2020 Georgia Code
Title 43 - Professions and Businesses
Chapter 40 - Real Estate Brokers and Salespersons
§ 43-40-25. Violations by Licensees, Schools, and Instructors; Sanctions; Unfair Trade Practices

1. In accordance with the hearing procedures established for contested cases by Chapter 13 of Title 50, the "Georgia Administrative Procedure Act," whenever a license, a school approval, or an instructor approval has been obtained by false or fraudulent representation, or whenever a licensee, an approved school, or an approved instructor has been found guilty of a violation of this chapter, of the rules and regulations promulgated by the commission, or of any unfair trade practices, including, but not limited to, those listed in this Code section, the commission shall have the power to take any one or more of the following actions:
   1. Refuse to grant or renew a license to an applicant;
   2. Administer a reprimand;
   3. 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;
   4. Revoke any license or approval;
   5. Revoke the license of a broker, qualifying broker, or associate broker and simultaneously issue such licensee a salesperson's license;
   6. Impose on a licensee, applicant, approved school, or approved instructor monetary assessments in an amount necessary to reimburse the commission for the administrative, investigative, and legal costs and expenses incurred by the commission in conducting any proceeding authorized under this chapter or Chapter 13 of Title 50, the "Georgia Administrative Procedure Act";
   7. Impose a fine not to exceed $1,000.00 for each violation of this chapter or its rules and regulations with fines for multiple violations limited to $5,000.00 in any one disciplinary proceeding or such other amount as the parties may agree;
   8. Require completion of a course of study in real estate brokerage or instruction;
   9. Require the filing of periodic reports by an independent accountant on a real estate broker's designated trust account; or
   10. Limit or restrict any license or approval as the commission deems necessary for the protection of the public.

       Any action taken by the commission pursuant to this subsection may, at its discretion, be construed as a "disciplinary sanction" or "sanction" as such terms are used in this chapter.

