Georgia Law Flashcards

Question

Nonresident Licensees:

Answer 1

Remember that residents of other states may hold Georgia licenses, and Georgia License Law sets the conditions for this. It is important to note that any nonresident holding a license on July 1, 1991, is not required to meet the current nonresident requirements in order to continue to hold a license unless that nonresident allows that license to lapse or applies for a different type of license. In order for a nonresident of Georgia to be granted a license in Georgia, the applicant must meet the age, education and examination requirements already noted in earlier screens of this course for original license applicants.

Answer 2

Submission of satisfactory proof of current licensure in the applicant's state of residence Payment of any required fees A signed statement stating that the applicant has read the Georgia real estate license laws, and its rules and regulations, and has agreed to abide by the rules in all brokerage activity in Georgia Affiliation with a resident or nonresident broker if the applicant is an individual community association manager, salesperson, or associate broker Remember, if a nonresident licensee terminates the affiliation with a broker licensed by the Commission, the license of such nonresident will AUTOMATICALLY be terminated unless the nonresident places the license on inactive status OR affiliates with another broker licensed by the commission within 30 DAYS. No license will be issued to any member, officer, independent contractor, employee, or partner of a nonresident firm until that firm qualifies for a broker's license. A nonresident corporation or limited liability company must obtain from the proper agency and maintain a certificate of authority to do business in Georgia. In addition to the aforementioned requirements, the nonresident applicant must designate the Commissioner as his agent to receive any legal or judicial notices that are filed. The applicant must also agree that in the event of any investigations brought by the Commission, the applicant will fully cooperate with the Commission.

Answer 3

The rules regarding nonresident brokers state that, in order to work in real estate transactions and earn a fee for such activities in Georgia, the nonresident broker may only do so under one of these THREE conditions: The nonresident must have a written agreement with a Georgia broker to conduct the real estate brokerage business in Georgia. If a nonresident licensee wants to do business without first obtaining a Georgia license, this IS permissible if the nonresident broker enters into a written agreement with a Georgia broker. Please note that, under these circumstances, there must be a separate agreement for each transaction, clearly stating the procedures to be followed. Georgia must have a written reciprocity agreement with the state in which the broker has his or her license. If the licensed broker of another state is acting as a referral agent, involving only the mere referral of one person to another, the licensed broker in Georgia is permitted to divide a real estate commission with, or pay a referral fee to, the out-of-state broker. (In this case, the referring broker is NOT involved in the actual negotiations, execution of documents, collections of rent, management of property, or any other real estate brokerage activity.)

Answer 4

the Georgia broker is considered responsible. Remember, though, that there is a chance the broker's liability might be diminished or even eliminated, provided that the broker can prove that: The brokerage firm had a training program. That brokerage firm followed proper procedures in its supervision of nonresident licensees and other affiliates; AND The Georgia broker himself did not participate in any way in the violation.

Answer 5

Review all advertisements. Review all offers within 30 days of their being written. Ensure that all affiliates' licenses remain active. Ensure that a person with management authority is always available to help affiliates and the public, should the need arise. Ensure that all trust fund payments are made according to the regulations. Keep affiliates updated to law changes on a regular basis. Review all trust account records and journals. Provide safekeeping for all necessary records. Ensure that each affiliate has a written and signed employment agreement. Ensure that there is a written policies and procedures manual for all affiliates.

Answer 6

All license applicants must apply to take the exam, and pay a nonrefundable fee. A score of 75% or higher is considered to be a passing grade and is required for licensure. Honorably discharged veterans who have one or more years of service (of which at least 90 days was served during wartime) automatically receive a 5-point credit. Veterans discharged from the military due to injury or illness with at least a 10% disability, will receive a 10-point credit. A nonresident licensee might be exempt from the education and exam requirements of Georgia, IF the real estate commission in the state in which he was licensed verifies that the applicant has met all of the following criteria. He has fulfilled both prelicense and continuing education requirements of that state; He has passed a licensing exam similar in scope to the one required by Georgia; He has not had any disciplinary actions imposed on him; AND He has retained an active license with a maximum of 90 days of inactive or lapsed time.

Answer 7

The applicant must apply for the license within 3 months of the date of the exam and pay a fee; OR after 3 months of the exam date but before 12 months, with a double fee. An application must include the signature of the applicant's employing broker; OR, if there isn't an employing broker, the applicant may apply for an inactive license. (Remember, a licensee MUST have an employing broker to have an ACTIVE license!)

Answer 8

The applicant must apply for the broker license within ONE YEAR of the exam date. If the broker applicant does not apply for the license within that time frame, the exam is considered null and the applicant must retake the exam if he wishes to be licensed in the future.

Answer 9

It has been a minimum of 10 years since the conviction, sentence, or release from any incarceration, whichever is latest. There are no criminal charges pending against the applicant. The applicant presents the Commission with satisfactory proof that the applicant now bears a good reputation for honesty, trustworthiness, integrity and competence to transact the business of a licensee in such a manner as to safeguard the public interest. Remember, if an applicant or licensee has been found guilty of a violation of either the Federal or Georgia State Fair Housing law AND any appeal of the conviction has been concluded, the conviction itself may be sufficient grounds for refusing the license or imposing any sanction permitted by this chapter. If an applicant or licensee has made a false statement of material fact on his or her application, OR if he or she has submitted (or been a party to submitting or preparing for submission) any falsified application to the Commission, such action may be sufficient grounds for refusing, suspending, or revoking the license.

Answer 10

ten days after it is issued unless the licensee named in the order requests a hearing before the Commission. If he requests a hearing, the Commission must then file a notice of hearing and provide a hearing for such licensee.

Answer 11

he licensee must immediately notify the Commission of that conviction. The licensee's license will automatically be revoked 60 days after the licensee's conviction unless the licensee makes a written request to the Commission for a hearing during that 60-day period. Once the hearing is over, it is up to the Commission's discretion whether or not to impose upon that licensee any sanction permitted by the law. Under the circumstance that the Commission revokes or suspends the license of a community association manager, a salesperson, an associate broker, or a broker, then any school or instructor approval that the licensee holds will ALSO be revoked or suspended. If a licensee surrenders a real estate license as noted above, then any school or instructor approval, which such licensee holds will also be subject to revocation or suspension.

Answer 12

The license is surrendered to the Commission. The employing broker needs to send the release (also known as "change") form and the wall license to the Commission.

Answer 13

that licensee is permitted to make the delivery of the wall license herself to the new broker. At this time, the new broker will sign the transfer application and send it to the Commission. The Commission must also be notified in writing by the former broker that the wall license has been moved. All of these notifications must, under Georgia law, be made within 30 days of the move.

Answer 14

A license can be surrendered to the Georgia Real Estate Commission either voluntarily OR involuntarily (at the Commission’s request because of a revocation or suspension of the license). When surrendering a license, the licensee must forward his or her wall license and pocket card to the Commission immediately. A surrendered license is not the same as having a license on inactive status, since the right to reactivate the license is different from a license on inactive status. Any licensee who wants to reinstate a surrendered license must apply for licensure as an original applicant. If a qualifying broker surrenders HIS or HER license, he or she must also surrender the wall licenses and pocket cards of the affiliated agents. Note: This may not be required, IF a new qualifying broker is named.

Answer 15

Current Fees for Original Licenses and Renewals The current fees for original licensing are as follows. The fee for original licensure as an individual broker, associate broker, salesperson or community association manager is $170.00. This includes $20.00 for the Real Estate Education, Research, and Recovery Fund. (We will discuss the Real Estate Education, Research and Recovery Fund in detail in a later unit.) Note: Any person who applies for a salesperson or community association manager license more than three months but less than one year from the date of taking the exam must pay an original license fee of $340. The fee for original licensure as a firm or an approved school or instructor is $225.00. This includes $20.00 for the Real Estate Education, Research, and Recovery Fund. The current fees for license renewals are as follows. $125.00 for each individual licensee and each approved instructor OR $100.00 if submitted and paid through the Commission’s Internet on-line system. $125.00 for each firm licensed as a broker and each approved school OR $100.00 if submitted and paid through the Commission’s Internet on-line system.

Answer 16

may be reinstated IF it is within two years of the date of the lapsing, provided the licensee has completed any required continuing education courses. In order to do this, the licensee must pay the total amount of all renewal fees and late charges which would have been due during the period that the license was lapsed, plus a reinstatement fee. If the license or approval is reinstated within 4 months of the date of lapsing, the reinstatement fee is $100.00. If the license or approval is reinstated more than 4 months after the date of lapsing the reinstatement fee is $100.00, plus an additional fee of $25.00 for an individual or instructor OR $50.00 for a firm or school for each month or portion of a month beyond the 4 months from the date of lapsing.

Answer 17

he licensee may reinstate that license by doing all of the following: Paying the total amount of all renewal fees and late charges that would have been due during the period when the license was lapsed Paying a reinstatement fee Completing successfully any educational course or courses that the Commission requires

Answer 18

the licensee must meet the education and examination requirements of a new licensee.

Answer 19

An applicant submits an incomplete application. A licensee or applicant fails to notify the Commission in writing within 30 days of a change of address, the opening or closing of a designated trust account, a transfer to a new company or leaving a firm to go on inactive status. A licensee fails to affiliate with a new company or to apply to go on inactive status within 30 days of the Commission's receipt of notice that the broker holding the license no longer wishes to do so and has mailed a letter to the licensee's last known address indicating that the broker is returning the license to the Commission.

Answer 20

to any applicant or licensee who submits a check that is returned unpaid or disputes a charge to a credit card for a fee owed to the Commission, when the dispute results in a chargeback to the Commission’s account. The Commission also has the authority to impose “reasonable fees, not to exceed the renewal fee charged broker licensees” on a licensee or applicant who fails to respond within 30 days to a written inquiry from the Commission requesting further information on any application filed with the Commission.

Answer 21

complete a form prescribed by the Commission regarding the status of the broker's trust account(s) and any trust account(s) that the broker allows affiliated licensees to maintain.

Answer 22

may reactivate that license by paying the fee required of an original applicant if: That nonresident licensee has maintained an active license in his or her state of residence during the period that his or her license lapsed; AND Has met the continuing education requirements of his or her state of residence.

Answer 23

30 days of ceasing work that the license be placed on inactive status. If a license is on inactive status, that individual may not continue any brokerage duties except for his own personal transactions. Any individual licensee who wants to activate a license which has been on inactive status for a period of two years or longer must attend a Commission-approved course of study prior to activating an inactive license. An inactive licensee IS required to take the 25-hour post-license course for new licensees, AND to pay the same renewal fees as an active licensee. Inactive status is valid for an indefinite amount of time. Once the licensee applies to the Commission, the license is then reactivated. However, the licensee must be up-to-date on his continuing education requirements of six hours per year, if his license has been on inactive status for two years or more.

Answer 24

he is permitted to do so if he surrenders his broker's license and applies for a salesperson's license. He doesn't have to take an exam. If this same person wishes to be relicensed as a broker, he doesn't have to take an additional broker's examination. If the licensee changes status as we've just read, the licensee WILL be required to pay the same fee as an original applicant. On the chance that a license is suspended or revoked, then this will prevent the licensee from changing status in this way.

