The Colorado Division of Real Estate is increasing licensing fees, following an unexpected nose dive of 60 percent in the number of new license applications.

Erin Toll, director of the division, in a memo said that the division is increasing fees to fund $4.1 million in costs.

"The division is cash-funded, meaning licensing fees pay for the program," Toll wrote in the memo. The division is increasing licensing and renewal fees for real estate brokers, subdivision applicants beginning Monday.

Toll noted that the division does not receive any subsidy or other appropriation form the state's General Funds.

"In Colorado, all real estate programs are 100 percent cash-funded," she said.

She called the increases "significant," and said they needed to be boosted because fee levels have been too low for teh past several years to cover program costs.

This year, fees are only covering 65 percent of the program costs, he said.

She said fees had been raised gradually to match necessary revenues, but "changing trends require "immediate further adjustment at this time."

The original license/real estate broker application is now $500, double the previous fee of $250. and the original license/subdivision application is $4,000, 300 percent higher than the previous fee of $1,000. And changing the name of a real estate company, typically as a limited liability corporation (LLC), has risen by 400 percent to $1,000 from $200.

At least one real estate official already said he thinks since the division has fewer people to regulate, it would make more sense to cut staff at the division than raise fees.

In addition to fee increases, the division is managing program costs by such things as reducing printing and copying, permitting telecommuting by staff members, restricting office supplies, foregoing performance pay salary increases in fiscal year 2009 to 2010, and adhering to the state hiring freezes. At this time, the division is not filing several vacant positions.

Toll also noted that the division is receiving an "ever-increasing number of complaints, due in large part to the housing boom and subsequent credit crisis." She said the division has dramatically reduced the turn around time for investigations.

"Two years ago, the case back log for real estate brokers was 54 percent," she said in the memo. "Today, the backlog is only 9 percent. To continue the division's consumer protection mission in a timely and efficient manner, the program must be adequately funded."

Independent broker Gary Bauer said he has no problem with the increase, although he said he thinks a lot of Realtors won't like it, given the tough housing market.

"My personal opinion is that the real estate commission does a good job and I have always felt we should be paying appropriate fees," Bauer said. "They should not be operating at a loss. But it is going to be a sock in the pocket for a lot of people, with the market being what it is right now. It's not going to help those part-timers who don't want to spend the extra money."

Toll agreed.

"I think the silver lining might be that it will convince some part-timers, who might only have licenses to help family or friends to leave the industry," Toll said. "That might mean that we only have people who are serious about selling real estate, and improve the overall professionalism. That's good for the industry and good for consumers."

She said almost all of the early feedback she is getting from brokers has been positive.

For more information: http://www.dora.state.co.us/real-estate/whatsnew/whatsnew.htm