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Early Fall 2010

Early Fall 2010

 


•  Construction Disburser Notices: Tools for Troubled Times

•    Legislative Update

• County Clerk and Recorder Fees (HB10-1007)
• Requirement for Mortgage Companies to Be Licensed by the Division of Real Estate (HB10-1141) and Division of Real Estate Rule 5-1-2
• Expedited Residential Foreclosure Sales (HB10-1249) and Rule 120.1
• Commercial Real Estate Brokers Commission Security Act (HB10-1288)
• Amendments to the Homeowner Protection Act of 2010 (SB10-045)
• Other Legislation
• Bill Title

•    Case Law Update

• Extending a Judgment Lien Predicated upon a Foreign Judgment (Wells Fargo Bank v. Kopfman)

 

 

 


•    Citizens’ Initiatives Update

• Citizens’ Initiatives Will Seriously Impact Colorado Governments’ Finances (Proposition 101, Amendment 60 and Amendment 61)

•    Committee Reports
      •     Legislative Policy Committee    
      •     Title Standards Committee
      •     Real Estate Commission Forms Committee
      •     Interprofessional Committee
      •     Colorado Housing Council
      •     Additional Information

•    2010-2011 Real Estate Section Council Slate 

•    Upcoming Continuing Legal Education Opportunities

      •   2010 Topical CLE Luncheons
      •   Upcoming CLE Real Estate Programs
      •   Save the Date – 29th Annual Real Estate Symposium

•    Legal Writing Opportunities

•    Correction to “Installment Land Contracts: A Potential Trap for the Unwary” contained in the Spring 2010 CBA Real Estate Law Section Newsletter

•   2010-2011 Real Estate Section Council Contact Names and Numbers

 

 

 

 

 

 

 

Construction Disburser Notices
Tools for Troubled Times

By B. Joseph Krabacher & Curtis B. Sanders,
Sherman & Howard, L.L.C.

Frequently overlooked by the principal contractor, subcontractor, material supplier or laborer are the provisions of Colorado's General Mechanic’s Lien statute regarding notices that are required to be recorded by construction funds disbursers, the right to serve notices of labor or materials furnished or to be furnished, and the right to serve notices to disbursers.

Recording of the Disburser’s Notice. Under the provisions of CRS §38-22-126(2), a lender or any other party (such as an owner) which is disbursing funds to pay for the cost of construction, alterations or repairs, is required to record a Disburser’s Notice in the office of the County Clerk and Recorder where the project is located. CRS §38-22-126(2). The Disburser’s Notice is required to contain the name and address of the owner of the property, the names, addresses and telephone numbers of the principal contractor as well as the disburser, and a legal description of the land and any street address.  The notice is indexed under the name of the owner and each principal contractor by the Clerk and Recorder. Aside from the rights discussed below, this recorded document also contains helpful information when filing a statement of lien or notice to extend, and the information should be checked against the client’s title report or foreclosure certificate.

Notice Under CRS §38-22-102(4). While not available to a principal contractor, any subcontractor, material supplier or laborer may provide written notice to the owner, superintendent, architect or disburser of the performance of labor or materials, or an agreement to do so in the future. CRS §38-22-102(4).

While separate and distinct from the Notice to Disburser under CRS §38-22-126(4) described below, this portion of the mechanic’s lien law allows notice to be given either before or after performing labor or supplying materials, including notice of the terms of an agreement to do so in the future. The requirements of the notice include the estimated or agreed amount in value of the work already done or furnished, or of the whole amount agreed to be done or furnished. Id.

After the notice is given, it is the duty of the person who contracted with the principal contractor (typically the owner) to withhold sufficient money from the principal contractor to satisfy the claim and any lien that may be filed. CRS §38-22-102(6).

Notice to Disburser Under CRS §38-22-126(4). This provision creates a valuable tool for the lien claimant, and is somewhat infrequently used. Any lien claimant, including a principal contractor, is allowed to give a Notice to Disburser. A “disburser” under this section is defined to include any lender disbursing construction funds, any person who receives funds from the lender, contractor or owner, and any owner who has agreed to progress payments to any contractor. CRS §38-22-126(1).

The Notice to Disburser requires the lien claimant to include the address or legal description of the property, the claimant’s name, address and telephone number, the name of the person with whom the claimant contracted, a general statement of the contract, and contract price. Service is made by certified mail or personal delivery, or by leaving a copy at the residence or place of business of the disburser with some person in charge. CRS §38-22-126(5).

Once served, the disburser then has legal obligations directly to the lien claimant, as discussed below. CRS §38-22-126(6). This tool should be used early and as often as necessary.

Obligations of the Disburser. After a disburser receives the Notice to Disburser under CRS §38-22-126(4), the disburser is required to: (i) ascertain the amount due to the claimant on any disbursement date; and (ii) to pay such amount directly to the claimant out of any undisbursed funds. CRS §38-22-126(6).

In Crissey-Fowler Lumber Co. v. First Community Industrial Bank, 8 P.3d 531 (Colo. App. 2000), one of the only reported cases in Colorado addressing in detail the obligation of a lender upon receipt of a Notice to Disburser, the Colorado Court of Appeals held that the lender had a statutory duty as disburser to pay the subcontractor directly after the general contractor abandoned the project. The court also held that the amount due to the subcontractor was not limited merely to the funds paid to the general contractor, but includes the construction loan proceeds in full.

Advantages and Shortcomings of the Notice to Disburser. Many principal contractors, subcontractors, material suppliers or laborers have this procedure available, but do not use it, and as a result frequently miss an opportunity to get paid without the need to file a mechanic’s lien. Particularly in this troubled economic cycle, lenders are much more aware of the potential for mechanic lien claims to prime the construction loan. The priority of a mechanic’s lien generally relates back to the first work performed on the project, typically by the architect, surveyor or geotechnical engineer, even if they have been paid. CRS §38-22-106(1). Accordingly, once the Notice to Disburser is served, the owner or the lender may insist that the principal contractor pay the lien claimant.