Answer 25

The expenses for the administration and enforcement of this chapter of the law must be paid from these funds. All expenditures authorized by the Commission must be paid from these funds. The expenses of the Commission and the Commissioner must always be kept within the income collected and deposited in accordance with this chapter AND must not be supported or paid from any other state fund.

Answer 26

the Georgia Real Estate Commission may extend that licensee's renewal period for up to two years without further payment of any fee by the licensee upon satisfactory proof of the licensee's uninsured major damage or loss. The Commission is also permitted to make appropriate adjustments in deadline dates for applications filed by applicants and licensees located in counties designated as disaster areas by state or federal authorities.

Answer 27

his partnership, limited liability company or corporation must secure a new qualifying broker within 60 days. If it does not do so, then it must cease all real estate brokerage activity until a new qualifying broker is secured. In the interim, while the firm is seeking a new qualifying broker, the firm must take the following action, depending on the type of firm. If the firm is a partnership, designate a partner. If the firm is a limited liability company, designate a member. If the firm is a corporation, designate an officer. This designated person then has the authority to sign any documents and applications that must be filed with the Commission AND to disburse trust funds from the firm's designated trust account(s), if such disbursements are required by any contracts or agreements.

Answer 28

a period of one year and then may destroy the application. The Commission must maintain all electronic licensing records for a period of at least 15 years.

Answer 29

40 years for all investigative files in which the Commission imposes a formal disciplinary action OR makes a payment from the Recovery Fund; and 15 years for all other investigative files.

Answer 30

A broker is not considered to have a fiduciary relationship with any party, OR fiduciary obligations to any party but is only be responsible for exercising reasonable care in the broker's specified duties as provided in this chapter of the law, and, in the case of a client, as specified in the brokerage engagement.

Answer 31

Perform the terms of the brokerage engagement made with the seller. Promote the interests of the seller by: Seeking a sale at the price and terms stated in the brokerage engagement or at a price and terms acceptable to the seller Presenting all offers to and from the seller, even when the property is subject to a contract of sale, in a timely manner Disclosing all materials facts of which the broker has actual knowledge regarding the transaction to the seller Advising the seller to obtain expert advice as to material matters that are beyond the expertise of the broker Accounting for all money and property received, and doing so in a timely manner, regarding the monies/properties in which the seller has or may have an interest Exercise reasonable skill and care in performing the duties under the law in Georgia. Comply with all requirements of BRRETA, as well as all applicable statutes and regulations, including but not limited to fair housing and civil rights statutes. Keep confidential all information received by the broker during the course of the engagement, if that information is identified as confidential by an express request or instruction from the seller, and unless the seller permits such disclosure by subsequent word or conduct, or such disclosure is required by law. Please note, however, that this is provided that disclosures between a broker and any of the broker's affiliated licensees assisting the broker in representing the seller are not deemed to breach the duty of confidentiality.

Answer 32

Brokerage Relationships in Real Estate Transactions Act

Answer 33

All adverse material facts regarding the physical condition of the property and improvements located on the property. This includes (but is not limited to) the following: Material defects in the property Environmental contamination Those facts required by statute or regulation to be disclosed. These are those facts that are actually known by the broker, but which could not be discovered by a reasonably diligent inspection of the property by the buyer. ``` All material facts pertaining to existing adverse physical conditions in the immediate neighborhood within one mile of the property which are actually known to the broker and which could not be discovered by the buyer upon a diligent inspection of the neighborhood or through the review of reasonably available governmental regulations, documents, records, maps, and statistics. The examples of reasonably available governmental regulations, documents, records, maps, and statistics include without limitation: Land use maps and plans Zoning ordinances Recorded plats and surveys Transportation maps and plans Maps of flood plains Tax maps School district boundary maps Maps showing the boundary lines of governmental jurisdictions ```

Answer 34

The broker cannot always be held responsible if misinformation is given. Rather, the broker's liability depends on the circumstances. Brokers must knowingly give prospective buyers false information to be breaking the law - this is obvious, right? However, the law says that a broker is not liable to a buyer for providing false information to the buyer if the broker did not have actual knowledge that the information was false and if he discloses to the buyer the source of the information. The responsibility in divulging or discovering adverse material facts does not rest solely in the broker's hands. Both the seller and the buyer have responsibilities under the law in Georgia regarding material facts: The seller has an obligation under the law to make all adverse material facts known regarding the physical condition of the property. Also, it is up to the buyer or tenant to make a reasonable but diligent inspection. This might include familiarizing themselves with potentially adverse conditions related to the physical condition of the property, any improvements located on the property, and the neighborhood in which the property is located.

Answer 35

To perform the terms of the brokerage engagement made with the landlord To promote the interests of the landlord by: Seeking a tenant at the price and terms stated in the brokerage engagement or at a price and terms acceptable to the landlord; provided, however, the broker is not obligated to seek additional offers to lease the property while the property is subject to a lease, or letter of intent to lease, unless the brokerage engagement so provides Presenting all offers to and from the landlord in a timely manner, even when the property is subject to a lease or a letter of intent to lease Disclosing to the landlord adverse material facts of which the broker has actual knowledge concerning the transaction Advising the landlord to obtain expert advice as to material matters that are beyond the expertise of the broker Timely accounting for all money and property received in which the landlord has or may have an interest.Keeping the following information confidential: all information received by the broker during the course of the engagement, which is made confidential by an express request OR instruction from the landlord unless the landlord permits a disclosure by subsequent word or conduct, or unless the disclosure is required by law Please note, however, that this is provided that disclosures between a broker and any of the broker's affiliated licensees assisting the broker in representing the seller are not deemed to breach the duty of confidentiality.

Answer 36

BRRETA does NOT create any duty on the part of a broker to discover or seek to discover either adverse material facts pertaining to the physical condition of the property or existing adverse conditions in the immediate neighborhood. BRRETA states that the broker cannot always be held responsible if misinformation is given. Rather, the broker's liability depends on the circumstances. Brokers must not knowingly provide prospective tenants with false information. A broker is not liable to a prospective tenant for providing false information to the tenant if the broker did not have actual knowledge that the information was false and discloses to the tenant the source of the incorrect information.

Answer 37

does not rest solely in the broker's hands. Both the landlord and the tenant have responsibilities under the law in Georgia regarding material facts: The landlord has an obligation under the law to make all adverse material facts known regarding the physical condition of the property. Also, it is up to the tenant to make a reasonable but diligent inspection. This might include familiarizing themselves with such aspects as potentially adverse conditions related to the physical condition of the property, any improvements located on the property, and the neighborhood in which the property is located. The broker cannot be held liable (by any parties to the transaction) for revealing information in compliance with the law. A broker may not be considered liable for failure to disclose any matter other than those mentioned in this section of the law. If there is a failure to reveal information not listed in these laws, the broker cannot be held liable unless it is proven that the broker's intention was to commit fraud.

Answer 38

To perform the terms of the brokerage engagement made with the buyer. To promote the interests of the buyer by: Seeking a property at a price and terms acceptable to the buyer (However, the broker is not obligated to seek other properties for the buyer while the buyer is a party to a contract to purchase property, unless the brokerage engagement so provides.) Presenting all offers to and from the buyer in a timely manner, even when the buyer is a party to a contract to purchase property Disclosing to the buyer adverse material facts of which the broker has actual knowledge concerning the transaction Advising the buyer to obtain expert advice regarding those material matters about which the broker does not have expertise Accounting in a timely manner for all money and property received, in which the buyer has or may have an interest To exercise ordinary skill and care in such other duties as may be agreed to by the parties. To comply with all requirements of BRRETA and all applicable statutes and regulations. This includes but is not limited to fair housing and civil rights statutes. To keep confidential all information received by the broker during the course of the engagement that is made confidential by an express request or instruction from the buyer unless the buyer permits such disclosure by subsequent word or conduct, or such disclosure is required by law.

Answer 39

in a timely manner all material facts actually known by the broker regarding the buyer's financial ability to perform the terms of the sale, AND, if the property is residential, the buyer's intent to occupy the property as his principal residence. The law says that this stipulation applies in a situation in which the prospective seller is working with the broker as his customer, and who is selling property that will be financed either by a loan assumption or by the seller's providing a part or all of the financing. As always, the brokers must not knowingly give prospective sellers false information. Also, the broker will not be held liable to a seller for providing false information to the seller if the broker did not have actual knowledge that the information was false and discloses to the seller the source of the information. Also, it is the prospective buyer's obligation to disclose to the prospective seller all adverse material facts actually known by the buyer concerning the buyer's financial ability to perfo

Answer 40

To perform the terms of the brokerage engagement made with the tenant. To promote the interests of the tenant by: Seeking a property at a price and terms acceptable to the tenant Presenting all offers to and from the tenant in a timely manner, even when the tenant is a party to a lease or a letter of intent to lease Disclosing to the tenant adverse material facts of which the broker has actual knowledge concerning the transaction Advising the tenant to obtain expert advice regarding those material matters about which the broker does not have expertise Accounting in a timely manner for all money and property received, in which the tenant has or may have an interest To exercise ordinary skill and care in such other duties as may be agreed to by the parties. To comply with all requirements of BRRETA and all applicable statutes and regulations. This includes but is not limited to fair housing and civil rights statutes. To keep confidential all information received by the broker during the course of the engagement, which is made confidential by an express request or instruction from the tenant unless the tenant permits such disclosure by subsequent word or conduct, or such disclosure is required by law. However, disclosures between a broker and any of the broker's affiliated licensees assisting the broker in representing the tenant are NOT considered to be a breach of the duty of confidentiality.

Answer 41

is the agency relationship between the broker and the client, and can ONLY be created by a written contract. In Georgia, the agent is not a fiduciary, and therefore, only reasonable standards of behavior are required of the broker. Remember, a payment or promise of payment of compensation to a broker by a seller, landlord, buyer, or tenant does not establish or prove that a brokerage engagement relationship has been created between any broker and a seller, landlord, buyer, or tenant.

Answer 42

Advise the prospective client of the types of agency relationships available through the broker Advise the prospective client of any brokerage relationships held by the broker with other parties, which would conflict with any interests of the prospective client actually known to the broker, but excluding the fact that the broker may be representing other sellers and landlords in selling or leasing property or that the broker may be representing other buyers and tenants in buying or leasing other property Advise the prospective client about the broker's compensation, including whether the broker will share such compensation with other brokers who may represent other parties to the transaction in an agency capacity Advise the prospective client of the broker's obligations to keep information confidential

Answer 43

is created when both parties to a single real estate transaction are clients of two agents within the same firm. It happens specifically when each of the agents is assigned by the broker to represent one client, but not the other. While this type of agency does sound similar to dual agency, neither the agent nor the broker in such a situation is actually acting as a dual agent. A broker may assign directly or through the adoption of a company policy different licensees affiliated with the broker as designated agents to exclusively represent different clients in the same transaction.

Answer 44

a broker who has not entered into a client relationship with any of the parties to a particular real estate transaction and who performs only ministerial acts on behalf of one or more of the parties, but who is paid valuable consideration by one or more parties to the transaction pursuant to a verbal or written agreement for performing brokerage services. A transaction broker is permitted to provide assistance to buyers, sellers, tenants, and landlords by performing ministerial acts.

