Property and real estate is a broad area of law, reaching far beyond just the buying, management, and selling of real property. Issues of real estate law may arise unexpectedly during a divorce, move, or starting a business. Even more, there are intricacies surrounding buying, leasing, developing, and selling a property. Furthermore, the laws vary from state to state.
If you live in Colorado, here are a few common real estate law questions that might come up.
Common Law Marriage and Property Ownership
Issues with property ownership and marriage generally come to head during separation or divorce, but how do Colorado real estate laws apply to common law marriage? Colorado is one of eleven states that recognize common law marriage. While Colorado law does not require couples live together for a set amount of time, to be considered a valid common law marriage, the couple must hold themselves out as married, mutually consent to the marriage, and they generally have the reputation of being a married couple. This is usually always accompanied by co-habiting at a residence together. While there is no exact formula for establishing a common law marriage, the burden of proof demonstrating a common law marriage may include introducing each other as married, having joint bank accounts, joint property ownership, or filing joint tax returns.
Once established, common law marriage has the same legal standing as a traditional marriage and may only be dissolved by divorce or death. Therefore, property law issues that come up during traditional marriage also apply to common-law marriages. Colorado is an equitable distribution state, which means that property owned prior to marriage, or inherited by an individual spouse are not included in marital property. Upon divorce, marital property is distributed equitably, as opposed to equally. It’s more about what is fair and just as opposed to splitting property equally.
Stipulations on Out-of-State Land Purchases and Ownership
Many people choose to invest in property before relocating to Colorado, or to use their property as an investment and want to know if there are specific stipulations for out-of-state buyers and sellers. In Colorado, nonresident individuals are subject to Colorado income tax withholding at the time of closing on the sale of real estate over $100,000. The amount is the smaller of 2% of the sale price, or the net proceeds from the sale, is withheld by the title insurance company and is submitted to the Colorado Department of Revenue to be credited to the out-of-state seller’s estimated tax payment.
Building on Property You Own
If you already own property but wish to build on it, you must first know whether you are zoned for the type of structure you want to construct. All Colorado property is subject to its county’s Land Use Code and zoning regulations. Each parcel of land is zoned for certain allowable development and that may restrict the types of structures you may build on your property. For example, property in a Neighborhood Commercial Zone may include limitations on the height of commercial buildings, or their closeness to the roadway. Because these regulations are set by individual counties, to determine what is included in your Land Use Code, visit your county website or contact a real estate attorney.
Starting A Real Estate Management Company
If you wish to start a property management company in Colorado, you will face more hurdles than many other states. In Colorado, property managers must have a real estate broker’s license. This is because property management endeavors, like collecting rent and handling security deposits, are considered real estate activities under Colorado law.
Co-Ownership of Real Estate
Those wishing to purchase property in Colorado with another person or entity are faced with the decision of whether to hold the title as tenants in common or as joint tenants. With tenancy in common, each co-tenant (or co-owner) is considered the sole owner of his share of the property and may mortgage, sell, or transfer his interest without the consent of the other owners.
If a tenant in common co-owner dies, the tenant in common share then goes to their heirs. If the Deed does not specify how title is held, then, tenancy in common is the default method of co-ownership. Joint tenancy, on the other hand, must be specifically designated in the deed. Joint tenancy may only be created between individuals at the time of conveyance (the purchase and acquisition of the property). Thereafter, when one joint tenant dies, his interest passes to the surviving joint tenants instead of his heirs. For this reason, many married couples elect to own property in joint tenancy.
Real estate management, ownership, and maintenance is a complex endeavor. The best way to get your real estate law questions answered is to contact a Colorado real estate attorney. They will be able to assist you in understanding a real estate problem or opportunity that you have lined up.
Buying or selling real estate property in Colorado? Download a free set of notice forms commonly used in Colorado real estate transactions.