On the other hand, if there are construction defects, or disputes over the invoicing or quality of the work, the subcontractor, material supplier or laborer may still remain unpaid, so it is important that they keep in mind the deadline for providing a notice of intent to lien and recording a statement of lien, as well as the deadlines for filing the lien foreclosure lawsuit and recording a lis pendens.

Notice Extending Time to File Lien. Another tool that should be considered is the recording of a notice extending the time to file a lien statement. CRS §38-22-109(10). This is particularly helpful for subcontractors, material suppliers or laborers who performed work early in the life of the project, and have completed their work, but would prefer to delay recording any mechanic's lien until after the project is substantially complete. Recording the notice to extend will extend the time for recording a statement of lien to four months after completion of the structure or other improvement, or if earlier, six months after filing the notice to extend. Id.

Distressed economic times bring distressed real estate projects, and you should be sure that you are evaluating all of the tools available in these troubled times. Many opportunities may be overlooked, and should be carefully evaluated to maximize your clients’ recoveries while minimizing their costs and legal fees.

[The opinions expressed in the preceding article do not necessarily reflect the opinions or official positions of the Colorado Bar Association, the Real Estate Section Council or its members.]

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LEGISLATIVE UPDATE


One of the core purposes of the Real Estate Section Council is to "participate actively in the drafting, review, recommendation and promotion of legislation and other laws, rules or regulations that affect real property, titles and the practice of real estate law."  Bylaws of the Real Estate LawSection of the Colorado Bar Association (as amended and restated effective May 20, 2003).  Each legislative session of the Colorado General Assembly, members of the Real Estate Section Council review, and in some cases support or oppose, proposed legislation affecting real property.  The following is a brief overview of some of the legislation the Colorado General Assembly adopted during the 2010 legislative session of interestto real estate practitioners.  All bills are available on the website of the Colorado General Assembly: http://www.leg.state.co.us/.

• County Clerk and Recorder Fees (HB10-1007).

HB 10-1007, effective July 1, 2010, amends C.R.S. §§30-1-103(1) and (4). HB 10-1007 makes recording fees uniform on a statewide basis, thereby eliminating confusion for submitters.

The passage of this law will have the following impacts on documents recorded in the Real Estate Records of the Recording Division of the Clerk and Recorder’s Office:

$11 for the first page and $5 for each additional page for recording standard sized documents (includes $1.00 surcharge per document C.R.S. §30-10-421)

Eliminates the additional charges of $5 per grantor/grantee entries into the Index.

This fee adjustment will NOT impact the following documents: oversized documents (plats, land survey plats), federal tax liens, UCC’s, treasurer’s certificates of redemption and mining claims. The fees for recording these documents will remain the same.

Documents received on July 1, 2010 or thereafter, will be charged the adjusted fee.

[Thanks to Michael Valdez, Colorado Bar Association, Director - Legislative Relations.]

• Requirement for Mortgage Companies to Be Licensed by the Division of Real Estate (HB10-1141) and Division of Real Estate Rule 5-1-2.

HB 10-1141, effective August 11, 2010, moves regulation of mortgage loan originators from the Director of the Division of Real Estate to a board of mortgage loan originators, comprised of three licensed mortgage loan originators and two members of the public at large. The statute requires that all mortgage companies be registered with the nationwide licensing system by January 1, 2011. The bill was drafted to expand regulation under the statute to most attorneys engaged in any type of residential mortgage loan advising. The Real Estate Section Council successfully lobbied to eliminate those changes, to leave the existing provisions of C.R.S. § 12-61-904(1)(d) as currently drafted, so that attorneys are only subject to regulation under the mortgage loan originator statute if they are primarily engaged in the business of negotiating residential loans.

The Division of Real Estate had proposed as part of Rule 5-1-2 to expand the application of the mortgage loan originator regulations to attorneys beyond those attorneys currently subject to regulation pursuant to C.R.S. § 12-61-904(1)(d). The Real Estate Section submitted comments objecting to this expansion of the regulation of attorneys under the mortgage loan originator structure and testified in objection to the proposed expansion. The final version adopted by the Division of Real Estate maintained the application to attorneys under current statute and did not make any further expansion of regulation of attorneys.

[Thanks to Catherine A. Hance, Davis, Graham & Stubbs, LLP.]

 

• Expedited Residential Foreclosure Sales (HB10-1249) and Rule 120.1

HB 10-1249, effective August 1, 2010, provides an expedited foreclosure process for residential properties that are abandoned. Lenders are required to provide evidence at the Rule 120 hearing of abandonment. If deemed to have presented clear and convincing evidence of abandonment, the foreclosure sale can occur between 40 and 55 days after the recording of the notice of election and demand for foreclosure. Notice of the Rule 120 hearing must be posted in English and Spanish in a conspicuous place on the property at least fifteen days prior to the hearing. CRCP Rule 120.1 has been drafted to provide for orders for expedited sales under this statute.

[Thanks to Catherine A. Hance, Davis, Graham & Stubbs, LLP.]

 

• Commercial Real Estate Brokers Commission Security Act (HB10-1288).

HB10-1288, adopted effective August 11, 2010, gives licensed brokers a pre-judgment lien to secure payment of leasing commissions when the broker procures a person who has leased an interest in commercial real estate. The lien would be placed on the fee, not on the leasehold. Similar to a mechanics lien, the realtor would first deliver a notice-of-intent to file and the lien could be bonded over. Unlike a mechanics lien, the realtor and owner must first mediate the commission dispute for 30 days. Also, unlike mechanics liens, when the commission is paid in installments, the realtor must record successive liens.