Answer 45

Presenting, in a timely manner, all offers to and from the parties, involving the sale, lease, and exchange of property Accounting for, in a timely manner, all money and property received by the broker on behalf of a party in a real estate transaction Disclosing, in a timely manner, the following: All adverse material facts regarding the physical condition of the property and improvements located on the property. This includes (but is not limited to) the following: Material defects in the property Environmental contamination Those facts required by statute or regulation to be disclosed. These are those facts that are actually known by the broker, but which could not be discovered by a reasonably diligent inspection of the property by the buyer All material facts pertaining to existing adverse physical conditions in the immediate neighborhood WITHIN ONE MILE OF THE PROPERTY, which are actually known to the broker and which could not be discovered by the buyer upon a diligent inspection of the neighborhood or through the review of reasonably available governmental regulations, documents, records, maps, and statistics.

Answer 46

a transaction broker does not have any agency obligation to any party in a transaction, but that he may receive compensation for the performance of ministerial duties.

Answer 47

A common source information company is any person, firm, or corporation that is a source, compiler, or supplier of information regarding real estate for sale or lease and other data and includes but is not limited to multiple listing services. Remember, unless specifically provided in a written agreement between the parties, a broker is not considered to have an agency relationship with a common source information company. A broker is not considered a "subagent" of any client of another broker solely by reason of membership or other affiliation by such brokers in a common source information company, including but not limited to multiple listing services.

Answer 48

Completion of performance of the task for which the broker was originally engaged (for example, when the seller closes on the sale of his home, or a tenant signs a lease) If the aforementioned condition is not applicable, then the earlier of the following: The time limit agreed to in the brokerage agreement or amendments to the agreement has expired. All involved parties have mutually agreed to end the relationship.In the event that there is no expiration date noted in the agreement and the relationship has not been terminated otherwise, then it will be terminated one year after the initial engagement, as provided by BRRETA.

Answer 49

An accounting of all monies and property relating to the engagement Continued confidentiality of all information received during the course of the engagement, which was made confidential by request or instructions from the client This does not apply if The client permits the disclosure either by word or conduct. The disclosure of the information is required by law. The information becomes public from a source other than the broker.

Answer 50

Georgia real estate laws set forth the rules for the trust accounts of real estate businesses. The license law in Georgia requires that all real estate licensees deposit all funds or place any valuables held on the behalf of others in a trust account. These funds are protected in the trust or escrow account and cannot be seized in order to pay the broker's or the firm's debts. It is a violation of the law in Georgia for a broker to use any portion of the funds in a trust or escrow account while those funds are being held. Trust funds must, under the law, be kept separate from the broker's personal funds or the firm's funds. Commingling, which is mixing the client's monies with the broker's or firm's funds, is against the law and can result in disciplinary action.

Answer 51

in a separate, federally insured bank checking account in Georgia. This account must be designated a trust or escrow account into which all down payments, earnest money deposits, or other trust funds received by the broker or the broker's affiliated licensees, on behalf of a principal or any other person, must be deposited.

Answer 52

Brokers are permitted to maintain more than one designated trust or escrow account. The broker must notify the Commission of the name of the bank in which each account is maintained and each account's name or number within one month of opening each account. It is permissible for a broker to maintain the broker's own funds in a designated trust or escrow account only when they are clearly identified as the broker's deposit and only for the following purposes: If the bank in which the account is maintained designates a specific minimum balance that must be maintained in order to keep the account open, the broker may maintain that amount in the account designated as the broker's funds. If the bank in which the account is maintained requires a service charge on the account, the broker may maintain a reasonable amount to cover that service charge. The broker is also allowed to maintain a reasonable amount sufficient to cover other occasional bank charges and costs of maintaining the account. A broker may allow commissions due the broker that are being paid from funds of others held in the broker's designated trust or escrow account to remain in the account provided that both these conditions are true. The broker's accounting system for trust or escrow accounts designates those commissions as the broker's funds and properly accounts for them. The broker removes from the account every month any of the broker's funds that exceed the minimum necessary to comply with bank regulations previously discussed. Only checks made payable to the broker may be used to withdraw those monies designated as the broker's funds from the designated trust or escrow account.

Answer 53

The names of buyer and seller or tenant and landlord or member and community association or broker The amount and date of deposit The identification of property involved The amount, payee and date of each check drawn on the escrow account in connection with that deposit Keep in mind that these rules also apply to trust or escrow accounts maintained by brokers in the state of Georgia : All earnest money refunds must be paid by check or credited at closing. The total of all checks written against each deposit should reflect a zero balance in the designated escrow or trust account relating to the closing of each individual transaction except when a portion of the deposit is transferred to the broker's name for the purpose of satisfying a commission. Upon such a transfer being made, the total of that transfer and all checks written against that deposit should reflect a zero balance. If a licensee who owns a designated trust account files a bankruptcy petition, he or she must immediately notify the Commission in writing of the filing of that petition. If a qualifying broker or the firm that a licensee serves as qualifying broker files a bankruptcy petition, the qualifying broker must immediately notify the Commission in writing of the bankruptcy filing.

Answer 54

Those brokers who manage real property or community associations may maintain designated rental or assessment trust or escrow accounts separate from their other trust or escrow accounts. For this type of broker, part of his duties might consist of paying bills on behalf of an owner or an association from any designated rental or assessment escrow or trust account. In these circumstances, there must be enough money credited and deposited to the owner's or the association's account to cover the bills. Remember that security deposits, if they are kept in a designated rental trust or escrow account, must be clearly identified as such and credited to the tenant. In addition, there must always be a balance in the account equal to the total of those security deposits.

Answer 55

These people are required by law to deposit those funds into a designated trust account maintained by the broker with whom their licenses are affiliated or in a designated trust account approved by that broker. If the broker approves the affiliated licensee's holding such trust funds in a designated trust account owned by the licensee, then the broker must notify the bank in which the account is maintained to designate the account as a trust account. In addition, the broker must notify the Commission of the name of the bank in which the account is maintained, the number of the account and the name of the licensee who owns the account. The licensee who owns such an account must maintain these records on the account and follow the applicable rules and regulations for brokers in maintaining their trust accounts under the law. It is the responsibility of the licensee who owns this type of account to provide his or her own broker with a written reconciliation statement comparing the licensee's total trust liability with the reconciled bank balance of the licensee's trust account. This must be provided to the licensee's broker at least on a quarterly basis.

Answer 56

Notification of the Commission of the name of the bank in which the trust account is maintained and the number of the account. In the event that the bank does not use numbered accounts, the broker must instead provide the name of the account on forms provided. This information must be provided within 30 days. Georgia law also states that each broker who maintains a trust account must authorize the Commission to examine such trust account by a duly authorized representative of the commission. The Commission has the authority to examine such account at any time upon reasonable cause. In addition, the Commission must examine each broker's trust account or accounts during each renewal period.

Answer 57

A broker who is required to maintain a trust or escrow account must also have made, at least once a month, a written reconciliation statement comparing the broker's total trust liability with the reconciled bank balance of the broker's trust account. The broker's trust liability is the sum total of all deposits received, required by contract to deposit, and being held by the broker at any point in time. The minimum information to be included in the monthly reconciliation statement includes: The date the reconciliation was undertaken The date used to reconcile the balances The name of the bank The name of the account The account number The account balance and date Any deposit in transit The amounts of any outstanding check identified by date and check number An itemization of the broker's outstanding trust liability showing the amount and source of funds received and not yet disbursed, and other items necessary to reconcile the bank account balance with the balance in the broker's checkbook and with the amount of the broker's trust liability The broker must review the monthly reconciliation statement and maintain copies in his files for a period of 3 years.

Answer 58

the reconciliation statement must contain a description or explanation for the difference and any corrective action taken with reference to shortages or overages of funds in the account. If a trust bank account record reflects a service charge or fee for a non-sufficient check being returned or whenever an account has a negative balance, the reconciliation statement must state the reason of the returned check or negative balance and the corrective actions that have been taken. There are rare cases in which a real estate licensee believes that a person who placed trust funds in the licensee's care has abandoned those funds. In such a case, the licensee may not disburse those funds from a trust account unless: The licensee's written authorization to hold those funds requires a particular disbursal The licensee has complied with the requirements of the Disposition of Unclaimed Property Act The licensee has complied with all other statutory or court-ordered requirements that are appropriate to the circumstances

Answer 59

They are permitted to utilize either manual or electronic accounting systems to meet the accounting requirements of the Commission's rules. The choice of the type of system can be based on what the efficiency of the firm's business operations dictate. Regardless of whether the option chosen is manual or electronic, the accounting system must: Include all the components required by law and sound business practices Be readily accessible Be in a readily understandable format Be reasonably available to any authorized representative of the Commission Any 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: The licensee can produce true and correct copies of such documents and records; and 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

Answer 60

Copies of the following documents must be kept in the broker's file for a minimum of 3 years (as noted already), and made available to authorized agents of the Commission upon reasonable request and at a reasonable cost to the Commission. Documents falling under this requirement include: Engagements Closing statements Leases Other documents related to a real estate transaction Remember that brokers that must keep copies of the documents noted on this screen include any broker identified in a sales contract, brokerage engagement, closing statement, lease, or other document related to a real estate transaction.

Answer 61

When the licensee must handle funds for a member of the public - this includes earnest money, security deposits, etc. - then it is the broker's responsibility to have written policies regarding such monetary transactions. It is also the broker's duty to train all affiliated licensees in the policies regarding the handling of funds. Earnest money is required by law to be deposited into a trust account immediately, UNLESS the contract provides for a different option. The listing BROKER is responsible for depositing this money, unless, again, the contract names other provisions. Earnest money IS permitted under Georgia law to be deposited in an interest-bearing account IF the contract provides for this AND names the person who is to receive the interest earned on this deposit. It is typical that a buyer request that the earnest money check be held until the offer is accepted. This is permissible under the following circumstances: It must be clearly stated in the contract. The salesperson must still turn the check over to the broker. Only the broker is allowed to hold the check. A broker is not entitled to any part of the earnest money or other money paid to the broker in connection with any real estate transaction as part or all of the broker's commission or fee until the transaction has been consummated or terminated.

Answer 62

If a person becomes a licensed real estate salesperson, associate broker, or broker, he no longer can "act" as an unlicensed person in dealing with any real estate transactions - even the sale, rental, purchase, or lease of his own property! All real estate licensees - whether active or inactive - must disclose on ALL contracts that they are licensed in real estate. This rule also applies to those licensees who advertise regarding their own property - their licensed status must be divulged. If a Georgia licensee wishes to sell or lease his property, he must do one of the following: List the property with the broker. In this case, any trust deposits made will go into the broker's account. List the property with a different broker - after first obtaining his own broker's permission to do so. In this case, any trust deposits would go into that other broker's account. Handle the transaction himself. This will necessitate the licensee opening a personal trust account, which must be registered with the Georgia Real Estate Commission, and set up under the supervision of the licensee's broker. Because an active licensee's broker is considered accountable for all the licensee's transactions - including personal ones - the broker must be informed in writing and must approve the procedure and any advertising the licensee wishes to do. This is true even with option #2 above, in which the licensee can choose to utilize another firm's services.

