Chapter 24

Georgia Real Estate An Introduction to the Profession Eighth Edition Chapter 24 Georgia Rules and Regulations

Key Terms agency brokerage engagement citation client customer Firm hearing post-license education preliminary decision © 2015 OnCourse Learning

Overview The rules are created by the commission. The law is created by the state legislature. © 2015 OnCourse Learning

Organization of the Commission Every year, the commission elects a chair and a vice-chair. Rules clarification can be requested from the commission upon receipt of written request. It is better to get permission before you can rather than ask for forgiveness later. © 2015 OnCourse Learning

Definitions Agency – a relationship created by express contract where a broker represents another in a real property transaction. © 2015 OnCourse Learning

Definitions Brokerage engagement – a written contract between a person and a broker where the person becomes a client of the broker. In Georgia, brokerage engagements must be in writing. © 2015 OnCourse Learning

Definitions Client – a person who has entered into a brokerage engagement with a broker. © 2015 OnCourse Learning

Definitions Customer – a person who has not entered into a brokerage engagement with a broker. The broker is limited to performing only ministerial acts. The only way to become a client is by entering into a written brokerage engagement agreement. © 2015 OnCourse Learning

Definitions Dual agent – a broker who has a brokerage engagement with both parties in the same transaction. © 2015 OnCourse Learning

Definitions Firm – Any person licensed as a broker © 2015 OnCourse Learning

Definitions Franchise name – a name that requires the permission of another who has a right in the trade name. © 2015 OnCourse Learning

Definitions Ministerial acts – acts that do not require confidentiality or the exercise of judgement or the providing of advice. © 2015 OnCourse Learning

Definitions Timely – a reasonable time under the circumstances. © 2015 OnCourse Learning

Commission Operations Upon written request, the commission will provide a history of a licensee’s records only for the preceding five years. © 2015 OnCourse Learning

Commission Operations If a licensee surrenders their license or the license is suspended or revoked, the licensee shall immediately forward their wall license and pocket card to the commission. © 2015 OnCourse Learning

Commission Operations Upon surrender, suspension or revocation, the commission does not prorate or refund any fees paid by the licensee. Anyone whose license has been revoked or surrendered must qualify as an original applicant to receive another license. © 2015 OnCourse Learning

Obtaining a License The primary purpose of the commission is to protect the public through the licensing. © 2015 OnCourse Learning

Obtaining a License To qualify for a broker’s license, the licensee must have at least three years of experience within the last five years to qualify. The candidate must also pass the state exam. © 2015 OnCourse Learning

Obtaining a License Anyone who has passed the state exam has 12 months from the date of the exam to activate the license. The license must be activated within three months of passing or the license fee doubles. © 2015 OnCourse Learning

Obtaining a License The candidate must provide a Georgia Criminal Information Center (GCIC) report that has been issued in the previous 60 days. © 2015 OnCourse Learning

Obtaining a License The firm must operate under the name which the license has been issued. To use a trade name, the name must be certified with the county clerk and submitted to the commission with the license application. © 2015 OnCourse Learning

Obtaining a License A person with a criminal past, or disciplinary hearings, may make a request for a preliminary decision from the commission before taking the pre-license course and state exam. © 2015 OnCourse Learning

Maintaining a License A 25-hour Post-license course must be taken within one year of activating your license. All licensees must complete at least 6 hours of continuing education per year. © 2015 OnCourse Learning

Maintaining a License After June 30, 2015, the continuing education requirement increases to 9 hours per year, or 36 hours per renewal period. After July 1, 2016, all licensees must complete a 3 hour course on license law. © 2015 OnCourse Learning

Maintaining a License Licensees other than a broker can be licensed under only one Georgia broker at a time. Licensees cannot begin work until their broker has received their wall license. © 2015 OnCourse Learning

Maintaining a License Inactive licensees must complete the continuing education requirements they would have taken had their license been active to be eligible to activate their license. © 2015 OnCourse Learning

Maintaining a License Active licensees who wish to perform brokerage activities for another must do so as a broker or on behalf of a broker. © 2015 OnCourse Learning

Maintaining a License A license can lapse for nonrenewal or failure to complete continuing education. © 2015 OnCourse Learning

Maintaining a License Any time a licensee is involved in a civil or criminal action, the licensee shall notify the commission in writing of the final ruling within 10 days of the conclusion. © 2015 OnCourse Learning

Maintaining a License A licensee who becomes a resident of another state may place their license on inactive status or apply for nonresident status. © 2015 OnCourse Learning

Brokerage Relationships All exclusive brokerage relationship agreements must have a definite expiration date and each person signing must receive a copy. © 2015 OnCourse Learning

Brokerage Relationships Net brokerage engagements are prohibited in Georgia. © 2015 OnCourse Learning

Brokerage Relationships Property management agreements include: 1.identification of the property 2.all terms and conditions of the management agreement 3.terms of periodic statements of income and expenses 4.which expenses will be paid by the broker 5.compensation for the broker © 2015 OnCourse Learning

