Georgia Real Estate Law

Question 1

Agency

Answer 1

Every relationship in which a real estate broker acts for or represents another as a client by the latter’s written authority in a real property transaction

Question 2

Associate Broker

Answer 2

A person who acts on behalf of a real estate broker in performing any act authorized by this chapter to be performed by the broker

Question 3

Broker

Answer 3

Any person who, for another, and who, for a fee, commission, or any other valuable consideration, or with the intent or expectation of receiving the same from another:

Negotiates or attempts to negotiate, or assists in procuring prospects for the listing, sale, purchase, exchange, renting, lease,

Holds himself or herself out as a referral agent for the purpose of securing prospects for the listing, sale, purchase, exchange, renting, lease, or option for any real estate.

Collects rents, assessments, or other trust funds or attempts to collect rents, assessments, or other trust funds.

Is employed by or on behalf of the owner or owners at a salary, fee, commission, or any other valuable consideration to sell such real estate or any part thereof in lots or parcels or intervals or other disposition.

Question 4

Duties of a Broker

Answer 4

Engages in the business of charging an advance fee or contracting for collecting of a fee, other than an advertising fee, in connection with any contract whereby he or she undertakes primarily to promote the sale of real estate either through its listing in a publication issued primarily for such purpose, or for referral of information concerning such real estate to brokers, or both.

Auctions or offers or attempts or agrees to auction real estate.

Buys or offers to buy, sells or offers to sell, or otherwise deals in options to buy real estate.

Performs property management services or community association management services.

Provides or attempts to provide to any party to a real estate transaction consulting services designed to assist the party in the negotiations or procurement of prospects for the listing, sale, purchase, exchange, renting, lease, or option for any real estate or the
improvements thereon.

Advertises or holds himself or herself out as engaged in any of the aforementioned activities.

Question 5

Brokerage agreement

Answer 5

An express written contract wherein the client promises to pay the real estate broker a valuable consideration or agrees that the real estate broker may receive a valuable consideration from another in consideration of the broker’s producing a seller, buyer, tenant, or landlord ready, able, and willing to sell, buy, or rent the property or in consideration of the broker’s performing property management services or performing community association management services.

Question 6

Community association

Answer 6

An owner organization of a residential or mixed use common interest realty association in which membership is mandatory as an incident of ownership within the development,

Question 7

Community association management services

Answer 7

The provision, for a valuable consideration, to collect, control, or disburse the funds;

obtain insurance, arrange for and coordinate the maintenance to the association property;

and otherwise overseeing the day-to-day operations of the association.

Question 8

Community association

Answer 8

An owner organization of a residential or mixed use common interest realty association in which membership is mandatory as an incident of ownership within the development,

Question 9

Firm

Answer 9

Any business entity, including, but not limited to, a corporation,
partnership, limited liability company, or sole proprietorship.

Question 10

Licensee

Answer 10

Any person who is licensed as a community association

manager, salesperson, associate broker, or broker.

Question 11

Ministerial acts

Answer 11

Those acts related to real estate brokerage activities,
which a licensee or a licensee’s employee performs and which do not
require discretion or the exercise of the licensee’s own judgment.

Question 12

Person

Answer 12

Individuals and firms.

Question 13

Property management services

Answer 13

The provision, for a valuable consideration, to another of
marketing, including referring prospective tenants; leasing; physical, administrative, or financial maintenance; and overall management of real property; or supervision of the foregoing activities
for another pursuant to a property management agreement.

Question 14

Purchaser

Answer 14

A person who acquired or attempts to acquire or succeeds to an interest in land.

Question 15

Real estate

Answer 15

Condominiums and leaseholds, as well as any other interest or estate in land, whether corporeal, incorporeal, freehold or non-freehold and whether the real estate is situated in this state or elsewhere; and includes a mobile home when such mobile home is affixed to land.

Question 16

Salesperson

Answer 16

Any person, other than an associate broker, who acts on behalf of a real estate broker in performing any act authorized by this chapter to be performed by the broker.

Question 17

State

Answer 17

Any state, district, territory, possession, or province of the United States or Canada and any sovereign nation or any political subdivision of such sovereign nation.

