Colorado’s Real Estate Commission on Tuesday called for an investigation who share office space with businesses in which they have financial ties, such as title companies.
But the commission chose not to investigate other findings in The Postap stories, a requirement by law to disclose.
The board’s decision reversed a 3-2 vote earlier Tuesday in which they chose not look into any of the findings from The Postap articles that appeared in November. One of the commissioners abstained in the second vote, which was a 3-1 decision to open at least a partial inquiry.
Shared space is permitted as long as consumers don’t have to walk through the real estate portion of the office to reach the title business, the title company’s door is lockable and there is no quid-pro-quo in packaging transactions.
The Post found instances in which real estate companies shared office space with or rented it to businesses in which they held a financial interest. Critics say the practice at the minimum raises ethical questions.
Commissioners said their choice not to look into The Postap other findings was, in part, because the articles did not offer specific names of all the agents who did not register their business ties.
Of the three dozen agents who The Post found had not registered, only a handful returned calls from the newspaper.
The Post reviewed more than 2,200 Colorado home sales that occurred since mid-2015 involving about a dozen of the state’s largest affiliated business arrangements. The newspaper found that the title work mostly stayed within those partnerships, while three-quarters of them retained at least 90 percent of the transactions they controlled.
In three cases, the partnerships retained 100 percent of their real estate deals.
That wasn’t sufficient for the commission, which one commissioner said deals in “hard complaints, not statistics.”
“Itap a concern to me, but I don’t know that it rises to the level,” said Commissioner Julia Waggener, the lone public representative on the panel. “If we had the name of a broker to send to investigation, perhaps.”
The Post obtained all of the names from information held within state-owned databases that track registrations for the Division of Real Estate and the Division of Insurance.
It is illegal for agents to intentionally steer business to companies in which they have a financial interest without telling consumers about the connection or that they can choose freely.
Commissioner Chris McElroy, a licensed agent in Fort Collins, said Tuesday that he did not register an affiliated business arrangement he has with a title company because he has less than a 1-percent ownership interest and, by law, is not required to make the disclosure.
Though McElroy participated in the 3-2 vote to not look into other findings by The Post, he abstained from the vote that launched the inquiry into shared business spaces.
Waggener called for the inquiry into the shared business space. She was joined by Commissioner Amy Jo Dorsey, a broker from Edwards, and Commissioner Richard Krohn, a Grand Junction attorney who is the panel’s expert on subdivision development.
The lone vote against the inquiry was Commissioner Jarrod Nixon, a broker from Durango. Dorsey had voted with Nixon in the first ballot.
Real estate division director Marcia Waters said after the stories were published, the agency sent emails to thousands of licensed agents reminding them of the need to register affiliated business arrangements. The agency did not immediately know how many new registrations occurred following the stories and the email alert.
