The What, Why, and Risks of Using Lockboxes

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In this second advisory of the series, we discuss the types, use, risks, and some best practices involved with using lockboxes for accessing a seller’s property. We also touch on some real life examples of lockbox violations that can bring a real estate broker before the Real Estate Commission for discipline.

Why are lockboxes used?

Lockboxes are used for real estate showings to make it easier to show a seller’s property that is listed for sale when the seller is unavailable or away. This device makes it easier for a buyer’s real estate agent to gain permitted access to the property to show a prospective buyer, instead of having to travel back and forth to a listing agent’s office to pick up and drop off the house keys. Not only does it make the showing process convenient and time-saving, it can also increase the number of showings for the seller’s property. When a showing appointment is confirmed, the buyer’s broker receives a code to obtain the house key for access, and after the showing the key is placed back in the lockbox for the next showing.

A seller also has the option to indicate that they do not want a lockbox used on their property, and that any showings of the property must have their broker present when providing access to a buyer’s agent and prospective purchasers into the property.

A real estate broker should explain both the benefits and the risks involved when using a lockbox on a seller’s property. Access to the property should be detailed in writing in the Exclusive Right-to-Sell Listing Contract in section 9.2 within the "Listing Contracts" accordion drop down on the Broker Contracts and Forms page on the Division Website. This section not only spells out the type of lockbox being used, but also sets forth the authorization for which persons are allowed access.

There are different types of lockboxes on the market, some with technological advances, for instance:

  • Sentrilock lockbox allows a real estate agent to use a blue-tooth enabled smartphone or tablet to open the lockbox, and the seller’s agent can also generate codes for a certain day, time, duration, and track the access;
  • Supra iBox is another lockbox option that uses infrared technology and a smartphone to access the keys in the lockbox, and uses an electronic beam for access, which can track access times, dates, and the identity of the keyholder, while also restricting access of when it can be opened; and
  • Traditional combination lock lockboxes that use a spin-dial or push-button combination for access to the house key.

What are some safety pointers to consider using lockboxes?

  • Always change the factory settings and create a unique pin number to maintain adequate security.
  • Also, change the code or combination daily, or at least weekly, especially if you are using contractors to do work in the home.
  • If possible, change the access code after each showing.

Here are some common examples of lockbox violations by brokers:

  • A broker and their client accessed the property at an unauthorized time, which was also at a time that the seller was home, which intruded on their privacy.
  • A broker gave the lockbox access code to their client to enter the property on their own, without the broker being present.
  • A broker convinced a contractor working on the seller’s home to allow him and the prospective buyers to gain access to the property.
  • A broker shared the lockbox access code with another broker who in turn accessed the property with their clients without scheduling a showing.
  • A broker shared the lockbox access code with their clients, who in turn gave it to their friends to go look at the property on their own.
  • A broker gave the lockbox access code to his spouse to go look at the property.
  • A broker gave the lockbox access code to vendors to do some work in the seller’s home without any discussion and permission by the seller.

What are some risks and best practices when using a lockbox?

  • The main concern is the unauthorized use of the lockbox code for access to the property. Someone could see what code the broker is using or otherwise gain access to the code and use it for entering the property at a later time or share it with others, who could use it for improper or illegal purposes.
  • Providing a prospective buyer unauthorized access to a property by themselves creates numerous consumer harm issues such as possible theft, property damage, injury, personal safety, and trespassing.
  • Access to a seller’s property for a showing should only be given in accordance with the seller’s instructions.
  • Brokers showing the seller’s property for prospective buyers should not give out the lockbox code to the buyers or any other 3rd parties, and should always accompany the buyers at the showing.
  • While lockboxes can be beneficial for a seller to show their property, they must be used properly in order to keep the seller and their property safe.
  • Real estate brokers are bound by Real Estate Commission Rule 6.16 - Access Information for a Property, whereby a broker who is not the owner’s broker is prohibited from sharing access information to a property with any third party, such as an assistant, home inspector, contractor, or a Consumer without prior authorization from the owner’s broker.
  • The Division also has published CP-16, a Commissions Position Statement on Access to Properties Offered for Sale, which provides some guidance concerning the proper use of lockboxes.
  • A violation of property access by a real estate broker could be a violation of §12-10-217(1)(q), C.R.S., which provides discipline for "having demonstrated unworthiness or incompetency to act as a real estate broker by conducting business in such a manner as to endanger the interest of the public." As a consequence, disciplinary action may be taken whether or not there is actual harm caused by allowing a buyer or other third party unaccompanied access without the listing broker's authorization. 

Also, please read the Division’s article on “Providing Access to Properties (Lockboxes & Unauthorized Access)”, which covers a listing broker and buyer’s broker’s responsibility in these regards.