The Real Estate Section Council unsuccessfully lobbied to defeat this legislation based on a variety of concerns including the following:

 

1. The leasing broker's lien unreasonably burdens the fee. Pre-judgment liens adversely affect transfer of property by clouding the title prior to notice and opportunity to be heard as to the merits of the claimed lien. If the intent is to mimic mechanics liens, one of the tenets of the Mechanics Lien Act is that all persons who provide labor, materials or services that improve the property are all given equal rights to a lien with equal priority rights. Brokers should not be entitled to lien the land for the services that they provide to assist in effectuating a leasehold interest unless all others that also assist in the procurement of leases or maintenance and operation of the subject property are given equal rights, such as lawyers who represent landlord or tenant in the negotiation and drafting of the lease, a title insurer which provides a leasehold title search and then fails to get paid, as well as property managers, landscapers, janitorial service providers, snow removers and the like. In any event, the Real Estate Section Council took the position that pre-judgment lien rights should not be given to any person due to the mischief that the right to an involuntary unilaterally declared lien can create and the adverse affects such liens will place upon the alienability of fee title.

2. The bill incorrectly applies, or unreasonably alters, Colorado's race-notice recording laws and will increase priority battles affecting real property. Subsection 103(3) of the bill states the broker’s lien will not bind a bona fide purchaser who takes title prior to recording of the lien. However, the concept of a bona fide purchaser was eliminated from Colorado Law in 1927, such that everyone is treated with the same rights to gain priority. Accordingly, C.R.S. §38-35-109 protects the rights of "any person with any kind of rights in or to such real property who first records." By referring solely to bona fide purchasers, the bill causes confusion in the continuing effect of easements, leases on the property (including the lease negotiated with the broker's assistance), use agreements and other matters of interest.

3. Pre-conditions to filing the lien are ambiguous. Prior to giving notice of intent to record a lien, the broker need only demonstrate a written agreement, a procuring communication, the tenant, and claim of an unpaid amount. The "written agreement" is not necessarily a leasing or brokerage agreement. Since the bill defines "Owner" to include an "agent of Owner," the leasing broker, as agent for the Owner, could enter into an letter of intent or a cooperative agreement with another broker that gives rise to lien rights against the Owner's property. The bill contains various deadlines, but no deadline for how quickly the lien must be filed after the initial services are performed. The bill does not appear to require that an actual lease be signed or performed."

4. Creation of imbalance in freedom to contract. The negotiating parties (owners of commercial buildings and commercial brokerage firms) are among the most sophisticated parties in the real estate industry - generally capable of protecting their respective interests. Such parties are national or international in organization. To give one side the ability to cloud title, thereby affecting other tenants, lenders, potential purchasers, and investors (both public and private), will create a significant imbalance in the freedom to contract and one which could lead to reduced interest in Colorado commercial property by national owners and investors.

The Real Estate Section Council was successful in lobbying for a number of changes including the following:

 

1. Having the act expressly state that priorities are governed by C.R.S. §38-35-109 (the Race Notice statute).

2. Removing a number of provisions that further exacerbated questions raised in the bill regarding priority issues.

3. Clarifying the definition of the "agreement" required as a pre-condition to a lien. Clarifying some (but not all) of the provisions where an Owner's agent can bind the Owner without notice to the Owner. Adding a deadline by which notice of lien must be filed: ninety days after the tenant takes possession. Adding a defense to a lien claimed by a tenant's broker if the Owner has paid an amount to the leasing broker intended to satisfy the commissions due tenant's broker.

4. Adding a provision contemplating the possibility of a prospective waiver of lien rights by a broker. The new C.R.S. §38-22.5-103(2) provides as follows:

The General Assembly intends that nothing in this Section is subject to a prospective waiver by either party without consideration acceptable to the parties to the waiver.

[Thanks to Christopher W. Payne, Ballard Spahr LLP, James G. Benjamin, Benjamin, Bain & Howard, LLC and Andrew M. Toft.]

• Amendments to the Homeowner Protection Act of 2010 (SB10-045).

HB10-1278, effective January 1, 2011, sets up a new state office within the Division of Real Estate as an “HOA Information and Resource Center” for owners, associations and declarants in Colorado common interest communities. The bill also requires all owner associations that are organized under Section 38-33.3-301 of the Colorado Common Interest Ownership Act to register with the Director of the Division of Real Estate. Pending the effective date of the legislation, the Division of Real Estate will be setting up the required infrastructure, adopting association registration rules, and employing the required personnel (one HOA Information Officer and up to one FTE assistant).

The HOA Information Officer and Office has 5 primary responsibilities:

• to act as a clearinghouse for information concerning the basic rights and duties of owners, declarants and owners’ associations in common interest communities

• to track inquiries and complaints

• to establish an annual registration and report process for all owner associations organized under Section 38-33.3-301 of the Colorado Common Interest Ownership Act to register and provide basic information to the Division of Real Estate

• to collect annual registration fees from owner associations (those required to register)

• to report annually to the Director of the Division of Real Estate regarding the number and types of inquiries and complaints received.

The HOA Information Officer has no enforcement authority and is not expected to intervene in or resolve complaints.

The registration fee (to be established) will cover all direct and indirect costs of operating the HOA Information and Resource Center. The maximum fee is set at $50.00 per year. Associations with annual revenues of $5,000 or less or that are not authorized to make assessments and have no revenue are exempt.

If an association fails to register, it may not enforce a lien for assessments and may not employ any other enforcement mechanisms to enforce covenants until the association is validly registered. A lien for assessment filed when the association was validly registered or before registration was required is not extinguished by a lapse in the association’s registration, but any pending enforcement proceedings related to the lien will be suspended and time limits tolled until the association is again validly registered.

The legislation repeals, by its own terms, in 2020, unless extended.

[Thanks to Candyce Cavanagh, Orten Cavanagh Richmond & Holmes.]

• Other Legislation.

The following bills, addressed in detail in previous issues of this newsletter, were also adopted into law:

• Surveying: Licensing Requirements, Affidavit of Correction and Recordation of Orders Establishing Property Corners (HB10-1085);

• Limitations on the Inclusion of Agricultural Lands within Urban Renewal Areas (HB10-1107);

• Regulation of Distressed Real Property by a Board of County Commissioners (HB10-1118);

• Amendments to the “Colorado Foreclosure Protection Act” (HB10-1133); and

• Decrease in Maximum Amount of State Income Tax Credit that May be Claimed for the Donation of a Conservation Easement in Gross (HB10-1197).

