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Georgia Real Estate InfoBase Contents - Chapter 1

Chapter 1

Questions Licensees Frequently Ask the Commission

As a service to real estate licensees and other interested parties, this chapter provides general responses to some questions that licensees frequently ask the Commission and its staff. The answers given to these questions are not exhaustive. Consult all relevant laws and rules and regulations contained in this book for further information. Some answers contain references to specific laws and/or rules and regulations. In addition, these answers are subject to change due to subsequent amendments to real estate laws and/or rules and regulations.

GENERAL QUESTIONS

Q1: 

Asked of the Commission's staff--Could you please interpret a particular law or rule for me?

A1:

No. Interpreting laws or rules is giving legal advice. The law prohibits Commission employees from interpreting laws in order to guide citizens in particular or hypothetical situations.  For such interpretations, licensees must consult their broker or, if the broker approves, the broker's attorney. Non-licensees should consult an attorney.

Q2: 

May my secretary who is unlicensed give information on listings over the phone when no agents are available?

A2:  

As specified in Rule 520-1-.07 (6) (f) (6), an unlicensed secretary or assistant may not answer any questions about a listing except for information on price and amenities that you have expressly authorized in writing. See Section 3.11 of this Guide regarding assistants, secretaries and support staff.

Q3: 

Can my broker make me pay dues to a trade association?

A3:  

This issue is not a matter related to the license law. It is controlled solely by agreement between you and your broker. If the broker’s firm belongs to the trade association, the broker likely contractually agreed that all licenses affiliated with the firm will also belong to the trade association.

Q4: 

May I work for a mortgage company and a real estate company at the same time?

A4:

While there is not a specific barrier in the license law to such activity, licensees must be careful that they do not create intentional or unintentional conflicts of interest. Thus, prudent licensees will clarify in writing with their broker any work in which they engage other than for the broker.

Q5: 

Is errors and omissions insurance a requirement for licensure in Georgia?

A5:

No, but it may be a good business practice to have such insurance.

Q6:

What happens if someone complains to the Commission about my brokerage activity?

A6:    

See Chapter 4 of this manual, "Investigations and Disciplinary Procedures," and License Law 43‑40‑27.

LICENSE PROCEDURES

Q1

What do I need to do to become licensed?

A1:

See Chapter 3 of this manual, "Licensure," for licensing requirements and License Law 43‑40‑8. You may also access this information at www.grec.state.ga.us.

Q2:    

How do I reinstate a lapsed license?

A2:  

Contact  the Commission at (404) 656-6650 or at www.grec.state.ga.us  The process to reinstate the license depends on the reason the license lapsed and how long ago the license lapsed See License Law 43‑40‑8 & 43‑40‑12 and Rule 520‑1‑.05.

Q3:

Can an individual who has had a criminal conviction obtain a real estate license?

A3: 

An individual with a criminal conviction may obtain a license under certain      circumstances, but the Commission may also deny his or her application. See Chapter 3 of this manual, "Licensure," regarding applicants with criminal convictions, License Law 43‑40‑15 and Rule 520-1-.04. You may also access this information at www.grec.state.ga.us.

Q4: 

How do I open a new firm?

A4: 

See Chapter 5 of this manual, "Opening and Closing a Real Estate Brokerage Firm." You may also access this information at www.grec.state.ga.us.

Q5:

How do I close a real estate firm?

A5:

See Chapter 5 of this manual, "Opening and Closing a Real Estate Brokerage Firm." You may also access this information at www.grec.state.ga.us.

BROKER AND COMPANY LICENSE

Q1: 

Can I be a broker for two companies?

A1: 

Yes. See Rule 520‑1‑.07 (4) (a).

Q2: 

Can I be a broker for one company and an associate broker with another company?

A2:   

Yes, but you must give the required notice to the broker holding your associate broker's license. See Rule 520‑1‑.07 (4) (b).

Q3:

Can I be the qualifying broker for a corporation if I do not own any stock in the corporation?

A3: 

Yes, but you must be an officer. See License Law 43‑40‑18 (e).

Q4:

Can I open a company in my home?