Answer 63

is to determine market value. Market value is the most probable price the property will bring, not the average price or the highest price. Payment must be made in cash or its equivalent. Buyer and Seller must be unrelated and acting without undue pressure. A reasonable length of time must be allowed for the property to be exposed in the open market. Both the Buyer and Seller must be well informed of the property's use and potential including its assets and defects. Market value is different than market price. Market price is what it actually sold for.

Answer 64

in terms of real estate appraisal, may be described as the present worth of future benefits arising from the ownership of real properties. To have value in the real estate market property must have these economic characteristics: ``` Demand Utility Scarcity Transferability Memory tool: DUST ```

Answer 65

Highest and Best Use is the most profitable single use to which the property may be adapted or the use that is likely to be in demand in the reasonably near future. Substitution states that maximum value of a property tends to be set by the cost of purchasing an equally desirable and valuable replacement property. Principle of supply and demand states that the value of a property will increase if the supply decreases and the demand either increases or remains constant and vice-versa. Balance is achieved when adding improvements to the land and structures will increase its property value. Conformity means that maximum value is realized if the use of the land conforms to existing neighborhood standards. Competition states that excess profits tend to attract competition and change. The principle of change states that no physical or economic condition remains constant.

Answer 66

The Sales Comparison Approach (sometimes called the Market Data Approach), The Cost Approach, The Income Capitalization Approach

Answer 67

(sometimes called the Market Data Approach): The definition of this approach to value is "an estimated value is obtained by comparing the subject property with recently sold comparable properties." A simplified version of this approach is the "CMA" (Competitive Market Analysis) that is usually completed by a real estate licensee to help a seller of property establish a price to market their property. In the Sales Comparison Approach, an appraiser makes adjustments based on four basic categories: Sales of financing concessions, date of sale, location and physical features and amenities. After an appraiser compares the two, if the subject is better the appraiser adds value to the comparable. If the comparable is better the appraiser subtracts value from the comparable. MEMORY TOOL: SBA (SUBJECT BETTER "ADD") and CBS (COMPARABLE BETTER "SUBTRACT"). ALWAYS ADD AND SUBTRACT FROM THE "COMPARABLE" - NEVER THE "SUBJECT".

Answer 68

is based on the principal of substitution and it consists of the following steps: Estimate the value of the land as if it were vacant. Land is never depreciated for appraisal purposes. Estimate the current cost of constructing the building for site improvements. Estimate the amount of accrued depreciation resulting from physical deterioration. Deduct accrued depreciation from the estimated construction costs and add the estimated land value to the depreciated cost of the buildings.

Answer 69

a value based on the present value of the rights to future income. This is for income generating properties. The steps are as follows: Estimate the annual potential gross income. Deduct an allowance for vacancies to arrive at Effective Gross Income. Deduct the annual operating expenses of the real estate from this effective gross to get a net operating income. Estimate the price a typical investor would pay for the income produced by this particular class and type of property. This is accomplished by estimating the rate of return that an investor would demand for this investment. This rate of return is called the Capitalization (Cap) Rate. Finally, the capitalization rate is applied using this formula: Net Operating Income divided by Capitalization Rate = Value Memory tool - IRV (Income divided by Cap Rate = Value. Net Income divided by Value = Cap Rate. Value X Cap Rate = Net Income

Answer 70

Net Operating Income divided by Capitalization Rate = Value Memory tool - IRV (Income divided by Cap Rate = Value. Net Income divided by Value = Cap Rate. Value X Cap Rate = Net Income

Answer 71

In an appraisal, if more than one approach is used to determine the value, then there is a reconciliation step. Reconciliation is the art of analyzing and effectively weighing the findings to determine which is the most appropriate. IF YOU DIVIDE THE NET INCOME RATE BY THE CAPITALIZATION RATE, YOU GET VALUE. IF YOU DIVIDE THE NET INCOME BY THE VALUE YOU GET RATE. IF YOU MULTIPLY THE VALUE BY THE CAPITALIZATION RATE, YOU GET NET INCOME.

Answer 72

A multiplier used to establish value without concern for expenses. This is not a recommended way to purchase property in today's market. If you are given the monthly rent and the GRM, multiply the monthly rent by the GRM to establish value.

Answer 73

is similar to GRM except that it is used for income producing properties such as office buildings, warehouses, etc., not rental houses. As you can see a gross income multiplier is used with annual income rather than monthly income.

Answer 74

Begins at a POINT OF BEGINNING and proceeds around tract of land by reference to linear measurements and directions and then ends at the same point of beginning.

Answer 75

Based on two sets of intersecting lines: principal meridians (n/s) and base lines (e/w).

Answer 76

Uses lot and block numbers referred to in a plat map located in the public records of the county where the land is located.

Answer 77

A visible marker, either a natural or artificial object, set up by the government or surveyors, used to establish the lines and boundaries of a survey.

Answer 78

A permanent reference mark affixed to a durable object, such as an iron post or brass marker embedded in a side wall, used to establish elevations and altitudes above sea level over a surveyed area.

Answer 79

A level surface to which heights and depths are referred. The datum may be an assumed point (such as a monument), or it may be tidal in nature. The spot where the surveyor begins measurement of a specific parcel.

Answer 80

Planning - local government creates a master plan, which includes issues such as land use, public facilities, circulation, conservation and noise regulation. Zoning local laws that regulate and control the use of land and structures within designated areas. The purpose of zoning is to implement a local master plan. Zoning ordinances must not violate the rights of individuals and property holders. If the means used are destructive, unreasonable, arbitrary or confiscatory, the legislation is usually considered void. Nonconforming use -- refers to a building that does not conform to the zoning use, because it was erected prior to the enactment of the zoning law. Conditional use permit-- usually granted to a property owner to allow a special use that is in the public interest, such as a church in a residential area.   Variance -- may be sought to provide a deviation from an ordinance.

Answer 81

When a broker wishes to renew his license, he must submit his renewal application, along with the fee, and a summary of data on the broker's trust account or accounts on a form prepared by or approved by the Commission if that data appears complete and includes no indication of irregularities. Once it has initiated the authorized investigation, the Commission can require a broker to supply written reports on the status of the broker's designated trust account or accounts. If the Commission so advises, a report on the broker's designated trust account(s) from a certified public accountant might be taken in lieu of the summary of data from the broker himself.

Answer 82

The rejection of an offer to buy, sell, rent, lease, exchange, or option real estate The withdrawal of an offer not yet accepted to buy, sell, rent, lease, exchange, or option real estate At the closing of the transaction Securing a written agreement which is signed by all parties having an interest in the trust funds and is separate from the contract that directs the broker to hold the funds The filing of an interpleader action in a court of competent jurisdiction The order of a court of competent jurisdiction A reasonable interpretation of the contract that directed the broker to deposit the fun

Answer 83

the salesperson must immediately refer this customer or client to the licensee's BROKER. The salesperson should not make ANY statements or infer in any way whether or not such a refund would be possible.

Answer 84

the broker must immediately notify all parties in the writing of the disbursal.

Answer 85

In a sales transaction, the transaction has closed or the date of closing specified in the sales agreement AND any extensions of that date have passed. In a lease or rental transaction, possession has been delivered to the tenant. In a lease/purchase transaction, the sales transaction has closed or the date of closing specified in the sales agreement and any extensions thereof have passed. The broker has secured a written agreement, separate from the sales contract or lease agreement, signed by all parties having an interest in the transaction who have agreed that the broker is entitled to any commission.

Answer 86

If a firm uses a trade name on "for sale" signs, business cards, contracts, or other documents relating to real estate transactions, these items must clearly and unmistakably include said firm's name as registered with the Commission in a way that is "reasonably calculated to attract the attention of the public." Any firm using a trade name on office signs must also clearly and unmistakably include said firm's name as registered with the Commission on these office signs in an easily visible manner that is, again, "reasonably calculated to attract the attention of the public." A licensee must not advertise to sell, buy, exchange, rent, or lease property in a manner indicating that the offer to sell, buy, exchange, rent, or lease such property is being made by a private party not licensed by the Real Estate Commission.

Answer 87

All advertisements must not misrepresent the property or terms of the sale. A broker is not allowed to advertise without the express written permission of the owner, and a definite expiration date must be given along with this permission, in writing. This rule applies to all listings, including open listings. Any advertisement must contain the broker's (company's) name. Those that do not are referred to as "blind ads," and these are strictly forbidden. Whenever a licensee becomes aware that a principal with whom the licensee's firm has a brokerage engagement is advertising to sell, buy, rent, lease, or exchange a property in a manner that is inconsistent with this rule, then the licensee must immediately take steps to stop the advertising until it complies with the rule.

Answer 88

the licensee may do so provided: If the licensee's license is affiliated with a broker, the broker holding the licensee's license has been notified in writing of the specific property to be advertised. Regardless of whether the licensee's license is affiliated with a broker or on inactive status, any advertisement must include the legend "(seller, buyer, landlord, tenant) select the appropriate name) holds a real estate license." If the licensee's license is affiliated with a broker, the broker gives written consent to advertising the specific property and the advertisement itself.

Answer 89

A licensee must not advertise that such licensee offers, sponsors, or conducts Commission-approved courses or that licensee offers, sponsors, or conducts Commission-approved courses in conjunction with an approved school or other approved organization unless the licensee is approved by the Commission to offer such courses. A licensee must not advertise any property for sale, rent, lease, or exchange unless the licensee has first secured the written permission of the owner or the owner's authorized agent and said permission has a definite date of expiration. Where this permission is granted, a licensee advertising property that is listed with another licensee must clearly and conspicuously disclose that fact and the name of the listing licensee unless the listing licensee has expressly agreed to waive those clear and conspicuous disclosures. Any licensee who advertises any property for sale, rent, lease, or exchange on the Internet must remove such advertisement within 10 days after the expiration of the listing.

Answer 90

Any licensee who does not give equal service to anyone because of race, color, religion, sex, national origin, familial status, or handicap, is not just violating the Georgia Fair Housing Law, but the FEDERAL FAIR HOUSING LAWS. It can mean not just civil and criminal charges, but also the loss of the real estate licensee's license, and therefore, his career and livelihood! The Georgia Fair Housing Law is enforced by the Fair Housing Division of the Georgia Commission on Equal Opportunity. The Georgia Fair Housing Law prohibits various forms of discrimination in residential real estate transactions on the basis of race, sex, religion, disability, national origin, familial status or color.

Answer 91

Any single-family dwelling sold or rented by an owner, if: The owner does not own more than three such single-family dwellings at any one time. The owner does not own any interest in, title to or any right to all or a portion of the proceeds from the sale or rental of more than three such single-family dwellings at any one time. The dwelling is sold or rented without the use of a licensed real estate agent, broker or salesperson and without the use of anti-discriminatory advertisements, mailings or other written notice. Rooms or units in dwellings containing independent living quarters for no more than four families, if the owner actually maintains and occupies one of such living quarters as his residence.

