What do Georgia license law and the commissions regulations say about trust funds?

Current through Rules and Regulations filed through June 22, 2022

(1) Presenting Offers. A licensee shall promptly tender to any customer or client any signed offer to purchase, sell, lease, or exchange property made to such client or customer. In a transaction in which the offeror is not a client or customer of the licensee, the licensee receiving an offer must provide a copy of the offer to the licensee working with or representing the offeree. However, a licensee who obtains an offer may negotiate a sale, exchange, or lease directly with an owner, a lessor, a purchaser, or a tenant if the licensee who obtains the offer knows that such offeree has a written outstanding agreement in connection with such property that expressly provides the other licensee will not provide negotiation services to the offeree.

(2) License Numbers in Offers. A licensee preparing or signing a brokerage engagement or an offer to purchase, sell, lease, or exchange real property shall include the license number issued by the Commission of each firm and of each licensee participating in the transaction. The licensee shall include the six digit license number issued by the Commission.

(3) Responsibility to Distribute Copies. A licensee shall provide a copy of any document utilized in a real estate transaction to any individual signing such document. If any offer to purchase, sell, lease, or exchange is accepted and signed by all parties, copies of that document shall be properly distributed, one to each person signing the document and one to each brokerage firm involved in the transaction.

(4) Retention of Copies of Records and Documents. Copies of sales contracts, brokerage engagements, closing statements, leases, and other documents related to a real estate transaction required by law to be maintained in a broker's file for three years shall be made available to authorized agents of the Commission upon reasonable request and at a reasonable cost to the Commission. Brokers that must keep copies of the documents cited in this paragraph include:

(a) any broker identified in a sales contract, brokerage engagement, closing statement, lease, or other document related to a real estate transaction;

(b) any broker firm that participates in the negotiations involving a sales contract, brokerage engagement, lease, or other contractual document related to a real estate transaction; and

(c) any broker required by O.C.G.A. Section 43-40-20 to maintain a trust account.

Copies of documents and other records which licensees are required by law and the Commission's rules to maintain may be maintained in any records storage system that utilizes paper, film, electronic, or other media provided that:

(a) the licensee can produce true and correct copies of such documents and recordsand

(b) copies of such documents and records can be made available to an authorized representative of the Commission upon reasonable request and at reasonable cost to the Commission.

(5) Falsification of Transaction Documents and Misleading Representations Prohibited. No licensee shall falsify or be a party to the falsification of a document involved in a real estate transaction or knowingly represent, either verbally or in writing, to a principal or any interested third party:

(a) an amount other than the true and actual sales, lease, or exchange price;

(b) an amount other than the true and actual downpayment;

(c) an amount other than the true and actual earnest money, security deposit, or other trust funds or that such trust funds have been tendered in any form other than its true and actual form;

(d) a payment of trust funds in cash when in fact some other method of such is made; or

(e) an artifice, contrivance, or machination with the intent to deceive.

Any or all such practices shall constitute a misrepresentation.

(6) Disclosure of Commissions, Fees, Rebates, or Other Valuable Consideration.

(a) The disclosures required by O.C.G.A. § 43-40-25(b)(6) from a licensee to a principal may be made in advance of the payment or receipt of a commission, fee, rebate or thing of value to a licensee based upon pre-established terms set forth in a brokerage agreement, a brokerage engagement agreement, management agreement or other written agreement.

(b) In a transaction where a licensee refers a principal to another broker for brokerage or relocation services (and the broker to whom the principal is referred knows of the referral and the referring licensee's expectation of receiving a commission, fee or other thing of value for the referral), the payment of a commission, fee or other thing of value to the referring licensee by the broker working with the principal shall be disclosed in writing to the principal by the broker to whom the referral was made no later than at the closing of the purchase, sale, exchange, or lease, of any property in a transaction where a commission, fee or other thing of value will be paid by the broker to the referring licensee.

(c) The disclosures required in O.C.G.A. § 43-40-25(b)(6)(c) shall be in addition to any requirements of federal law pertaining to the payment or receipt of anything of value for the referral of any service or product in a real estate transaction.

(d) For the purposes of O.C.G.A. § 43-40-25(b)(6), the term "licensee's principal" shall, in the specific real estate transaction for which disclosure is required, mean both the client of the broker and a customer of the broker if the customer is working primarily with the broker and is not being represented by another broker in the transaction.

(e) A licensee may rebate to a principal any part of a commission, fee, or other compensation received by the licensee related to the purchase, sale, lease or exchange of real estate as long as said rebate is disclosed on the closing statement for that transaction and as long as the rebate does not mislead any other licensee, other principal, lender, title company or government agency involved in the transaction regarding the source of funds to complete the transaction or regarding the financial resources or obligations of a buyer principal.

Notwithstanding anything to the contrary above, no disclosure is required for gifts, products, services, or other things of value given to a principal by a licensee provided that they are not contingent upon the purchase, sale, lease or exchange of real estate for that transaction.

O.C.G.A. Secs. 43-40-2, 43-40-7, 43-40-8, 43-40-11, 43-40-14, 43-40-25.

Original Rule entitled "Salesman" adopted as ER. 520-1-0.1-.10. F. and eff. July 12, 1973, the date of adoption.

Amended: Permanent Rule entitled "Business Name" adopted. F. Dec. 7, 1973; eff. Dec. 27, 1973.

Amended: F. Feb. 14, 1977; eff. Mar. 6, 1977.

Repealed: New Rule of same title adopted. F. Apr. 16, 1979; eff. May 6, 1979.

Amended: F. Nov. 16, 1979; eff. Dec. 6, 1979.

Amended: Authority changed. F. Aug. 5, 1982; eff. Nov. 1, 1982, as specified by the Agency.

Amended: F. May 9, 1985; eff. July 1, 1985, as specified by the Agency.

Amended: F. July 19, 1994; eff. August 8, 1994.

Repealed: New Rule entitled "Handling Real Estate Transactions" adopted. F. Nov. 12, 2003; eff. Dec. 2, 2003.

Amended: F. Sept. 21, 2004; eff. Oct. 11, 2004.

Amended: F. Jan. 14, 2005; eff. Feb. 3, 2005.

Amended: F. Aug. 15, 2007; eff. Sept. 4, 2007.

Amended: F. Oct. 16, 2009; eff. Nov. 5, 2009.

Amended: F. May 10, 2012; eff. May 30, 2012.

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