Colorado

Title Insurance industry in Colorado is licensed and regulated (Regulation 3-5-1) by the Division of Insurance. Title insurance includes the business of real estate closing settlement services when performed by a licensed Title Company (i.e. title insurance company, title agent or attorney title agent). Though the title industry in Colorado is regulated, title companies are not required to have any form of business insurance /coverage to protect themselves, the consumer or other parties to the real estate transaction.

Most title companies use and issue the “American Land Title Association” (ALTA) promulgated policy forms. All title rates and closing settlement fees must be filed by the title company with the Division of Insurance and can be different in all of Colorado’s 64 counties. There are many title endorsements used by title companies to provide additional coverages over the basic ALTA policy coverage, with many endorsements also carry an additional charge. There are varying discounted (i.e. short-term / reissue) title rates available from different title companies that are based on a previously issued policy amounts, types and date of issuance.

In a sale transaction, the seller customarily selects the title company through their real estate professional (i.e. real estate broker, mortgage loan originator, banker or attorney) and also pays for the issuance of the owner’s title policy (inclusive of owner’s extended coverages) for the benefit of the buyer. Customarily, the buyer / borrower to a sale and / or loan transaction pays for all their title related charges of their loan transaction unless specifically negotiated to the contrary. The real estate closing fees to a sale transaction are typically split between seller and buyer, but can be negotiated between the parties through the real estate contract.

The issuance of a “Closing Protection Letter” (CPL) to lenders, sellers, buyers & borrowers is not prohibited in Colorado and available, upon request, by certain title insurance underwriters. The issuance of a CPL issued by the title insurance underwriter provides additional protections and assurances, such as coverages against loss from the failure of the underwriter’s designated Title Company to comply with the written closing instructions and the fraud, dishonesty and negligence of the Title Company in the handling of monies and documents in connection with the real estate closing.

The conveyance of real property is generally made by a Warranty Deed and a state documentary transfer tax is assessed at 10 cents per $1,000 based on the purchase price of the property and paid to the applicable county of where the property is located, by the buyer. It should be noted that a few governmental jurisdictions impose an additional transfer tax from 1% to 4% of the purchase price, which payment can be negotiated between the parties Although a mortgage is authorized and can be used, the Deed of Trust is the customary security instrument used for a securing a loan. Foreclosure under a Deed of Trust typically involves a public trustee and a mortgage if used must be judicially foreclosed through the court. In addition, there are no mortgage taxes allowed at the state or local governmental levels.

Real estate taxes are payable annually and due the following year by the end of April if paid in full, or by two equal installments due at the end of February and the end of July.