Question 18

Corporeal

Answer 18

Interestsrelates to a physical material body: as a : not spiritual b : not immaterial or intangible

Question 19

Incorporeal

Answer 19

Interests in real property are those that cannot be possessed physically, since they consist of rights of a particular user, or the right to enforce an agreement concerning use. The five major types of incorporeal interests are easements; profits; covenants running with the land; equitable servitudes; and licenses.

Question 20

freehold estate

Answer 20

A right of title to land that is characterized by two essential elements: immobility and indeterminate duration.

Question 21

Nonfreehold estates

Answer 21

Are interests in real property without seisin and which are not inheritable. The four main types of nonfreehold estates are an estate for years, an estate from year to year, a tenancy at will, and a tenancy at sufferance.

Question 22

Commission Members

Answer 22

The Georgia Real Estate Commission is comprised of 6 members appointed by the governor of Georgia, and confirmed by the Georgia state senate.

Five of these six 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.

Question 23

Commission Requirements

Answer 23

In the event of a vacancy in the Commission, the governor will fill the vacancy. Each member serves his or 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 for any of the following
reasons:

Incompetence

Dishonesty

Neglect of duties

Inability to perform the necessary duties

Commission members appoint their own Chairperson every year. In order to be eligible to serve as a Chairperson, the member must have served on the Commission for a minimum of one year.

Question 24

Commission Duties

Answer 24

According to the Georgia Real Estate Commission, each member of the Commission devotes an average of two to three days per month to their duties on the Commission.

These tasks include attending meetings, reading large volumes of preparatory material for these meetings, hearing presentations on a
variety of regulatory and procedural issues, and evaluating and subsequently voting on those issues.

Meetings of the Georgia Real Estate Commission are held at least once per month.

A quorum is comprised of four Commission members.

Question 25

The Myths Regarding Commission Members

Answer 25

The public (as well as licensees) to assume - mistakenly - that the role of a Commission member is either to "represent the 
public" or to "represent the real estate industry."  

It is up to the Commission members to be steadfast in identifying actions and requests that may compromise their judgments.

There are times when seemingly innocent personal requests made to them are improper. It is essential to the person’s role in the Commission to guard against personal biases that could improperly influence a decision.

Question 26

Purpose of the Commission

Answer 26

1. 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.
2. To create a regulatory environment for the real estate industry that is reasonable and
   allows the licensee to attain economic success.

Question 27

The Responsibilities of Commission Members

Answer 27

According to Georgia real estate law, the Commission members
have five focal points of responsibility. They are as follows:
1. Developing a spirit of cooperation and unity among
Commission members;
2. Evaluating staff operations;
3. Establishing a fair qualifying process;
4. Establishing a fair and unbiased hearing process;
5. Communicating with the industry and the public.

Question 28

Spirit of Cooperation

Answer 28

The first responsibility for a Commission member is to work with his or her colleagues in a spirit of cooperation and with a sense of social responsibility.

Members of the Georgia Real Estate Commission must actively and willingly participate in the activities of the Commission and the functions it must perform.

In addition, members must provide each other with the opportunity to debate issues to allow open discussion and dissent from the majority position.

Situations may arise in which matters of conscience require a particular member to abstain from discussing and voting on a specific issue.

The Real Estate Commission is ultimately an administrative body rather than a deliberative body. If most or all members can agree on policy issues and on a course of action to carry out policies, then that policy is more effective

Question 29

The second responsibility of the Commission members

Answer 29

The second responsibility of the Commission members is the selection and evaluation of the activities of a full-time staff.

All Commission members must stay current with sufficient
information about how the staff accomplishes its daily duties so the Commission member can make informed personnel and policy decisions.

The Commission selects a Real Estate Commissioner to oversee the day-to-day activities of its staff. However, the Real Estate Commissioner and the other staff members can only take actions consistent with the policies established by the Commission.

Before we go any further, we’d like to point out that the Real Estate Commissioner is NOT a member of the Real Estate Commission in Georgia. , the following is true of the Georgia Real Estate Commissioner:

He or she is NOT a member of the Real Estate Commission.

He or she hires and oversees the staff that performs day-to-day activities.

He or she CANNOT hold an active real estate license (nor can ANY other employee of the Real Estate Commission in the state of Georgia).

Question 30

The third of the Commission members’ responsibilities

Answer 30

The third of the Commission members’ responsibilities is to make sure the process of obtaining a license is reasonably available to all who wish to seek a license.