Answer 92

a religious organization, association or society, or any nonprofit institution or organization operated, supervised, or controlled by or in conjunction with a religious organization, association or society, from limiting the sale, rental or occupancy of dwellings which it owns or operates for other than a commercial purpose to persons of the same religion or from giving preference to such persons unless membership in such religion is restricted on account of race, color, sex, handicap, familial status or national origin. Nothing in these laws prohibits a private club not open to the public, which as an incident to its primary purpose or purposes provides lodgings which it owns or operates for other than a commercial purpose, from limiting the rental or occupancy of such lodgings to its members or from giving preference to its members.

Answer 93

Provided under any state or federal program that the administrator determines is specifically designed and operated to assist elderly persons as defined in the state or federal program Intended for, and solely occupied by, persons 62 years of age or older Intended and operated for occupancy by at least one person 55 years of age or older per unit

Answer 94

Up to $10,000, if the respondent has not previously been found guilty of committing a discriminatory housing practice Up to $25,000, if the respondent has been found guilty of committing one prior discriminatory housing practice within the preceding five years   Up to $50,000, if the respondent has been found guilty of committing two or more discriminatory housing practices within the preceding seven years In addition to these fines, the court has the authority to award reasonable attorney's fees and costs to the administrator or aggrieved person in any action in which the administrator or aggrieved person prevails or to the respondent in any action in which the respondent prevails only upon a showing that the action is frivolous, unreasonable, or without foundation. In addition to these fines, the court may award actual damages and punitive damages to the aggrieved person. Punitive damages awarded under this subsection may be awarded only when the evidence shows that the respondent's actions showed willful misconduct, malice, fraud, wantonness, oppression, or that entire want of care, which would raise the presumption of conscious indifference to consequences or to the rights of the aggrieved party.

Answer 95

It is permitted under Georgia law for a licensee who is affiliated with a broker to hire support personnel to assist the affiliated licensee in the conduct of the real estate brokerage business. When this occurs, it is essential to realize that both the firm and the affiliated licensee are responsible for the acts of the support personnel. This means the firm and licensee must ensure that the support personnel comply with the requirements of this rule and the license law; and for making sure that any licensed support personnel are properly licensed with the firm. Without a license, the unlicensed support personnel may NOT perform any duties and tasks of a real estate licensee. These unlicensed persons are permitted to perform only ministerial duties, which are those that do not require discretion or the exercise of the licensee's own judgment. Those individuals who are actively licensed with one firm may not work as support personnel for a licensee in another firm. In the event of an individual whose license is on inactive status and who works as support personnel for a licensee, this individual may perform only activities that do not require licensure until and unless that individual activates his license.

Answer 96

He must enter into a written agreement with the affiliated licensee authorizing the use of the support personnel, clearly explaining the duties that the support personnel may perform, and approving any compensation arrangement that the firm permits the affiliated licensee to have with the support personnel. He must enter into a written agreement with the support personnel assisting its affiliated licensee. This agreement must specify any duties that the support personnel is permitted to undertake on behalf of the affiliated licensee. He must insure that the affiliated licensee and the support personnel have entered into a written agreement specifying all duties that the support personnel may undertake on behalf of the affiliated licensee and the manner in which the support personnel will be compensated.

Answer 97

Answering the phone and forwarding calls to a licensee Submitting data on listings to a multiple listing service Checking on the status of loan commitments after a contract has been negotiated Assembling documents for closings Securing documents that are public information from the courthouse and other sources available to the public Having keys made for company listings and installing or removing lock boxes from company listings Writing advertisements and promotional materials for the approval of the licensee and supervising broker Placing advertisements in magazines, newspapers, and other media as directed by the supervising broker Receiving, recording, and depositing earnest money, security deposits, and advance rents Typing contract forms as directed by the licensee and the supervising broker Monitoring personnel files and license reports from the Commission Computing commission checks Placing signs on property and removing such signs. Ordering items of routine repair as directed by a licensee Acting as courier for such purposes as delivering documents or picking up keys (the licensee remains responsible for assuring delivery of contracts and closing documents as required by law) Scheduling appointments with the owner or the owner's agent in order for a licensee to show listed property Arranging dates and times for inspections Arranging dates and times for the mortgage application, the pre-closing walk through, and the closing Scheduling an open house Accompanying a licensee to an open house or a showing only for security purposes Performing physical maintenance on a property

Answer 98

Making cold calls by telephone or in person or otherwise contacting the public for the purpose of securing prospects for listings, leasing, sales, exchanges or property management Hosting open houses, kiosks, home show booths or fairs Preparing promotional materials or advertisements without the review and approval of licensee and supervising broker Showing property Answering any questions on title, financing or closings (other than the time and place) Answering any questions regarding a listing except for information on price and amenities expressly authorized in writing by the licensee Discussing or explaining a contract, listing, lease, agreement or other real estate document with anyone outside the firm Negotiating or agreeing to any commission, commission split, management fee or referral fee on behalf of a licensee Discussing the attributes or amenities of a property, under any circumstances, with a prospective purchaser or lessee Discussing with the owner of real property, the terms and conditions of the real property offered for sale or lease Collecting or holding deposit monies, rent, other monies or anything of value received from the owner of real property or from a prospective purchaser or lessee Providing owners of real property or prospective purchasers or lessees with any advice, recommendations or suggestions as to the sale, purchase, exchange or leasing of real property that is listed, to be listed, or currently available for sale or lease Holding himself or herself out in any manner, orally or in writing, as being licensed or affiliated with a particular firm or real estate broker as a licensee

Answer 99

the property owner is the principal or agent, and the manager is the agent to the owner. A professional property manager is a real estate agent who must have absolute loyalty to the property owner, as the manager works to maintain and even enhance the property and the property owner's investment. A property manager needs to be aware of applicable laws affecting the management of a property. These laws include those governing agency, leases, fair housing, and landlord-tenant relationships.

Answer 100

The names of the parties involved, including the exact names of the owners, as well as the firm taking responsibility for the management duties. A clear statement outlining the duties and responsibilities of the manager, and specifying the manager's authority. A specific description of the property. The requirements for reports made by the manager to the owner. The terms of the management fee, which is usually either a percentage of the collected rents, or a specific dollar amount.

Answer 101

Specify which payments of property related expenses are to be made by the broker to third parties and how such payments are to be funded. State the amount of fee or commission to be paid and when the fee or commission will be paid. Specify whether security deposits and prepaid rents will be held by the broker or the owner. Contain the effective date of the agreement and its termination date. Provide the terms and conditions for termination of the property management agreement by the broker or the owner of the property. Contain signatures of broker and owner or their authorized agent.

Answer 102

A property management agreement is an agency contract. The property owner is the principal, and the broker is the agent. The property management agreement should be in writing in order to be enforceable. A legible copy of every written property agreement must be given to the owner at the time the owner signs the agreement. The broker must also retain a copy of this agreement. BRRETA's required disclosures must be on property management agreements.

Answer 103

The duty of confidentiality. The broker agrees to keep confidential that information the owner requests or instructs to be kept confidential. However, if the owner allows the disclosure of this information, whether by subsequent work or conduct, OR if the disclosure is required by law, then the broker may reveal the information. The requirement that the broker not knowingly give customers false information. *Remember that any time there is a conflict between the broker's duty not to give false information, and the broker's duty of confidentiality to the owner, the duty not to give false information to a customer ALWAYS prevails.   The obligation of the broker to disclose any conflict of interest with the owner's interests. In other words, unless specifically noted, the broker has no other agency relationships with other parties that could be in conflict with the owner's interests. (The exception to this is that the broker IS permitted to represent other tenants, owners, buyers and sellers in buying, selling, or leasing property.)

Answer 104

There are fewer costs and accounting responsibilities for the broker, since there isn't anything to withhold or any contributions to make. Licensees (agents) pay their own estimated taxes and manage their own business expenses. Licensees (agents) have more freedom regarding hours worked, etc., and brokers have less control over the licensees. The agents are accountable to the broker, but only for the end results of their work (as opposed to the way they perform). Agents can be required to attend training sessions on license law.

Answer 105

How the licensee is to be compensated while working for the broker How the licensee will be compensated for work begun but not completed if the affiliation ends What accounting will take place for listings, records, signs, prospects, plats, and keys when the affiliation ends Remember, even though the employment agreement will provide proof of those clauses agreed to in advance, there might still be disputes involved at some point. In the event that there is a dispute, the Commission will NOT get involved OR enforce these contracts. The disputes will have to be resolved by another means.

Answer 106

The broker must be able to prove he's provided adequate training and supervision. The broker must be able to prove that he was unaware of AND did not participate in any way in the offense. The broker must keep agents instructed on the law and any related changes. The broker must review all contracts within 30 days. The broker must provide and distribute written company policies and procedures; and The broker is responsible for retaining legal advice when needed.

Answer 107

A salesperson has the responsibility to be familiar with AND to obey the company's policies. The salesperson must be consulted when there is something that he doesn't understand or whenever a problem arises. It is also the duty of the salesperson to inform the broker before a salesperson sells, buys, leases or rents a property in his own name.

Answer 108

All agency agreements must be in writing, and must have definite ending dates. Automatic renewal provisions are not permitted and are considered violations. All parties signing a contract must be given a copy of it. Dual agency is permissible, but ONLY if both parties agree in writing. A broker is not permitted to offer a property for sale, describe terms on which the sale can be made, OR place a sign on the property without the written consent of the owner. All offers must be presented by the broker to the client as soon as possible. A written disclosure must be given stating which party a licensee represents as the agent and this disclosure must be made at the time a written offer is made on a property, or before that time. Only a broker - but NOT a licensee - can conduct a closing. A licensee may conduct the closing if under the supervision of the broker or under the supervision of an attorney (and with the broker's approval of this). The broker must retain copies of all sales contracts, listings, closing statements, and other transaction-related documents for a period of 3 YEARS. A broker is not authorized to do a property appraisal unless he is licensed as such under Georgia law. When the licensee is also the buyer, seller, lessor or lessee in a transaction, the person's status as the holder of a real estate license must be disclosed in the contracts, to give notice to the other parties to the transaction that the licensee has special knowledge or training in real estate. (This rule also applies in the case of a person whose license is currently on inactive status.)

Answer 109

A reprimand or censure in the case of minor offenses In the case of trust fund violations, periodic reports from an independent accountant Required attendance at an applicable educational program or programs Fines of up to $1,000 for a single violation Fines of up to $5,000 for multiple violations Suspension of license temporarily Revocation of license permanently Remember that a suspension is temporary but a revocation is permanent. If a person's license is revoked, "permanent," in this case, doesn't necessarily mean "forever." However, the individual would have to apply for a new license, and is only permitted to do so after a minimum of 10 YEARS.

