Georgia Law Flashcards
How many members Georgia Real Estate Commission?
6
The members are appointed by the __________, and then must be confirmed by the____________.
governor of Georgia, Georgia state senate.
Member rules of the Georgia Real Estate Commission
5 of these 6 members must be real estate licensees, who have been actively licensed for a MINIMUM of 5 years, AND must have been residents of Georgia for at least 5 years.
The sixth member must have an interest in consumer affairs, but must NOT have ANY interest in the real estate industry.
All members’ terms are 5 years each.
The members’ terms are staggered, and only one LICENSEE member’s term can expire each year.
In the event of a vacancy in the Commission…
the governor will fill the vacancy. Each member serves his/her term and can continue to serve until the Governor names a successor. The governor also has the authority to remove a Commission member from office
With what frequency do members appoint their own Chairperson?
every year
Meetings of the Georgia Real Estate Commission are held how frequntly?
At least once a month
A quorum is comprised of how many Commission members?
4
purpose of the real estate license law
First, the Commission seeks to protect the public from any harmful acts of people acting as real estate licensees by assuring that licensees meet basic levels of competency. This includes either intentional or unintentional acts.
Second, the Commission attempts to create a regulatory environment for the real estate industry that is reasonable and allows the licensee to attain economic success.
The responsibilities of Commission members
Developing a spirit of cooperation and unity among Commission members:
Evaluating staff operations;
Establishing a fair qualifying process;
Establishing a fair and unbiased hearing process; and
Communicating with the industry and the public.
The Georgia Real Estate Commissioner:
He/She is NOT a member of the Real Estate Commission.
He hires and oversees the staff for day-to-day activities.
He/She CANNOT hold an active real estate license (Nor can ANY other employee of the Real Estate Commission in the state of Georgia).
Who gave the Real Estate Commission the authority to make rules?
The General Assembly. Keep in mind that while these rules have the force of law, the General Assembly does not pass them.
The authority of the Georgia Real Estate Commission is based upon what?
statutory law. The license law gives the Real Estate Commission the authority to adopt rules and regulations, which have been designed to clarify sections of the law.
A violation of a rule is considered the same as violating the license law itself, and is subject to the same disciplinary actions.
The Georgia Real Estate Commission’s authority involves 4 separate categories…
Issuing Licenses
Taking Disciplinary Actions
Passing Rules and Regulations
Establishing Fees
In the case of a revocation, the person is not allowed to apply for a new license for…
a minimum of 10 years.
If the Commission discovers that a person is practicing without a license…
they have the authority to issue a cease and desist order. In addition, the Commission can impose a fine of up to $1,000 per day for this violation.
Exemptions to license law:
An owner of real estate, the spouse of an owner, a general partner of a limited partnership, a landlord, or a prospective purchaser OR their regular employees OR spouses, who perform(s) any act with reference to property owned, leased, or to be acquired by such owner, limited partnership, lessor, or prospective purchaser when said person is buying, leasing, or selling for his own purposes
An attorney in fact under a duly executed power of attorney to convey real estate from the owner or lessor. This person - whether an actual attorney, or simply an individual authorized to act on another’s behalf as an agent - may act as an agent for the principal without having a real estate license, with a legally executed power of attorney
An attorney at law - also known as a licensed practicing attorney - acting solely as an incident to the practice of law
Any person acting as receiver, trustee in bankruptcy, administrator, executor, or guardian or while acting under a court order or under the authority of a will or of a trust instrument
Any officer or employee of a government agency in the conduct of official duties
Any person employed full-time by a public or private utility - including utility companies, and lending institutions - who performs any act with reference to property owned, leased, or to be acquired by the utility employing that person, where such acts are performed in the regular course of, or as incident to, the management of such property and the investment therein
The innkeeper’s exemption
any person who provides property management services on properties available for less than 90 days’ occupancy by guests or occupants and meets all of the following conditions is exempt from license law. In other words, this is in regard to those who make accommodations to others on a daily/weekly basis, in operation of a hotel/motel/vacation rental.
to qualify for a community association manager’s license:
Be 18 years of age or older.
Be a resident of the state of Georgia (this is not necessary IF the person has fully complied with the provisions regarding out of state licensees).
Be a high school graduate or the holder of a certificate of equivalency.
Furnish evidence of completion of at least 25 in-class hours in a community association manager’s course OR courses of study approved by the Commission.
Take and pass a real estate examination administered by or approved by the Commission, which covers, in general, topics important to those brokers who provide community association management services and community association managers, after the above coursework has been completed.
To qauilify for a salesperson’s license:
Be 18 years of age or older.
Be a resident of the state of Georgia (this is not necessary IF the person has fully complied with the provisions regarding out of state licensees).
Be a high school graduate or the holder of a certificate of equivalency.
Furnish evidence of completion of at least 75 in-class hours in a salesperson’s course or courses of study approved by the Commission.
Take and pass a real estate examination administered by or approved by the Commission covering the general matters of importance to real estate brokers and salespersons, after completing taking the salesperson’s prelicense course.
To qualify for a broker or associate broker’s license:
e 21 years of age or older.
Be a resident of the state of Georgia (this is not necessary IF the person has fully complied with the provisions regarding out of state licensees).
