1. Chapter 23

2. Georgia Real Estate An Introduction to the Profession Eighth Edition Chapter 23 Georgia License Law

3. Key Terms associate broker broker brokerage agreement commission commissioner licensee real estate real estate education, research and recovery fund salesperson © 2015 OnCourse Learning

4. Overview This chapter covers Title 43, Chapter 40 of the Georgia Statutes and Codes, which relates specifically to real estate licensing. License law is the law that the state used to protect the interests of its citizens from improper practice of licensees. © 2015 OnCourse Learning

5. Definitions A broker is a person who, for compensation, does an act of real estate for another. This could be negotiating contracts or procuring prospects for real estate transaction. © 2015 OnCourse Learning

6. Definitions An associate broker is a person, other than a salesperson, who acts on behalf of a real estate broker in performing acts of real estate. An associate broker has a broker's license but chooses to work for another broker. © 2015 OnCourse Learning

7. Definitions A salesperson is licensed to perform acts of real estate on behalf of a broker. © 2015 OnCourse Learning

8. Definitions A brokerage agreement is a written contract between a broker and client where the broker is hired to represent the interests of the client in the transaction and be compensated for doing so. © 2015 OnCourse Learning

9. Definitions The commission refers to the Georgia Real Estate Commission, and commissioner refers to the real estate commissioner. © 2015 OnCourse Learning

10. Definitions A licensee is any person with a real estate license, active or in active; a person could be an individual or firm, and a firm is any business entity such as a corporation, partnership, or limited liability company. © 2015 OnCourse Learning

11. Definitions Real estate is defined as any interest in real property, whether that interest be tangible or intangible, freehold or non-freehold, and would also include a mobile home it is permanently attached. © 2015 OnCourse Learning

12. Creation of the Commission The commission is composed of six members who are appointed by the governor for a five-year term, and approved by the Senate. © 2015 OnCourse Learning

13. Creation of the Commission Five of the six members must be licensed in real estate for five years and residents of Georgia for five years. © 2015 OnCourse Learning

14. Creation of the Commission The six-member is a consumer member who cannot have any connection with the real estate industry and who has a recognized interest in consumer affairs. © 2015 OnCourse Learning

15. Creation of the Commission In the event of vacancy occurs, the governor shall appoint a person to fill the unexpired term. © 2015 OnCourse Learning

16. Creation of the Commission The commission appoints a chairperson each year. © 2015 OnCourse Learning

17. Creation of the Commission The governor is able to remove members for their inability to perform, negligence to perform, incompetence, dishonest conduct or for having disciplinary sanctions imposed upon them by any licensing agency. © 2015 OnCourse Learning

18. Creation of the Commission The license law empowers the commission to pass rules and regulations relating to the professional conduct of licensees. © 2015 OnCourse Learning

19. Determination of Fees The commission does not receive tax support. The commission establishes and collects fees to cover the cost of its operation. © 2015 OnCourse Learning

20. Office of Commissioner The commissioner is a full-time employee of the commission. It is the commissioner's job to run the department on a daily basis. The commissioner hires and is responsible for the staff. © 2015 OnCourse Learning

21. Status of Commission Employees While an employee of the commission, no licensee is allowed to maintain an active real estate license. © 2015 OnCourse Learning

22. Seal and Records The commission shall be able to certify the license history of a licensee for five years. © 2015 OnCourse Learning

23. Application for Licenses The licensee’s name, license number, license status and any disciplinary information is available to the general public through the real estate commissioner's website. © 2015 OnCourse Learning

24. Qualifications of Licensees To qualified for a community association manager’s license: 18 years old Resident of the state High school graduate or GED equivalent Complete a 25-hour community association manager's course Pass the state exam © 2015 OnCourse Learning

25. Qualifications of Licensees To qualified for a salesperson’s license: 18 years old Resident of the state High school graduate or GED equivalent Complete a 75-hour salesperson's course Pass the state exam © 2015 OnCourse Learning

26. Qualifications of Licensees Each licensee must also complete a 25-hour post-license course within one year of activating their license. If the post-license course is not completed within one year, the license will lapse. © 2015 OnCourse Learning

