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Colorado · CBS1 §§23–24Colorado Notice to Terminate and earnest money release

Under Colorado's CBS1 contract, a party with a right to terminate ends the contract by a written Notice to Terminate that the other party receives on or before the deadline (§24.1). If it is not received by then, the party accepts the matter and waives that right – a late notice is ineffective. On termination the earnest money must be timely returned to the buyer (§24.2), released on written mutual instructions; if there is a dispute, the holder may wait, interplead, or notify the parties that it will return the money to the buyer unless a lawsuit is filed within 120 days (§23).

The rules

  1. Receipt by the deadline (§24.1)

    Termination is effective when the other party receives a written Notice to Terminate on or before the applicable deadline. A notice received after the deadline does not terminate the contract, and the right is waived.

  2. Effect (§24.2)

    All earnest money must be timely returned to the buyer, and the parties are released, subject to the surviving provisions (§§10.4 and 21).

  3. Release (§23)

    The Earnest Money Holder releases the money on written mutual instructions, such as an Earnest Money Release form signed by both parties.

  4. Dispute (§23)

    The holder may wait for a proceeding, interplead the money into court, or notify the parties that it will return it to the buyer unless it receives a filed lawsuit with a case number within 120 days.

Delivering notices (§26)

  • In writing; effective when physically received by the party, a person named to receive notices, or the broker or brokerage working with that party.
  • Electronic notice by fax, email or another method written in the contract – but notices after closing, cancellation or termination must reach the party itself.
  • Deadlines end at 11:59 p.m. Mountain Time unless a Time of Day Deadline is set (§3.3).

What the TC tracks

  • Each Termination and Resolution deadline in §3.1 – a notice must be received, not just sent, on time.
  • Proof of receipt (email time stamp, signed copy).
  • The Earnest Money Release signed by both parties after termination.

Questions about Colorado termination

When is a Colorado Notice to Terminate effective?

When the other party receives it in writing on or before the applicable deadline (CBS1 §24.1).

What happens if a Colorado buyer sends the termination notice late?

It is ineffective, the contract continues, and the buyer is treated as accepting the matter and waiving that right to terminate.

How is earnest money released in Colorado after termination?

By written mutual instructions signed by buyer and seller, such as the Earnest Money Release form (CBS1 §23).

What if the parties disagree about the earnest money?

The holder may wait for a proceeding, interplead the money, or give notice that it will return it to the buyer unless a lawsuit is filed within 120 days.

Can a Colorado termination notice be emailed?

Yes, if email is an allowed method in §26.2; after closing, cancellation or termination, notices must go to the party itself.

Colorado guides

Keep every Colorado termination and resolution deadline on the deal timeline in ClosingCode, with reminders before each one – so notices are received, not just sent, on time.

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Source: Colorado Real Estate Commission, CBS1 Contract to Buy and Sell Real Estate (Residential), adopted August 5, 2025, mandatory January 1, 2026, §§3.3, 23, 24, 26 (dre.colorado.gov).

General information, not legal advice. ClosingCode is software; it is not a law firm or brokerage, and it is not affiliated with the Colorado Real Estate Commission.