Real Estate Study

Real Estate Study Guide

The Purpose of Real Estate License Laws in Georgia

Let’s say you broke your leg in a skateboarding accident. Would you let your neighbor, Bob, who “used to be a medic in ‘Nam,” set your leg for you? Probably not. That’s because Bob doesn’t have the credentials, training, and experience to do the job.

The purpose of licensing is to protect the public by requiring certain education, training and standards of licensees. The license provides the public with assurance that you know what you’re doing. The requirements for licensing provide an important oversight component to ensure that you continue to meet the terms of your license.

There are different types of licenses based on experience level, training, and education, and different requirements and responsibilities that go with each license. One day, you may manage your own firm. In the meantime, learning how to be the best licensee you can be will provide a great foundation for that step.

The good news is, once you have your license, you will legally be able to perform activities that only licensed real estate professionals may perform—and receive commission for performing them. And if you ever use an unlicensed assistant, or recruit a friend or relative to assist you in your work, be sure you know the limits on their activities, because if they overstep and perform activities that require a license, the only license that’s up for revocation will be yours! Remember, when it comes to real estate, if you’re selling your own property or buying property for yourself, you don’t need a license. But if you’re involved in buying and selling property ‘on behalf of others, for compensation of any kind,’ then you’ll need a real estate license to do those things legally.

In Georgia, the authority that administers the law in known as the Georgia Real Estate Commission, or GREC for short. GREC can create rules and regulations for licensees to ensure that the law is followed. You’ll learn a bit more about GREC throughout this section, but it’s a good idea to familiarize yourself with its website, where adopted rules and other notices are posted regularly. You may even want to subscribe to its newsletter.

Let’s Teach Thomas a Thing or Two

Candace and Thomas have already discussed quite a bit related to license law, but Thomas will need to get a few terms down straight. He, and all licensees in Georgia, will see these terms quite often throughout their education, and careers.

Georgia Real Estate Commission - Regulates license law in Georgia; issues licenses; often referred to as GREC or the commission.

Broker - A person who, for a commission or other valuable consideration, performs specific real estate-related acts for another person. These acts include, but are not limited to, helping someone in the selling, exchanging, buying, leasing, auctioning, and/or listing of real estate.

Salesperson - A person who is associated with a licensed broker for the purpose of performing an act for which a real estate license is required

Party - A prospective buyer, seller, landlord, or tenant, or the authorized representative of any of those parties, in a real estate agreement. This does not include a license holder representing a party to the transaction.

Third party - A purchaser, seller, tenant, or landlord who is not subject to a representation relationship with a real estate licensee

Associate broker- A broker who chooses to work as a salesperson for another broker

Licensee - A person who holds an active real estate license

Brokerage engagement - A written contract, required in Georgia, in which the seller or buyer becomes the client of the broker and promises to pay the broker a valuable consideration or agrees that the broker may receive a valuable consideration from another for producing a ready, able, and willing prospective buyer or seller, or performing other brokerage services. Also called brokerage agreement.

Real estate - This is the land and all of those items that are attached to the land. It is the physical, tangible entity, together with all the additions or improvements on, above, or below the ground

Georgia Real Estate Commission: Powers and Duties

43-40-2 Creation of the Commission

This section creates the commission, which is composed of six members appointed by the governor and approved by the Georgia State Senate:

Five members must be licensed in real estate for at least five years and must have been residents of Georgia for at least five years

One member must be an individual who’s not associated with the real estate industry, but who has a demonstrated interest in consumer affairs

Members meet at least monthly and receive a small per diem amount for each meeting day, plus expenses. They serve five-year terms. The governor may remove members for:

Inability to perform

Negligence

Incompetence

Dishonest conduct

Being the subject of disciplinary sanction by any licensing agency

In the event a member can’t serve out their term, the governor may appoint a replacement, which doesn’t require senate approval.

43-40-3 Determination of Fees

Although GREC is a state agency, it doesn’t receive tax dollars. Instead, it’s a self-sustaining agency through licensee fees. The commission may periodically adjust these fees as needed to meet its operating expenses.

43-40-4 Office of the Commissioner

In addition to the six non-salaried members of the commission, there is a commissioner. This individual is a full-time, salaried employee of the commission who may hire support staff to meet commission objectives.

43-40-5 Status of the License of Commission Employees

A licensee is not allowed to maintain an active license while serving as a commission member or employee. The licensee must place their license on an inactive status during their term with the commission. Fees will not be charged to these individuals while employed by the commission.

43-40-6 Seal and Records

The commission uses an official seal, either engraved or ink-stamped, with the words “State Real Estate Commission, State of Georgia.” When affixed on a document with the commissioner’s signature, this gives the document the legal weight and effect of an original document.

GREC must keep on hand documents sufficient to certify the prior five years’ licensing records.

43-40-7 Application for Licensees and Confidentiality

Individuals who want to obtain a real estate license must complete an application approved by the commission. The commission may, at the time of application, request additional documentation from the applicant. All provided documentation will be kept confidential, but the following will be made available to the public on the GREC website:

Licensee name, number, and license status

Disciplinary action against the licensee

43-40-14 Power of the Commission to Issue, Revoke, Suspend and Censure

The commission, through the power granted in Title 43, may:

Issue, revoke, or suspend licenses

Censure licensees

Enter into contracts with auditing professionals to examine brokers’ trust account

Note that GREC’s authority is limited to real estate license law.

