgically and inexpensively address your needs, especially as the world and different laws evolve.

Q: If my brokerage firm does not have any policy documents, what documents does the Colorado Division of Real Estate require my brokerage firm to have in your forms system?
A: If you are a one person operation then you need (1) a Brokerage Relationship Policy ($300) [*] and (2) a Data Protection Policy ($150).
A: If you have agents who hang their licenses under you, then you need (1) a Brokerage Relationship Policy ($300), (2) a Data Protection Policy ($350) and (3) our general Office Policy Manual ($300). Not required, but regularly requested with these is the Independent Contractor Agreement ($300).

Q: In your law firm’s system, if my brokerage firm engages in property management of client’s properties, must I also have a separate office policy manual addressing property management issues?
A: Yes, however, if a brokerage firm orders four (4) documents from the law firm at once, then the economies of scale allows us to discount one of the $300 products to be free to you. So instead of $1,250 total, the charge would be $950.

Q: Does the Office Policy Manual have policies that fill in the gaps in the Covid driven public health orders?
A: The Office Policy Manual requires your agents to comply with applicable public health orders.  It does not have policies to fill in the gaps of the PHOs.

Q: How come your system doesn’t fill in the gaps of the public health orders?
A: (1)  The understanding of the Covid-19 evolves.  The virus may evolve.  The PHOs change frequently.    Our OPM strives to avoid obsolescence.  Attempts to fill the gaps of the PHOs would very much increase the likelihood that your OPM would quickly become obsolete.  (2)  Providing Covid-19 directives does not reduce brokerage firm risk unless your agents actually follow the directives.  Systemic failure to follow Brokerage Firm directives enhances your risk.  (3) In some instances, the attempt to resolve uncertainty enhances risk.  Any attempt to fill in the gaps of the public health orders creates the risk that we fill in the gaps differently than the enforcers intend.  Unless you are inclined to resolve the uncertainty of the PHOs very conservatively, and unless you are confident that your agents will carefully follow those conservative policies, we perceive that the attempt to fill in the gaps of the PHOs enhance your risk. (4)  There is not a “one-size-fits-all” solution to filling the gaps of the public orders.  Solutions, for example, that work for agents who live close to the properties that they list may not work for agents who roam over large areas.  If you seek Covid specific policies, call us.  After the law firm gets to know your firm better, together we’ll explore ways that we can efficiently help you.  That consultation is included in the flat fee price of your OPM.

Return to Brokerage Firm Policies Order Forms

___________________________________

[*] These costs, and all other costs quoted in this F.A.Q. are estimates that assume that your choices fit within our form generation system.  If you need customization of your documents, then there may be additional expense.

Call Now Button