Be a high school graduate or the holder of a certificate of equivalency.
Have served actively for three years as a licensee.
Furnish evidence of completion of 60 in-class hours in a broker’s course of study approved by the Commission, provided that if licensed as a community association manager, the applicant must furnish evidence of completion of an additional 75 in-class hours in courses or a course of study approved by the Commission
Take and pass a real estate examination administered by or approved by the Commission covering the general matters of importance to real estate brokers, AFTER completing the aforementioned educational requirements AND after serving at least two of the previous five years of active licensure.
Any salesperson whose license lapses for failure to complete the post-license course…
may reinstate the license by completing the course within six months of the lapsing of the license, if all of the following conditions are true.
The licensee enrolled in the post-license course within one year of the issuance of an original license.
He or she paid all required fees for the course.
The licensee failed to complete the class requirements, can produce a medical doctor’s certificate explaining the incapacitation which caused the failure to complete the course OR shows proof that the failure was due to cancellation of the course by the approved school.
If the previous conditions exist, the individual may reinstate the license by completing the course within six months of the lapsing of the license.
If a licensee doesn’t submit a renewal application in a timely manner, and with the required fee, his license will lapse. To reinstate…
the licensee has 2 years in which he may reinstate the license. He may do so by paying a reinstatement fee, as well as all renewal fees and other charges, and then by submitting evidence that all continuing education requirements have been met.
If a license has been lapsed MORE THAN TWO YEARS, but LESS THAN FIVE YEARS, the individual may still reinstate it by paying the fees AND taking the prelicense course. Once five years have passed, however, the individual must qualify as an original applicant, and “start from scratch.”
Inactive Status:
Inactive status is offered for those licensees who wish to temporarily discontinue active involvement in real estate. An inactive licensee is not permitted to practice real estate (with the exception of personal transactions), but IS required to take the 25-hour post-license course for new licensees AND to pay the same renewal fees as an active licensee.
Inactive status is valid for:
an indefinite amount of time. Once the licensee applies to the Commission, the license is then reactivated. However, the licensee must be up-to-date on his continuing education requirements of six hours per year, if his license has been on inactive status for two years or more.
Nonresident Licensees:
Remember that residents of other states may hold Georgia licenses, and Georgia License Law sets the conditions for this. It is important to note that any nonresident holding a license on July 1, 1991, is not required to meet the current nonresident requirements in order to continue to hold a license unless that nonresident allows that license to lapse or applies for a different type of license.
In order for a nonresident of Georgia to be granted a license in Georgia, the applicant must meet the age, education and examination requirements already noted in earlier screens of this course for original license applicants.
A nonresident who is licensed in another state must meet any requirements established by the Commission, which may include:
Submission of satisfactory proof of current licensure in the applicant’s state of residence
Payment of any required fees
A signed statement stating that the applicant has read the Georgia real estate license laws, and its rules and regulations, and has agreed to abide by the rules in all brokerage activity in Georgia
Affiliation with a resident or nonresident broker if the applicant is an individual community association manager, salesperson, or associate broker
Remember, if a nonresident licensee terminates the affiliation with a broker licensed by the Commission, the license of such nonresident will AUTOMATICALLY be terminated unless the nonresident places the license on inactive status OR affiliates with another broker licensed by the commission within 30 DAYS.
No license will be issued to any member, officer, independent contractor, employee, or partner of a nonresident firm until that firm qualifies for a broker’s license. A nonresident corporation or limited liability company must obtain from the proper agency and maintain a certificate of authority to do business in Georgia.
In addition to the aforementioned requirements, the nonresident applicant must designate the Commissioner as his agent to receive any legal or judicial notices that are filed. The applicant must also agree that in the event of any investigations brought by the Commission, the applicant will fully cooperate with the Commission.
Nonresident Brokers:
The rules regarding nonresident brokers state that, in order to work in real estate transactions and earn a fee for such activities in Georgia, the nonresident broker may only do so under one of these THREE conditions:
The nonresident must have a written agreement with a Georgia broker to conduct the real estate brokerage business in Georgia. If a nonresident licensee wants to do business without first obtaining a Georgia license, this IS permissible if the nonresident broker enters into a written agreement with a Georgia broker. Please note that, under these circumstances, there must be a separate agreement for each transaction, clearly stating the procedures to be followed.
Georgia must have a written reciprocity agreement with the state in which the broker has his or her license.
If the licensed broker of another state is acting as a referral agent, involving only the mere referral of one person to another, the licensed broker in Georgia is permitted to divide a real estate commission with, or pay a referral fee to, the out-of-state broker. (In this case, the referring broker is NOT involved in the actual negotiations, execution of documents, collections of rent, management of property, or any other real estate brokerage activity.)
If a nonresident licensee who is affiliated with a broker’s office violates Georgia license law, rules, or regulations…`
the Georgia broker is considered responsible. Remember, though, that there is a chance the broker’s liability might be diminished or even eliminated, provided that the broker can prove that:
The brokerage firm had a training program.
That brokerage firm followed proper procedures in its supervision of nonresident licensees and other affiliates; AND
The Georgia broker himself did not participate in any way in the violation.
The procedures to which all Georgia brokers must adhere in their supervision of affiliates are as follows:
Review all advertisements.