Brokerage Relationships Property management agreements include: 6.who holds prepaid rent or security deposits 7.effective and termination date of agreement 8.terms and conditions for termination 9.signature of the parties © 2015 OnCourse Learning

Brokerage Relationships Brokers providing community association management services must be covered by a fidelity bond when collecting more than $60,000 on behalf of the association. A separate bond must be maintained for each association. © 2015 OnCourse Learning

Brokerage Relationships If a licensee buys, sells or leases property for themselves, the licensee must disclose their position as principal in the transaction and include in the contract that they are licensed. © 2015 OnCourse Learning

Brokerage Relationships A licensee must make a written disclosure identifying who the firm is acting as agent for and from whom the licensee will receive compensation. © 2015 OnCourse Learning

Brokerage Relationships If a licensee is going to pay a fee to another licensee who represents another party, this must be disclosed to all parties. © 2015 OnCourse Learning

Management Responsibilities of Firms Brokers are required to conduct their business under the name under which their license was issued. © 2015 OnCourse Learning

Management Responsibilities of Firms A broker is responsible for the acts of any licensees affiliated with the firm and for training licensees on the license law and rules. The broker must notify the commission of any violations. © 2015 OnCourse Learning

Management Responsibilities of Firms If a qualifying broker leaves a firm, the firm must obtain a new qualifying broker within 60 days. A person may serve as the qualifying broker for multiple firms. © 2015 OnCourse Learning

Management Responsibilities of Firms An associate broker may serve as the qualifying broker for one or more firms as long as their broker is notified in writing. © 2015 OnCourse Learning

Management Responsibilities of Firms No broker may refuse to transfer a licensee upon request, even if the licensee owes the broker money. © 2015 OnCourse Learning

Management Responsibilities of Firms When leaving a firm, the licensee must transfer their license to a new firm or request to be placed on inactive status within 30 days. © 2015 OnCourse Learning

Management Responsibilities of Firms If a broker wishes to release a licensee from the firm and the licensee cannot be located, or the licensee refuses to sign the transfer, the broker must mail a letter to the licensee informing them that their license is being sent to the commission. © 2015 OnCourse Learning

Management Responsibilities of Firms Any written brokerage engagements entered into while with the broker remain to the broker. The transferring licensee cannot have any contact with clients of the firm without written permission from the former broker. © 2015 OnCourse Learning

Management Responsibilities of Firms Any support personnel hired by a licensee are the responsibility of the broker and the licensee. Unless licensed, the support person may only perform ministerial acts. © 2015 OnCourse Learning

Unlicensed Support Staff Duties an unlicensed support person can perform: 1.Answering the phone 2.Assembling closing documents 3.Having keys made and installing and removing lockboxes 4.Writing advertisements, which must be approved © 2015 OnCourse Learning

Unlicensed Support Staff Duties an unlicensed support person can perform: 5.Typing contract forms 6.Computing commission checks 7.Placing and removing signs 8.Acting as a courier 9.Scheduling appointments © 2015 OnCourse Learning

Unlicensed Support Staff Duties an unlicensed support person can perform: 10.Scheduling open houses 11.Accompanying a licensee to an open house or showing for security purposes 12.Physical maintenance on the property © 2015 OnCourse Learning

Unlicensed Support Staff Duties an unlicensed support person CANNOT perform: 1.Making cold calls 2.Hosting open houses 3.Showing property 4.Discussing or explaining contracts with anyone outside the firm © 2015 OnCourse Learning

Unlicensed Support Staff Duties an unlicensed support person CANNOT perform: 5.Negotiating commissions or fees 6.Discussing the attributes of a property with a prospect 7.Collecting or holding earnest money or rent 8.Providing advice, recommendations or suggestions to clients or customers © 2015 OnCourse Learning

Managing Trust Accounts and Trust Funds A broker may have multiple trust accounts so long as the commission is notified of the name of the bank and the account’s name or number within one month of opening. © 2015 OnCourse Learning

Managing Trust Accounts and Trust Funds Licensees are required to turn all valuables received to their broker as soon as practically possible after receipt. © 2015 OnCourse Learning

Managing Trust Accounts and Trust Funds The broker must deposit the money as soon as practically possible after receipt unless all parties having an interest in the money have agreed otherwise in writing. © 2015 OnCourse Learning

Managing Trust Accounts and Trust Funds A broker may have an interest-bearing trust account. The broker must obtain written agreement of all parties stating who will receive any interest earned on the deposit. © 2015 OnCourse Learning

Managing Trust Accounts and Trust Funds The broker can only have their own money in the trust account in the following circumstances: To maintain a minimum balance required by the bank To cover service charges required by the bank To be converted to commission if agreed to by the parties © 2015 OnCourse Learning

Managing Trust Accounts and Trust Funds Every month, the broker must remove funds from the trust account that exceed the minimum amounts required to maintain the minimum balance or cover service charges. © 2015 OnCourse Learning

Managing Trust Accounts and Trust Funds The broker must maintain accurate records including: Name of the parties Amount and date of deposit Identification of property involved Amount, payee, and date of each check drawn © 2015 OnCourse Learning