This does not mean the Commission should make it “easy” for anyone to get a license. In fact, the opposite is true.

It is the members’ responsibility to assure that the process of acquiring a license is reasonably rigorous to eliminate those who do not possess sufficient knowledge.

Because of this, the Commission approves schools, instructors, and course content to provide to licensees the knowledge necessary to protect the general public.

The Commission also contracts with examination and testing professionals to produce, administer, and grade its license
examinations.

Question 31

Due Process

• (The official and proper way of doing things in a legal case : the rule that a legal case must be done in a way that protects the rights of all the people involved) - All fairness

Answer 31

The fourth responsibility of the Commission members is to assure that licensees and the public receive their due process rights. The Commission establishes precise guidelines for the staff to initiate and conduct necessary investigations.

Commission members are only authorized to act to discipline a
licensee within the procedures set forth in the Administrative
Procedure Act that governs all state agencies with regulatory
authority.

As a rule, the Commission members often go beyond the requirements of that act to assure fairness. For example, when Commission members review the results of investigative cases that
may lead to a hearing, they do so without knowing the names of the parties involved. Staff members present only the facts of the situation so that the Commission members may vote solely on the issues in the case.

Assuring due process rights also requires that Commission members strive to fulfill all requirements of Georgia law but never to exceed the limits of this law.

Another note of interest is that, within the hearing process members may discover that a licensee or a member of the public has committed what appears to be an improper act. However, unless the law expressly prohibits that act, the Commission may not use its authority
to correct the error or to impose punishment.

Question 32

More Due Process

Answer 32

The General Assembly in Georgia has given the Real Estate Commission the authority to make rules. Keep in mind that while these rules have the force of law, the General Assembly does not pass them.

In proposing a rule, Commission members seek to determine whether a real need exists for the rule and what economic impact it may have.

The following issues must be considered at this time:

1. If the implementation of a new rule will result in higher costs of operating businesses (which licensees will in turn pass on to consumers), then the Commission does not seek to adopt such rules unless a compelling need for the rule exists.
2. If a need exists and a rule is economically feasible, then the Commission member must ask two further questions:
   a. Is the proposed rule reasonable?
   b. Is the rule within the limits of the legislative law?

Note that ANY rule the Commission creates must meet both tests. This means that if the Commission wishes to make a rule that is reasonable, it may not do so if the rule exceeds the limits of the law. For example, if the law expressly required that licensees pay all
renewal fees by a cashier’s check or money order, the Commission could not make a rule that allowed persons who personally deliver their application to the Commission’s office to pay that fee by personal check or cash.

Question 33

Communication

Answer 33

The final of the Commission members’ responsibilities is to actively communicate with both licensees and the public. Proper communication requires both of the following:

1. Informing licensees and the public of Commission actions and changes in the law.
2. Providing opportunities for licensees and the public to discuss matters of interest with a Commission member. Such opportunities exist when the Commission holds open forums to allow licensees and the public to ask questions and express opinions. Such meetings
   are held often in the interest of encouraging active communication.

Also, the Commission encourages licensees and the public to see that the regulatory process works efficiently and fairly by communicating ideas and suggestions in writing to its offices. Both licensees and the general public are encouraged to put forth their ideas in this manner.

Question 34

The Georgia Real Estate Commission

Answer 34

The authority of the Georgia Real Estate Commission is based upon 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.

Please note that if there is a matter brought to the Commission’s attention and this matter is not in the public’s best interests, it is within the Commission’s authority to pass a rule to remedy the
situation. In this case, it is not necessary for the Commission to wait for the legislature to meet to pass said rule.

(The rule may not be passed if it is not based on license law OR if it conflicts with license 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 administers the license law that regulates brokers, salespersons, and community association managers.

In addition, the Real Estate Commission supplies staff support to the Georgia Real Estate Appraisers Board. However, please note that the
Real Estate Commission has no authority over the administration of the Georgia Appraisal Act .

As a regulatory body, the role of the Commission is NOT to protect the industry or the profession that it regulates; NOR is its role to protect consumers. It is not the role of Commission members to be advocates for either a profession or consumers. Instead, the role of the Commission members is to protect the public interest.