A4:  

Yes, as long as you comply with all local ordinances regarding business activities. See License Law 43-40-18 (a).

Q5:  

Can someone else use my real estate firm's name without my permission?

A5:

Firm names are not a license law matter. The Corporations Division of the Secretary of State's office controls the names of corporations. Firms must register trade names with the Clerk of the Superior Court in each county in which the firm is operating. Disputes over whether someone is improperly using a firm's trade name are matters for the courts and the legal profession.   See Rule 520‑1‑.04.

Q6:

I have applied to open a new firm. When may I begin taking listings and handling other brokerage business?

A6:    

A new firm is an original application for licensure, and may not begin brokerage activity until it receives  a wall certificate for the from the Commission. There is an alternative to waiting for the mailed certificate. Once the firm license has been issued by the Commission, the broker can immediately print a firm license on the Commission’s website at www.grec.state.ga.us. This is done through the “Online Services” section of the website.


COMMUNITY ASSOCIATION MANAGER, SALESPERSON, & ASSOCIATE BROKER LICENSE

Q1:

Can I work for more than one broker at the same time? 

A1:  

No, except after transferring to a new broker you may do certain things relating to transactions begun prior to the transfer, but even then only under certain conditions. See License Law 43‑40‑19 (d). and Rule 520‑1‑.07 (5) (a).

Q2:  

I have just passed the salesperson's (or the community association manager’s or broker’s) examination. How soon can I start to work?

A2:

If you passed the examination at an AMP Test Center, and received a wall license and an active pocket card from the test center, you may begin work as soon as you have delivered your wall license to your broker.  Otherwise, you may not begin brokerage activity until your broker receives your wall certificate and pocket card from the Commission (usually five to ten working days after the Commission receives a complete and correct application). There is an alternative to waiting for the mailed certificate. Once the license has been issued by the Commission, a licensee can immediately print their license on the Commission’s website at www.grec.state.ga.us.  This is done through the “Online Services” section of the website.

Q3:

I just passed the salesperson's (or the community association manager’s or broker’s) examination. How soon must I apply for a license using my AMP test score?

A3:   

As with any person who passes a salesperson's (or community association manager’s or broker’s) examination, you should apply for your license within three months of the exam date. Often you can obtain the license the same day that you pass the state exam. If you apply after three months but before twelve months, the fee charged to activate your license will double. If you do not apply for a license within twelve months, you must retake the examination before you can apply for a license (neither salesperson nor community association manager nor broker applicants will be required to retake the pre-license course).

BRANCH OFFICES

Q1: 

What is the law on branch offices?

A1:

A firm may have as many branch offices as it desires as long as it complies with all local business ordinances affecting their operations. The license law does not require that a broker be in each office. However, the broker of the firm is responsible for the acts of any licensee in any of the firm's branch offices. See License Law 43‑40‑18.

BUSINESS LICENSES  

Q1: 

Do I have to have a local business license? 

A1: 

Check with your local government to see what licenses, if any, they require. Most city and county governments do require firms to have a business license.

TRANSFERRING

Q1:   

Do I have to sign a Change Application when an agent asks me to do so even if the agent owes my company money?

A1: 

Yes. See Rule 520‑1‑.07 (5) (b).

Q2:

How long do I have to wait for my broker to sign a Change Application?

A2: 

You should schedule an appointment to meet personally with your broker or the management personnel authorized to sign such Change Applications. The broker or the broker's designee must sign that Change Application at that meeting. However, you must account to the broker for the items listed in Rule 520‑1‑.07 (5) (c). if you do not, the broker may file a written complaint with the Commission against you and pursue other legal remedies.

Q3:  

May I take my listings when I transfer?

A3: 

Listings belong to the real estate firm. They are not yours. Thus, only your broker can release an owner from a listing and allow you to attempt to list the property for your new firm.  See License Law 43‑40‑25 (b)(13) & (26) and Rule 520‑1‑.07 (5) (c)

Q4:   

May I tell my listing clients that I am moving to another company and give them my new address and phone number?