The “Homeowner Protection Act of 2010”, which was the subject of SB10-045, was postponed indefinitely. The Real Estate Section Council opposed this bill which would have, among other things, required the holder of a residential mortgage to negotiate for a mutually acceptable agreement before commencing foreclosure and, if a foreclosure action were commenced, to participate in mediation.

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CASE LAW UPDATE:
Extending a Judgment Lien Predicated upon a Foreign Judgment

George E. Reeves, Esq.

In Wells Fargo Bank v. Kopfman, 226 P.3d 1068 (Colo. 2010), the Colorado Supreme Court said:
 

. . . We conclude that, under section 13-52-102(1), in order to extend a judgment lien predicated upon a foreign judgment domesticated in Colorado, judgment creditors must revive the underlying foreign judgment in the jurisdiction that originally issued the judgment. Then, the judgment creditor must revive the domesticated foreign judgment in Colorado by complying with the requirements of C.R.C.P. 54(h), and filing a transcript of the revived judgment record in the county where the original transcript of judgment was recorded.
. . .
. . . section 13-52-102(1)’s statement that a judgment creditor must file a “transcript of the judgment record of such revived judgment, certified by the clerk of the court in which such revived judgment was entered,” cannot be satisfied by filing some evidence of revival of the foreign judgment.

 

[The opinions expressed in the preceding article do not necessarily reflect the opinions or official positions of the Colorado Bar Association, the Real Estate Section Council or its members.]

 

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CITIZENS’ INITIATIVES UPDATE:

Citizens' Initiatives Will Seriously Impact Colorado Governments' Finances

In December 2009, three citizens' initiatives that will have significant adverse affects on all governments in Colorado were certified for the November 2, 2010, ballot by the Colorado Secretary of State. Opponents of the measures fear that not only will the State budget and local governments’ budgets be severely impacted, but that the measures will negatively impact our entire economy. If approved, each would go into effect on January 1, 2011.

 

Proposition 101. Proposition 101 is a statutory change that reduces the State income tax, various motor vehicle fees and taxes and fees on telecommunication services. When fully implemented, the provisions of this proposal would reduce the State income tax by 25%, State and local revenues from a range of sales taxes and vehicle fees, and State revenues from telecommunications charges and fees. While official estimates are not available, it is possible that annual revenue losses will be substantial.

Click on these links for a full copy of Proposition 101 (http://www.sos.state.co.us/pubs/elections/Initiatives/filings/09-10/Original10-0910.pdf) and a look at the website established by proponents of Proposition 101 (http://www.cotaxreform.com/).

 

Amendment 60. Amendment 60 would amend Article X, Section 20 of the Colorado Constitution ("TABOR") to add a new section to establish additional limits on property taxes. This section will be in addition to all other provisions of TABOR. Some of the provisions of this proposal appear intended to override court decisions interpreting TABOR (as it pertains to property taxes) and to invalidate certain prior property tax voter approvals under TABOR. Amendment 60 would also require school districts to reduce the operating tax levy by 50% over 10 years.

Click on these links for a full copy of Amendment 60 (http://www.sos.state.co.us/pubs/elections/Initiatives/filings/09-10/Original12-0910.pdf) and a look at the website established by proponents of Amendment 60 (http://www.limitpropertytax.com/).
 

Amendment 61. This proposal amends Article X, Section 20 of the Colorado Constitution ("TABOR") to add a new section to prohibit State debt and limit local government debt. It also amends certain sections of Article XI. The amendments to TABOR will be in addition to all other provisions of TABOR.

The proposal applies to "any loan, whether or not it lasts more than one year; may default; is subject to annual appropriation or discretion; is called a certificate of participation, lease-purchase, lease-back, emergency, contingency, property lien, special fund, dedicated revenue bond, or any other name; or offers any other excuse, exception, or form." This definition appears broad enough to include all government borrowings, including conduit borrowings on behalf of private entities such as private activity bonds.

The State is prohibited from borrowing, directly or indirectly, money or other items of value for any reason or for any period of time. This applies to any loan, whether it lasts more than a year or not, regardless of its form. Specifically, this addresses lease purchase agreements and certificates of participation and other obligations subject to annual appropriation which have been exempt from voting requirements under existing law. Colorado would be the only state to be completely banned from borrowing even $1 for one day. This prohibition applies to the State and its enterprises, authorities and other state political entities. Local governments would be permitted to engage in a limited amount of borrowing under Amendment 61, but could only issue debt with a maximum maturity of 10 years, and only upon meeting a new and tight debt limit.

Click on these links for a full copy of Amendment 61 (http://www.sos.state.co.us/pubs/elections/Initiatives/filings/09-10/Final21-0910.pdf) and a look at the website established by proponents of Amendment 61 (http://www.limitcodebt.com/).

An organization to oppose these initiatives has also been formed. A link to the organization’s website can be found here (http://www.donthurtcolorado.com/)

[Thanks to the Public Finance Department of Sherman & Howard, L.L.C.]

 

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COMMITTEE REPORTS

Legislative Policy Committee

Each legislative session of the Colorado General Assembly, members of the Real Estate Section Council review, and in some cases recommend sponsoring, proposing changes to, supporting or opposing proposed legislation affecting real property. Any such actions by the Real Estate Section Council (“RESC”) require the approval of the Legislative Policy Committee of the Colorado Bar Association (“CBA”) and, in some instances, of either the Board of Governors of the CBA or the Executive Council of the CBA. For more information on the policies and procedures of the Legislative Policy Committee visit the CBA website. James G. Benjamin, Benjamin, Bain & Howard, LLC, currently serves as the Real Estate Section Liaison to the Legislative Policy Committee.

