HB 24-1094

House Bill 24-1094 in Colorado requires developers to register with the real estate commission before selling parts of a subdivision. It mandates that any money received from potential buyers while waiting for approval must be kept safe by an independent third party and fully refundable if needed. For time share estates, after approval, earnest money must also be held in trust unless it comes from accredited investors, who have more flexibility with their deposits as long as the developer discloses how the funds will be used. The bill was signed into law on May 28, 2024 and will take effect on August 7, 2024.

Official Summary

Before transferring or negotiating to transfer any subdivision or part of a subdivision, a developer is required to apply for registration with the real estate commission (commission). Current law requires that, with permission from the commission, any reservation fees that a developer receives from prospective purchasers while the developer's registration application is pending must be held in trust by a third party and be fully refundable. If the subdivision is a time share estate, the act requires that, after the commission has approved a developer's registration application, any earnest money received by the developer from a prospective purchaser must be held in trust by an independent third party. The act creates an exception to this requirement for earnest money deposits received from an accredited investor. A developer may use funds from an accredited investor's deposit for development purposes only if the purchase contract or other written disclosure clearly sets forth: To whom the funds will be delivered; When the delivery will occur; How the funds will be used; and Any restrictions on the use of the funds. APPROVED by Governor May 28, 2024 EFFECTIVE August 7, 2024(Note: This summary applies to this bill as enacted.)

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