Managing Trust Accounts and Trust Funds If brokers wish to claim any portion of money paid to them in trust as commission, the transaction must have been closed. © 2015 OnCourse Learning

Managing Trust Accounts and Trust Funds If security deposits are being kept, there must always be a balance at least equal to the amount of the security deposits being held. © 2015 OnCourse Learning

Managing Trust Accounts and Trust Funds In the event that a broker disburses money in a manner contrary to the contract, the broker shall be deemed to have demonstrated incompetence to interact with the public in a manner that safeguards the public. © 2015 OnCourse Learning

Disbursing Funds A broker can disburse funds: Upon rejection of an offer Upon withdrawal of the offer At closing Upon the separate agreement of all parties with an interest in the trust funds © 2015 OnCourse Learning

Disbursing Funds A broker can disburse funds: Upon the filing of an interpleader (may be used if there is no agreement) Upon court order Upon reasonable interpretation of the contract © 2015 OnCourse Learning

Disbursing Funds A broker must not disburse funds until they have a reasonable assurance that the funds have cleared the bank. If the broker disburses funds when all parties have not agreed, the broker must notify all parties in writing of the disbursal. © 2015 OnCourse Learning

Advertising This rule regulates any type of advertising done by or for a licensee and includes any form of media that is a promotion to the public. © 2015 OnCourse Learning

Advertising If you have to ask whether you must disclose, the answer is yes. © 2015 OnCourse Learning

Advertising Any misleading advertising is prohibited. The statement must be the truth. © 2015 OnCourse Learning

Advertising Advertising cannot be directed toward or in reference to a person of any particular race, color, religion, national origin, sex, handicap or familial status. © 2015 OnCourse Learning

Advertising All advertising by salespersons, associate brokers and community association managers must be done in the name of the licensed broker and under that broker’s direct supervision. © 2015 OnCourse Learning

Advertising The advertising of property by a licensee requires written permission of the owner or the owner’s agent. © 2015 OnCourse Learning

Advertising When placing advertising of properties on the internet, a licensee must update outdated information or remove the advertising within 30 days of the advertising becoming outdated. © 2015 OnCourse Learning

Advertising All advertising of specific properties must include the name and telephone number of the firm in equal size, prominence and frequency as the name or telephone number of the licensee. © 2015 OnCourse Learning

Advertising Any advertising by a licensee must be under the supervision of the broker and in the name of the broker. Any advertisement without proper disclosure is known as a blind ad. © 2015 OnCourse Learning

Advertising Any property listed with a broker can only be advertised in the name of the broker. © 2015 OnCourse Learning

Advertising When licensees advertise properties in their own name, they must: Notify the broker in writing Disclose in the ad that they are the owner and that they are licensed Receive written permission from the broker for the advertisement © 2015 OnCourse Learning

Handling Real Estate Transactions Offers must be presented as soon as reasonably possible. © 2015 OnCourse Learning

Handling Real Estate Transactions Any offer, whether written or oral, must be presented until closing. © 2015 OnCourse Learning

Handling Real Estate Transactions Offers must provide the license number of the firm and licensees. Any individual signing an offer must receive a copy. © 2015 OnCourse Learning

Handling Real Estate Transactions Once fully signed and accepted, a copy must be provided to each person and each firm. © 2015 OnCourse Learning

Handling Real Estate Transactions Copies of all documents used in a transaction must be maintained by the broker for at least three years. © 2015 OnCourse Learning

Handling Real Estate Transactions Any representation made in a transaction that is false or has the intent to deceive is a violation. Do not falsify, mislead or misrepresent. © 2015 OnCourse Learning

Licensees Acting as Principals In the event that a licensee working for a broker wishes to buy, sell or lease a property in their own name, they must first notify their broker in writing. The licensee must receive written permission from the broker for any advertising that is used. © 2015 OnCourse Learning

Licensees Acting as Principals If a licensee offers to buy or lease a property as an inducement to obtain a brokerage agreement, or to enable a person to buy or lease another property, the licensee must first enter into an agreement with the party that expresses all terms and conditions of the purchase or sale. © 2015 OnCourse Learning

Licensees Acting as Principals If a licensee is inducing an owner of property to enter into a listing agreement with them by offering to purchase the property at the end of the listing if it does not sell, the licensee must enter into the purchase agreement with the seller first, showing the price and the terms of the purchase. © 2015 OnCourse Learning

Fair Housing It is a violation to treat a person differently based on race, color, religion, national origin, sex, handicap or familial status. © 2015 OnCourse Learning

Fair Housing Violations include: Making statements that the make-up of a neighborhood is changing Denying housing based on protected classes Discriminating against a person based on a protected class in connection with a property © 2015 OnCourse Learning

Fair Housing Violations include: Refusing to accept or transmit offer based on a protected class. Refusing to negotiate based on a protected class Representing that housing is not available or refusing a person to inspect housing based on a protected class © 2015 OnCourse Learning

Citations When the commission determines by investigation that the law or rules have been violated, it may issue a citation. A citation may require the completion of education, period reports by an independent accountant or fines. © 2015 OnCourse Learning