2. Licensees shall not engage in any of the following unfair trade practices:
   1. Because of race, color, religion, sex, disability, familial status, or national origin:
      1. Refusing to sell or rent after the making of a bona fide offer, or refusing to negotiate for the sale or rental of, or otherwise making unavailable or denying, real estate to any person;
      2. Discriminating against any person in the terms, conditions, or privileges of sale or rental of real estate or in the provision of services or facilities in connection therewith;
      3. Making, printing, or publishing or causing to be made, printed, or published any notice, statement, or advertisement, with respect to the sale or rental of real estate, that indicates any preference, limitation, or discrimination or an intention to make any such preference, limitation, or discrimination;
      4. Representing to any person that any real estate is not available for inspection, sale, or rental when such real estate is in fact so available; or
      5. Representing explicitly or implicitly that a change has or will or may occur in a block, neighborhood, or area in order to induce or discourage the listing, purchasing, selling, or renting of real estate;
   2. Intentionally advertising material which is misleading or inaccurate or which in any way misrepresents any property, terms, values, policies, or services of the business conducted;
   3. Failing to account for and remit any money coming into the licensee's possession which belongs to others;
   4. Commingling the money or other property of the licensee's principals with the licensee's own;
   5. Failing to maintain and deposit in a separate, federally insured account at a financial institution all money received by such broker acting in such capacity, or as escrow agent or the temporary custodian of the funds of others, in a real estate transaction unless all parties having an interest in such funds have agreed otherwise in writing;
   6. Failing to disclose in writing to a principal in a real estate transaction any of the following:
      1. The receipt of a fee, rebate, or other thing of value on expenditures made on behalf of the principal for which the principal is reimbursing the licensee;
      2. The payment to another broker of a commission, fee, or other thing of value for the referral of the principal for brokerage or relocation services; or
      3. The receipt of anything of value for the referral of any service or product in a real estate transaction to a principal;
   7. Representing or attempting to represent a real estate broker, other than the broker holding the licensee's license, without the express knowledge and consent of the broker holding the licensee's license;
   8. Accepting a commission or other valuable consideration by a licensee from anyone other than the broker holding that licensee's license without the consent of that broker;
   9. Acting in the dual capacity of agent and undisclosed principal in any transaction;
   10. Guaranteeing or authorizing any person to guarantee future profits which may result from the resale of real property;
   11. Placing a sign on any property offering it for sale or rent without the written consent of the owner or the owner's authorized agent and failing to remove such sign within ten days after the expiration of listing;
   12. Offering real estate for sale or lease without the knowledge and consent of the owner or the owner's authorized agent or on terms other than those authorized by the owner or the owner's authorized agent;
   13. 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;
   14. 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 listing 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 written outstanding exclusive brokerage agreement with another broker, unless the outstanding listing or brokerage agreement provides that the licensee holding such agreement will not provide negotiation services to the client;
   15. 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 Chapter 39A of this title;
   16. 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;
   17. Paying a commission or compensation to any person for performing the services of a real estate licensee who 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, provided that nothing contained in this subsection or any other provision of this Code section shall be construed so as to prohibit the payment of earned commissions:
       1. 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;
       2. 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; or
       3. By the brokerage firm holding a licensee's license to an unlicensed firm in which an individual licensee affiliated with the brokerage firm owns more than a 20 percent interest provided:
          1. Such individual licensee earned the commission on behalf of the brokerage firm;
          2. Such unlicensed firm does not perform real estate brokerage activity;
          3. The affiliated licensee and the brokerage firm have a written agreement authorizing the payment to the unlicensed firm; and
          4. The brokerage firm obtains and retains written evidence that the affiliated licensee owns more than a 20 percent interest in the unlicensed firm to which the compensation will be paid;
   18. Failing to include a fixed date of expiration in any written listing agreement and failing to leave a copy of said agreement with the principal;
   19. 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;
   20. Failing to timely ensure that his or her client or customer receives a copy of the closing statement from a real estate transaction if the closing statement is provided to the licensee at closing. The broker shall retain true copies of such closing statements in the broker's files;
   21. Making any substantial misrepresentations;
   22. Acting for more than one party in a transaction without the express written consent of all parties to the transaction;
   23. 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;
   24. 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 said listing contract exists;
   25. Having demonstrated incompetency to act as a real estate licensee in such manner as to safeguard the interest of the public or any other conduct whether of the same or a different character than heretofore specified which constitutes dishonest dealing;
   26. 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 an exclusive brokerage agreement with such owner, purchaser, or tenant, unless the licensee has written permission from the broker having the first exclusive brokerage agreement; provided, however, that notwithstanding the provisions of this paragraph, a licensee shall be 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;
   27. Failing to keep for a period of three years a true and correct copy of all sales contracts, closing statements if provided to the licensee, any offer or other document that resulted in the depositing of trust funds, accounting records related to the maintenance of any trust account required by this chapter, 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;
   28. Being or becoming a party to any falsification of any portion of any contract or other document involved in any real estate transaction;
   29. Failing to obtain the written agreement of the parties indicating to whom the broker shall pay any interest earned on trust funds deposited into an interest-bearing account prior to depositing those funds into such account;
   30. 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;
   31. Attempting to perform any act authorized by this chapter to be performed only by a broker, associate broker, or salesperson while licensed as a community association manager;
   32. 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;
   33. Failure to deliver to a community association terminating a management contract within 30 days of the termination, or within such other time period as the management contract shall provide:
       1. A complete and accurate record of all transactions and funds handled during the period of the contract and not previously accounted for;
       2. All records and documents received from the community association or received on the association's behalf; and
       3. Any funds held on behalf of the community association;
   34. Failure to deliver to a property owner terminating a management contract within 30 days of the termination, or within such other time period as the management contract shall provide:
       1. A complete and accurate record of all transactions and funds handled during the period of the contract and not previously accounted for;
       2. All records and documents received from the property owner or received on the owner's behalf; and
       3. Any funds held on behalf of the property owner;
   35. 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; or
   36. Failing to obtain a person's written agreement to refer that person to another licensed broker for brokerage or relocation services and to inform such person being referred whether or not the licensee will receive a valuable consideration for such referral.
3. When a licensee has previously been sanctioned by the commission or disciplined by any other state's real estate brokerage licensing authority, the commission may consider any such prior sanctions or disciplinary actions by another state's real estate brokerage licensing authority in determining the severity of a new sanction which may be imposed upon a finding that the licensee has committed an unfair trade practice, that the licensee has violated any provision of this chapter, or that the licensee has violated any of the rules and regulations of the commission. The failure of a licensee to comply with or to obey a final order of the commission may be cause for suspension or revocation of the individual's license after opportunity for a hearing.
4. Whenever a licensee acts in a real estate transaction as a principal or as an officer, employee, or member of a firm or any other entity acting as a principal, the commission may impose any sanction permitted by this chapter if the licensee commits any unfair trade practice enumerated in this Code section or violates any other provision of this chapter or any rules and regulations adopted pursuant to this chapter in such a transaction.
5. Whenever a community association manager, a salesperson, or an associate broker violates any provision of this chapter or any rules and regulations adopted pursuant to this chapter by performing any duty or act of a broker enumerated in this chapter or any rules and regulations adopted pursuant to this chapter either with the proper delegation of that duty or act by the broker or without the broker's authorization, the commission may impose any sanction permitted under this chapter on the license of such community association manager, salesperson, or associate broker.

