GREC REnews, 2018 May

GGRREECC RREENNeewwss May 2018
Volume 14 Issue 5

Monthly Newsletter of the Georgia Real
Estate Commission

2018Calendar
Common Violations Class - May 24, 2018 Savannah BOR
Savannah, GA 912-354-1513 - June 13, 2018 GAMLS Tucker, GA 770-493-9000 - July 24, 2018 Augusta BOR Augusta, GA 706-736-0429 Georgia Instructor Training (GIT) August 1-2-2018 Georgia Realtors Atlanta, GA GREEA@garealtor.com
Link to the Georgia Real Estate License Laws, Rules,
and Regulations
Link to GREC Disciplinary Actions View Current Suspensions and Revocations

This Issue Case of Developers Disciplinary Stats Conference Notice Focus on Terminology The Appraisers Page

P.1-2 P. 1 P. 2 P. 2 P. 3-5

A Case Developed by Developers

All names used herein are fictional. John Dither owned a development company, Common Development Group, Inc, with two other individuals. They were actively marketing several residential lots for sale that were owned by the Common Development Group. John Dither and his two associates were real estate licensees in Georgia. In fact, they formed a real estate company (Common Realty) for the purpose of marketing their own Firm's properties and producing commission income.
John Dither created, produced, and distributed a variety of marketing materials regarding the subdivision in various media on site, as well as online. None of the marketing materials disclosed that the three owners of the company, and the lots, were actually real estate licensees.
While promoting the subdivision, the real estate brokerage division of the company listed and marketed Lot 73 in their subdivision development. Although they were aware that Lot 73 was already listed exclusively with a different brokerage firm, they assumed that since they owned the property, they could continue to advertise and market it.
Additionally, when a contract was entered into on Lot 29 in their subdivision, the owners signed the contract and failed to disclose their licensure within the contract.
Lastly, during the development process, the company moved office locations. When the investigators of the Georgia Real Estate Commission came calling, they discovered the company was no longer at the address registered with the Commission.
During the GREC investigation, the following violations were found:
1. They did not disclose that they were licensed in their marketing of the lots. 43-40-.18 States broker obligations in(c)(1) Reviewing all advertising to ensure compliance with this chapter and its rules and regulations;(3) Reviewing for compliance with this chapter and its rules and regulations all listing contracts, leases, sales contracts, and management agreements to buy, sell, lease, or
...Continued on page 2

Link to Proposed
Rule Changes

Click Here

Click here to review a legend of the disciplinary actions the Commission may impose.
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"Avoiding Trust
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"Being a Broker and Staying Out of Trouble"
Georgia Real Estate Commission Suite 1000 International Tower 229 Peachtree Street NE Atlanta, GA 30303-1605 Phone 404-656-3916