The following is a list of some of the legislation for the upcoming 2010 or future legislative sessions on which the Legislative Policy Committee of the Colorado Bar Association (“LPC”) has taken a position:

  • Adjustment to Fees Charged by County Clerk and Recorders (described more particularly in the Legislative Update above) (HB10-1008). The CBA is supporting this Bill.
  • Low Profit Limited Liability Companies or “L3C” (HB10-1111). The CBA is opposing the Bill as misleading consumers and practitioners to mistakenly assume that “Program Related Investment” provisions of the Internal Revenue Code flow with the formation of an LLC under this proposed Act.
  • Amendments to the Homeowner Protection Act of 2010 (described more particularly in the Legislative Update above) (SB10-045). As noted above, the CBA is opposing this bill.

The LPC has taken action on the following, not yet introduced legislation:

  • Uniform Real Property Transfer on Death Act. The CBA is opposing this although not yet introduced. This proposed Uniform Act would purportedly create a format and uniform forms that would permit a consumer in another state to designate a beneficiary, by deed not valid until death, to become vested with title to real estate located in Colorado. Opposition is premised, among other specifics, on the fact that the existing Beneficiary Deed Act (CRS §15-15-401, et. seq.) is more suited for Colorado real estate related transactions.

Title Standards Committee

The Title Standards Committee of the Real Estate Law Section of the CBA is appointed by the RESC and the RESC is represented by a liaison to the Committee. “The charge of the committee is to consider current title problems and draft and propose title standards or legislation for their solution.” Real Estate Title Standards (revised and effective July 1, 2008). The resulting Colorado Real Estate Title Standards address, “the impact of certain specified title issues on the marketability of title” and provide instructions, “as to the duties of an examining attorney and scope of a title search.” Id. Click here to see the 2010 Colorado Real Estate Title Standards on the CBA website.  George E. Reeves, currently serves as the Real Estate Section Liaisons to the Title Standards Committee.

The Title Standards Committee has revised Title Standard XV to address changes in the law arising out of the adoption of the Servicemembers’ Civil Relief Act of 2003 and related Colorado Rules of Civil Procedure.  In particular, the Title Standards Committee considered whether concluding a quiet title action without the appointment of an attorney to represent unknown parties who may be serving in the military adversely affects marketability of title to the subject property.  The revised Title Standard XV is reprinted below:

 

XV.         SERVICEMEMBERS CIVIL RELIEF ACT
(50 U.S.C. App. §501 et. seq.  See particularly §§521, 522, 526, 533 and 591; formerly cited as §§520, 522, 526, 532, and 590).

 

15.1        Actions and Foreclosure Proceedings

No current Standard.  The prior Standards:  15.1.1, 15.1.2, and 15.1.3 (adopted in 1946), and 15.1.4 (adopted in 1950), are currently under review for possible revision and reenactment).

15.2        Liens and Encumbrances

No current Standard.  The prior Standards:  15.2.1 (adopted in 1947) and 15.2.2 (adopted in 1960), are currently under review for possible revision and reenactment).
               
15.3        Appointment of Attorney

 

15.3.1    Attorney for Unknown Parties

Problem: The record reveals a quiet title decree indicating that “unknown parties” were named as defendants, served by publication pursuant to court order, and default judgment was entered against them. However, the decree does not indicate that an attorney was appointed to represent the interests of any unknown parties who may have been in the military service.  If the quiet title decree is otherwise proper and title to the property is otherwise marketable, is title marketable?

Answer: Yes.

NOTES: The Servicemembers Civil Relief Act adopted in 2003, 50 USC §501, et seq. is a recodification of the Soldiers’ and Sailors’ Civil Relief Act, initially adopted in 1940.  The recodification did not effect a substantive change, but substituted “Servicemembers” for “Soldiers and Sailors”.  The result stated in this Title Standard 15.3.1 would be the same under the Act as currently formulated and as initially enacted in 1940.

See C.R.C.P. Rule 121§1-14(3) regarding the appointment of an attorney for a party against whom a default judgment is sought when such appointment is required under 50 USC §520 (now cited as §521).

 

Real Estate Commission Forms Committee.

The RESC is represented by a liaison to the Real Estate Commission Forms Committee which recommends changes to the forms adopted by the Real Estate Commission in response to new laws, changes in practice and consideration of public protection.  Input of the Council is frequently sought for revisions to forms before they are finalized and approved by the Real Estate Commission.  Kent Jay Levine, Kent Jay Levine, P.C., currently serves as the Liaison to the Forms Committee.

The Real Estate Commission Forms Committee adopted a number of new contract forms, including  and in August the Colorado Real Estate Commission to approximately thirty amended or new forms.  More information regarding the amended and/or new forms, effective for use as of January 1, 2011, is available on the Colorado Real Estate Commission’s website.

 

Interprofessional Committee.

The RESC is represented by liaisons to the Interprofessional Committee, whose purpose is to promote a better understanding among real estate professionals and whose members also (besides the CBA, represented by the Real Estate Section) include the Colorado Division of Real Estate, Colorado Association of REALTORS, the Land Title Association of Colorado and the Colorado Division of Insurance.   The current liaisons are Candyce D. Cavanagh, Orten Cavanagh Richmond & Holmes, Paul V. Timmins, Holme Roberts & Owen, LLP, and  Peter J. Griffiths, Land Title Guarantee Co.

At its April 2010 meeting, the Interprofessional Committee discussed that Marsha Waters is acting director of the Division of Real Estate.  The Division of Insurance discussed the recently adopted DOI Reg. 3-5-1 and its impact, which requires insurance companies to charge for O&E reports.  Kent Levine presented with respect to the proposed contract forms revisions, which include creation of separate forms for commercial and vacant land transactions.   The Real Estate Section Council provided comments on all of these forms to Kent Levine and the forms are in the process of being revised to address and incorporate these comments.