A4: 

The listing clients are not yours. They belong to the firm for which you were acting when you listed the property. When you decide to leave the firm, discuss with your broker whether you can have any contact with the persons who listed property with the firm through you and follow strictly the broker's desires in that matter. See License Law 43‑40‑19 (c) & 43‑40‑25 (b) (26) and Rule 520‑1‑.07 (5) (e).

Q5:   

I plan to transfer my license to a new firm. How soon may I begin work for the new firm?

A5:  

You may begin work for the new firm as soon as: (1) your former broker signs a Change Application releasing you from his or her firm, (2) your new broker signs your Change Application, and (3) you fax or mail that completed application to the Commission. See Rule 520‑1‑.07 (5) .Your license can also be released by your former broker and affiliated with your new broker on the Commission’s website at www.grec.state.ga.us This is done through the “Online Services” section of the website.

Q6:  

May I still collect my earned commissions if I transfer to a new firm?

A6: 

The terms of your written employment or independent contractor agreement with your broker determine your commission rights. See License Law 43‑40‑19 (c) and Rule 520‑1‑.07 (5) (a).

INACTIVE STATUS

Q1:    

If I place my license on inactive status, may I work in sales or leasing for a builder or developer?

A1:

No. See License Law 43‑40‑12 (g), 43-40-29 and Rule 520-1-.05 (2) (g) and (h). The exceptions to licensure listed in License Law 43-40-29 apply only to unlicensed individuals and not to individuals holding an inactive license. To qualify for one of the exceptions listed in License Law 43-40-29, a licensed individual will need to surrender the license. If the individual wishes to become licensed in the future, he or she will need to qualify for the license as an original applicant.


 EDUCATION

Q1:   

Is it possible to have an extension of time to complete the Sales Post license course?

A1:

A six-month extension of time to complete the course is available ONLY IF: (1) you have BOTH enrolled in and paid all fees for an approved course before the date your license is scheduled to lapse and (2) you do NOT conduct any brokerage business after the date your license lapses until you have mailed to the Commission (a) an education certificate for the Sales Post license course and (b) a reinstatement application signed by you and by your broker asking that you be reassigned to the firm. See License Law 43‑40‑8 (d) and Rule 520‑1‑.05 (1).

Q2: 

How many hours and courses of continuing education must I take in order to renew my license?

A2:

Six hours for each year of the renewal period. Thus, if you are renewing a four-year license, you must take 24 hours. You may take all of the hours in one approved course or in several approved courses so long as you complete the course or courses during the renewal period.  See License Law 43‑40‑8 (e) and Rule 520‑2‑.07.

Q3:

What courses has the Commission approved to meet continuing education requirements?

A3: 

Use the “Real Estate Schools” list on the Commission’s website to locate schools authorized by the Commission to offer approved education courses. The “Real Estate Schools” list is located in the gray “Quick Links” menu on the Commission’s website’s home page at www.grec.state.ga.us.


COMMISSION PAYMENTS

Q1:    

May I pay a referral fee to an unlicensed person?

A1:

No. See License Law 43‑40‑25 (b) (17).

Q2:

Can the Commission call my broker and get my commission check corrected (or paid)?

A2: 

No. Payment of commissions between licensees is a matter of contract law, not license law. Company policies and employment or independent contractor agreements between the licensees generally control such issues. If disputes arise and direct negotiations cannot resolve them, licensees must resort to arbitration or the courts for settlement. See Rule 520‑1‑.07 (5) (a).
 

Q3: 

Can I file a complaint with the Commission against another company in order to collect my share of a commission?

A3:

No. The license law does not permit the Commission to intervene in disputes between licensees about fees.

   
AGREEMENTS BETWEEN LICENSEES

Q1: 

What do I do if I don't agree with the employment or independent contractor agreement my broker offers to me?

A1: 

The terms of such written agreements are controlled solely by negotiation between the parties. If you do not understand parts of the proposed agreement or disagree with any of its terms, discuss those with the broker and negotiate a clear agreement before signing. See Rule 520‑1‑.07 (a).


LICENSEES DEALING IN THEIR OWN PROPERTY

Q1:   

May I sell my house without paying my broker a commission? 