Review all offers within 30 days of their being written.
Ensure that all affiliates’ licenses remain active.
Ensure that a person with management authority is always available to help affiliates and the public, should the need arise.
Ensure that all trust fund payments are made according to the regulations.
Keep affiliates updated to law changes on a regular basis.
Review all trust account records and journals.
Provide safekeeping for all necessary records.
Ensure that each affiliate has a written and signed employment agreement.
Ensure that there is a written policies and procedures manual for all affiliates.
License Exam rules:
All license applicants must apply to take the exam, and pay a nonrefundable fee.
A score of 75% or higher is considered to be a passing grade and is required for licensure.
Honorably discharged veterans who have one or more years of service (of which at least 90 days was served during wartime) automatically receive a 5-point credit.
Veterans discharged from the military due to injury or illness with at least a 10% disability, will receive a 10-point credit.
A nonresident licensee might be exempt from the education and exam requirements of Georgia, IF the real estate commission in the state in which he was licensed verifies that the applicant has met all of the following criteria.
He has fulfilled both prelicense and continuing education requirements of that state;
He has passed a licensing exam similar in scope to the one required by Georgia;
He has not had any disciplinary actions imposed on him; AND
He has retained an active license with a maximum of 90 days of inactive or lapsed time.
These are the requirements for the salesperson or community association manager license application:
The applicant must apply for the license within 3 months of the date of the exam and pay a fee; OR after 3 months of the exam date but before 12 months, with a double fee.
An application must include the signature of the applicant’s employing broker; OR, if there isn’t an employing broker, the applicant may apply for an inactive license. (Remember, a licensee MUST have an employing broker to have an ACTIVE license!)
The requirements for a broker license applicant:
The applicant must apply for the broker license within ONE YEAR of the exam date.
If the broker applicant does not apply for the license within that time frame, the exam is considered null and the applicant must retake the exam if he wishes to be licensed in the future.
An applicant who wishes to be licensed as an associate broker or a broker AND who has been convicted of any offense set forth here may be licensed by the Commission as an associate broker or a broker only if:
It has been a minimum of 10 years since the conviction, sentence, or release from any incarceration, whichever is latest.
There are no criminal charges pending against the applicant.
The applicant presents the Commission with satisfactory proof that the applicant now bears a good reputation for honesty, trustworthiness, integrity and competence to transact the business of a licensee in such a manner as to safeguard the public interest.
Remember, if an applicant or licensee has been found guilty of a violation of either the Federal or Georgia State Fair Housing law AND any appeal of the conviction has been concluded, the conviction itself may be sufficient grounds for refusing the license or imposing any sanction permitted by this chapter.
If an applicant or licensee has made a false statement of material fact on his or her application, OR if he or she has submitted (or been a party to submitting or preparing for submission) any falsified application to the Commission, such action may be sufficient grounds for refusing, suspending, or revoking the license.
An order of revocation is final when?
ten days after it is issued unless the licensee named in the order requests a hearing before the Commission. If he requests a hearing, the Commission must then file a notice of hearing and provide a hearing for such licensee.
If a licensee is convicted of any offense named in the license laws…
he licensee must immediately notify the Commission of that conviction. The licensee’s license will automatically be revoked 60 days after the licensee’s conviction unless the licensee makes a written request to the Commission for a hearing during that 60-day period. Once the hearing is over, it is up to the Commission’s discretion whether or not to impose upon that licensee any sanction permitted by the law.
Under the circumstance that the Commission revokes or suspends the license of a community association manager, a salesperson, an associate broker, or a broker, then any school or instructor approval that the licensee holds will ALSO be revoked or suspended. If a licensee surrenders a real estate license as noted above, then any school or instructor approval, which such licensee holds will also be subject to revocation or suspension.
How to leave a broker and go to inactive status:
The license is surrendered to the Commission. The employing broker needs to send the release (also known as “change”) form and the wall license to the Commission.
If the licensee is joining a new firm…
that licensee is permitted to make the delivery of the wall license herself to the new broker. At this time, the new broker will sign the transfer application and send it to the Commission. The Commission must also be notified in writing by the former broker that the wall license has been moved. All of these notifications must, under Georgia law, be made within 30 days of the move.
Surrendering a license
A license can be surrendered to the Georgia Real Estate Commission either voluntarily OR involuntarily (at the Commission’s request because of a revocation or suspension of the license).
When surrendering a license, the licensee must forward his or her wall license and pocket card to the Commission immediately.
A surrendered license is not the same as having a license on inactive status, since the right to reactivate the license is different from a license on inactive status. Any licensee who wants to reinstate a surrendered license must apply for licensure as an original applicant.
If a qualifying broker surrenders HIS or HER license, he or she must also surrender the wall licenses and pocket cards of the affiliated agents.
Note: This may not be required, IF a new qualifying broker is named.
Current Fees for Original Licenses and Renewals
Current Fees for Original Licenses and Renewals
The current fees for original licensing are as follows.
The fee for original licensure as an individual broker, associate broker, salesperson or community association manager is $170.00. This includes $20.00 for the Real Estate Education, Research, and Recovery Fund. (We will discuss the Real Estate Education, Research and Recovery Fund in detail in a later unit.)
