The Audit Process:
Transparency, Accountability, and Legal Compliance

Real Estate Broker compliance with statutes and regulations is of paramount importance.  Licensees, the Division of Real Estate, and the Colorado Real Estate Commission share a common goal of consumer protection. In furtherance of this goal, significant time, effort, and resources are invested in broker education, broker investigations, and the enforcement of discipline against brokers. 

The Division carries this out in a variety of ways, but one useful tool is the Division’s authority to conduct audits. Each audit is tailored to the broker’s license type and business activity and determines whether the broker’s practice involves property management, sales transactions, or personal investment properties.

To facilitate prompt, efficient, and compliant audits, it is essential for brokers to maintain accurate and up-to-date records. Awareness of relevant laws and accurate records helps prevent common compliance violations which include, but are not limited to:

• Section 12-10-217(1)(h), C.R.S. - Failure to account for or remit any money coming into the licensee’s possession that belongs to others and failing to keep records relative to the money
• CREC Rule 5.14 - Failure to maintain proper records, including performing monthly three-way reconciliations
• Section 12-10-217(1)(i), C.R.S. and CREC Rule 5.9 - Converting or diverting funds of others
• Section 12-10-217(1)(i), C.R.S. and CREC Rule 5.10 -Commingling funds of others with the broker's own funds or failing to keep the funds of others in an escrow or a trustee account with some bank or recognized depository in this state.
• CREC Rule 5.2 - Failure to maintain funds in a Trust or Escrow Account labeled with the word “trust” or “escrow,” or missing a clear purpose label
• CREC Rule 5.11 - Failure to understand activities not involving Real Estate Brokerage Services which are required to be deposited into Broker’s or Brokerage Firm’s Trust or Escrow account(s)
• CREC Rule 6.5 - Failure to provide written brokerage relationships disclosures, such as the Disclosure to Tenant or include the Brokerage Duties Addendum in the Property Management Agreement
• CREC Rule 6.17 - Failure to disclose, in writing, the broker’s license status or any conflicts of interest

Timely and complete responses to Division audits are essential. Should deficiencies be identified, the Division may issue a Correction Letter requesting additional documentation or clarification. Then, after reviewing the complete response, the Division may either close the audit with an Audit Closure Letter or prepare a formal report for the Commission if potential violations are identified.

Through these audits, the Division shows its commitment to maintaining compliance, promoting transparency, and ensuring accountability across the real estate profession. For additional information on the financial audit process, visit the Division’s Broker Financial Audit Process webpage.

May HOA Forum:
Protecting HOA Finances: Fraud Prevention, ACH Payments, and Board Oversight

As HOAs increasingly rely on electronic payments and remote financial access, boards and managers face growing exposure to fraud risks with limited understanding of how those risks arise.

For this month’s HOA Forum, the HOA Information & Resource Center is pleased to host Lauren Kvamme, Vice President, Treasury Management Officer of MidWestOne Bank as guest speaker.

Lauren works with community associations, property managers, and nonprofit organizations to help evaluate banking relationships, improve payment structures, and strengthen financial controls for operating and reserve funds. Lauren specializes in ACH payments, electronic disbursements, account oversight, and fraud risk mitigation, and regularly educates boards and managers on practical, non‑sales‑focused approaches to financial governance and decision‑making.

For this session, Lauren will provide a non‑technical overview of common fraud schemes affecting community associations, including ACH fraud, check fraud, and business email compromise. Attendees will learn how electronic payment tools can both reduce risk and create vulnerabilities, and what basic controls should be in place to safeguard operating and reserve funds. The session emphasizes practical oversight responsibilities and actionable steps boards can implement immediately.

In addition, attendees will gain insight regarding how to:

• Identify common fraud risks impacting HOA communities
• Understand how ACH and electronic payments relate to fraud exposure
• Recognize warning signs of payment‑related fraud
• Implement basic internal controls to reduce financial risk
• Ask effective questions of managers, banks, and vendors regarding security

While this session is primarily intended for HOA board members and homeowners serving in financial or leadership roles within their communities, all are welcome to attend. 

Please join us for an informative and educational presentation and Q&A session on Friday, May 29, 2026, at 1:00 PM (MT).

All are welcome to attend.

Presentation Details: 

• Date: Friday, May 29, 2026
• Time: 1:00 p.m. - 2:00 p.m. (MT)
• Location: Online Webinar Only

You may register for the event here:

Life is Busy - We Get It!

Did you miss any of our meetings or forums last month? No need to worry! You can click the links below to catch up and stay current with what is going on at the Division of Real Estate.

- April 3, 2026 - Stakeholder Engagement Meeting - Colorado Real              Estate Commission (CREC):
  Webinar - Video

- April 7, 2026 -Colorado Real Estate Commission (CREC) Meeting:
  Webinar - Video

- April 24, 2026 - HOA Information & Resource Center Forum: 2025              Annual Report
  Webinar - Video