Georgia License Law, Rules and Practices

Question 1

Commission members are appointed by…

Answer 1

All six members of the Georgia Real Estate Commission are appointed by the Governor of Georgia.

Question 2

How is the Georgia Real Estate Commission composed?

Answer 2

Five of the six members of the Georgia Real Estate Commission have licenses. One is an unlicensed member of the “general public” so that the unlicensed public will have representation on the Board.

Question 3

When and where does the money that belongs to clients or customers need to be deposited?

Answer 3

All money that belongs to clients or customers must be deposited in the brokerage trust fund as soon as possible (ASAP) after receipt.

Question 4

What does a licensee need to do to reactivate a lapsed license after 2 years?

Answer 4

When a license has been lapsed for more than two years but less than five years the former licensee may request reinstatement and retake a 75-hour pre-license course. After ten years the former licensee must follow the procedure for new applicants.

Question 5

When a broker appoints one of his agents to serve the seller and one to serve the buyer, they are called…

Answer 5

designated agents and the broker is a dual agent.

Question 6

When a consumer or client (not another licensee or a relative of the accused licensee) is financially damaged by the actions of a licensee, he or she can…

Answer 6

file through the court a claim against the Georgia Real Estate Education, Research and Recovery Fund for
reimbursement up to certain limits.

Question 7

For a brokerage or any licensee under a managing broker to be a Dual Agent, he/she must…

Answer 7

obtain written permission from both the seller and the buyer before acting on behalf of either party.

Question 8

Representing the Real Estate Industry is NOT a purpose of the Georgia Real Estate Commission. One of its purposes is to…

Answer 8

protect the public through the licensing and regulating of

licenses.

Question 9

A licensee, who owns several pieces of rental property on which he collects and holds security deposits, cannot…

Answer 9

post a bond in lieu of depositing the client’s money in a trust account.

Question 10

When is a licensee supposed to renew his/her Real Estate License?

Answer 10

All renewal deadlines for licenses are set for the last day of the licensee’s birth month every four full years. (The first renewal period may be longer, depending on when the
license was obtained).

Question 11

Is it true that the Seller must attach an inspection report to a listing contract?

Answer 11

No, the seller does not need to attach an inspection report to the listing contract.

Question 12

Assuming a licensee has completed the GA Post License Course during the first year of licensure, what are the renewal requirements for the first 4 years and for the following years?

Answer 12

He will have gotten credit for 9 hours and will only need to complete 27 hours of CE during the rest of the first four-year licensure period. For the second period and thereafter the requirement is 36 hours of CE.

Question 13

Is is true that an applicant for a license in Georgia has 12 months to apply for a license?

Answer 13

No. Licenses must be obtained within three (3) months and then the licensee has twelve (12) months to complete the 25-hour Post License Course.

Question 14

What does the salesperson have to do if a buyer client wishes to withdraw from a contract and get his earnest money returned?

Answer 14

The salesperson must refer the issue to the managing broker for a decision.

Question 15

How much of every original license fee is allocated to fund the RE Education, Research and Recovery Fund?

Answer 15

When every original license fee is received, of the funds received $20.00 from each license fee is allocated to fund the RE Education, Research and Recovery Fund. Funds received cannot be used for conducting research on computer hardware.

Question 16

What happens if a broker commits a violation involving his brokerage trust funds?

Answer 16

His/her license might be suspended, fined $1,000 or ordered to make periodic trust account reports but he will NOT be imprisoned.

Question 17

Based on Fair Housing Laws, what should licensees be careful with when advertising Real Estate?

Answer 17

Licensees must be careful to not use words that indicate discrimination or might be interpreted as discrimination against a Fair Housing Act protected category. For instance, while age is not a protected category under Fair Housing, using the phrase “mature persons” might be interpreted as denial of families with children (Familial Status).

Question 18

Is it true that applications are kept on file for five (5) years.

Answer 18

No. The retention period for applications is fifteen (15) years, and as much as forty (40) years for investigative files.

Question 19

The clause used to safeguard the broker from unscrupulous buyers or sellers, who would take the broker’s generated leads, but then buy or sell the property once the listing agreement has expired in order to avoid paying the commission to the licensee is known as a…

Answer 19

Safety or Carryover or Extender Clause.

Question 20

Does a listing broker have to share his sales commission with the selling broker who has
procured the ultimate buyer, and why? If he doesn’t share the commission, has he violated license law?

Answer 20

It depends from what was agreed on the listing agreement

Question 21

Contacts require the parties on both sides to know what they are agreeing to. A listing agreement is a contract. In which case could the contract be considered not valid?

Answer 21

If a party to the contract is later proven to have been insane when signing the contract, the contract is not valid.

Question 22

Does a Dual Agency need written consent to be valid? If so, what does the contract need to disclose?

Answer 22

Yes, when a client signs a consent form it contains the following: That the broker will be representing two clients whose interests could be different or even adverse, that the agent will disclose all known adverse material facts to all parties, and that the engagement has been read and understood. But the document does NOT say the client must consent to the dual agency.

Question 23

A written bilateral brokerage services agreement will set forth that a licensee represents…

Answer 23

a client in exchange for a promise of compensation for (selling), (buying), (leasing), (managing) real property for the client.

Question 24

Since a transaction broker has an agency
relationship with neither the buyer nor the seller, the broker is obligated to disclose everything
he or she knows about a property to all parties in the transaction. Is this statement true?

Answer 24

No, a transaction broker has no agency relationship. Transaction brokers are facilitators, not agents.

Question 25

Every brokerage must maintain an _____________ to detail all receipts and deposits received from others that are under the control of the brokerage.
Salespersons and Associate brokers must deliver all client funds received to the __________.

