Georgia Broker Supplement Examination

Key Concepts

Required licensure / definition of "broker." A "broker" includes anyone who, for another and for a fee or valuable consideration: negotiates or attempts to negotiate the sale, purchase, exchange, renting, lease, or option for real estate (§ 43-40-1(2)(A)); collects rents, assessments, or other trust funds (§ 43-40-1(2)(C)); charges an advance fee in connection with a contract to promote the sale of real estate through listing in a publication (§ 43-40-1(2)(E)); auctions real estate (§ 43-40-1(2)(F)); performs property management services (§ 43-40-1(2)(H)) or community association management services (§ 43-40-1(2)(H), defined at § 43-40-1(4.2)); provides consulting services designed to assist a party in negotiations or procurement of prospects (§ 43-40-1(2)(I)); or advertises or holds himself or herself out as engaged in any of the foregoing (§ 43-40-1(2)(J)). "Property management services" means providing, for valuable consideration, to another, marketing, leasing, maintenance, and management of real property (§ 43-40-1(7)); no minimum rent, unit count, or property type applies.

Qualifications. Salesperson: age 18 (§ 43-40-8(b)(1)) and 75 instructional hours of approved prelicense study (§ 43-40-8(b)(4)); a 25-hour post-license course within one year of issuance of the original license (§ 43-40-8(d)). Broker/associate broker: age 21 (§ 43-40-8(c)(1)), active salesperson licensure for at least three of the five years immediately preceding application (§ 43-40-8(c)(4)), and 60 instructional hours in a broker's course (§ 43-40-8(c)(5)). Community association manager: at least 25 instructional hours (§ 43-40-8(a)(4)).

Conduct and disclosure. Net brokerage engagements are prohibited; the broker must add the broker's fee and notify the client of the gross price (Rule 520-1-.06(1)(c)). A licensee buying or leasing property listed with the licensee or the firm must clearly disclose the buyer position to the seller and insert a clause to that effect in the contract (Rule 520-1-.06(4)(a)). Agency disclosure must be made no later than when any party first makes an offer to purchase, sell, lease, or exchange (Rule 520-1-.06(4)(b)).

Key Concepts

Broker supervision and management duties — O.C.G.A. § 43-40-18(c) - The broker or qualifying broker must establish and implement procedures for reviewing advertising (§ 43-40-18(c)(1)), providing written policies, and systematic review of trust accounting (§ 43-40-18(c)). - Provide programs for study and review of the chapter and its rules and regulations for all licensed associates (§ 43-40-18(c)(2)). - Review for compliance all listing contracts, leases, sales contracts, and management agreements to buy, sell, lease, or exchange real property, as well as any accepted offer, secured or negotiated by the firm's associates. This review must take place within 30 days of the date of the offer or contract (§ 43-40-18(c)(3)). - When the firm pays compensation to an individual licensee (other than another firm), the broker must ensure that licensee's license was assigned to the firm by the commission at the time the compensation was earned (§ 43-40-18(c)(5)). - The firm and all licensed affiliates must enter into a written agreement specifying the terms under which the licensee is compensated during affiliation and how the licensee is compensated for work begun but not completed prior to termination of the affiliation (§ 43-40-18(c)(9)). - The commission shall not regulate the content of compensation agreements; setting commission rates is not a listed management responsibility (§ 43-40-18(c)).

Delegation and liability - A broker may delegate any management duty in subsection (c), but remains responsible for the acts of the person to whom the duty is delegated (§ 43-40-18(d)). - To avoid responsibility for an affiliate's violation, the broker must show all three: (1) reasonable supervisory procedures were in place, (2) the broker did not participate in the violation, (3) the broker did not ratify it (§ 43-40-18(b)). - Violations by a firm licensed as a broker subject the qualifying broker's license to sanction (§ 43-40-10). A firm must authorize its qualifying broker to bind the firm to any settlement of a contested case before the commission (§ 43-40-10).

Georgia Broker Supplement Examination

Key Concepts

• Trust account location. Each broker who accepts down payments, earnest money deposits, security deposits, rents, association fees, or other trust funds shall maintain a separate, federally insured account at a financial institution in this state designated as a trust or escrow account (O.C.G.A. § 43-40-20(a)).
• Commission examination authority. The Georgia Real Estate Commission may examine a broker's trust accounts at any time upon reasonable cause. No court order or advance written notice is required, and examinations are not limited to license renewal periods (O.C.G.A. § 43-40-20(c)).
• Multiple trust accounts. A broker may maintain more than one designated trust or escrow account. The broker shall notify the Commission of the name of the financial institution holding each account and each account's name or number within one month of opening each account (Rule 520-1-.08(1)(a)).
• Property management statements. Periodic written statements of property income and expenses shall be submitted to the owner at least annually (Rule 520-1-.06(2)(a)(3)).
• Support personnel at closing. Unlicensed support personnel may assemble documents for closings (Rule 520-1-.07(6)(e)(4)). They shall not answer any questions on title, financing, or closings other than the time and place (Rule 520-1-.07(6)(f)(5)); they may not negotiate commissions or discuss contracts with anyone outside the firm (Rule 520-1-.07(6)(f)).
• Recovery Fund minimum balance. The Commission shall maintain a minimum balance of $1 million in the real estate education, research, and recovery fund (O.C.G.A. § 43-40-22(b)).
• No claim by a principal. A licensee acting as a principal or agent in a real estate transaction has no claim against the fund (O.C.G.A. § 43-40-22(b)(2)).
• Automatic revocation. If the Commission pays any amount from the fund toward satisfaction of a judgment against a licensee, that licensee's license is automatically revoked upon issuance of the court order authorizing payment (O.C.G.A. § 43-40-22(d)(6)).
• Subrogation. When the Commission has paid from the fund, it is subrogated to all rights of the judgment creditor, and the judgment creditor shall assign all right, title, and interest in the judgment to the Commission before any payment is made (O.C.G.A. § 43-40-22(h)).
• Insufficient fund balance. Unpaid claims are satisfied in the order originally filed, plus accumulated interest at 4 percent a year (O.C.G.A. § 43-40-22(d)(7)).

Key Formulas & Tables