27. Qualifications of Licensees To qualified for a broker’s license: 21 years old Resident of the state High school graduate or GED equivalent Complete a 60-hour broker's course Pass the state exam © 2015 OnCourse Learning

28. Qualifications of Licensees All licensees must complete six hours of continuing education per year of the renewal period. © 2015 OnCourse Learning

29. Nonresident Licenses Licensees do not have to be residents of Georgia. A person who is not licensed in their state may obtain a Georgia real estate license by meeting the same age, education, and exam requirements of a resident licensee. © 2015 OnCourse Learning

30. Nonresident Licenses A person who is licensed in their own state may also obtain a Georgia real estate license. © 2015 OnCourse Learning

31. Nonresident License Requirements Requirements include: Providing proof of licensure in their own state Paying fees Stating in writing that they have read the laws, rules, and regulations and agrees to abide by them © 2015 OnCourse Learning

32. Nonresident License Requirements Affiliates with a broker Provides documentation with copies of disciplinary action Appoints the real estate commissioner as agent to receive legal notices on their behalf Provides a written agreement that the licensee will cooperate with investigations by the commission © 2015 OnCourse Learning

33. Nonresident Licenses License law also allows a licensee from another state to enter into a written agreement with the Georgia broker, which would allow the out-of-state licensee to practice in Georgia without a license. © 2015 OnCourse Learning

34. Nonresident Licenses The written agreement shall include: How commissions will be split between the Georgia broker and the out-of-state licensee Any listings or management agreements to be in the name of the Georgia broker The out-of-state licensee will conduct negotiations only with the express permission of the Georgia broker © 2015 OnCourse Learning

35. Nonresident Licenses The written agreement shall include: Any advertising identifies the Georgia broker Any contracts identify the Georgia broker Any trust funds to be held in the Georgia broker’s trust account unless all parties agree in writing to the contrary © 2015 OnCourse Learning

36. Nonresident Licenses The commission is limited to suspending or revoking the Georgia broker’s rights to enter into further agreements with out-of-state brokers. © 2015 OnCourse Learning

37. Granting of a Broker’s License To be issued a broker’s license to a firm, the firm is required to designate an individual licensed as a broker to be its qualifying broker, and the qualifying broker should have the authority to bind the firm in cases before the commission. © 2015 OnCourse Learning

38. Granting of a Broker’s License The qualifying broker will be responsible for making sure that the firm and all licensees comply with the law and rules. The qualifying broker is responsible for making sure that all persons acting as licensees for the firm are properly licensed. © 2015 OnCourse Learning

39. Fees Nonrefundable fees: Examination fee Activation fee Renewal fees Real estate licenses are renewed by the last day of the birth month every four years. © 2015 OnCourse Learning

40. Fees If a license lapse is due to failure to pay fees, the licensee may reinstate the license within two years of the lapse by paying all renewal fees, late charges, and a reinstatement fee. © 2015 OnCourse Learning

41. Fees If the lapse is greater than two years but less than five years, the licensee may reinstate the license by paying all renewal fees, late charges and a reinstatement fee. The licensee must also complete the pre- license course for the license to be reinstated. © 2015 OnCourse Learning

42. Fees If the lapse is more than five years, the licensee must requalify as an original applicant, taking the pre-license course and state exam. © 2015 OnCourse Learning

43. Inactive Status If a person does not wish to continue to be actively licensed, they may make a written request to have their license placed in an inactive status. © 2015 OnCourse Learning

44. Inactive Status This request must be made within 30 days of ceasing work for a broker. While inactive, the licensee may not engage in any brokerage activity except for property the licensee owns. © 2015 OnCourse Learning

45. Inactive Status While inactive, the license must be renewed every four years, with renewal fees being paid to the commission. © 2015 OnCourse Learning

46. Inactive Status To reactivate, the licensee must complete continuing education courses equal to what would have been required if the licensee had maintained an active license. © 2015 OnCourse Learning

