A Semi-Annual publication to all Georgia Real Estate Licensees The Georgia Real Estate Commission Newsletter Winter Spring 2011 Inside this issue: Case & Violations P1&2 Laws & News P2 Training P3 Violations P3 AMK P3 Schedule P4 Winter 2011 Newsflash: Ignorance of the Terrain can lead one down a Slippery Road in Georgia. Georgia Real Estate Commission Suite 1000 International Tower 229 Peachtree Street NE Atlanta, GA 30303-1605 Phone 404-656-3916 Members George W. Holtzman Chair Bill Bonner Vice Chair Paul G. Brower David J. Burge Scott Free Gwen Fulcher Young Staff William L. Rogers, Jr. Real Estate Commissioner Craig Coffee Deputy Commissioner Sometimes Things Can Just Snowball... Consider this actual case and decide how you would have handled it. As illustrated in the following salesperson conducted negotiations on case, a licensee's ignorance can several of these listings but no contracts lead him down a slippery road and were written. his actions can easily snowball into Several violations occurred: multiple violations of the Georgia 1. The salesperson continued to advertise License Law, Rules and properties under a Broker with which he Regulations. was no longer affiliated. A salesperson decided to 2. The salesperson conducted misleading transfer his license from brokerage advertising on multiple properties. Firm A to brokerage Firm B. Upon 3. The salesperson continued to advertise request, the Broker of Firm A a listing that was expired. License Law promptly released the salesperson's requires removal of all advertising license from the firm. However, they within 10 days of the listing's expiration. did not consult the salesperson's 4. The salesperson continued to perform independent contractor agreement real estate brokerage activity as if regarding the handling of several affiliated with Firm A while he was existing listings obtained by the affiliated with Firm B without the salesperson while affiliated with Firm knowledge and approval of Broker B. A. The salesperson affiliated with Firm B and informed his new Broker in writing that no listings would be transferred from Firm A to Firm B. Two months after affiliating with Firm B, signs, web postings, and multiple listing services still advertised properties with the salesperson's name and Firm A's name and contact information. Even an expired listing and a listing withdrawn from Firm A were still being advertised! In addition, the These activities are false and misleading to the public and violate the License Law. In determining the appropriate disposition in this case, the Commission determined that the salesperson's actions demonstrated a disregard for the License Law but resulted in no monetary harm to the public. The Commission issued a Citation and the salesperson was required to pay $1,000.00 and complete several education courses. If he did not comply with these conditions within 45 days, other disciplinary action could be taken against him by the Commission Licensee Laws Violated: 43-40-25(b) (2) (7) (13) (14), 43-4019(d), 520-1-.07(1) (5) (c) (e), 520-1.09 (2) (2.1) (Each issue of this newsletter will contain an actual case study with reference to specific license laws that can be used in broker-licensee training meetings.) Citations: 1) Maximum of $1,000 for each violation 2) Maximum of $5,000 for multiple violations in one citation 3) Usually requires completion of a certain course of study 4) May require the filing of periodic reports on the broker's trust account(s) by an independent accountant 5) May require any combination of the above. Clipart from MicrosoftTM page 2 Georgia Real Estate Commission Newsletter Georgia Real Estate Commission News and Recent Changes to the License Law, Rules and Regulations William L. Rogers appraisers. Jr. was sworn in as A native of Gainesville, Georgia, the new Real Estate Commissioner Rogers earned his Commissioner for Bachelor degree in History at Emory the state of Georgia University and a JD degree at the on Tuesday January University Of Georgia School Of Law. 18th. He serves as the Executive After a br ief stint as a 2 nd Lieutenant Officer for the Georgia Real Estate in the U.S. Army Signal Corps, Commission and the Georgia Real Commissioner Rogers was admitted Estate Appraisers Board. His to the State Bar of Georgia in 1971. administrative responsibilities Prior to joining the Real Estate include overseeing the day-to-day Commission, he was a partner at operations of the state agency Whelchel, Dunlap, Jarrard & Walker, responsible for implementing the LLP in Gainesville practicing real license law regulating Georgia's estate and banking law. over 90,000 real estate brokers and In other news, recent law salespersons and the law regulating changes address the registering of Georgia's 5,000 real estate Appraisal Management Companies. On June 2, 2010 the Governor signed Georgia House Bill 1050 that requires Appraisal Management Companies in Georgia to register with the Georgia Real Estate Appraisers Board. This bill amends O.C.G.A. Title 40-39A. The Commission web site provides a list of Appraisal Management Companies. The electronic newsletter of the Real Estate Commission announces changes in License Laws, Rules and Regulations as they are adopted. Go to www.grec.state.ga.us to sign up for the GREC RENewsletter. Common Property Management Violations Property management issues are getting a lot of attention from investigators at the Real Estate Commission. Licensees must realize that managing their own property is still property management. In addition, Brokers must establish clear policies and procedures regarding security deposits and management agreements. Jumping into property management requires planning and knowledge of the license laws and use of different management systems. Listed below are some of the recent, and unfortunately common, violations