Answer 110

``` No one is permitted to bring about or maintain any action in the courts for the collection of compensation for the performance of any of the acts mentioned in this chapter unless he can prove that the person was a licensed broker in Georgia at the time the alleged cause of action arose. Brokers cannot bring about or maintain action: For the collection of compensation for the performance of any of the acts mentioned in this chapter without alleging and proving that any person acting in the broker's behalf was so licensed in Georgia at the time the alleged cause of action arose. Against another broker (nor can any affiliated licensee do the same against the broker holding his or her license) for the collection of compensation without alleging and proving that he or she was a licensee in Georgia at the time the alleged cause of action arose. The Commission (by and through its Commissioner) is permitted to bring an action for any violation of the license law, regulations or rules. ```

Answer 111

Refuse to grant or renew a license to an applicant. Administer a reprimand. Suspend any license or approval for a definite period of time or for an indefinite period of time in connection with any condition that may be attached to the restoration of the license or approval. Revoke any license or approval. Revoke the license of a broker, qualifying broker, or associate broker and simultaneously issue that licensee a salesperson's license. Impose on a licensee, applicant, school approval, or instructor approval monetary assessments in an amount necessary to reimburse the Commission for the administrative, investigative, and legal costs and expenses incurred by the Commission. Impose a fine not to exceed $1,000 for each violation of this chapter or its rules and regulations with fines for multiple violations limited to $5,000 in any one disciplinary proceeding or such other amount as the parties may agree. Require completion of a course of study in real estate brokerage or instruction. Require the filing of periodic reports by an independent accountant on a real estate broker's designated trust account. Limit or restrict any license or approval as the Commission deems necessary for the protection of the public.

Answer 112

Negotiating a sale, exchange, or lease of real estate directly with an owner, a lessor, a purchaser, or a tenant if the licensee knows that such owner or lessor has a written outstanding contract in connection with such property, granting an exclusive agency or an exclusive right to sell to another broker or that such purchaser or tenant has a brokerage agreement with another broker Indicating that an opinion given to a potential seller, purchaser, landlord, or tenant regarding a listing, lease, rental, or purchase price is an appraisal unless such licensee holds an appraiser classification in accordance with appraisal licensing requirements Performing or attempting to perform any of the acts of a licensee on property located in another state without first having been properly licensed in that state or otherwise having complied fully with that state's laws regarding real estate brokerage Inducing any party to a contract of sale or lease or a brokerage agreement to break such contract or brokerage agreement for the purpose of substituting in lieu thereof any other contract or brokerage agreement with another principal

Answer 113

Paying a commission or compensation to any person for performing the services of a real estate licensee if that person has not first secured the appropriate license under this chapter or is not cooperating as a nonresident who is licensed in such nonresident's state or foreign country of residence, under the stipulation that nothing contained in this subsection or any other provision of this Code section is construed so as to prohibit the payment of earned commissions: To the estate or heirs of a deceased real estate licensee when such deceased real estate licensee had a valid Georgia real estate license in effect at the time the commission was earned and at the time of such person's death To a citizen of another country acting as a referral agent if that country does not license real estate brokers and if the Georgia licensee paying such commission or compensation obtains and maintains reasonable written evidence that the payee is a citizen of said other country, is not a resident of this country, and is in the business of brokering real estate in said other country

Answer 114

Failing to include a fixed date of expiration in any written listing agreement and failing to leave a copy of that agreement with the principal Failing to deliver, within a reasonable time, a completed copy of any purchase agreement or offer to buy or sell real estate to the purchaser and to the seller Failure by a broker to deliver to the seller in every real estate transaction, at the time the transaction is consummated, a complete, detailed closing statement showing all of the receipts and disbursements handled by such broker for the seller or failure to deliver to the buyer a complete statement showing all money received in the transaction from that buyer and how and for what the same was disbursed Making any substantial misrepresentations Acting for more than one party in a transaction without the express written consent of all parties to the transaction, also known as undisclosed dual agency

Answer 115

Failure of an associate broker, salesperson, or community association manager to place, as soon after receipt as is practicably possible, in the custody of the broker holding the licensee's license any deposit money or other money or funds entrusted to the licensee by any person dealing with the licensee as the representative of the licensee's licensed broker Filing a listing contract or any document or instrument purporting to create a lien based on a listing contract for the purpose of casting a cloud upon the title to real estate when no valid claim under that listing contract exists Having demonstrated incompetence to act as a real estate licensee in such manner as to safeguard the interest of the public or any other conduct that constitutes dishonest dealing Obtaining a brokerage agreement, a sales contract, or a lease from any owner, purchaser, or tenant while knowing or having reason to believe that another broker has a brokerage agreement with such owner, purchaser, or tenant, unless the licensee has written permission from the broker having the first brokerage agreement; provided that a licensee is permitted to present a proposal or bid for community association management if requested to do so in writing from a community association board of directors

Answer 116

Failing to keep for a period of 3 years a true and correct copy of all sales contracts, closing statements, any offer or other document that resulted in the depositing of trust funds, accounting records related to the maintenance of any trust account required and other documents relating to real estate closings or transactions or failing to produce such documents at the reasonable request of the Commission or any of its agents for their inspection Being or becoming a party to any falsification of any portion of any contract or other document involved in any real estate transaction Conducting the closing of any real estate transaction by any licensee except a broker unless the licensee acts under the supervision of the broker under whom such licensee is licensed or under the supervision of a practicing attorney with the knowledge and consent of the broker Failing to obtain the written agreement of the parties indicating to whom the broker will pay any interest earned on trust funds deposited into an interest-bearing checking account prior to depositing those funds into the account Failing to disclose in a timely manner to all parties in a real estate transaction any agency relationship that the licensee may have with any of the parties

Answer 117

Created to ensure that the buyer and seller in a residential real estate transaction involving a new first mortgage loan have knowledge of all settlement costs. The Act is administered by the Consumer Financial Protection Bureau (CFPB). Applies to the majority of residential real estate closings in our country today. Must be a new first mortgage loan, second mortgage (junior), or a refinance -- Does not apply to loans secured by mortgaged property larger than 25 acres, installment land contracts, contracts for deed, construction loans, or home improvement loans.

Answer 118

Lenders must give a copy of the booklet, "Real Estate Settlement Costs and You" to every person at the time of application for a loan. Lenders must provide a good faith estimate of settlement costs at the time of loan application or within three business days of application. Uniform Settlement Statement - This is a form designed to detail all financial particulars of a transaction. This must be made available to the borrower at or before closing. The borrower may request to see the form one business day prior to closing. RESPA prohibits kickbacks or unearned fees paid to lender for referring customers to insurance agencies, etc. RESPA is administered by the Consumer Financial Protection Bureau (CFPB).

Answer 119

A law for lenders that prohibits them from discriminating against race, color, religion, national origin, sex, marital status, age or dependency on public assistance in the granting of credit to consumers.

Answer 120

``` Income Net worth Job stability Credit rating Income would most interest a lender when making a loan. If a person applying for a loan is relying on income from child support for repayment of a loan, the income must be revealed to the lender. ```

Answer 121

The Real Estate Settlement Procedures Act of 1974 was introduced to protect the borrower from unnecessarily high settlement costs. RESPA requires lenders to provide a HUD “Guide to Settlement” booklet and a Good Faith Estimate (GFE) of all costs related to settlement to borrowers within 3 days of loan application. RESPA further requires the use of the HUD-1 settlement statement at closing plus a final good faith estimate and Truth-in-Lending Statement. Most lenders today require the borrower to provide funds that are held in escrow to insure that sufficient monies are available for future real estate tax payment and hazard insurance fees. RESPA limits the amount of money that may be held in escrow accounts to the equivalent of two months’ payments. While RESPA is directed to the practices of lenders and settlement companies, real estate licensees should be generally aware of RESPA requirements and changes implemented January 1, 2010.

Answer 122

Loan summary information on page 1 of the GFE is written in a consumer friendly, question and answer format and reveals information about the loan which borrowers may otherwise been unaware of.

Answer 123

Is written in a more borrower friendly format and includes charts to allow the borrower to shop, requires GFE& HUD-1 to be “in sync”, imposes tolerances for differences in charges between GFE and HUD-1 at closing, and the lender may only collect for a credit report at loan application.

Answer 124

GFE page 2 (A) determination of origination charges are explained in detail.

Answer 125

GFE page 2 (B) fully discloses settlement charges in a uniform format. When borrowers shop for loans this will allow them to have added insight into actual loan costs.

Answer 126

Three tables on the top of page 3 GFE disclose to borrowers the limitation on differences in charges between the GFE and HUD-1 at settlement. It is significant to note there is no limit to variations in charge for services selected by the borrower. The premise is the lender cannot be responsible to accurately disclose charges which may be incurred by service providers that they do not normally do business with.

Answer 127

The loan tradeoff table on page 3 GFE allows the lender to demonstrate the effect of varying interest rates and or settlement charges to borrowers who have different preferences or circumstances.

Answer 128

On page 3 of the GFE there is a shopping chart which allows for uniform comparison of loans between lenders. Eleven uniform questions, when answered, will avail the borrower with an “Apples to Apples” comparison of loan products.

Answer 129

The lender must deliver the GFE to the borrower within 3 days after loan application and the GFE is valid for 10 days to allow the borrower to “shop”. Another consideration is that borrowers now have additional time to review Truth in Lending disclosure statements. There will be a seven-day waiting period (excluding Sundays and federal holidays) from the time a lender delivers its good faith estimate of the cost of the credit and the closing. Changes to the APR will require corrected disclosures to be given and will extend the waiting period at least another three days.

Answer 130

Terms of the loan are disclosed and reviewed on the bottom of page 3 of the HUD- 1. This provides the borrower the opportunity to affirm the loan they are obtaining is the same as disclosed on the GFE. As in the GFE it is written an easily understood narrative format.

Answer 131

GFE and HUD - 1 time line constraints may necessitate additional days required to settle a real estate transaction. Settlement company officers and lenders recommend allowing about 20 additional days to settle a transaction under the current RESPA. This will vary from market to market and as the parties involved become more proficient in the process, the additional recommended days may change.

Answer 132

Attempting to perform any act authorized by this chapter to be performed only by a broker, association broker, or salesperson while licensed as a community association manager Attempting to sell, lease, or exchange the property of any member of a community association to which a licensee is providing community association management services without the express written consent of that association to do so Failure to deliver to a community association terminating a management contract within 30 days of the termination, or within another time period as the management contract provides: A complete and accurate record of all transactions and funds handled during the period of the contract and not previously accounted for All records and documents received from the community association or received on the behalf of the association Any funds held on behalf of the community association

Answer 133

Failure to deliver to a property owner terminating a management contract within 30 days of the termination, or another time period as the management contract provides: A complete and accurate record of all transactions and funds handled during the period of the contract and not previously accounted for All records and documents received from the property owner or received on the behalf of the owner Any funds held on behalf of the property owner Inducing any person to alter, modify, or change another licensee's fee or commission for real estate brokerage services without that licensee's prior written consent It is a violation of license law for a person to fail to obtain a person's agreement to refer that person to another licensee for brokerage or relocation services and to inform such person being referred whether or not the licensee will receive a valuable consideration for that referral.

Answer 134

this may be cause for the suspension or revocation of the individual's license (after the opportunity for a hearing has been given).