Note: Any person who applies for a salesperson or community association manager license more than three months but less than one year from the date of taking the exam must pay an original license fee of $340.
The fee for original licensure as a firm or an approved school or instructor is $225.00. This includes $20.00 for the Real Estate Education, Research, and Recovery Fund.
The current fees for license renewals are as follows.
$125.00 for each individual licensee and each approved instructor OR $100.00 if submitted and paid through the Commission’s Internet on-line system.
$125.00 for each firm licensed as a broker and each approved school OR $100.00 if submitted and paid through the Commission’s Internet on-line system.
Any license or approval which lapses solely because the licensee failed to pay the renewal fee…
may be reinstated IF it is within two years of the date of the lapsing, provided the licensee has completed any required continuing education courses.
In order to do this, the licensee must pay the total amount of all renewal fees and late charges which would have been due during the period that the license was lapsed, plus a reinstatement fee.
If the license or approval is reinstated within 4 months of the date of lapsing, the reinstatement fee is $100.00.
If the license or approval is reinstated more than 4 months after the date of lapsing the reinstatement fee is $100.00, plus an additional fee of $25.00 for an individual or instructor OR $50.00 for a firm or school for each month or portion of a month beyond the 4 months from the date of lapsing.
If the license has lapsed for a period longer than two years and less than ten years due solely to a failure to pay a renewal fee…
he licensee may reinstate that license by doing all of the following:
Paying the total amount of all renewal fees and late charges that would have been due during the period when the license was lapsed
Paying a reinstatement fee
Completing successfully any educational course or courses that the Commission requires
If the license has lapsed for longer than ten years for failure to pay a renewal fee:
the licensee must meet the education and examination requirements of a new licensee.
The Commission will charge a fee of $25 for any of the following situations:
An applicant submits an incomplete application.
A licensee or applicant fails to notify the Commission in writing within 30 days of a change of address, the opening or closing of a designated trust account, a transfer to a new company or leaving a firm to go on inactive status.
A licensee fails to affiliate with a new company or to apply to go on inactive status within 30 days of the Commission’s receipt of notice that the broker holding the license no longer wishes to do so and has mailed a letter to the licensee’s last known address indicating that the broker is returning the license to the Commission.
The Commission will charge a fee of $100:
to any applicant or licensee who submits a check that is returned unpaid or disputes a charge to a credit card for a fee owed to the Commission, when the dispute results in a chargeback to the Commission’s account.
The Commission also has the authority to impose “reasonable fees, not to exceed the renewal fee charged broker licensees” on a licensee or applicant who fails to respond within 30 days to a written inquiry from the Commission requesting further information on any application filed with the Commission.
To renew a license, a broker must…
complete a form prescribed by the Commission regarding the status of the broker’s trust account(s) and any trust account(s) that the broker allows affiliated licensees to maintain.
a nonresident licensee whose license lapses for failure to pay a renewal fee…
may reactivate that license by paying the fee required of an original applicant if:
That nonresident licensee has maintained an active license in his or her state of residence during the period that his or her license lapsed; AND
Has met the continuing education requirements of his or her state of residence.
In the case of either a real estate broker who doesn’t wish to be actively engaged in the brokerage business, or a licensee who is temporarily not engaged on behalf of a broker, that licensee may continue a license by making a written request within…
30 days of ceasing work that the license be placed on inactive status. If a license is on inactive status, that individual may not continue any brokerage duties except for his own personal transactions.
Any individual licensee who wants to activate a license which has been on inactive status for a period of two years or longer must attend a Commission-approved course of study prior to activating an inactive license. An inactive licensee IS required to take the 25-hour post-license course for new licensees, AND to pay the same renewal fees as an active licensee.
Inactive status is valid for an indefinite amount of time. Once the licensee applies to the Commission, the license is then reactivated. However, the licensee must be up-to-date on his continuing education requirements of six hours per year, if his license has been on inactive status for two years or more.
If a broker wishes to be licensed as a salesperson…
he is permitted to do so if he surrenders his broker’s license and applies for a salesperson’s license. He doesn’t have to take an exam. If this same person wishes to be relicensed as a broker, he doesn’t have to take an additional broker’s examination. If the licensee changes status as we’ve just read, the licensee WILL be required to pay the same fee as an original applicant. On the chance that a license is suspended or revoked, then this will prevent the licensee from changing status in this way.
Funds deposited by the Commission into the state treasury…
The expenses for the administration and enforcement of this chapter of the law must be paid from these funds.
All expenditures authorized by the Commission must be paid from these funds.
The expenses of the Commission and the Commissioner must always be kept within the income collected and deposited in accordance with this chapter AND must not be supported or paid from any other state fund.
In the event that a licensee who resides in a county designated as a disaster area by state or federal authorities suffers uninsured major damage or loss to his residence or place of business…
the Georgia Real Estate Commission may extend that licensee’s renewal period for up to two years without further payment of any fee by the licensee upon satisfactory proof of the licensee’s uninsured major damage or loss.
The Commission is also permitted to make appropriate adjustments in deadline dates for applications filed by applicants and licensees located in counties designated as disaster areas by state or federal authorities.