(Ga. L. 1925, p. 325, §§ 11, 12; Ga. L. 1929, p. 316, § 32; Code 1933, §§ 84-1417, 84-1418; Ga. L. 1949, p. 943, § 4; Ga. L. 1965, p. 629, § 9; Code 1933, § 84-1421, enacted by Ga. L. 1973, p. 100, § 1; Ga. L. 1974, p. 379, § 4; Ga. L. 1977, p. 691, § 1; Ga. L. 1978, p. 231, §§ 5-7; Ga. L. 1980, p. 1398, § 8; Ga. L. 1983, p. 1411, § 5; Ga. L. 1984, p. 844, § 9; Ga. L. 1985, p. 360, §§ 15, 16; Ga. L. 1986, p. 10, § 43; Ga. L. 1986, p. 364, §§ 9, 10, 11, 12; Ga. L. 1987, p. 3, § 43; Ga. L. 1987, p. 252, §§ 7, 8; Ga. L. 1989, p. 1619, § 8; Ga. L. 1990, p. 650, §§ 5-8; Ga. L. 1991, p. 642, § 7; Ga. L. 1992, p. 1402, § 2; Ga. L. 1992, p. 1541, §§ 2, 3; Ga. L. 1993, p. 123, § 58; Ga. L. 1993, p. 376, § 2; Ga. L. 1995, p. 1302, § 13; Ga. L. 1996, p. 194, § 12; Ga. L. 1998, p. 196, § 7; Ga. L. 2000, p. 1527, § 21; Ga. L. 2003, p. 370, § 14; Ga. L. 2004, p. 398, § 1; Ga. L. 2006, p. 792, § 8/SB 547; Ga. L. 2007, p. 483, § 9/SB 114; Ga. L. 2009, p. 319, § 1/HB 315; Ga. L. 2011, p. 415, § 2/HB 53; Ga. L. 2011, p. 613, § 3/HB 423; Ga. L. 2012, p. 1099, §§ 12, 13/SB 365; Ga. L. 2015, p. 1208, § 2/SB 95; Ga. L. 2016, p. 516, § 2/HB 869.)

The 2015 amendment, effective July 1, 2015, in paragraph (b)(5), substituted "federally insured account at a financial institution" for "federally insured checking account" near the beginning, and substituted "such" for "said" three times; and deleted "checking" following "interest-bearing" in paragraph (b)(29).

The 2016 amendment, effective July 1, 2016, in subsection (b), substituted the present provisions of paragraph (b)(20) for the former provisions which read: "Failure by a broker to deliver to the seller in every real estate transaction, at the time said 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 said transaction from such buyer and how and for what the same was disbursed; the broker shall retain true copies of such statements in the broker's files" and, in paragraph (b)(27), inserted "if provided to the licensee" following "closing statements".

- Civil liability of real estate broker for discriminatory actions in connection with sale or purchase of housing accommodations, §§ 8-3-202 and8-3-207.

Suspension or revocation of license of real estate broker or salesperson for violation of laws relating to discrimination in sale, lease, financing of housing accommodations, § 8-3-208.

False or fraudulent advertising, § 10-1-420 et seq.

- Pursuant to Code Section 28-9-5, in 2006, "commission on behalf" was substituted for "commission in behalf" in division (b)(17)(C)(i).

