Colorado Real Estate Exam- Ch 2 Licensing Requirements Exam Review Questions And Answers, Rated A+/| Latest Update 2024/25|

COLORADO REAL ESTATE EXAM- CH 2 LICENSING REQUIREMENTS EXAM REVIEW QUESTIONS AND ANSWERS, RATED A+/ E&O Insurance - -E&O insurance protects the Broker against loss from oversights in filling out forms and conducting business. It does not protect the Broker if fraud is involved or alleged in the transaction. All activelicensed Brokers must carry E&O insurance. The CREC requires that it be on file with them or they may inactivate a license. The insurance is purchased through private carriers and an Employing Broker can help you with obtaining your insurance. Approved vendors are also listed on the DORA web pages. An often asked question for testing is who must carry the insurance. The answer is all active licensed Agents including the Employing Broker and..... any Corporation or LLC that is doing business as a firm. This last part trips new Agents up. In this case as in others, a LLC(Limited Liability Corporation) or regular Corporation are viewed as a person or personal entity. As such they also need E&O insurance. The best example is a Broker that wants to have a brokerage firm. Let's say Gary wishes to be an Employing Broker. Gary could operate as a sole proprietor and just work as such. Later Gary learns that working as a sole proprietor he might be sued one day, and since he is the business, his home and personal assets would be at risk. His attorney tells him he should consider an LLC or limited liability company as a vehicle to protect himself and conduct business. By forming the company, now it is considered its own entity. Gary is protected and has limited his liability to the assets of the company and is less at risk personally. Since the company has its own liability, it must carry E&O insurance and Gary must carry it for himself also. In addition, any agent Gary hires must have E&O insurance as well. Active and Inactive Licenses - -How can a license become inactive?The most common ways are a broker may place his or her license on inactive status voluntarily or the Real Estate Commission may suspend your license for cause. A couple of other ways include: Failure of the Employing Broker to notify the Commission of a change of locationor failure of the Broker Associate to notify the Commission of a move from one firm or location to another. If the Employing Broker moves their office, the Employing Broker's license and all the licenses under him or her become inactive if the CREC is not notified, and if the Employing Broker's license is suspended or revoked then all licensee under him are placed on inactive status. Remember, you are responsible for your license always. LLC - -Limted Liability Company May obtain 90 day temporary license, with one 9