resulting in investigations; citations; sanctions: An associate broker did not notify his/her broker when renting out her own personal real estate A licensee did not place a rental security deposit in the broker's trust account. A Broker did not register a trust account he had established for property management activities. A salesperson acting as a principal set up her own company to conduct property management, did not inform her broker, and failed to get the new company licensed by GREC. A Salesperson acting as a principal in renting out her house did not disclose her licensure in the lease agreement nor give a copy to her Broker. A Broker failed to supervise the property management activities of a salesperson and his unlicensed assistant. A Broker did not review management agreements and rental forms resulting in incomplete and poorly written documentation. A Broker allowed an unlicensed assistant to perform the activities of a property manager. All of these situations are clear violations of the License Law, Rules and Regulations. If listing activity is slow, leasing out vacant properties may be an option, but it requires serious planning, otherwise one violation can lead to multiple violations. Property management is a specialty area of real estate. It requires established procedures for the handling of security deposits and rental deposits, clear ledger and journal entries, certain accounting systems, and familiarity with specific License Laws, Rules and Regulations. Both the firm and the individual performing Property Management services are required to have a real estate license. Georgia Real Estate Commission Newsletter Second Online CE Course Regarding Broker Issues is Free to All Licensees The Broker of the firm carries the responsibility for the licensed firm. The Commission introduced a new online course in October written to assist the Broker in managing those responsibilities. The online course titled, "Being a Broker and Staying Out of Trouble," is for Brokers and all other licensees. Every licensee can benefit from the ideas, including those for contract review, an advertising review checklist and ideas for preparing for a t rust account office examination. These tools are not only part of the course, but those page 3 lists are also available from the Georgia Real Estate Commission School web page Resource Section at www.jmre.com/grec The 2 GREC online courses are PC and MAC compatible and require an Internet connection with either FoxfireTM or Internet ExplorerTM as the browser. To enroll go to www.jmre.com/grec Summary of Recent Violations Although the Real Estate Commission works on a variety of investigative cases, certain License Law violations seem to occur repeatedly. They are listed below: Advertising violations Improper Trust account activities Activities of expired and inactive licensees Improper property management activities Improper documentation Lack of broker supervision Failure to obtain broker's approval Licensees acting as principals without proper disclosure and failure to notify their broker Individuals conducting real estate activities without a license Depending on the facts of the individual case, License Law violations lead to different types of disciplinary actions. The following actions were ordered by the Commission over the previous 6 months: 123 Citations 17 Disciplinary Sanctions 29 Suspensions 52 Cease and Desist Orders 39 Revocations of Licensure The Suspensions category includes licenses suspended due to a default on the repayment of a student loan. This type of suspension is carried out by the Commission at the direction of the Georgia Higher Education Assistance Corporation. The Commission's web site at www.grec.state.ga.us regularly posts the names of those licensees receiving disciplinary actions, such as Suspensions and Revocations. Citations are not posted. Anyone (a licensee or the public) can search by licensee to view what disciplinary actions the licensee has received. AAbsolutely MMust KKnow Section ............Do you know the AMKs? Every issue will include up to 3 critical items from the License law. A Licensee can never convert the form of the trust funds received. If $500 cash is provided as earnest money, the same cash must be given to the Broker for deposit or deposited according to the Broker's Policies and Procedures. Advertising real estate in any type of social media, such as Facebook or Twitter, must comply with the License Law, Rules and Regulations. Media includes all forms of advertising. Every real estate advertisement, including signs, web sites, etc., must include the brokerage firm name as it is licensed and the main phone number of the firm. page 4 Georgia Real Estate Commission Newsletter Brokerage Class Schedule March 30, 2011 GAMLS-South (770) 961-2203 April 27, 2011 Camden Board (912) 882-5806 May 18, 2011 Rome Board (706) 295-1727 June 15, 2011 Athens Assoc. (706) 353-1126 July 13, 2011 Cobb Assoc. (770) 422-3900 Calendar of Classes Trust Account Class Schedule March 31, 2011 GAMLS-South (770) 961-2203 April 28, 2011 Camden Board (912) 882-5806 May 19, 2011 Rome Board (706) 295-1727 June 16, 2011 Athens Assoc. (706) 353-1126 July 14, 2011 Cobb Assoc. (770) 422-3900 Common Violations Class March 23, 2011 Athens Assoc. (706) 353-1126 April 20, 2011 Hall County Board (770) 534-1564 April 26, 2011 Valdosta Board (229) 242-2085 May 2, 2011 GIRE Atlanta (404) 252-6768 May 4, 2011 Savannah Board (912) 354-1513 The Georgia Real Estate Commission Newsletter www.grec.state.ga.us Semi-Annual Publication for all Georgia Real Estate Licensees Georgia Real Estate Commission Suite 1000 International Tower 229 Peachtree Street NE Atlanta, GA 30303-1605 Phone 404-656-3916 INSIDE THIS ISSUE: Cases & Laws 1-2 Training 3 Violations 3 AMK 3 Schedules 4 PRSRT STD U.S. POSTAGE PAID ATLANTA GA PERMIT NO. 2582