At its May 20, 2010 meeting, the Interprofessional Committee discussed recent activities by the Division of Real Estate, including activities to accommodate the recent mortgage loan originator legislation creating a board for regulation of mortgage loan originators.  The Division of Real Estate is requiring all commercial real estate brokers to register with the Division by January 1, 2011 or they will lose their lien rights granted by the recent broker lien law.  The Division of Insurance noted that insurance companies may hold classes that are title insurance related without charge but must otherwise charge for classes.  The Colorado Association of Realtors noted that there were three recent cases addressing transaction broker duties; the trial courts in these cases went different directions as to the scope of duties and at least one is expected to be appealed to the Court of Appeals.  CAR expects appeals to clarify the scope of transaction broker duties, particularly in cases where there is no signed brokerage agreement.  As noted herein, significant revisions to the real estate contract forms are ongoing (36 forms are being revised or eliminated).  Expect rule making approving the revised forms in August 2010 with the forms required for use on January 1, 2011.  Main change is addition of commercial and vacant land forms. 

 

Colorado Housing Council.       

The RESC is represented by liaisons to the Colorado Housing Council, whose purpose is to see to it that the public is better served in its housing needs through the advancement of communication among industry members, delivery of programs and information to the public, cooperation with legislative and regulatory bodies, and coordination with major employers and federal, state and local agencies.  The current liaisons from the RESC are  Catherine A. Hance, Davis, Graham & Stubbs, LLP, and  Deanne Stodden, Castle Meinhold & Stawiarski LLC.

During the April 2010 meeting of the Colorado Housing Council, Don Childears of the Colorado Bankers Association spoke with respect to the perception of banking.  His presentation addressed that most of the riskier loans were made by non-bank lenders.  He noted that banks are lending at rates equal to those prior to the start of the recession, but that non-bank lenders had been making around 2/3rds of the loans in the market and that is the lending area that has essentially disappeared.   
           
Ryan McMaken, Community Relations Director for the Colorado Division of Housing also provided foreclosure updates at both the April 2010 and May 2010 meetings. That data included monthly reports for March and April 2010 and the first quarter 2010 report.  No good data on commercial foreclosures is presently available to the Housing Division.  Foreclosure filings continue to be done compared to 2008 and 2009, but completed sales are up relative to the prior years; this is in part because of moratoria on sales that delayed and/or reduced foreclosure sales.  Foreclosure numbers are increasing most significantly in western counties, mountain/vacation property areas and more affluent suburbs.  Foreclosure filings and sales are down or flat in most Denver metro counties.    The Division of Housing’s current Housing Snapshot report can be found at http://divisionofhousing.blogspot.com/2010/06/june-2010-housing-snapshot-now.html.

 

Additional Information.

For additional information regarding the activities and responsibilities of the members of the Real Estate Section Council, see the article on the Real Estate Section page of the Colorado Bar Association Website entitled “What Does the Real Estate Law Section Do for Me?

 

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2010-2011 REAL ESTATE SECTION COUNCIL SLATE

The Nominating Committee of the Real Estate Section Council is pleased to announce the following officers for the 2010-2011 term:  Chairperson – Geoffrey P. Anderson, Burns Figa & Will PC; Vice Chairperson – Thomas L. Devine, Faegre & Benson, LLP; Secretary – Randall G. Alt, Otten Johnson Neff + Ragonetti; and Board of Governors Representative – Peter J. Griffiths, Land Title Guarantee Co.  The new Section Council members elected for a three-year term are Daniel A. Sweetser, The Sweetser Law Firm PC; Deanne R. Stodden, Castle Meinhold & Stawiarski LLC, Rebecca B. Givens, Montgomery Little & Soran PC, and Fred L. Otis, Otis Coan & Peters LLC.  The Council thanks the members of the Council whose terms expired June 30, 2010:  Jerri L. Jenkins, Foster Graham Milstein Miller & Calisher, LLP (outgoing Section chair); Cynthia Stovall, Sherman & Howard L.L.C.; Andrew M. Toft; and David L. Osborn, The Osborn Law Firm, LLC.  In addition, the Council thanks all the highly qualified individuals who expressed interest in serving on the Real Estate Section Council.

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UPCOMING CONTINUING LEGAL EDUCATION OPPORTUNITIES

2010 Topical CLE Luncheons

October 7, 2010 at Maggiano’s DTC (NOTE THE LOCATION)
"What Real Estate Lawyers Need to Know about Ballot Initiatives 60 and 61, and Proposition 101".  Speakers: Rick Reiter, Campaign Manager for Vote No 60, 61, 101, and Gary R. White, White Bear Ankele P.C.

November 4, 2010 at Maggiano’s Denver Pavilions
“Expedited Foreclosures”.  Speaker: Deanne Stodden, Castle Meinhold & Stawiarski LLC.

Reservations are recommended.  Call Colorado Bar Association, 303-860-1115 x 727, or by email to lunches@cobar.org

29th Annual Real Estate Symposium, July 14-16, 2011 in Vail, CO2010 Annual Fall Real Estate Law Update - October 15, 2010 9:00 AM - 3:25 PM

Where:
CLECI Large Classroom
1900 Grant Street, Suite 300
Denver CO 80203
(303) 860-0608
Credits:
General credits: 6.00
Ethics credits: 1.00
Prices:
Non Member $309.00
CBA Member $269.00
CBA Associate $229.00
New Lawyer (<2yrs) $229.00
CBA Real Estate Sec $249.00

 

 

 

 

 

 

 

 

 

 

To register call (303) 860-0608
To register on-line or find out more about these programs, simply visit the CBA-CLE web site at http://www.cobar.org/cle

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LEGAL WRITING OPPORTUNITIES

Article Opportunities and Accolades – The Colorado Lawyer. The Real Estate Section encourages all aspiring authors to contribute articles (or even just ideas for articles) for publication in the real estate column of The Colorado Lawyer. Articles submitted need to provide a balanced discussion of new, developing or interesting areas relating to the practice of real estate law in Colorado or nationally. To encourage your creative energy, the Real Estate Section will honor the best real estate article published in The Colorado Lawyer during 2010/2011 with a stipend of $500 to the contributing author or firm. Articles should be submitted to Joseph Lubinski at Ballard Spahr (lubinskij@ballardspahr.com) or to Rebecca G. Givens (rgivens@montgomerylittle.com ) for consideration.