In the event that the qualifying broker of a partnership, limited liability company or corporation dies, resigns or is discharged unexpectedly…
his partnership, limited liability company or corporation must secure a new qualifying broker within 60 days.
If it does not do so, then it must cease all real estate brokerage activity until a new qualifying broker is secured.
In the interim, while the firm is seeking a new qualifying broker, the firm must take the following action, depending on the type of firm.
If the firm is a partnership, designate a partner.
If the firm is a limited liability company, designate a member.
If the firm is a corporation, designate an officer.
This designated person then has the authority to sign any documents and applications that must be filed with the Commission AND to disburse trust funds from the firm’s designated trust account(s), if such disbursements are required by any contracts or agreements.
Whenever a licensee submits any other application to the Commission on paper, the Commission must maintain the paper record for…
a period of one year and then may destroy the application. The Commission must maintain all electronic licensing records for a period of at least 15 years.
The Commission must maintain investigative files under the following schedules:
40 years for all investigative files in which the Commission imposes a formal disciplinary action OR makes a payment from the Recovery Fund; and
15 years for all other investigative files.
Brokers and fiduciary relationships:
A broker is not considered to have a fiduciary relationship with any party, OR fiduciary obligations to any party but is only be responsible for exercising reasonable care in the broker’s specified duties as provided in this chapter of the law, and, in the case of a client, as specified in the brokerage engagement.
According to BRRETA, a broker engaged by a seller has the following duties. He must:
Perform the terms of the brokerage engagement made with the seller.
Promote the interests of the seller by:
Seeking a sale at the price and terms stated in the brokerage engagement or at a price and terms acceptable to the seller
Presenting all offers to and from the seller, even when the property is subject to a contract of sale, in a timely manner
Disclosing all materials facts of which the broker has actual knowledge regarding the transaction to the seller
Advising the seller to obtain expert advice as to material matters that are beyond the expertise of the broker
Accounting for all money and property received, and doing so in a timely manner, regarding the monies/properties in which the seller has or may have an interest
Exercise reasonable skill and care in performing the duties under the law in Georgia.
Comply with all requirements of BRRETA, as well as all applicable statutes and regulations, including but not limited to fair housing and civil rights statutes.
Keep confidential all information received by the broker during the course of the engagement, if that information is identified as confidential by an express request or instruction from the seller, and unless the seller permits such disclosure by subsequent word or conduct, or such disclosure is required by law. Please note, however, that this is provided that disclosures between a broker and any of the broker’s affiliated licensees assisting the broker in representing the seller are not deemed to breach the duty of confidentiality.
BRRETA
Brokerage Relationships in Real Estate Transactions Act
A broker who is engaged by a seller is required to make the following disclosures in a timely manner to ALL parties with whom the broker is working:
All adverse material facts regarding the physical condition of the property and improvements located on the property. This includes (but is not limited to) the following:
Material defects in the property
Environmental contamination
Those facts required by statute or regulation to be disclosed. These are those facts that are actually known by the broker, but which could not be discovered by a reasonably diligent inspection of the property by the buyer.
All material facts pertaining to existing adverse physical conditions in the immediate neighborhood within one mile of the property which are actually known to the broker and which could not be discovered by the buyer upon a diligent inspection of the neighborhood or through the review of reasonably available governmental regulations, documents, records, maps, and statistics. The examples of reasonably available governmental regulations, documents, records, maps, and statistics include without limitation: Land use maps and plans Zoning ordinances Recorded plats and surveys Transportation maps and plans Maps of flood plains Tax maps School district boundary maps Maps showing the boundary lines of governmental jurisdictions
Brokers liability for misinformation:
The broker cannot always be held responsible if misinformation is given. Rather, the broker’s liability depends on the circumstances.
Brokers must knowingly give prospective buyers false information to be breaking the law - this is obvious, right? However, the law says that a broker is not liable to a buyer for providing false information to the buyer if the broker did not have actual knowledge that the information was false and if he discloses to the buyer the source of the information.
The responsibility in divulging or discovering adverse material facts does not rest solely in the broker’s hands. Both the seller and the buyer have responsibilities under the law in Georgia regarding material facts:
The seller has an obligation under the law to make all adverse material facts known regarding the physical condition of the property.
Also, it is up to the buyer or tenant to make a reasonable but diligent inspection. This might include familiarizing themselves with potentially adverse conditions related to the physical condition of the property, any improvements located on the property, and the neighborhood in which the property is located.
A broker engaged by a landlord has the following duties:
To perform the terms of the brokerage engagement made with the landlord
To promote the interests of the landlord by:
Seeking a tenant at the price and terms stated in the brokerage engagement or at a price and terms acceptable to the landlord; provided, however, the broker is not obligated to seek additional offers to lease the property while the property is subject to a lease, or letter of intent to lease, unless the brokerage engagement so provides
Presenting all offers to and from the landlord in a timely manner, even when the property is subject to a lease or a letter of intent to lease
Disclosing to the landlord adverse material facts of which the broker has actual knowledge concerning the transaction
Advising the landlord to obtain expert advice as to material matters that are beyond the expertise of the broker
Timely accounting for all money and property received in which the landlord has or may have an interest.Keeping the following information confidential: all information received by the broker during the course of the engagement, which is made confidential by an express request OR instruction from the landlord unless the landlord permits a disclosure by subsequent word or conduct, or unless the disclosure is required by law Please note, however, that this is provided that disclosures between a broker and any of the broker’s affiliated licensees assisting the broker in representing the seller are not deemed to breach the duty of confidentiality.