- For note on 1993 amendment of this Code section, see 10 Georgia St. U.L. Rev. 23 (1993).

Paragraphs contained in this section are regulatory in nature. Campagna v. Sara Hudson Realty Co., 137 Ga. App. 451, 224 S.E.2d 102 (1976).

This section did not create a new legal right. Campagna v. Sara Hudson Realty Co., 137 Ga. App. 451, 224 S.E.2d 102 (1976).

Unless dishonest or criminal activity is involved, this section does not authorize the commission to punish by rules and regulations. Georgia Real Estate Comm'n v. Warren, 152 Ga. App. 283, 262 S.E.2d 570 (1979).

- In order for there to be a "substantial misrepresentation" there must be an intention to mislead. Georgia Real Estate Comm'n v. James, 152 Ga. App. 193, 262 S.E.2d 531 (1979).

- Revocation of license, even after hearing evidence of mitigation, is within the commission's discretion. Land v. Georgia Real Estate Comm'n, 142 Ga. App. 860, 237 S.E.2d 243 (1977).

- Racial discrimination in housing is a serious problem which demands rectification; to this end this section gives the Real Estate Commission the power to suspend or revoke a realtor's license if the realtor discriminates. Georgia Real Estate Comm'n v. Horne, 141 Ga. App. 226, 233 S.E.2d 16 (1977).

Motivation behind a broker's actions is irrelevant in cases of discrimination under this section, if in fact such actions amount to racial discrimination in sale of property. Georgia Real Estate Comm'n v. Horne, 141 Ga. App. 226, 233 S.E.2d 16 (1977).

- Broker's failure to reveal material information regarding a defect on property to the purchaser constituted a substantial misrepresentation in violation of O.C.G.A. § 43-40-25. Georgia Real Estate Comm'n v. Peavy, 229 Ga. App. 201, 493 S.E.2d 602 (1997).

- Real estate agents did not have an affirmative duty to voluntarily disclose the existence of other bidders when soliciting or accepting written offers from potential purchasers. Rayborn v. Long, 243 Ga. App. 128, 532 S.E.2d 433 (2000).

- O.C.G.A. §§ 10-6A-5,10-6A-1443-40-15(a), and43-40-25(b)(25) and related code sections fail to impose any duties regarding pets other than the general duty to exercise reasonable skill and care in performing all duties; a trial court's summary judgment dismissing claims against real estate agents and brokers for injuries arising from a dog bite while the injured person was viewing listed property for sale was affirmed. Gibson v. Rezvanpour, 268 Ga. App. 377, 601 S.E.2d 848 (2004).

Cited in Flowers v. Georgia Real Estate Comm'n, 141 Ga. App. 105, 232 S.E.2d 586 (1977); Kimball Bridge Rd. v. Everest Realty Corp., 141 Ga. App. 835, 234 S.E.2d 673 (1977); Waugh v. Georgia Real Estate Comm'n, 148 Ga. App. 165, 250 S.E.2d 879 (1978); Georgia Real Estate Comm'n v. Burnette, 243 Ga. 516, 255 S.E.2d 38 (1979); Georgia Real Estate Comm'n v. James, 152 Ga. App. 193, 262 S.E.2d 531 (1979); Georgia Real Estate Comm'n v. Brown, 152 Ga. App. 323, 262 S.E.2d 596 (1979); Campbell v. Mutual Serv. Corp., 152 Ga. App. 493, 263 S.E.2d 202 (1979); Hartrampf v. Georgia Real Estate Comm'n, 256 Ga. 45, 343 S.E.2d 485 (1986); Bowdish v. Johns Creek Assocs., 200 Ga. App. 93, 406 S.E.2d 502 (1991).

Allowing licensed persons to be affiliated with more than one real estate firm is permitted by the laws governing real estate brokers, although certain multiple affiliations could lead to violations of the law in specific situations. 1983 Op. Att'y Gen. No. 83-26.

§ 43-40-20 as to trust accounts. - Exception in O.C.G.A. § 43-40-25(a)(5) to the provision enumerating a ground for sanction of a licensee's license, as an indirect authorization, must yield to the direct command in the more extensive provisions of O.C.G.A. § 43-40-20 requiring trust funds to be placed in a trust or escrow account. 1984 Op. Att'y Gen. No. 84-80.