Articles, Practice Pointers and Other Contributions Needed for Real Estate Section Newsletter. All members of the Real Estate Section are invited to contribute to the Newsletter. Please submit articles, practice pointers and other contributions to Catherine A. Hance, Davis, Graham & Stubbs, LLP (catherine.hance@dgslaw.com), George E. Reeves (geltonreeves@yahoo.com) , Michael J. Repucci, Johnson & Repucci LLP (mjrepucci@j-rlaw.com), or Daniel A. Sweetser, The Sweetser Law Firm PC (dsweetser@sweetserlaw.com).

Request for Input on Real Estate Section Web Page. We are working to improve the Real Estate Law Section page of the Colorado Bar Association website and need your input and suggestions. Are there links or other information you have expected to find on the page only to have your hopes dashed? Have your discovered aspects of the site that you feel could be more user-friendly or informative? Please e-mail your comments to Dana Collier Smith at dcolliersmith@cobar.org or to Michael J. Repucci (mjrepucci@j-rlaw.com ). We welcome your suggestions and we will carefully review all of them.

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CORRECTION

The Practice Pointer entitled “Installment Land Contracts: A Potential Trap for the Unwary” contained in the Spring 2010 CBA Real Estate Law Section Newsletter erroneously refers to C.R.S. §39-1-108 but should instead refer to C.R.S. §38-35-126.

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Section Officers
July 1, 2010- June 30, 2011
Chair:
Geoffrey P. Anderson
Burns Figa & Will PC
6400 S. Fiddlers Green Cir., Suite 1030
Englewood, CO  80111
(303)796-2626
(303) 796-2777 - FAX
ganderson@bfw-law.com
Vice Chair:
Thomas L. DeVine
Faegre & Benson, LLP
1700 Lincoln Street, Suite 3200
Denver, CO  80202
(303) 607-3765
(303) 607-3600  Fax
tdevine@faegre.com
Secretary:
Randall G. Alt
Otten Johnson Robinson
Neff & Ragonetti
950 17th St., #1600
Denver, CO 80202
(303)575-7548
(303) 825-6525 - FAX
ralt@ottenjohnson.com
CBA Board of Governors Representative:
Peter J. Griffiths
Land Title Guarantee Company
3033 E. 1st Ave., #600
Denver, CO 80206
(303)331-6323
pgriffiths@ltgc.com

 

Liaisons, Committees and Ex Officio Members
Immediate Past Chairperson
Jerri L. Jenkins
Foster Graham Milstein Miller & Calisher, LLP
621 17th Street, 19th Floor
Denver, CO  80293
(303) 333-9810
(303) 333-9786 – FAX
jjenkins@fostergraham.com
Forms Committee:
Kent Jay Levine, P.C.
3780 S. Broadway
Englewood, CO 80113
(303)783-0222
(303) 484-2621 – FAX
E-Mail: kent@kjlpc.com
Ethics Committee
Judith McNerny
Carpenter & Klatskin PC
518 17th St., Suite 1500
Denver, CO 80202
(303)534-6315
(303) 534-0514 - FAX
jmcnerny@ckdenver.com
Trust and Estates Section
David W. Kirch
David W. Kirch PC
3131 S. Vaughn Wy., #200
Aurora, CO 80014
(303)671-7726
303-671-7679 - FAX
dkirch@dwkpc.com
Real Estate Title Standards
George E. Reeves
1050 Sherman Street, Suite 201
Denver, CO 80203
(303) 832-7114
geltonreeves@yahoo.com

 

Legislative Policy Committee:
James G. Benjamin
Benjamin, Bain & Howard, LLC
7315 E. Orchard Rd., Suite E400
Greenwood Village, CO 80111
(303) 290-6600
(303) 290-8323 – FAX
jgbenjamin@bbhlegal.com
Supreme Court Civil Rules Committee Liason
Frederick B. Skillern
Montgomery Little Soran & Murray, PC
5445 DTC Parkway, Ste 800
Greenwood Village, CO 80111
(303) 773-8100
(303) 220-0412
fskillern@montgomerylittle.com
REAL ESTATE SECTION NEWSLETTER  
George E. Reeves
1050 Sherman Street, Suite 201
Denver, CO 80203
(303) 832-7114
geltonreeves@yahoo.com 
Catherine A. Hance
Davis, Graham & Stubbs, LLP
1550 17th Street, Suite 500
Denver, CO  80202
(303) 892-9400
(303) 893-1379 - FAX
catherine.hance@dgslaw.com

Daniel A. Sweetser
The Sweetser Law Firm PC 
1741 High Street
Denver, CO  80218
(303) 321-3575
(303) 321-3432 - FAX
email: dsweetser@sweetserlaw.com

Section Newsletter and Website 
Michael J. Repucci
Johnson & Repucci LLP
2521 Broadway, Suite A
Boulder, CO  80304
(303) 442-1900
(303) 442-0191 - FAX
mjrepucci@j-rlaw.com

 