Answer 25

accounting system, managing broker.

Question 26

When two people want to simply exchange one property for another, the person who handles the details for a fee must have either a…

Answer 26

real estate license or a law license.

Question 27

What’s the commission members term length?

Answer 27

Members of the Georgia Real Estate Commission serve five-year terms.

Question 28

Whenever a property owner engages a licensee to list property for sale where the commission is not a pre-set percentage or simple dollar value but will be all funds than remain after the owner receives a certain amount the arrangement is called a…

Answer 28

NET LISTING and it is illegal.

Question 29

What happens when a licensee chooses to go inactive?

Answer 29

Whenever a licensee chooses to go inactive he or she cannot conduct any activities or receive any money. He CANNOT continue and/or complete those transactions he started before his inactivation.

Question 30

What’s the principal licensee’s duty to the brokerage?

Answer 30

Typically, a licensee’s duty to the brokerage is to work to promote and sell the broker’s listings.

Question 31

If a landlord refuses to rent to a handicapped lawyer for being a lawyer or to a student with small children because she is a student, no matter what race, color, national origin, or gender, is the landlord violating Fair Housing Laws?

Answer 31

No, this is not a violation of Fair Housing, because lawyers and students are not protected categories.

Question 32

What does the licensee need to do in order to be able to change from one brokerage to another?

Answer 32

In order to change from one brokerage to another the licensee needs to get the current managing broker to sign a release form and send it to the commission.

Question 33

Can an unlicensed assistant show listings, hold open houses, negotiate deals or be paid a sales commission for doing so?

Answer 33

No, an unlicensed assistant is only allowed to perform administrative tasks like directing phone calls, filing documents, preparing certain documents etc…

Question 34

A Managing broker must have all licensed and unlicensed staff, whether employees or independent contractors sign…

Answer 34

a written employment agreement setting forth the

relationship, the duties and the compensation.

Question 35

Any listing contract, buyer agency agreement, or property management agreement must have a…

Answer 35

definite termination date and no provision for an automatic renewal.

Question 36

Any applicant for a license who have a criminal history must provide the Commission with…

Answer 36

the appropriate data so the Commission’s investigator can get an FBI Report.

Question 37

What is a Fidelity Insurance? Who is required to carry it and who is exempt from it?

Answer 37

Fidelity Insurance is similar to a Performance Bond and any brokerage who handles more than $60,000 in trust funds is required to carry a fidelity insurance policy. Any
broker who handles less than $60,000 is exempt from the fidelity insurance requirement.

Question 38

What happens if a licensee is not satisfied once a hearing has been held and a decision rendered?

Answer 38

The case is entitled to a judicial review.

Question 39

What are the requirements for a salesperson who wants to get a broker’s license.

Answer 39

Any salesperson who wants to get a broker’s license, in addition to taking a broker pre-license course and passing a broker license exam, and being 21 years old must have been licensed as a salesperson for at least three (3) of the five years preceding application.

Question 40

What is the term for a new licensee to complete the 25-hour post license course after receiving a license?

Answer 40

A new licensee, within one year - twelve (12) months - after receiving a license must complete a 25-hour Post License Course and report to the commission its completion.

Question 41

Does a property manager need a real estate license?

Answer 41

A property manager who does not negotiate leases and is primarily responsible for maintenance does not need a license. A property manager who markets the property, shows the property and negotiates leases must have a real estate license.

Question 42

What would be the correct advertising information when a real estate broker is selling his own property?

Answer 42

For Sale by Owner-Broker. Call Hahn Realty at 321-7788.

Question 43

Why do landlords usually require a deposit? Where must it be kept and for how long?

Answer 43

Most Landlords require tenants to provide a deposit as a safeguard against default or damage to the property. The deposit remains the property of the tenant until the lease
expires, must be kept in a separate federally insured Security Deposit Trust Account, and returned to the tenant after departure, with a written exclamation for any deductions.

Question 44

What does a salesperson need to do when he/she receives funds for any reason?

Answer 44

Any funds received by a salesperson or associate broker from a real estate transaction, even if it is a gratuity or bonus for a job well done, needs to be delivered by the
agent to his or her broker for distribution.

Question 45

What is the Earnest Money Deposit? In which case can the EMD be disbursed to the broker?

Answer 45

Earnest money is a good faith deposit and is usually intended to be part of the purchase price when the sale is closed. If the seller is paying a commission to the broker, and the settlement statement indicates this disbursement, it is possible to disburse the earnest money to the brokerage as part of the commission. But it is NOT true that a buyer would authorize earnest money to be used as part of the brokerage commission.

Question 46

Can a former licensee who lost a license due to a criminal conviction reapply to get a new license?

Answer 46

A former licensee who lost a license due to a criminal conviction may reapply for a license after 10 years and the Commission has the option to grant the license – or not grant it.

Question 47

Whenever an agent attempts to guide a client to or away from a particular part of the community or property, perhaps because they have children or are of a particular race, it may be with the best of intentions, but can be defined as…

Answer 47

Steering which is a violation of the FAIR HOUSING LAWS.

Question 48

Can a GA licensee who moves to another state obtain a GA Nonresident license? Once obtained, how can the GA Nonresident license be lost? Can a Nonresident licensee also have a reciprocal Georgia license?

Answer 48

Licensees who move to another state may qualify for nonresident licensure only if they make application to change their status from resident to nonresident, sign a Consent to Jurisdiction, and sign an agreement to cooperate with any investigation initiated by the Commission. Nonresident licensees must meet Georgia’s continuing education requirements to keep their license.

Question 49

Under Georgia Law, would language in a lease that required all tenants to waive all rights to their security deposit be enforceable?

Answer 49

Yes, using a waiver of security deposit.