The following facts apply to brokers engaged by landlords, and the liability of those brokers:
BRRETA does NOT create any duty on the part of a broker to discover or seek to discover either adverse material facts pertaining to the physical condition of the property or existing adverse conditions in the immediate neighborhood.
BRRETA states that the broker cannot always be held responsible if misinformation is given. Rather, the broker’s liability depends on the circumstances.
Brokers must not knowingly provide prospective tenants with false information.
A broker is not liable to a prospective tenant for providing false information to the tenant if the broker did not have actual knowledge that the information was false and discloses to the tenant the source of the incorrect information.
The responsibility in divulging or discovering adverse material facts:
does not rest solely in the broker’s hands. Both the landlord and the tenant have responsibilities under the law in Georgia regarding material facts:
The landlord has an obligation under the law to make all adverse material facts known regarding the physical condition of the property.
Also, it is up to the tenant to make a reasonable but diligent inspection. This might include familiarizing themselves with such aspects as potentially adverse conditions related to the physical condition of the property, any improvements located on the property, and the neighborhood in which the property is located.
The broker cannot be held liable (by any parties to the transaction) for revealing information in compliance with the law.
A broker may not be considered liable for failure to disclose any matter other than those mentioned in this section of the law.
If there is a failure to reveal information not listed in these laws, the broker cannot be held liable unless it is proven that the broker’s intention was to commit fraud.
a broker engaged by a buyer has the following responsibilities:
To perform the terms of the brokerage engagement made with the buyer.
To promote the interests of the buyer by:
Seeking a property at a price and terms acceptable to the buyer (However, the broker is not obligated to seek other properties for the buyer while the buyer is a party to a contract to purchase property, unless the brokerage engagement so provides.)
Presenting all offers to and from the buyer in a timely manner, even when the buyer is a party to a contract to purchase property
Disclosing to the buyer adverse material facts of which the broker has actual knowledge concerning the transaction
Advising the buyer to obtain expert advice regarding those material matters about which the broker does not have expertise
Accounting in a timely manner for all money and property received, in which the buyer has or may have an interest
To exercise ordinary skill and care in such other duties as may be agreed to by the parties.
To comply with all requirements of BRRETA and all applicable statutes and regulations. This includes but is not limited to fair housing and civil rights statutes.
To keep confidential all information received by the broker during the course of the engagement that is made confidential by an express request or instruction from the buyer unless the buyer permits such disclosure by subsequent word or conduct, or such disclosure is required by law.
Under BRRETA, a buyer’s broker must disclose to the prospective seller…
in a timely manner all material facts actually known by the broker regarding the buyer’s financial ability to perform the terms of the sale, AND, if the property is residential, the buyer’s intent to occupy the property as his principal residence. The law says that this stipulation applies in a situation in which the prospective seller is working with the broker as his customer, and who is selling property that will be financed either by a loan assumption or by the seller’s providing a part or all of the financing. As always, the brokers must not knowingly give prospective sellers false information. Also, the broker will not be held liable to a seller for providing false information to the seller if the broker did not have actual knowledge that the information was false and discloses to the seller the source of the information. Also, it is the prospective buyer’s obligation to disclose to the prospective seller all adverse material facts actually known by the buyer concerning the buyer’s financial ability to perfo
A broker engaged by a tenant has the following responsibilities:
To perform the terms of the brokerage engagement made with the tenant.
To promote the interests of the tenant by:
Seeking a property at a price and terms acceptable to the tenant
Presenting all offers to and from the tenant in a timely manner, even when the tenant is a party to a lease or a letter of intent to lease
Disclosing to the tenant adverse material facts of which the broker has actual knowledge concerning the transaction
Advising the tenant to obtain expert advice regarding those material matters about which the broker does not have expertise
Accounting in a timely manner for all money and property received, in which the tenant has or may have an interest
To exercise ordinary skill and care in such other duties as may be agreed to by the parties.
To comply with all requirements of BRRETA and all applicable statutes and regulations. This includes but is not limited to fair housing and civil rights statutes.
To keep confidential all information received by the broker during the course of the engagement, which is made confidential by an express request or instruction from the tenant unless the tenant permits such disclosure by subsequent word or conduct, or such disclosure is required by law. However, disclosures between a broker and any of the broker’s affiliated licensees assisting the broker in representing the tenant are NOT considered to be a breach of the duty of confidentiality.
brokerage engagement
is the agency relationship between the broker and the client, and can ONLY be created by a written contract. In Georgia, the agent is not a fiduciary, and therefore, only reasonable standards of behavior are required of the broker.
Remember, a payment or promise of payment of compensation to a broker by a seller, landlord, buyer, or tenant does not establish or prove that a brokerage engagement relationship has been created between any broker and a seller, landlord, buyer, or tenant.