47. Penalty Fees Penalty fees maybe imposed on a licensee who submits a check with insufficient funds or who fails to notify the commission of a change of address, the opening or closing of the trust account, transfer to a new company, or departure from a firm to go inactive. These notifications must be made within 30 days. © 2015 OnCourse Learning

48. Disposition of Fees Fees collected by the commission shall be deposited in the state treasury. Expenses of the commission shall be paid from these funds. © 2015 OnCourse Learning

49. Disposition of Fees The expense of the commission shall not be supported by state tax dollars. The commission must be self-supporting. © 2015 OnCourse Learning

50. Power of Commission to Issue, Revoke, Suspend and Censure The commission is empowered to regulate the issuance of licenses, revoke or suspend licenses, and censure licensees. © 2015 OnCourse Learning

51. Granting, Revoking and Suspending Licenses For the commission to grant a license to a person, the individual shall have a reputation for honesty, trustworthiness, integrity and competence to do business in such as manner as to safeguard the interest of the public. © 2015 OnCourse Learning

52. Granting, Revoking and Suspending Licenses The commission may deny a license to a company if a stockholder, member, or partner with more than 20% ownership of the company does not have a good reputation for honesty, trustworthiness, and integrity, or if such person has been convicted of any crimes. © 2015 OnCourse Learning

53. Granting, Revoking and Suspending Licenses A license can be refused if a licensee is guilty of forgery, embezzlement, obtaining money under false pretenses, theft, extortion, conspiracy to defraud and other like offenses. © 2015 OnCourse Learning

54. Granting, Revoking and Suspending Licenses No one who has a conviction may be eligible to apply for a license until all terms of sentence have been completed and at least two years have passed since the end of the term for a single conviction; or five years have passed since the end of the term for multiple convictions. © 2015 OnCourse Learning

55. Granting, Revoking and Suspending Licenses An applicant for an associate broker or broker license who has been convicted of an offense cannot be licensed by the commission until: At least 10 years have passed since the conviction or release There are no criminal charges pending © 2015 OnCourse Learning

56. Granting, Revoking and Suspending Licenses An applicant for an associate broker or broker license who has been convicted of an offense cannot be licensed by the commission until: Provides proof that they now have a reputation for honesty, trustworthiness, integrity, and confidence, and will do business in such a manner as to safeguard the interest of the public © 2015 OnCourse Learning

57. Granting, Revoking and Suspending Licenses Making false statements on the application is grounds for refusal to issue, suspend or revoke. © 2015 OnCourse Learning

58. Granting, Revoking and Suspending Licenses A person who is perceived to have falsified the application would not be considered to have a reputation for honesty, trustworthiness, and integrity or to demonstrate competency to safeguard the interest of the public. © 2015 OnCourse Learning

59. Granting, Revoking and Suspending Licenses Any sanctioned by an occupational body of this or any other state can also be sufficient grounds to refusal to issue. © 2015 OnCourse Learning

60. Granting, Revoking and Suspending Licenses Upon conviction of any crimes, the licensee must immediately notify the commission of the conviction. The license shall be automatically revoked in 60 days unless the licensee makes a written request for hearing. © 2015 OnCourse Learning

61. Granting, Revoking and Suspending Licenses The commission can also refuse to issue a license or suspend a license if someone is not in compliance with a child support order or is in default on a student loan. © 2015 OnCourse Learning

62. Refusal to Issue If the commission refuses to issue a license after proper application, the commission must provide for a hearing. © 2015 OnCourse Learning

63. Management of Firms and Licensed Affiliates Every brokerage firm must have a broker or qualifying broker. © 2015 OnCourse Learning

64. Management of Firms and Licensed Affiliates This person shall be responsible for the acts of the firm and its licensees and is responsible for violations unless the broker can demonstrate that they had procedures for supervision, did not participate in any violation, and did not ratify the violation. © 2015 OnCourse Learning

65. Management of Firms and Licensed Affiliates If the firm is a sole proprietorship, the firm must be entirely owned by the broker. If the firm is a partnership or limited partnership, the qualifying broker must be a general partner. © 2015 OnCourse Learning