Answer 135

Prior to the Commission censuring or a licensee or before revoking or suspending a license, it must provide an opportunity for a hearing for that license holder. Unless otherwise agreed to by the Commission, all such hearings must be held in the county of domicile of the Commission. If any licensee or applicant fails to appear at any hearing after reasonable notice, then the Commission may proceed to hear the evidence against such licensee or applicant, and take action as if that licensee or applicant had been present. A notice of hearing, initial or proposed decision, or final decision of the Commission in a disciplinary proceeding must be served upon the licensee or applicant by personal service or by certified mail, return receipt requested, to the last known address of record with the Commission. If such material is returned marked "unclaimed" or "refused," or is undeliverable and if the licensee or applicant cannot, after diligent effort, be located, the Real Estate Commissioner must be deemed to be the agent for that such licensee or applicant to fulfill the purposes of the law. In such a case, service upon the Real Estate Commissioner is considered to be service upon the licensee or applicant. Any person who has exhausted all administrative remedies available within this chapter and who is still not satisfied with the final decision in a contested case is entitled to judicial review. This initial judicial review of a final decision of the Commission must be available solely in the superior court of the county of domicile of the Commission.

Answer 136

Upon its own motion Keep in mind that the Commission may investigate not just licensees, but the actions of any application for licensure, or real estate courses or instructors approved by the Commission.

Answer 137

the Commission must be notified immediately. After 60 days, the license will automatically be revoked, unless the licensee has requested a hearing. After the hearing, the Commission can then decide what action is appropriate.

Answer 138

to compensate those customers who have suffered damages through the fault of a real estate licensee, and who cannot recover the damages through the normal legal means.

Answer 139

must be at least $1,000,000.

Answer 140

the Commission has the authority to assess a fee of up to $30 per year for all licensees, in order to build up the Fund's balance.

Answer 141

The funds are invested in legal securities, and any income earned through this is to be used by the Commission for purposes involved with real estate education and research in Georgia.

Answer 142

The fund may pay out - if the court orders such a payment - actual or compensatory damages. This does not include interests of costs sustained by the act, representation or conduct. Regardless of whether there was more than one person involved or how large the claims were, the fund cannot pay more than the $25,000 per transaction. The liability of the fund for the acts of a single licensee is limited to $75,000, regardless of how many persons or transactions are involved. No person who establishes a claim will ever get more than $25,000 from the fund. A licensee acting as a principal or agent in a real estate transaction has no claim against the Fund. Real estate licensees and their families have no claim against the Fund. In order to receive a claim against the Fund, the aggrieved party must bring the suit about within 2 YEARS of when the damage occurred. The aggrieved person, in beginning the action for the judgment, must notify the Commission in writing, by certified mail, return receipt requested, that he is beginning such an action. The Commission has the right to intervene in and defend any such action.

Answer 143

He or she must obtain a judgment against the licensee from a court of competent jurisdiction. Once the aggrieved person recovers the judgment, he or she may, upon termination of all proceedings including reviews and appeals, file a verified claim in the court in which the judgment was obtained. Upon 10 days’ WRITTEN NOTICE to the Commission, the aggrieved party can apply to the court for an order directing the payment out of the Real Estate Education, Research, and Recovery fund of the amount unpaid upon the judgment up to the $25,000 limit.

Answer 144

At the time of the cause of action, was not a spouse of the judgment debtor; or a parent, sibling, or child of the judgment debtor or the judgment debtor's spouse; or the personal representative of such person or persons. Has complied with all the requirements of the Georgia Code dealing with claims against the Fund. Has obtained a judgment stating the amount of the judgment and the amount still owed at the date of the application. The person must also state that, through this action (of filing the claim), he or she has joined any and all bonding companies, which issued corporate surety bonds to the judgment debtors as principals and all other necessary parties. Has had a writ of execution issued from the court, stating that no personal or real property of the judgment debtor to be sold to satisfy the judgment. It is mandated under Georgia law that any real OR personal nonexempt property belonging to the licensee can be seized to satisfy the judgment. Has obtained a court order for payment from the Real Estate Education, Research and Recovery Fund when the attempts to seize the judgment debtor's property cannot satisfy the judgment.

Answer 145

Once the court determines that all previous steps have been taken, it will make an order to the Commission for payment from the Real Estate Education, Research and Recovery Fund. If the Commission must make a payment from the Real Estate Education, Research and Recovery Fund in the settlement of a claim or toward satisfaction of a judgment against a licensee, the license of such licensee must be automatically revoked. The revocation is valid immediately upon the issuance of a court order authorizing payment from the Real Estate Education, Research and Recovery Fund. This stipulation regarding the revocation of a license applies regardless of the amount of payment that is to be made from the Fund. After the licensee's license is revoked, he will not be eligible to receive a new license until the Fund has been repaid in full, plus interest at the judgment rate. A discharge in bankruptcy does not relieve a person from the penalties and disabilities provided here. If, at any time, the money deposited in the Real Estate Education, Research and Recovery Fund is insufficient to satisfy any duly authorized claim or portion thereof, the Commission will, once sufficient money has been deposited into the Fund, then pay those unpaid claims (or portions thereof). In this situation, the Fund will pay past due monies in the order that such claims were originally filed, plus accumulated interest at the rate of 4 percent a year.

Answer 146

Any monies received by the Commission must be deposited into the state treasury and held in a special fund to be known as the "Real Estate Education, Research, and Recovery Fund." The money will be held by the Commission in trust until which time they might be needed for claim payments. The funds may also be invested in any investments that are legal for domestic life insurance companies under the laws of this state, and the interest from these investments must be deposited to the credit of the Real Estate Education, Research and Recovery Fund. The Fund's invested monies must also be available for the same purposes as all other money deposited in the Real Estate Education, Research and Recovery Fund.

Answer 147

It is illegal for any person or his agent to file with the Commission any notice, statement, or other document, that is false, untrue, or contains any material misstatement of fact. Such an offense will constitute a misdemeanor.

Answer 148

Enter an appearance File an answer Appear at the court hearing Defend the action Take whatever other action it finds appropriate The Commission has the authority to take recourse through any appropriate method of review on behalf of and in the name of the defendant.

Answer 149

the Commission must be subrogated to all of the rights of the judgment creditor. In addition, these rules apply: The judgment creditor must assign all his rights, title, and interest in the judgment to the Commission before any payment is made from the Fund. Any amount and interest so recovered by the Commission on the judgment must be deposited to the Fund. If the total amount collected on the judgment by the Commission is more than the amount paid from the Fund to the original judgment creditor plus interest and the cost of collection, the Commission might choose to pay any overage collected to the original judgment creditor OR reassign the remaining interest in the judgment to the original judgment creditor. The payment or reassignment to the original judgment creditor does not make the Fund liable for any further payment to the original judgment creditor based on that transaction or judgment. Any costs incurred by the Commission in the attempt(s) to collect assigned judgments must be paid from the Fund.

Answer 150

hen that person is considered to have waived his rights regarding the Fund. The Commission has the discretion to use any and all funds from new licensee payments to the Real Estate Education, Research and Recovery Fund, OR from the accrued interest earned on the fund to help underwrite the cost of developing courses, conducting seminars, conducting research projects on matters affecting real estate brokerage, publishing and distributing educational materials, or other education and research programs for the benefit of licensees and the public. These programs must be approved by the Commission so that it is in accordance with the applicable laws, rules and regulations. The Commission is not permitted to expend or commit sums for educational or research purposes in amounts that would cause the Fund to be reduced to an amount less than $1 million.

Answer 151

are associations of homeowners within certain subdivisions, townhouse developments, condominium complexes, cooperatives, or other planned developments. These organizations are designed to preserve and improve the homes and property within that development. Community association covenants deal with more than recreational and other common areas, however. They might set limits about the exterior changes to a property, its usage, or even the placement of satellite dishes on the property. The essential difference between property management and community association management is that in the former, there is a single client - being the owner or ownership entity - while in the latter, there are multiple owners. Another difference between the two forms of management is that a property manager doesn't have much day-to-day contact with the owner of the property, whereas with community association management, the manager is always interacting with the owners.

Answer 152

began with the common law idea of deed restrictions, or the idea that restrictions on ownership are able to be established by a contract. This evolved throughout the years. The Georgia Property Owners Association Act (POA) of 1994 offers the option to create a homeowners association OR submit it to a statutory development plan, which can provide collection and enforcement powers. Keep in mind that the POA offers this as an option, but it is NOT mandatory under law.

Answer 153

The first type is a subdivision with a mandatory association membership, in which the association "governing" that community has the authority to make sure its facilities are maintained AND that the covenants are enforced. The next type of HOA concerns a subdivision in which there is a voluntary homeowner association. The HOA in this situation allows the person to choose whether or not he wishes to belong to the association. If he chooses not to join, he is then choosing not to use the amenities of the subdivision. The third type of HOA recognized in Georgia is the subdivision that has NO governing homeowner association. In this situation, the owners still have the protection of the covenants of the homeowner association, but they have no obligation to pay assessments, and no HOA to enforce this.

Answer 154

is very similar to subdivision HOAs. In Georgia, the state law regulates the formation of condominiums. The condo owner automatically becomes a mandatory member of a community association. This owner is under obligation, as a member, to follow the rules of the association. There are a couple of differences in condominium management and managing a subdivision HOA. In a condominium complex, there is generally more commonly owned area to maintain than in a subdivision. Also, and more significantly, the covenants in condominium documents are much more specific, regulating everything from parking to pets. The reason for such pervasive restrictions is that the occupants live so close to each other and share many common areas. In a condominium development and the management of such a development, there are many more specifics to regulate. As a result, the condominium association seems to have more power.

Answer 155

Approving or not approving changes to the common elements, including the building exteriors Levying fines for those owners who violate covenants and rules Taking legal actions to enforce the regulations, in certain circumstances Taxing owners through regular or special assessments Adopting new reasonable rules to govern the condominium developments

Answer 156

very similar and easily confused. In cooperative ownership, a corporation actually owns the property, and the occupancy is allowed to those prospects that subscribe to the purchase of stock and sign a proprietary lease on their individual units in the complex. With cooperatives, the owners are technically tenants, and all must pay the common expenses, which are known as "carrying charges." Usually in this situation, the owners of the units are not responsible for the repair and maintenance of their own units. One vital aspect of community association management is the requirement of fidelity bond or insurance for providing such services.

Answer 157

The Commission requires that each broker who provides community association management services who collects, controls, has access to, or disburses community association funds must at all times provide or be covered by a fidelity bond or fidelity insurance coverage, which protects the community associations being managed by the broker against a loss of any funds belonging to those community associations being held or controlled by the broker. In other words, under Georgia license law, all managers who handle community association funds MUST be covered by a fidelity bond or fidelity insurance to protect the association against any loss because of mishandling of funds. The ONLY brokers exempt from this law are those who NEVER handle more than $60,000 at one time. The broker must have a separate fidelity policy for EACH association managed, and each association must receive a copy of the applicable policy. Directors (who have the authority to sign checks) are not usually covered under such a policy, but most association policies will cover these under the association's employee policy if it is so requested. Also, the broker must be able to produce a copy of this policy at the reasonable request of the Commission (or its agents) for inspection.

Answer 158

It must be written by an insurance company authorized to write such bonds/policies in Georgia. It must cover the maximum amount of funds that the broker providing community association management services handles in his duties as such. It must name the community association(s) as an additional named insured. It must cover the broker and all partners, officers, licensed affiliates, and employees of the broker and may cover others handling the funds. It must provide that the insurance company issuing the bond or policy may not cancel, or change the bond or policy without giving 30 days' notice in writing to the broker and to the community association. (This does NOT apply in the case of non-payment of premiums, with which only 10 days' notice must be given.)