- General partner, who is a licensed broker, in a limited partnership may not purchase a surety bond in lieu of placing security deposits in the broker's designated trust account and, similarly, a partner in a partnership, who is also a licensed real estate broker, may not purchase a surety bond in lieu of placing deposits in a designated trust account. 1984 Op. Att'y Gen. No. 84-80.

- Licensed real estate broker who is not licensed as a real estate appraiser may provide a real estate broker's price opinion to a lending institution for financing purposes. 1999 Op. Att'y Gen. No. 99-15.

RESEARCH REFERENCES

ALR.

- Does ordinary broker's contract exclude right of sale by owner, 10 A.L.R. 814; 20 A.L.R. 1268.

Validity of contract by agent for compensation from third person for negotiating loan or sale with principal, 14 A.L.R. 464.

Implied contract of employment of real estate broker to procure customer, 49 A.L.R. 933.

Real-estate broker's right to commission on sale, exchange, or lease of property listed without statement of price or other terms, 169 A.L.R. 380.

Real-estate broker's right to commission where purchaser refuses to go through with executory contract because of reckless misrepresentation made to him by broker respecting property, 9 A.L.R.2d 504.

Effect of statement of real-estate broker to prospective purchaser that property may be bought for less than list price as breach of duty to vendor, so as to bar claim for commission, 17 A.L.R.2d 904.

Rights and remedies where broker or agent, employed to purchase personal property, buys it for himself, 20 A.L.R.2d 1140.

Duty of real-estate broker to disclose that prospective purchaser is a relative, 26 A.L.R.2d 1307.

Broker's nondisclosure or misrepresentation of sale price of other property as affecting his rights against principal, 32 A.L.R.2d 728.

Agreement between brokers as within statute requiring agreements for commissions for the sale of real estate to be in writing, 44 A.L.R.2d 741.

Grounds for revocation or suspension of license of real-estate broker or salesman, 56 A.L.R.2d 573; 22 A.L.R.4th 136.

Broker's liability for damages or losses sustained by vendor of real property to vendee because of broker's misrepresentations, 61 A.L.R.2d 1237.

Right of principal to recover punitive damages for agent's or broker's breach of duty, 67 A.L.R.2d 952.

Liability of real-estate broker or agent to principal for concealing or failing to disclose offer, 7 A.L.R.3d 693.

Licensed real-estate broker's right to compensation as affected by lack of license on the part of partners, coadventurers, employees, or other associates, 8 A.L.R.3d 523.

Liability of real-estate broker for interference with contract between vendor and another real-estate broker, 34 A.L.R.3d 720.

Validity and construction of anti-blockbusting regulations designed to prevent brokers from inducing sales of realty because of actual or rumored entry of racial group into neighborhood, 34 A.L.R.3d 1432.

Suspension or revocation of real-estate broker's license on ground of discrimination, 42 A.L.R.3d 1099.

Failure of real-estate broker to disclose to principal fee-splitting agreement with adverse party, or adverse party's broker, as breach of fiduciary duty barring claim for commission, 63 A.L.R.3d 1211.

Revocation or suspension of real estate broker's license for violation of statutes or regulations prohibiting use of unlicensed personnel in carrying out duties, 68 A.L.R.3d 530.

Real estate broker's liability for misrepresentation as to income from or productivity of property, 81 A.L.R.3d 717.

Necessity of having real-estate broker's license in order to recover commission as affected by fact that business sold includes real property, 82 A.L.R.3d 1139.

Application of state antitrust laws to activities or practices of real-estate agents or associations, 22 A.L.R.4th 103.

Right to recover commission from seller where sale fails because of seller's failure to deliver good title, 28 A.L.R.4th 1007.

Remedies for fraud or misrepresentation as to heating or cooling costs of realty purchased, 32 A.L.R.4th 828.

Real-estate broker's or agent's misrepresentation to, or failure to inform, vendor regarding value of vendor's real property, 33 A.L.R.4th 944.

Real-estate broker's liability to purchaser for misrepresentation or nondisclosure of physical defects in property sold, 46 A.L.R.4th 546.

Grounds for revocation or suspension of license of real-estate broker or salesperson, 7 A.L.R.5th 474.