66. Management of Firms and Licensed Affiliates If the firm is a limited liability company, the qualifying broker must be a member. If the firm is a corporation, the qualifying broker must be an officer. © 2015 OnCourse Learning

67. Management of Firms and Licensed Affiliates The broker or qualifying broker must have the ability to sign on all trust accounts maintained by the firm. © 2015 OnCourse Learning

68. Management of Firms and Licensed Affiliates The firm must establish the following procedures: Ensure that all advertising is in compliance with laws and rules Provide training to licensees on the law and rules © 2015 OnCourse Learning

69. Management of Firms and Licensed Affiliates The firm must establish the following procedures: Provide for a review all offers and contracts within 30 days of the date of offer or contract Conduct an ongoing review of the firm’s trust account procedures © 2015 OnCourse Learning

70. Management of Firms and Licensed Affiliates The firm must establish the following procedures: Provide assurance that all personnel performing acts of a licensee are properly licensed Make sure trust disbursements are properly made © 2015 OnCourse Learning

71. Management of Firms and Licensed Affiliates The firm must establish the following procedures: Retain copies of all transaction records Provide a written policy and procedures manual to all licensees © 2015 OnCourse Learning

72. Management of Firms and Licensed Affiliates The firm must establish the following procedures: Provide a written agreement with all licensees that states how the licensee will be compensated for work while with the broker and how the licensee will be compensated for work not completed before leaving the broker © 2015 OnCourse Learning

73. Management of Firms and Licensed Affiliates The commission will not arbitrate commission disputes. © 2015 OnCourse Learning

74. Management of Firms and Licensed Affiliates The firm must establish the following procedures: Ensure that a person with management authority for the firm is reasonably available © 2015 OnCourse Learning

75. Change of Place of Business When a firm changes its address, it must notify the commission, in writing, within 30 days. © 2015 OnCourse Learning

76. Change of Place of Business When a licensee leaves a broker, the broker is required to forward the license to the commission or to the new broker. © 2015 OnCourse Learning

77. Change of Place of Business If a licensee leaves a broker and has transactions that have begun but not yet completed, the licensee may continue to act for the former broker under the following conditions: © 2015 OnCourse Learning

78. Change of Place of Business The brokers agree in writing The transactions are specifically identified The former broker accepts full responsibility for the licensee’s activities on the transactions The agreement states the form of compensation © 2015 OnCourse Learning

79. Trust Accounts A broker who takes money belonging to others, such as earnest money, security deposits and rents, must maintain an escrow account which is not subject to garnishment or attachment. © 2015 OnCourse Learning

80. Trust Accounts Once deposited, the broker cannot use that money as fee or commission until the transaction is consummated or terminated. © 2015 OnCourse Learning

81. Trust Accounts If a broker does not accept money belong to others, they are not required to maintain an escrow account. They must open an escrow account within one day of receiving funds. © 2015 OnCourse Learning

82. Trust Accounts Brokers may maintain as many trust accounts as they wish so long as they notify the commission of the proper information. © 2015 OnCourse Learning

83. Trust Accounts Any time a broker opens an account, the they must notify the commission of the name of the bank and the account number. © 2015 OnCourse Learning

84. Trust Accounts Any broker with an escrow account must allow the commission to audit the account any time the commission has reasonable cause. The commission is required to audit each broker’s account at least one time each renewal period. © 2015 OnCourse Learning

85. Trust Accounts The commission may accept a report from a CPA that the account is maintained in accordance with the law. © 2015 OnCourse Learning

86. Trust Accounts A nonresident broker may maintain a trust account in their resident state so long as the commission has the authority to audit it. © 2015 OnCourse Learning

87. Trust Accounts If the licensee has their own trust account, the account must be approved by the broker, the broker must notify the commission of the account and the licensee must provide, on a quarterly basis, a reconciliation of the trust account. © 2015 OnCourse Learning

88. Real Estate Education, Research and Recovery Fund The real estate education, research and recovery fund was created to protect the public against the illegal practices of brokers. © 2015 OnCourse Learning