Georgia Real Estate Commission Members

Six Members

Five members who are licensed brokers (as well as residents) in Georgia for five+ years

One member serving as a member of the public

All appointed by the governor and approved by the Georgia State Senate

Members serve five-year terms

A member of the commission is selected each year as the chairperson

Georgia Real Estate Commission: Power to Determine and Impose Fees

Because GREC doesn’t rely on tax dollar support, it has the authority to impose fees to sustain its operation, and adjust those fees as needed. These non-refundable fees are imposed on licensees and deposited into the state treasury. The commission’s costs are then paid from the treasury.

Fees are imposed for:

Examinations (failing an examination will require retaking the exam, and an additional fee will be required)

Activating a license

Renewing a license

Lapses in licensure may be cured within two years by the licensee paying:

All renewal fees

Late charges

A reinstatement fee

Licenses that have lapsed longer than two, but fewer than five years, require all of the above plus the completion of any education the commission requires. This may include the entire pre-license course for the type of license being reactivated.

Licensing Qualifications in Georgia

Qualifications for licensure in Georgia depend on the type of license. These are defined in 43-40-8 Qualifications of Licensees; Courses; Continuing Education, Reinstatement and Renewal of the Georgia Code.

Community Association Manager License

To be licensed as a community association manager, the applicant must:

Be at least 18 years old

Be a Georgia resident (unless qualifying as a non-resident licensee)

Hold a high school diploma or equivalent

Successfully complete a 25-hour in-class community association manager course

Successfully complete a state community association manager examination

Salesperson’s License

To be licensed as a salesperson, an applicant must:

Be at least 18 years old*

Be a Georgia resident (unless qualifying as a non-resident licensee)

Hold a high school diploma or equivalent

Successfully complete a 75-hour in-class salesperson course

Successfully complete the state salesperson’s examination with a passing score

Pay the fee for the salesperson exam

*A 17-year-old can complete the pre-licensing requirements, and take the exam, but must wait until age 18 to apply for a license.

Post-licensing Requirements for Salespersons

Within the first year of licensure, a salesperson must complete a 25-hour post-licensing course. This course should be specific to the salesperson’s area of real estate practice. The post-licensing course includes a commission-approved exam, and the licensee must successfully complete the course and exam to remain licensed.

If the licensee fails to complete the post-licensing requirement, their license will lapse. A licensee who enrolls in the course and doesn’t complete it in time can take it within six months to reinstate their license. If she waits more than six months, she’ll be charged reinstatement penalty fees.

*The successful completion of the 25-hour post-licensing course will count as nine course hours of continuing education for the first renewal period only, therefore, an additional 27 hours of continuing education is required before the end of the first four year renewal period.

Broker’s License

To be licensed as a broker, an applicant must:

Be at least 21 years old

Be a Georgia resident (unless qualifying as a non-resident licensee)

Hold a high school diploma or equivalent

Have been actively licensed for at least three of the previous five years

Successfully complete in-class education:

60 hours for those holding a salesperson's license

60 hours plus an additional 75 hours for those holding a community association manager’s license (the 75 hours equates to the pre-license education required of salespersons)

Successfully complete the state broker’s examination

Let’s Teach Thomas a Thing or Two

Georgia Real Estate Commission - Regulates license law in Georgia; issues licenses; often referred to as GREC or the commission.

Salesperson - A person who is associated with a licensed broker for the purpose of performing an act for which a real estate license is required

Third party - A purchaser, seller, tenant, or landlord who is not subject to a representation relationship with a real estate licensee

Associate broker- A broker who chooses to work as a salesperson for another broker

Licensee - A person who holds an active real estate license

The Purpose of Real Estate License Laws in Georgia

Georgia Real Estate Commission: Regulates license law in Georgia; issues licenses; often referred to as GREC or the commission.
Broker: A person who, for a commission or other valuable consideration, performs specific real estate-related acts for another person. These acts include, but are not limited to, helping someone in the selling, exchanging, buying, leasing, auctioning, and/or listing of real estate.
Salesperson: A person who is associated with a licensed broker for the purpose of performing an act for which a real estate license is required.
Party: A prospective buyer, seller, landlord, or tenant, or the authorized representative of any of those parties, in a real estate agreement. This does not include a license holder representing a party to the transaction.
Third party: A purchaser, seller, tenant, or landlord who is not subject to a representation relationship with a real estate licensee.
Associate broker: A broker who chooses to work as a salesperson for another broker.
Licensee: A person who holds an active real estate license.
Brokerage engagement: A written contract, required in Georgia, in which the seller or buyer becomes the client of the broker and promises to pay the broker a valuable consideration or agrees that the broker may receive a valuable consideration from another for producing a ready, able, and willing prospective buyer or seller, or performing other brokerage services. Also called brokerage agreement.
Real estate: This is the land and all of those items that are attached to the land. It is the physical, tangible entity, together with all the additions or improvements on, above, or below the ground.