A1:  

You must disclose to your broker in writing your intention to sell, buy, lease, or exchange property for your own account. Whether you pay a commission under such circumstances depends on what agreement you reach with your broker. See Rule 520‑1‑.11.

Q2: 

I own rental property that I obtained before I affiliated with my broker. Do I need to tell my broker anything?

A2: 

Yes. Your broker must approve procedures for your holding security deposits and collecting rent. See License Law 43‑40‑20 (h) and Rule 520-1-.08 (9).

Q3:  

Do I have to identify myself as an agent to sell or rent my own property?

A3:  

Yes. In advertisements, if the property is not listed with a real estate firm and in sales contracts or leases, regardless of whether you have listed the property with a real estate firm.  In advertisements, you must use the legend "(seller, buyer, landlord, tenant - select the appropriate name) holds a real estate license." See License Law 43‑40‑25 (b) (9)  and Rule 520‑1‑.09 (8).

           
ADVERTISING  

Q1: 

Since I am an independent contractor, may I do my own advertising?

A1:   

No. All advertising must be in the name of and approved by the broker, although the broker may allow you to pay for certain advertising of your listings. In addition, the broker may authorize you to advertise property you personally own under certain circumstances. However, the broker must expressly approve all advertising. See License Law 43‑40‑25 (b) (2) and Rule 520‑1‑.09. (2.1).

Q2:

Are their additional requirements for advertising on the Internet?

A2:

Yes. Please see Rule 520-1-.05(5).

Q3: 

Are addresses required on "For Sale" signs?

A3:

No. See Rule 520‑1‑.09(7).

Q4:

Do I need a sign outside the location of my business?

A4: 

The license law does not require one. Some local ordinances may require a sign.

       
OPEN HOUSES


Q1:   

I am holding a house open in a new subdivision.  May I give a door prize or gift to all prospective purchasers that attend?

A1:  

Yes, provided there is no lottery and your broker has expressly approved your prizes, procedures, and any advertising. The license law generally does not regulate such promotions but the Fair Business Practices Act does. See License Law 43‑40‑25 (b) (2) and Rule 520-1-.09 (2) and (2.1).

Q2: 

May we hire unlicensed persons to sit in open houses and pass out brochures with information on the houses?

A2:  

No. See Section 3.11 of this Guide.


AGENCY DISCLOSURE

Q1:  

May I tell a purchaser that I will represent him or her instead of the seller?

A1:  

Yes, if specifically authorized to do so by your broker. See Rule 520‑1‑.06(4). Also, see BRRETA § 10-6A-7(b).

Q2:   

May I work for the purchaser and be paid a fee by the seller and listing broker?

A2:   

Yes, provided you make proper disclosure. See Rule 520‑1‑.06. Also, see BRRETA § 10-6A-10(4).

Q3:    

Which agent is supposed to make the proper agency disclosure statement in a cooperating transaction?

A3: 

The selling agent has a responsibility to make the disclosure to the prospective purchaser, and the listing agent has a similar duty to make the disclosure to the prospective seller. If the listing agent discovers that the selling agent has not made the disclosure to the prospective purchaser, then in order to protect the interests of the seller, the listing agent makes the proper disclosure to the purchaser. See Rule 520‑1‑.06(4).

CONTRACTS AND OFFERS

Q1:

If an offer is accepted on the phone, is it a contract?

A1:   

No.

Q2:  

May offers be changed by the listing agent when essentials are left out of the offer by a selling agent?

A2:  

The listing agent's duty is to explain to the seller what essential items appear to be left out of the offer and to advise the seller to make a counter offer with those items included. See License Law 43‑40‑25.1.

Q3:  

Do I always have to obtain earnest money?

A3:   

While earnest money is not essential to create a binding contract, it is generally desirable to show the purchaser's good faith. Whether to obtain earnest money and in what amount is a policy decision that your broker will make as influenced by the parties' desires.


EARNEST MONEY

Q1:

How long can I keep earnest money before I take it to the office? 

