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Colorado Real Estate Contracts and
Regulations Questions and Answers
Latest 2026
Doctrine of Prior Appropriation: Ans: A theory of water
law based on the principle, restated as "first in time is
first in right" that regards the right to divert water from a
water source.
When writing a contract, you may be asked by the Buyer
to use a note for earnest money. The Commission has
created an _____________________ that you can use but
most sellers will not agree to that. However, it might be
used to cover a few days while buyers are having funds
transferred to the state. Ans: Earnest Money Promissory
Note
Two types of promissory notes supplied by the
Commission: Ans: a no default rate note
a strict acceleration note.
the no default rate note Ans: prevents borrowers from
forcing the Seller to give a notice of acceleration.
Example, the Buyer does not make the payment that
causes the Seller to start the foreclosure process, but
then the Buyer makes the payment which stops the
foreclosure process. If the borrower is in default more
© 2025 All rights reserved
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than once in a 12-month period, the note can be
foreclosed upon without redemption.
A Promissory Note is _____________________ Ans: a written
promise to repay a debt.
The terms of a Promissory note shall usually include the
following: Ans: 1) Names of note holder and borrower
2) Total amount to be paid
3) Interest rate
4) How payment is to be made (monthly, quarterly,
yearly) and amount of payment.
5) If there are charges for late payments
6) Date total indebtedness must be paid off.
7) If there is a prepayment penalty.
8) Statement that note is secured by deed of trust and the
deed of trust contains additional rights for the note
holder.
A deed of trust is a document that conveys
________________________ to a third party as security for
repayment of a debt. In Colorado it creates a lien on the
property. However, if payments are not made on the note,
it gives the "right to sell" the property to a third party
(the public trustee) without having to go to court. Ans:
"naked title" or "legal title"
© 2025 All rights reserved
Colorado Real Estate Contracts and
Regulations Questions and Answers
Latest 2026
Doctrine of Prior Appropriation: Ans: A theory of water
law based on the principle, restated as "first in time is
first in right" that regards the right to divert water from a
water source.
When writing a contract, you may be asked by the Buyer
to use a note for earnest money. The Commission has
created an _____________________ that you can use but
most sellers will not agree to that. However, it might be
used to cover a few days while buyers are having funds
transferred to the state. Ans: Earnest Money Promissory
Note
Two types of promissory notes supplied by the
Commission: Ans: a no default rate note
a strict acceleration note.
the no default rate note Ans: prevents borrowers from
forcing the Seller to give a notice of acceleration.
Example, the Buyer does not make the payment that
causes the Seller to start the foreclosure process, but
then the Buyer makes the payment which stops the
foreclosure process. If the borrower is in default more
© 2025 All rights reserved
, 2 | Page
than once in a 12-month period, the note can be
foreclosed upon without redemption.
A Promissory Note is _____________________ Ans: a written
promise to repay a debt.
The terms of a Promissory note shall usually include the
following: Ans: 1) Names of note holder and borrower
2) Total amount to be paid
3) Interest rate
4) How payment is to be made (monthly, quarterly,
yearly) and amount of payment.
5) If there are charges for late payments
6) Date total indebtedness must be paid off.
7) If there is a prepayment penalty.
8) Statement that note is secured by deed of trust and the
deed of trust contains additional rights for the note
holder.
A deed of trust is a document that conveys
________________________ to a third party as security for
repayment of a debt. In Colorado it creates a lien on the
property. However, if payments are not made on the note,
it gives the "right to sell" the property to a third party
(the public trustee) without having to go to court. Ans:
"naked title" or "legal title"
© 2025 All rights reserved
