Transcript Document

Chapter 24
Georgia Real Estate
An Introduction to the Profession
Eighth Edition
Chapter 24
Georgia Rules and Regulations
Key Terms
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agency
brokerage engagement
citation
client
customer
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Firm
hearing
post-license education
preliminary decision
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Overview
The rules are created by the commission.
The law is created by the state legislature.
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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.
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Definitions
Agency – a relationship created by express
contract where a broker represents another in
a real property transaction.
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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.
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Definitions
Client – a person who has
entered into a brokerage
engagement with a broker.
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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.
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Definitions
Dual agent – a broker who has a brokerage
engagement with both parties in the same
transaction.
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Definitions
Firm – Any person licensed
as a broker
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Definitions
Franchise name – a name
that requires the permission
of another who has a right
in the trade name.
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Definitions
Ministerial acts – acts that
do not require
confidentiality or the
exercise of judgement or
the providing of advice.
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Definitions
Timely – a reasonable time
under the circumstances.
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Commission Operations
Upon written request, the
commission will provide a
history of a licensee’s
records only for the
preceding five years.
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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.
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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.
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Obtaining a License
The primary purpose of the commission is to
protect the public through the licensing.
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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.
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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.
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Obtaining a License
The candidate must provide
a Georgia Criminal
Information Center (GCIC)
report that has been issued
in the previous 60 days.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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Maintaining a License
A license can lapse for
nonrenewal or failure to
complete continuing
education.
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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.
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Maintaining a License
A licensee who becomes a resident of another
state may place their license on inactive status
or apply for nonresident status.
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Brokerage Relationships
All exclusive brokerage
relationship agreements
must have a definite
expiration date and each
person signing must receive
a copy.
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Brokerage Relationships
Net brokerage engagements
are prohibited in Georgia.
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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
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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
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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.
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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.
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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.
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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.
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Management Responsibilities of Firms
Brokers are required to conduct their business
under the name under which their license was
issued.
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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.
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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.
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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.
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Management Responsibilities of Firms
No broker may refuse to transfer a licensee
upon request, even if the licensee owes the
broker money.
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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.
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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.
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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.
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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.
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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
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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
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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
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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
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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
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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.
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Managing Trust Accounts and Trust
Funds
Licensees are required to turn all valuables
received to their broker as soon as practically
possible after receipt.
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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.
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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.
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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
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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.
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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
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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.
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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.
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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.
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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
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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
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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.
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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.
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Advertising
If you have to ask whether you must disclose,
the answer is yes.
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Advertising
Any misleading advertising is prohibited.
The statement must be the truth.
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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.
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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.
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Advertising
The advertising of property by a licensee
requires written permission of the owner or the
owner’s agent.
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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.
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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.
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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.
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Advertising
Any property listed with a broker can only be
advertised in the name of the broker.
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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
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Handling Real Estate Transactions
Offers must be presented as soon as
reasonably possible.
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Handling Real Estate Transactions
Any offer, whether written or oral, must be
presented until closing.
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Handling Real Estate Transactions
Offers must provide the license number of the
firm and licensees.
Any individual signing an offer must receive a
copy.
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Handling Real Estate Transactions
Once fully signed and accepted, a copy must
be provided to each person and each firm.
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Handling Real Estate Transactions
Copies of all documents used in a transaction
must be maintained by the broker for at least
three years.
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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.
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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.
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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.
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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.
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Fair Housing
It is a violation to treat a
person differently based on
race, color, religion, national
origin, sex, handicap or
familial status.
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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
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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
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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.
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