A1:   

You must turn over earnest money to your broker as soon after receipt as is practicably possible. Your broker's responsibility is to provide you with written guidelines indicating how and when you must turn in earnest money and establishing guidelines for handling cash. See License Law 43‑40‑25 (b) (23) and Rule 520‑1‑.08 (1) (b) and (c).

Q2:   

May a salesperson give earnest money back to the purchaser if he or she is still holding it and has not turned it in?

A2:  

No, unless specifically directed to do so by your broker.  Once you receive earnest money on behalf of your broker, the decision as to whom and when to remit the money rests solely with the broker. See License Law 43‑40‑25 (b) (3) & (23) and Rules 520‑1‑.08 (3).

Q3:  

How must a broker disburse earnest money that the buyer (or seller) is demanding?

A3:    

According to the terms of the sales contract and the procedures outlined in Rule 520‑1‑.08 (3).

Q4:

Should a broker hold the earnest money or let the seller hold it when the seller is a builder?

A4: 

The party who holds the earnest money is controlled by the negotiation of the parties as expressed in the provisions of the sales contract.


TRUST ACCOUNTS

Q1:

May I have an interest‑bearing account for earnest money and security deposits?

A1:    

Yes, provided: (1) all parties to each transaction specifically agree in writing who is to receive any interest earned, (2) the bank designates the account as a trust account, and (3) you register it with the Commission on a Commission approved application. See License Law 43‑40‑20 and Rule 520‑1‑.08 (1) (d)

Q2: 

Can the Commission recommend a bank that does not charge too much to keep a trust account open?

A2:  

No. Contact several banks about their charges for such accounts.

Q3:   

What kind of record keeping do I need?

A3: 

See License Law 43‑40‑25 (b) (27) and Rule 520‑1‑.08 (2).

Q4:

How much of my own money can I keep in a trust account?

A4:   

Enough to cover service charges the bank may charge and to meet minimum balance requirements, if any.  See Rule 520‑1‑.08 (1) (e).

Q5:

Do I need separate trust accounts for rental property?

A5:   

Not necessarily. The volume of your business and your accountant will help decide this issue for you. If you do have a separate trust account for rentals, you must have the bank designate it as a trust or escrow account and properly register it with the Commission. See License Law 43‑40‑20 and Rule 520‑1‑.08.

  
DOING BUSINESS IN ANOTHER STATE

Q1: 

How can I do business in another state or let a broker from another state do business here?

A1:   

See License Law 43‑40‑9 and 43‑40‑25 (b) (16); Rules 520‑1‑.04 (3) (g), 520‑1‑.05 (6), and 520‑1‑.07 (7).

Q2:

May I obtain a license in another state by reciprocity?

A2:   

Yes, in some states.  If you want to obtain license in another state, you must contact that state directly for information on its licensing requirements for nonresidents.

Q3:

I would like to "co‑op" a deal with another broker in another state for some Georgia property. What must I do?

A3:

See License Law 43‑40‑9 and Rule 520-1-.07 (7).

GIFTS  

Q1: 

May I give gifts to clients and customers who do business with me? 

A1:  

Licensees may give gifts to clients and customers provided (1) they do not give such gifts to persons for performing the services of a real estate licensee; (2) a licensee's broker expressly approves giving the gift; (3) if the licensee gives the gift to a customer, the licensee's client knows of and approves of the giving of the gift; and (4) the gifts are consistent with the advertising provisions of the license law.  [See License Law 43‑40‑25 (b) (2) & (17) and Rules 520‑1‑.09]. However, there are other federal and state laws that regulate advertising and/or promotions (for example, the State’s Fair Business Practices Act). Therefore, if your broker is not certain whether a particular gift promotion meets the requirements of the law, your broker may need to seek legal advice.

Q2: 

May I pay a fee or give a gift to a person who refers a prospect to me?

A2:   

No, unless that person is a real estate licensee. Referral of prospects is the act of a real estate licensee, and a licensee may pay compensation to a person who performs the acts of a licensee only if such person is licensed. See License Law 43‑40‑25 (b) (17).


RENEWALS

Q1: 

When are the renewal fees due on my license? 