89. Real Estate Education, Research and Recovery Fund The fund is maintained by a $20 fee all new licensees pay into the fund at the time of initial application for a license. The fund must maintain a minimum balance of $1,000,000. © 2015 OnCourse Learning

90. Real Estate Education, Research and Recovery Fund If the fund falls below $1,000,000, each licensee will be assessed up to $30 for each year at the time of renewal. © 2015 OnCourse Learning

91. Real Estate Education, Research and Recovery Fund The fund will not pay more than $25,000 for any one transaction. The fund will not pay more than $75,000 for any one licensee. No one person will ever receive more than $25,000 from the fund. © 2015 OnCourse Learning

92. Real Estate Education, Research and Recovery Fund If someone has been harmed by a licensee, they must first take action against them and receive a judgment. © 2015 OnCourse Learning

93. Real Estate Education, Research and Recovery Fund Only upon failure to receive payment from the licensee using all appropriate actions available will they be able to ask a court to order the commission to pay from the recovery fund. © 2015 OnCourse Learning

94. Real Estate Education, Research and Recovery Fund Licensees, their spouses, siblings and children are not eligible to receive money from the fund. Should the commission be required to pay from the fund, the license of the licensee shall be automatically revoked. © 2015 OnCourse Learning

95. Real Estate Education, Research and Recovery Fund The licensee may not be eligible for a new license unless the licensee makes full restitution to the fund, including interest. © 2015 OnCourse Learning

96. Requirements to Bring Action Any person who brings an action against someone else for the payment of commission must first prove that they were properly licensed at the time of the cause of action. © 2015 OnCourse Learning

97. Unfair Trade Practices Sanctions The unfair trade practices section sets forth a code of conduct for licensees in the protection of the public. Any person violating these practices can be sanctioned in the following ways: © 2015 OnCourse Learning

98. Unfair Trade Practices Sanctions Refusal to grant or renew a license Formal reprimand Suspension of license Revocation of license, which is permanent Revocation of a broker or associate broker license with issuance of a salesperson’s license © 2015 OnCourse Learning

99. Unfair Trade Practices Sanctions Reimburse for expenses incurred in an investigation Fine not to exceed $1,000 per violation and not more than $5,000 per hearing Education requirements Filing of periodic reports by an accountant Limits or restrictions of the licensee to protect the public © 2015 OnCourse Learning

100. Unfair Trade Practice Violations 1.Treating people differently because of race, color, religion, sex, disability, familial status or national origin. 2.Advertising in a way that is intentionally misleading or inaccurate © 2015 OnCourse Learning

101. Unfair Trade Practice Violations 3.Failing to account for money that belongs to other 4.Commingling a licensee’s money with that of a principal © 2015 OnCourse Learning

102. Unfair Trade Practice Violations 5.Failure to deposit funds as soon as possible 6.Accepting, giving or charging undisclosed fees © 2015 OnCourse Learning

103. Unfair Trade Practice Violations 7.Representing a broker other than the broker holding the license without permission 8.Accepting commissions from anyone other than the broker without consent of the broker © 2015 OnCourse Learning

104. Unfair Trade Practice Violations 9.Failure to disclose license as a principal. If you have to ask whether you have to disclose, the answer is yes. 10.Guaranteeing a profit © 2015 OnCourse Learning

105. Unfair Trade Practice Violations 11.Placing a sign without written permission. Removing a sign within 10 days of expiration 12.Offering property for sale without the permission of the owner © 2015 OnCourse Learning

106. Unfair Trade Practice Violations 13.Inducing a person to break a contract to enter into another contract 14.Negotiating directly with the client of another broker without permission © 2015 OnCourse Learning

107. Unfair Trade Practice Violations 15.Expressing an opinion as an appraisal without having an appraiser license 16.Acting as a licensee in another state without a license in that state © 2015 OnCourse Learning

108. Unfair Trade Practice Violations 17.Compensating a person for real estate activities if that person does not have a real estate license 18.Listing without a termination date © 2015 OnCourse Learning

109. Unfair Trade Practice Violations 19.Failure to give copies of any offers or contracts to all parties. 20.Failure to provide a closing statement to all parties © 2015 OnCourse Learning