Council Members:
Terms expiring 2011
Mark H. Boscoe
Isaacson Rosenbaum, PC
633 17th Street, Suite 2200
Denver, CO  80202
(303) 292-5656      
(303) 292-3152  - FAX
mboscoe@ir-law.com
Candyce D. Cavanagh
Orten Cavanagh Richmond & Holmes
1445 Market Street, Suite 350
Denver, CO 80202
(720) 221-9780
(720) 221-9781 – FAX
ccavanagh@ocrhlaw.com
Christopher J. Heaphey
Holland & Hart, LLP
600 E. Main Street, Suite 104
Aspen, CO  81611
(970) 925-3476
(970) 925-9367 – FAX
cjheaphey@hollandhart.com
Paul V. Timmins
Holme Roberts & Owen, LLP
1700 Lincoln St Ste 4100
Denver, CO  80203
(303) 861-7000              (303) 861-7000      
(303) 866-0200 – FAX
paul.timmins@hro.com
Terms Expiring 2012
Catherine A. Hance
Davis, Graham & Stubbs, LLP
1550 17th Street, Suite 500
Denver, CO  80202
(303) 892-9400
(303) 893-1379 - FAX
catherine.hance@dgslaw.com
Christopher W. Payne
Ballard Spahr LLP
1225 17th Street, Suite 2300
Denver, CO  80202
(303) 292-2400
(303) 296-3956 - FAX
payne@ballardspahr.com
George E. Reeves
1050 Sherman Street, Suite 201
Denver, CO 80203
(303) 832-7114
geltonreeves@yahoo.com
Michael J. Repucci
Johnson & Repucci LLP
2521 Broadway, Suite A
Boulder, CO  80304
(303) 442-1900
(303) 442-0191 - FAX
mjrepucci@j-rlaw.com
Terms Expiring 2013
Daniel A. Sweetser
The Sweetser Law Firm PC 
1741 High Street
Denver, CO  80218
(303) 321-3575
(303) 321-3432 - FAX
email: dsweetser@sweetserlaw.com
Deanne R. Stodden
Castle Meinhold & Stawiarski LLC
999 18th Street, Suite 2201
Denver, CO  80202
(303) 865-1400
(303) 865-1410  Fax
dstodden@cmsatty.com
Rebecca B. Givens
Montgomery Little & Soran PC
5445 DTC Parkway, Suite 800
Greenwood Village, CO  80111
(303) 773-8100
(303) 220-0412 - FAX
rgivens@montgomerylittle.com
Fred L. Otis
Otis Coan & Peters LLC
1812 56th Avenue
Greeley, CO  80634
(970) 330-6700
(970) 330-2969 - FAX
flotis@nocolegal.com
Community Service and Charitable Committees

Mark H. Boscoe
Isaacson Rosenbaum PC
633 17th St., #2200
Denver, CO 80202
(303)292-5656
(303) 292-3152  - FAX
mboscoe@ir-law.com

Colorado Housing Council Committee
Catherine A. Hance
Davis Graham & Stubbs, LLP
1550 17th St., #500
Denver, CO 80202
(303)892-9400
(303) 893-1379 - FAX
catherine.hance@dgslaw.com
Deanne R. Stodden
Castle Meinhold & Stawiarski LLC
999 18th Street, Suite 2201
Denver, CO  80202
(303) 865-1400
(303) 865-1410  Fax
dstodden@cmsatty.com
Interprofessional Committee

Candyce D. Cavanagh
Orten Cavanagh Richmond & Holmes
1301 Washington Ave., Suite 350
Golden, CO 80401
(303)221-9780
(720) 221-9781 – FAX
ccavanagh@orchlaw.com

Paul V. Timmins
Holme Roberts & Owen LLP
1700 Lincoln St., #4100
Denver, CO 80203
(303)861-7000
(303) 866-0200 – FAX
Paul.timmins@hro.com

Peter J. Griffiths
Land Title Guarantee Co.
3033 E.1st Avenue Suite 600
Denver, CO 80206
(303) 331-6323
pgriffiths@ltgc.com

 

Education Committee --

CLE
Christopher J. Heaphey
Holland & Hart LLP
600 E. Main Street, #104
Aspen, CO 81611
(970)925-3476
(970) 925-9367 – FAX
cjheaphey@hollandhart.com

Christopher W. Payne
Ballard Spahr Andrews & Ingersoll LLP
1225 17th St., #2300
Denver, CO 80202
(303)292-2400
(303) 296-3956 - FAX
payne@ballardspahr.com

Deanne R. Stodden
Castle Meinhold & Stawiarski LLC
999 18th Street, Suite 2201
Denver, CO  80202
(303) 865-1400
(303) 865-1410  Fax
dstodden@cmsatty.com

Topical Lunch
Paul V. Timmins
Holme Roberts & Owen, LLP
1700 Lincoln St Ste 4100
Denver, CO  80203
(303) 861-7000
(303) 866-0200 – FAX
paul.timmins@hro.com

Publications Committee

The Colorado Lawyer
Rebecca B. Givens
Montgomery Little & Soran PC
5445 DTC Parkway, Suite 800
Greenwood Village, CO  80111
(303) 773-8100
(303) 220-0412 - FAX
rgivens@montgomerylittle.com

Section Newsletter
Catherine A. Hance
Davis, Graham & Stubbs, LLP
1550 17th Street, Suite 500
Denver, CO  80202
(303) 892-9400
(303) 893-1379 - FAX
catherine.hance@dgslaw.com

George E. Reeves
1050 Sherman St., #201
Denver, CO 80203
(303)832-7114
geltonreeves@yahoo.com

Daniel A. Sweetser
The Sweetser Law Firm PC 
1741 High Street
Denver, CO  80218
(303) 321-3575
(303) 321-3432 - FAX
email: dsweetser@sweetserlaw.com

Section Newsletter and WebsiteMichael J. Repucci
Johnson & Repucci LLP
2521 Broadway St., Ste. A
Boulder, CO 80304
(303)442-1900
mjrepucci@j-rlaw.com

 

 

Social Committee

Open

 

CBA Staff

Dana Collier Smith
1900 Grant St., Ste. 900
Denver, CO 80203-4309
(303)860-1115
(303)894-0821 - fax
email: dcolliersmith@cobar.org

Michael Valdez

1900 Grant St., Ste. 900
Denver, CO 80203-4309
(303)860-1115
(303)894-0821 - fax
email:mavaldez@cobar.org

 

CBA CLE

Gary Abrams
1900 Grant St., Ste. 300
Denver, CO 80203-4309
(303)860-0608
(303)894-0624 - fax
gabrams@cobar.org

Brock Wood
1900 Grant St., Ste. 300
Denver, CO 80203-4309
(303)860-0608
(303)894-0624 - fax
bwood@cobar.org

 

Membership & Practice Development Committee

Fred L. Otis
Otis Coan & Peters LLC
1812 56th Avenue
Greeley, CO  80634
(970) 330-6700
(970) 330-2969 - FAX
flotis@nocolegal.com

Christopher W. Payne
Ballard Spahr LLP
1225 17th Street, Suite 2300
Denver, CO  80202
(303) 292-2400
(303) 296-3956 - FAX
payne@ballardspahr.com