A1:  

Your renewal is due during the month of your birthday in the designated year as shown on your pocket card. The Commission will mail a renewal reminder notice to your broker within a month or two of the date that your renewal is due. However, it is your responsibility to keep your license current by paying renewal fees on time even if you do not receive the reminder from your broker. See Rules 520‑1‑.04 (1) (a) (2) & 520-1-.05 (3).

Q2:   

Is my firm’s (company’s) renewal fee a part of my individual broker renewal fee?

A2: 

No, a firm’s renewal is a separate fee and is due every 4 years. The time to pay the renewal for your firm appears on your firm's status report mailed from the Commission periodically.  See Rule 520‑1‑.04 & 520-1-.05 (3).

Q3:    

How much continuing education do I have to take and when is it due?

A3:  

Six hours for each year of your renewal period. Thus, in a four year renewal period, you must take a total of 24 hours. You may take all of the hours in one approved course or in several approved courses.  See License Law 43‑40‑8 (e) and Rule 520-2-.04 (14).

Q4:    

My continuing education course will not be completed in time for renewal. May I have an extension on the renewal due date?

A4:

While the due date cannot be extended, you can place the license on inactive status and then pay the renewal fee so that you avoid a late fee. If you renew online and all of the education courses are not completed and posted to your license record, the system will renew your license to an inactive status. Once you have completed the education you can return the license to active status by submitting a Change Application.  See License Law 43‑40‑12 (d) and Rule520-1-.05 (3).

Q5:

Do I have to pay renewal fees and take continuing education courses if my license is on inactive status?

A5: 

You must pay renewal fees to maintain an inactive license. While you are not required to complete continuing education courses until you apply to reactivate your license, you can take education courses while your license is inactive. See License Law 43‑40‑8 (e) and Rule 520‑1‑.05 (3).

INVESTIGATIONS

Q1: 

If someone accuses me of a violation of the license law, who can initiate an investigation? 

A1: 

Anyone may initiate an investigation by filing a sworn, written request for investigation with the Commission.  In addition, the Commission may, on its own motion, initiate an investigation.

Q2:   

If the Commission investigates me, will it notify me that I am the subject of an investigation?

A2:    

Yes.

Q3:  

Will an investigator notify me that my words may be held against me?

A3:  

Since the Commission does not have the power to arrest persons, the "Miranda warnings" required for criminal investigations do not apply.

Q4: 

Is there a statute of limitations on actions that can be brought against me?

A4:

Yes.  Three years, except for investigations of applicants for licensure, investigations of allegations of fraudulent conduct or of mishandling of funds held in a fiduciary capacity or investigations of possible license law violations that have been litigated in the courts or arise from litigation in the courts. See License Law 43-43-27(a).

Q5:  

Should I have an attorney represent me during an investigation?

A5:    

That is a judgment question the individual licensee must answer.  If a licensee feels more comfortable having an attorney present during an interview that is certainly permissible.  If the investigation reveals evidence of a possible violation of the license law and if the Commission has to hold a formal hearing as a result, then the Commission recommends that the licensee be represented by an attorney in that hearing.

Q6:

What rights do I have to subpoena witnesses and documents, especially from those whose interests are hostile to mine?

A6: 

The licensee has a right to subpoena witnesses and documents only if the Commission holds a formal hearing.

Q7:  

Do I have the right to confront and cross-examine witnesses against me?

A7:   

Yes, but only if the Commission holds a formal hearing.

Q8:

If I prefer, can I ask for a hearing by the full Commission rather than an Administrative Law Judge?

A8:

No, but decisions by Administrative Law Judges may be appealed to the full Commission.

Q9:

If the Commission files charges against me and offers a consent settlement that I refuse, can the Commission then impose a greater penalty than that offered in the consent settlement?

A9:

Yes.

Q10:

What documents can the Commission obtain from me without a warrant?

A10:

Since the Commission does not conduct criminal investigations, it does not issue warrants.  Licensees must supply to the Commission's investigator upon reasonable request the documents recited in O.C.G.A. §43-40-25 (b) (27) and Rule 520-1-.10 (4).

Q11:

If I do not agree with the findings of the Commission, to what court can I appeal?

A11:

The Superior Court.