110. Unfair Trade Practice Violations 21.Any substantial misrepresentation 22.Dual agency without written consent © 2015 OnCourse Learning

111. Unfair Trade Practice Violations 23.Failure to turn over funds to the broker as soon as possible 24.Clouding a title to a property without a valid claim © 2015 OnCourse Learning

112. Unfair Trade Practice Violations 25.Conduct that demonstrates dishonest dealings or incompetence to safeguard the public 26.Entering into an agreement or contract when an exclusive brokerage engagement exists with another broker © 2015 OnCourse Learning

113. Unfair Trade Practice Violations 27.Failure to maintain copies of all documents for 3 years 28.Falsification of any document © 2015 OnCourse Learning

114. Unfair Trade Practice Violations 29.Depositing money into an interest-bearing escrow account without written agreement from all parties as to who receives the interest 30.Failure to disclose agency relationships in a timely fashion © 2015 OnCourse Learning

115. Unfair Trade Practice Violations 31.Performing acts of a broker or salesperson with only a CAM license 32.When performing CAM duties, failure to obtain permission to perform other acts of real estate © 2015 OnCourse Learning

116. Unfair Trade Practice Violations 33.Accounting of all records within 30 days of termination – CAM 34.Accounting of all records within 30 days of termination – Property manager © 2015 OnCourse Learning

117. Unfair Trade Practice Violations 35.Changing the compensation of another licensee without prior written permission 36.Failure to disclose to a person that they are being referred and whether or not a referral fee will be paid for the referral © 2015 OnCourse Learning

118. Unfair Trade Practice Violations The commission may consider previous sanctions imposed on the licensee by the commission in determining the severity of new sanctions. © 2015 OnCourse Learning

119. Unfair Trade Practice Violations Licensees are allowed to complete pre-printed contracts so long as they were prepared by an attorney. This shall not be considered the practice of law. © 2015 OnCourse Learning

120. Unfair Trade Practice Violations Licensees must not give legal advice. © 2015 OnCourse Learning

121. Unfair Trade Practice Violations When completing a lease or offer to buy, sell, lease, rent or exchange real estate, a licensee is required to include a method of payment, a legal description, special stipulations as required and dates to make sure the parties meet their responsibilities. © 2015 OnCourse Learning

122. Hearings The commission will provide a licensee with the opportunity of a hearing before censuring the licensee or suspending or revoking the license. If a person disagrees with the findings, they are entitled to a judicial review. © 2015 OnCourse Learning

123. Investigation of Complaints The commission SHALL investigate upon a sworn written request of any person the actions of any licensee, instructor, or applicant for license. © 2015 OnCourse Learning

124. Injunctive Actions The attorney general can bring an injunctive action to stop acts and practices that the commission deems violates or will violate the license law. © 2015 OnCourse Learning

125. Exceptions The following are exceptions allowing a person to do acts of real estate for another without obtaining a license: © 2015 OnCourse Learning

126. Exceptions Property owner, spouse or general partner of a limited partnership An attorney-in-fact Practicing attorney Administrator, executor or guardian Government employee Utility employee © 2015 OnCourse Learning

127. Exceptions Full-time employee of the owner of the property Referral agent, with less than three transactions per year Employee of a broker with a management agreement with the property owner Property management services for property available for less than 90 days © 2015 OnCourse Learning

128. Exceptions Community association services provided by a member of the association Physical maintenance on property Certified public accountant acting as an accountant © 2015 OnCourse Learning

129. Exceptions A licensee who wishes to performs acts of real estate as an employee of the owner, such as a builder or developer, must surrender the license before providing brokerage services for the owner. © 2015 OnCourse Learning

130. Acting Without a License The commission is empowered to issue a cease and desist order to anyone providing acts as a real estate licensee without a license. © 2015 OnCourse Learning

131. Acting Without a License Fines are not to exceed $1,000 per violation, with each day of practice without a license being a separate violation. © 2015 OnCourse Learning

132. Penalty Any person found guilty of violating the provisions of the license law shall be guilty of a misdemeanor. © 2015 OnCourse Learning