Question 35

Commission Member Duties

Answer 35

Commission members regulate in an unbiased fashion. Members protect the public interest by:

Assuring each individual’s right to justice and equal opportunity

Denying the right to practice to the incompetent and unscrupulous

Eliminating barriers that unreasonably limit entry into a field of practice

Refusing to use licensing or registration laws to settle private disputes

Refusing to use licensing or registration laws to advance the interest of private trade associations

Encouraging free and open markets

Question 36

Commission Impartiality

Answer 36

To most effectively protect the public interest, Commission members use their best efforts to achieve impartiality. In order to enforce these laws fairly and impartially, the members of the
Real Estate Commission and its staff must:

Understand the attitudes and actions of both consumers and licensees in brokerage transactions and in their relationship with the Commission, while relying on their experience as consumers and licensees to provide background for this understanding and to render fair and impartial treatment.

Make judgments and reach conclusions only after careful review of all relevant facts and opinions regarding allegations of wrongdoing.

Recommend modifications to the existing laws or new laws or regulations.

Supervise and administer the regulatory and disciplinary powers of the license law to provide that licensees and the public receive due process rights.

Generate rules and regulations that are reasonable, within the limits of the legislative law, and economically feasible to administer and enforce.

Communicate with licensees and the public to assure the appropriate dissemination of the laws and to obtain opinions and concerns regarding the nature and content of the laws.

Develop policies and procedures that are administratively feasible and not unduly burdensome to the public and licensees.

Respect and consider all opinions and views concerning the nature of the laws and their administration.

Express opinions on matters of conscience and policy in appropriate forums.

Question 37

Commission’s Authority

Answer 37

The Georgia Real Estate Commission’s authority involves 4 separate categories.

 1. Issuing Licenses 
 2. Taking Disciplinary Action 
 3. Passing Rules and Regulations 
 4. Establishing Fees

Question 38

Issuance of Licenses

Answer 38

The Commission has the authority to either issue a real estate license to a qualified applicant, OR to deny issuance of a real estate license to a candidate with specific cause.

This cause could be misrepresentation on an application, for example - lying about educational background, criminal history, etc.

Such misrepresentation on an application would lead the Commission to hold a hearing, and after that, possibly to refuse to issue a license to the applicant.

Applicants for licenses must first apply to sit for the real estate licensing exam, and then, if the exam is passed, must apply for the license itself.

Question 39

Disciplinary Actions

Answer 39

The Commission has the authority, under statutory law, to take disciplinary actions for any violation of the license law, or of its rules or regulations. Such disciplinary actions might include
any of the following, OR a combination of any of the following, depending on the offense.

1. Permanent revocation of the license * **
2. Suspension of the license for a set, temporary period of time *
3. Required attendance at a specific educational program
4. In the case of a trust account violation, periodic reports from an independent accountant
5. Imposition of fines - at a maximum of $1,000 for a single violation or $5,000 for multiple violations
6. Censure (reprimand), in the case of a minor violation
7. For a relatively minor infraction, the Commission may choose to issue citations and skip the formal hearing process. (While the Commission has adopted a list of maximum fines for certain violations, the licensee may choose to request a hearing and contest the
   citation. )

*Because suspensions or revocations are so serious, these actions are only used for the most serious violations (for example, using a buyer’s earnest money for the licensee’s own personal funds) and are only imposed after a hearing has occurred.

**In the case of a revocation, the person is not allowed to apply for a new license for a minimum of 10 years

Question 40

Passing Rules and Regulations

Answer 40

Under the license law, the Commission has the authority to pass rules and regulations regarding the professional conduct of licensees AND the administration of the license law. The point of rules, as we noted earlier, is to fully explain sections of the license law that might cause misinterpretation. Rules and regulations may only be adopted IF they fall under the “umbrella” of license law in Georgia.
As we stated earlier in this unit, if a licensee violates a rule of the Commission, he or she will be subject to the same discipline as if violating the license law itself.

Question 41

Fees

Answer 41

The Georgia Real Estate Commission has the authority to set or adjust any fees - within a reasonable amount - for original licensure, renewals, change of license, and other penalty fees.

(Keep in mind that the Real Estate Commission in Georgia is actually a separate budgetary unit of the Georgia state government and, as such, has its own budget.)