New Colorado Requirement for Sharing Confidential Client Information
After significant deliberation by Colorado real estate brokerage regulators, the Colorado Division of Real Estate has appeared to finally settle on a policy regarding the handling of a client’s confidential information and when such information can (and can’t) be shared with a supervising broker. The upshot is that as of January 1, 2026, Colorado brokers need to take additional steps to get a client’s informed consent before sharing a client’s confidential information with supervising brokers.
Understanding Designated Brokerage in Colorado
First, some background regarding designated brokerage is critical. Colorado brokerage law imposes a notion of designated brokerage which essentially isolates the brokerage relationship between a client and a designated broker. For example, a buyer working with an agent under the Commission’s Exclusive Right to Buy Listing Contract only has an agency relationship with his or her buyer’s agent and no one else at the brokerage firm. In this example, the buyer’s agency relationship does not reach other than the buyer’s agent – it does not even reach the agent’s employing broker or supervising broker.
Second, Colorado brokers have an obligation to maintain as confidential certain client information. This means that unless a broker has a client’s informed consent, a broker may not share any of his or her client’s confidential information with any other party.
Confidential Information Defined for Sellers
Confidential information is defined by statute. From a seller’s perspective, confidential information includes:
(a) That a seller or landlord is willing to accept less than the asking price or lease rate for the property;
(b) What the motivating factors are for the party selling or leasing the property;
(c) That the seller or landlord will agree to financing terms other than those offered;
(d) Any material information about the seller or landlord unless disclosure is required by law or failure to disclose the information would constitute fraud or dishonest dealing; or
(e) Any facts or suspicions regarding circumstances that may psychologically impact or stigmatize any real property pursuant to section 38-35.5-101.
Confidential Information Defined for Buyers
From a buyer’s perspective, confidential information includes:
(a) That a buyer or tenant is willing to pay more than the purchase price or lease rate for the property;
(b) What the motivating factors are for the party buying or leasing the property;
(c) That the buyer or tenant will agree to financing terms other than those offered;
(d) Any material information about the buyer or tenant unless disclosure is required by law or failure to disclose the information would constitute fraud or dishonest dealing; or
(e) Any facts or suspicions regarding circumstances that would psychologically impact or stigmatize any real property pursuant to section 38-35.5-101.
Removal of Section 5.3 from Colorado Commission Contracts
According to the Colorado Division of Real Estate, without a client’s informed consent the license law limits a broker from sharing a client’s confidential information with any other party, including the broker’s own employing broker or supervising broker. Up until January 1, 2026, all versions of the Colorado Real Estate Commission’s approved listing contract contained some language authorizing a designated broker to share with their employing or supervising broker a client’s confidential information. See Section 5.3 of the Commission’s listing contracts predating January 1, 2026. However, for a variety of reasons, the Colorado Real Estate Commission elected to remove this language leaving designated brokers with: (i) a legal obligation to maintain certain client information as confidential, including withholding such confidential information from a broker’s employing or supervising broker, absent client consent to share it; (ii) and no specific authority to share such confidential information with employing or supervising brokers.
New Requirement for Written Informed Consent
Crucially, as of January 1, 2026, Colorado brokers need to find and use a means of obtaining written informed consent from his or her client before sharing confidential information with an employing or supervising broker. According to the Division of Real Estate, simply reinserting the now-deleted Section 5.3 is not sufficient. There are a variety of solutions, including an FJGG prepared form.
If you have questions regarding informed consent requirements or compliance with the new rule, please contact attorney Jordan May.
If you would like to obtain the Informed Consent Disclosure prepared by Frascona, Joiner, Goodman and Greenstein, P.C. for use beginning January 1, 2026, please complete this order form and return it to us.