All brokerage engagements must:
Advise the prospective client of the types of agency relationships available through the broker
Advise the prospective client of any brokerage relationships held by the broker with other parties, which would conflict with any interests of the prospective client actually known to the broker, but excluding the fact that the broker may be representing other sellers and landlords in selling or leasing property or that the broker may be representing other buyers and tenants in buying or leasing other property
Advise the prospective client about the broker’s compensation, including whether the broker will share such compensation with other brokers who may represent other parties to the transaction in an agency capacity
Advise the prospective client of the broker’s obligations to keep information confidential
Designated agency
is created when both parties to a single real estate transaction are clients of two agents within the same firm. It happens specifically when each of the agents is assigned by the broker to represent one client, but not the other. While this type of agency does sound similar to dual agency, neither the agent nor the broker in such a situation is actually acting as a dual agent.
A broker may assign directly or through the adoption of a company policy different licensees affiliated with the broker as designated agents to exclusively represent different clients in the same transaction.
transaction broker
a broker who has not entered into a client relationship with any of the parties to a particular real estate transaction and who performs only ministerial acts on behalf of one or more of the parties, but who is paid valuable consideration by one or more parties to the transaction pursuant to a verbal or written agreement for performing brokerage services.
A transaction broker is permitted to provide assistance to buyers, sellers, tenants, and landlords by performing ministerial acts.
In his work as a transaction broker, a licensee does the following:
Presenting, in a timely manner, all offers to and from the parties, involving the sale, lease, and exchange of property
Accounting for, in a timely manner, all money and property received by the broker on behalf of a party in a real estate transaction
Disclosing, in a timely manner, the following:
All adverse material facts regarding the physical condition of the property and improvements located on the property. This includes (but is not limited to) the following:
Material defects in the property
Environmental contamination
Those facts required by statute or regulation to be disclosed. These are those facts that are actually known by the broker, but which could not be discovered by a reasonably diligent inspection of the property by the buyer
All material facts pertaining to existing adverse physical conditions in the immediate neighborhood WITHIN ONE MILE OF THE PROPERTY, which are actually known to the broker and which could not be discovered by the buyer upon a diligent inspection of the neighborhood or through the review of reasonably available governmental regulations, documents, records, maps, and statistics.
transaction broker and agency obligation
a transaction broker does not have any agency obligation to any party in a transaction, but that he may receive compensation for the performance of ministerial duties.
Common Source Information Companies
A common source information company is any person, firm, or corporation that is a source, compiler, or supplier of information regarding real estate for sale or lease and other data and includes but is not limited to multiple listing services.
Remember, unless specifically provided in a written agreement between the parties, a broker is not considered to have an agency relationship with a common source information company. A broker is not considered a “subagent” of any client of another broker solely by reason of membership or other affiliation by such brokers in a common source information company, including but not limited to multiple listing services.
The end of the agency relationship occurs when one of the following happens:
Completion of performance of the task for which the broker was originally engaged (for example, when the seller closes on the sale of his home, or a tenant signs a lease)
If the aforementioned condition is not applicable, then the earlier of the following:
The time limit agreed to in the brokerage agreement or amendments to the agreement has expired.
All involved parties have mutually agreed to end the relationship.In the event that there is no expiration date noted in the agreement and the relationship has not been terminated otherwise, then it will be terminated one year after the initial engagement, as provided by BRRETA.
Following are the duties owed after the end of the agency:
An accounting of all monies and property relating to the engagement
Continued confidentiality of all information received during the course of the engagement, which was made confidential by request or instructions from the client
This does not apply if
The client permits the disclosure either by word or conduct.
The disclosure of the information is required by law.
The information becomes public from a source other than the broker.
facts about trust account law:
Georgia real estate laws set forth the rules for the trust accounts of real estate businesses.
The license law in Georgia requires that all real estate licensees deposit all funds or place any valuables held on the behalf of others in a trust account.
These funds are protected in the trust or escrow account and cannot be seized in order to pay the broker’s or the firm’s debts.
It is a violation of the law in Georgia for a broker to use any portion of the funds in a trust or escrow account while those funds are being held.
Trust funds must, under the law, be kept separate from the broker’s personal funds or the firm’s funds.
Commingling, which is mixing the client’s monies with the broker’s or firm’s funds, is against the law and can result in disciplinary action.
The trust account must be maintained…
in a separate, federally insured bank checking account in Georgia. This account must be designated a trust or escrow account into which all down payments, earnest money deposits, or other trust funds received by the broker or the broker’s affiliated licensees, on behalf of a principal or any other person, must be deposited.
The following rules apply to the maintenance of trust accounts.
Brokers are permitted to maintain more than one designated trust or escrow account.
The broker must notify the Commission of the name of the bank in which each account is maintained and each account’s name or number within one month of opening each account.
It is permissible for a broker to maintain the broker’s own funds in a designated trust or escrow account only when they are clearly identified as the broker’s deposit and only for the following purposes:
If the bank in which the account is maintained designates a specific minimum balance that must be maintained in order to keep the account open, the broker may maintain that amount in the account designated as the broker’s funds.
If the bank in which the account is maintained requires a service charge on the account, the broker may maintain a reasonable amount to cover that service charge. The broker is also allowed to maintain a reasonable amount sufficient to cover other occasional bank charges and costs of maintaining the account.