Answer 159

There are some people who are exempt from the Community Association Management (CAM) licensing requirements under Georgia law. These people might even perform the same services as a broker or community association manager, but they are not required to be licensed as such. They include the following: A person who is either the owner or is engaged by the owner, on a full-time basis, and who performs the usual CAM services A person who is a full-time employee of the property owner, who provides CAM services A person who is a full-time employee of the community association and provides management services A member of the community association, if that person provides CAM services only for that single association, and is a member of that association Any person who performs only physical maintenance on a property or A licensed certified public accountant or registered public accountant acting solely as an incident to the practice of public accounting

Answer 160

The differences between a CAM licensee and a salesperson are few. While the community association manager may not list or sell properties, and may only work in community association management, these are the most significant differences between the two types of licenses. Salesperson and community association management licensees are similar because both are only permitted to work if they do so in the capacity of agents of brokers. Community association managers may not enter into contracts themselves. Only the broker has the authority to sign a contract to provide CAM services for to a community association for a fee. The community association manager's duties are greatly varied, depending on the association, as well as the size of the community. This person usually works closely with association employees, board members, committee volunteers, contractors, and of course, the owners.

Answer 161

Adheres to the board's established guidelines Is familiar with the bylaws of the association Can serve both the directors and the owners as needed; AND Brings a sense of stability to this type of community, which is constantly changing.

Answer 162

A management agreement for a community association is made between the broker and the board of directors of the community association. These agreements vary depending on the association, but there are several basic items that should be found on each such agreement: Definitions of the following terms: association documents, fiscal year, and common areas. (This is important so these terms are not open for misinterpretation.) The date of the agreement The identification of the involved parties The role of the manager in the agreement The manager's financial and physical responsibilities The insurance/bonding agreements The books and record-keeping requirements The policies for on-site employees, and the contracting procedures for contract services Any auditing procedures Details for the compensation of the management The term of the agreement, and provisions for its termination The required reports and government filings required

Answer 163

Preparing and submitting a budget Collecting and depositing monies from the assessments Keeping minutes from meetings Obtaining security services as they might be needed Conducting membership meetings for the association Preparing or providing a newsletter to the owners Conducting elections in some cases Hiring pest control services (on an as-needed basis) Hiring and supervising clerical employees Sending out notices of membership meetings Maintaining equipment Buying insurance for the association Ensuring adequate trash disposal Enforcing the rules of the administration Administering those rules regarding architecture Keeping in touch with the accountant regarding statements or audits (if necessary) Contacting the attorney on an as-needed basis for delinquent accounts Paying the bills of the association

Answer 164

In the typical community association management situation, these duties are not usually delegated to the manager. Repairing an individual homeowner's property, unless it is the association's responsibility Offering advice regarding specific legal, financial, or other professional question, to owners Lending money to the association for any reason Borrowing money from the association for any reason Making any structural changes to the property unless specifically authorized to do so by the board of directors Following the instructions of anyone besides the person specifically designated by the board of directors to give such instructions

Answer 165

a federal law restricting interstate commerce, and has been in effect since 1890. Like all antitrust laws, this law was designed to restrict any monopolistic practices. The Sherman Antitrust Act applies to the real estate business because brokerage is considered a trade, and brokerage is also considered interstate commerce.

Answer 166

Price Fixing - Collusion between brokers and sales people with competing companies to set commission rates is illegal. "Everyone charges the same so you might as well list with me," would be an illegal statement, and a violation of the Sherman Antitrust Act. Group Boycotts - Licensees should never "get together" and boycott a company because of their business practices. "Let's not do business with AVC Real Estate Company, they discount their commissions," would also be a statement in violation of the Sherman Antitrust Act. Division of markets by location or price - "Why don't you take the south side town and our company will take the north side," is another statement that would violate the Sherman Antitrust Act.

Answer 167

The disciplinary actions for violations of the Sherman Antitrust Act can include prison terms of up to 3 years and fines of $100,000 per violation. In the case of a corporation violation of this act, the fine can go as high as $1,000,000. It is also permissible to file private antitrust suits, and these can result in TRIPLE damages, plus attorney fees and other costs. If all these potential punishments aren't enough to dissuade someone from violating the provisions of this act, perhaps this will: The Georgia Real Estate Commission has the power to sanction a licensee who violates a FEDERAL LAW. Remember, the errors and omissions insurance held by most brokers and licensees does NOT COVER violations of federal laws.

Answer 168

or FBPA, is designed to protect the public by focusing on deceptive advertising. This act deals mostly with fraudulent or otherwise misleading advertisements. This law, administered by the governor through the Office of Consumer Affairs, deals with any media, and says that an actual transaction must occur in order to prosecute someone for breaking this law. The advertising must have an impact on the public as a whole. The Georgia Uniform Deceptive Trade Practices Act, or UDTPA, is very similar to the FBPA, except that the UDTPA covers a much wider scope of deceptive practices. With this law, it is not necessary for an actual consumer transaction to take place. Also, any of the following can file a suit under this act: the state of Georgia, another broker or an individual. If a person is prosecuted under UDTPA, the offender can face injunctions, fines and/or triple damages.

Answer 169

``` Brokers Agents Real estate boards Companies Associations Multiple listing services ```

Answer 170

Train licensees to be in compliance with the antitrust standards. For example, make sure they know that the critical terms of a contract are never "standard" or nonnegotiable. A licensee should never make a statement like, "Let's make the listing period 3 months, because everyone in this city does that," or "I have to charge a 7% commission, because that's what all brokers do." A licensee is permitted to say, however, "This is my company's policy." Avoid contract forms that have pre-printed information, such as commission rates or a predetermined "listing duration." Don't compare commissions, prices, or territories when talking with other licensees. For example, never say, "If that broker lists for a 6 percent commission, then we just won't work with him again," or "Let's all agree not to take any listings for less than 90 days."

Answer 171

While legal descriptions can include different ways of describing properties, only the metes-and-bounds method or the short-form description are to be used in Georgia. A sales contract or listing form is not enforceable unless it contains a sufficient legal description. Keep in mind that a licensee can compose a short-form description, from the recorded subdivision plat. However, only surveyors, attorneys and other qualified individuals are permitted to compose a metes-and-bounds description.

Answer 172

If the seller isn't selling the entire tract. In this case, a new survey will be needed. When a recent survey is in conflict with the deed description. When the seller has previously sold a portion of the land. Again, a new survey will be needed.

Answer 173

Georgia law allows licensees to complete listing or sales contracts or leases whose form has been prepared by legal counsel. Doing so will not constitute the unauthorized practice of law. In completing a lease or a written offer to buy, sell, lease, rent, or exchange real property, the licensee must include: A description of the property involved The method of payment Any special stipulations or addenda the offer requires Whatever dates are necessary to determine whether the parties have acted timely in meeting their responsibilities under the lease, offer or contract

Answer 174

Real estate transfer tax is an excise tax on transactions involving the sale of real property where title to the property is transferred from the seller to the buyer. Before a deed, security instrument, or other writing can be recorded in the office of the clerk of the superior court, the real estate transfer tax must be paid. Once the tax has been paid the clerk of the superior court or their deputy will attach to the deed, instrument or other writing a certification that the tax has been paid. The real estate transfer tax is based upon the property's sale price at the rate of $1 for the first $1,000 or fractional part of $1,000 and at the rate of 10 cents for each additional $100 or fractional part of $100. The tax must be paid by the person who executes the deed, instrument, or other writing or the person for whose use or benefit the deed, instrument, or other writing is executed. The real estate transfer tax is paid by the seller unless otherwise agreed by contract between the parties. So for example, a property sells for $100,000. The seller would pay $1.00 for the first $1000 and $99,000 divided by $100 = 990 X.10 = $99.00 or a total of $100.00

Answer 175

Georgia also assesses an intangible recording tax on long-term notes secured by real estate. Every holder (lender) of a long-term note must record the security instrument in the county in which the real estate is located within 90 days from the date of the instrument executed to secure the note. Please note: Even though the holder of the note is responsible for the payment of the tax, the holder can (and usually does) pass the amount of tax on to the borrower. If this is done, it cannot be considered a finance charge in connection with the loan transaction. The tax for recording the note is at the rate of $1.50 for each $500.00 or fractional part of the face amount of the note. To compute the tax due on a note of $124, 950, do the following: $124, 950 ÷ $500 = 249.9 (round up to 250) 250 X $1.50 = $375 is the tax due

Answer 176

If a borrower has less than a 20% down payment, the lender may require that the borrower purchase private mortgage insurance, commonly referred to as PMI. Payment for PMI can be a one-time premium, but typically it is a percentage added to each monthly payment. When the loan balance is paid down to 80% of the total value, the PMI payment will be dropped. Should the borrower default, the lender may foreclose on the property. If the property sells at foreclosure for less than the mortgage balance, the PMI pays the lender up to the amount of the insurance, typically the top 20% to 25% of the loan.

Answer 177

Property owners generally purchase insurance to cover the liability of various risks. The three general categories are: Destruction of the premises Injury to others on the premises Theft of personal property of the homeowner or family members Most homeowner insurance policies contain a coinsurance clause that requires that the homeowner maintain insurance equal to at least 80% of the replacement cost of the dwelling (not including the value of the land). A homeowner may choose to insure 100% of the value of the improvements. Lenders generally require insurance that covers the mortgage balance. REMEMBER: Insurance is always paid in advance. If it is paid with the mortgage payment, it is being paid for the next year.

Answer 178

Puffing is exaggerated or superlative comments or opinions not made as representations of fact and thus not grounds for misrepresentations. For example, "This house has a fantastic view" is puffing because the prospective buyer can clearly assess the view. On the other hand, "This house has a fantastic view of the mountains," when in fact all the windows face the street, would be misrepresentation.

Answer 179

When dealing with tenants, landlords have several responsibilities and guidelines they must follow. Tenants also have certain responsibilities to their landlords. In any contract or lease for the use or rental of real property as a dwelling place, a landlord or a tenant may not waive, assign or transfer any of the rights, duties or remedies relating to the: Duties of the landlord to keep the property in good repair and make improvements Liability of the landlord for failure to repair or improve the property Rules regarding collection, safekeeping and return of security deposits

Answer 180

Before a tenancy begins, the landlord must disclose to the tenant, in writing, the names and addresses of the property owner and the person who will manage the property. A landlord must keep the premises in repair and is liable for all substantial improvements made to the premises by his consent. If a lease contains no expiration or termination date, the law considers the tenancy to be a tenancy at will. Terminating a tenancy at will requires sixty (60) days' notice from the landlord or thirty (30) days' notice from the tenant. Security deposits must be held in trust for the tenants in a separate escrow account specifically for that purpose. The landlord is obligated to inform the tenants in writing of the location and account number of the escrow account. Prior to accepting a security deposit, the landlord must give the tenant a comprehensive list of any existing damage to the premises, for the tenant to keep. The tenant has the right to inspect the premises to check the accuracy of the list prior to taking occupancy. Both the landlord and the tenant must then sign the list as evidence of its accuracy. If the tenant gives proper notice and vacates without owing any rent or damages, the landlord must return the security deposit to the tenant within thirty (30) days.

Georgia Law Flashcards

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