A broker may allow commissions due the broker that are being paid from funds of others held in the broker’s designated trust or escrow account to remain in the account provided that both these conditions are true.
The broker’s accounting system for trust or escrow accounts designates those commissions as the broker’s funds and properly accounts for them.
The broker removes from the account every month any of the broker’s funds that exceed the minimum necessary to comply with bank regulations previously discussed.
Only checks made payable to the broker may be used to withdraw those monies designated as the broker’s funds from the designated trust or escrow account.
Each broker who is required to maintain a trust or escrow account must also maintain an accounting system in which each trust or escrow deposit is detailed in the following manner:
The names of buyer and seller or tenant and landlord or member and community association or broker
The amount and date of deposit
The identification of property involved
The amount, payee and date of each check drawn on the escrow account in connection with that deposit
Keep in mind that these rules also apply to trust or escrow accounts maintained by brokers in the state of Georgia :
All earnest money refunds must be paid by check or credited at closing.
The total of all checks written against each deposit should reflect a zero balance in the designated escrow or trust account relating to the closing of each individual transaction except when a portion of the deposit is transferred to the broker’s name for the purpose of satisfying a commission. Upon such a transfer being made, the total of that transfer and all checks written against that deposit should reflect a zero balance.
If a licensee who owns a designated trust account files a bankruptcy petition, he or she must immediately notify the Commission in writing of the filing of that petition. If a qualifying broker or the firm that a licensee serves as qualifying broker files a bankruptcy petition, the qualifying broker must immediately notify the Commission in writing of the bankruptcy filing.
The following rules apply to trust accounts for property management or community associations:
Those brokers who manage real property or community associations may maintain designated rental or assessment trust or escrow accounts separate from their other trust or escrow accounts.
For this type of broker, part of his duties might consist of paying bills on behalf of an owner or an association from any designated rental or assessment escrow or trust account. In these circumstances, there must be enough money credited and deposited to the owner’s or the association’s account to cover the bills.
Remember that security deposits, if they are kept in a designated rental trust or escrow account, must be clearly identified as such and credited to the tenant. In addition, there must always be a balance in the account equal to the total of those security deposits.
Regulations concerning community association managers, salespersons or associate brokers who receive security deposits or other trust funds on property they own or who receive payments as a principal to the transaction.
These people are required by law to deposit those funds into a designated trust account maintained by the broker with whom their licenses are affiliated or in a designated trust account approved by that broker.
If the broker approves the affiliated licensee’s holding such trust funds in a designated trust account owned by the licensee, then the broker must notify the bank in which the account is maintained to designate the account as a trust account.
In addition, the broker must notify the Commission of the name of the bank in which the account is maintained, the number of the account and the name of the licensee who owns the account.
The licensee who owns such an account must maintain these records on the account and follow the applicable rules and regulations for brokers in maintaining their trust accounts under the law.
It is the responsibility of the licensee who owns this type of account to provide his or her own broker with a written reconciliation statement comparing the licensee’s total trust liability with the reconciled bank balance of the licensee’s trust account. This must be provided to the licensee’s broker at least on a quarterly basis.
More requirements for the maintenance of trust accounts include:
Notification of the Commission of the name of the bank in which the trust account is maintained and the number of the account.
In the event that the bank does not use numbered accounts, the broker must instead provide the name of the account on forms provided.
This information must be provided within 30 days.
Georgia law also states that each broker who maintains a trust account must authorize the Commission to examine such trust account by a duly authorized representative of the commission.
The Commission has the authority to examine such account at any time upon reasonable cause.
In addition, the Commission must examine each broker’s trust account or accounts during each renewal period.
reconciliation statement
A broker who is required to maintain a trust or escrow account must also have made, at least once a month, a written reconciliation statement comparing the broker’s total trust liability with the reconciled bank balance of the broker’s trust account. The broker’s trust liability is the sum total of all deposits received, required by contract to deposit, and being held by the broker at any point in time. The minimum information to be included in the monthly reconciliation statement includes:
The date the reconciliation was undertaken
The date used to reconcile the balances
The name of the bank
The name of the account
The account number
The account balance and date
Any deposit in transit
The amounts of any outstanding check identified by date and check number
An itemization of the broker’s outstanding trust liability showing the amount and source of funds received and not yet disbursed, and other items necessary to reconcile the bank account balance with the balance in the broker’s checkbook and with the amount of the broker’s trust liability
The broker must review the monthly reconciliation statement and maintain copies in his files for a period of 3 years.
n the event that the trust liability and the bank balances do not agree…
the reconciliation statement must contain a description or explanation for the difference and any corrective action taken with reference to shortages or overages of funds in the account.
If a trust bank account record reflects a service charge or fee for a non-sufficient check being returned or whenever an account has a negative balance, the reconciliation statement must state the reason of the returned check or negative balance and the corrective actions that have been taken.
There are rare cases in which a real estate licensee believes that a person who placed trust funds in the licensee’s care has abandoned those funds. In such a case, the licensee may not disburse those funds from a trust account unless:
The licensee’s written authorization to hold those funds requires a particular disbursal
The licensee has complied with the requirements of the Disposition of Unclaimed Property Act
The licensee has complied with all other statutory or court-ordered requirements that are appropriate to the circumstances