GREC RENews May 2018, Volume 14 Issue5
Developing Case...continued from page 1
exchange real property and any offer to buy, sell, lease, or exchange real property accepted within the time limit of said offer secured or negotiated by the firm's associates. This review shall take place within 30 days of the date of the offer or contract; 2. They did not disclose any agency relationship in the purchase and sale agreement. 520-1-.06(4)(a) No licensee shall buy or lease, nor take an option to buy or lease, any interest in property listed with the licensee or the licensee's firm on which the licensee or the licensee's firm has been requested to act as a broker, unless the licensee shall clearly disclose the licensee's position as a buyer to the seller or as a tenant to the landlord, as the case may be, and insert a clause to this effect in the contract. Neither shall any licensee sell or lease or otherwise convey any interest in property owned by the licensee to any person, unless the licensee shall clearly disclose the licensee's position as a seller to the buyer or as a landlord to the tenant, as the case may be, and insert a clause to this effect in the contract. 3. They listed and marketed a property that was already under listing agreement. 43-40-25 states the violation(b)(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. 4. They failed to notify the Georgia Real Estate Commission with 30 days of a change of address. 520-1-.04 States the violation (1)(a)(4.)(1) failure to notify the Commission in writing within 30 days of a change of address, of the opening or closing of a designated trust account, of transferring to a new company, or of leaving a firm to go on inactive status; As a result of their actions and inactions, the parties involved were issued a Citation, and in addition, were required to do the following: 1. Pay a fine by money order or cashier's check. 2. Reimburse the Commission for its administrative, investigative, legal costs, and expenses incurred as a result of the investigation. 3. Complete a three-hour course approved the Commission on the subject of legal issues and the avoidance of license law violations. All of these violations and expenses could have been easily avoided. A review of the Georgia Real Estate License Law, Rules, and Regulations can be accomplished with training in a classroom or online from a variety of GREC approved schools and training sources. In addition, brokers are required to provide training to the licensees affiliated with their brokerage firm. "The broker or qualifying broker shall be responsible for establishing, implementing, and continuing procedures for ...providing programs for study and review of this chapter and its rules and regulations for all licensed associates." 43-40-.18(c)(2)
2018 REEA Conference
The Real Estate Educators Association (REEA) is holding their annual conference June 21-25, 2018, in San Diego, California. Contact REEA headquarters at 520-609-2380 or www.REEEAConference.com for more information.
Focus on Terminology: "Disclose"
The definition of disclose by Webster's Dictionary is "to open up; to expose to view; to make known or public." All of these descriptions apply to real estate brokerage in a very direct message. As a general rule of thumb when deciding whether something needs to be disclosed or not, consider the following: if the party that does not have the information might make a better informed decision with the information, it should probably be disclosed.
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The Appraisers Page

Georgia Real Esta1te Appraisers Board

May 2018

Useful Links:
GREAB Web Site

Appraisal Act


Georgia Real Estate Appraisers Board Update:
By: D. Scott Murphy, SRA
There is a lot of confusion surrounding recent changes to qualifications for real estate appraisers. On February 1, 2018, the Appraisals Qualifications Board (AQB) adopted changes to the Real Property Appraiser Qualification Criteria. In a surprising move to some, they have made the qualifications less stringent. Its just a little more than 10 years since the largest real estate melt down in our nation's history and it takes less education and less experience to become an appraiser the third party, unbiased entity designed to ensure collateral value is reasonable.

GREAB Disciplinary Sanctions


Some would say the AQB yielded to pressure from the large lending lobbies who have complained about an apparent appraiser shortage which caused long turn around times and higher appraisal fees. The AQB's response is that they did not yield to lender pressure. They state the qualifications for appraisers in terms of experience hours have not changed significantly for many years and the required courses have increased. They feel that this increase in course work can replace "in the field" experience. They also state that these requirements simple represent the minimum requirements to become an appraiser.

There are two major areas which are being changed 1. college level education 2. The amount of experience hours required and the amount of time required to complete those hours

On February 1, 2018 the AQB voted to change the minimum requirements as follows:

PART 1: College level education

...Continued on page 4

Page 1 Page 3

The Appraisers Page

Georgia Real Estate Appraisers Board

May 2018

Useful Links:
GREAB Web Site


Georgia Real Estate Appraisers Board Update:
By: D. Scott Murphy, SRA

Appraisal Act


GREAB Disciplinary Sanctions


PART 2: Experience hours and time required to complete those hours See Next Page
...Continued on page 5

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The Appraisers Page

Georgia Real Estate Appraisers Board

May 2018

Useful Links: Georgia Real Estate Appraisers Board Update:

GREAB

By: D. Scott Murphy, SRA

Web Site



Appraisal Act



GREAB

Disciplinary

Sanctions



*charts above were taken from the Appraisal Foundation website

The part that is no not fully understood by most is that these are simply the minimum requirements established by the

AQB. Each state sets their own standard. The AQB just says it can not be less stringent that what is outlined above.

While these standards went into effect by the AQB on May 1, 2018, each state must determine what if any of these

changes they will adopt. This can be a lengthy process with inter-agency debate, public meetings, legal approvals,

legislative approvals in some situations and then published lead times.

The Georgia Real Estate Appraisers Board began this process two months ago and has formulated a proposed rule change and posted it for public opinion. A public meeting will be held at the Board's office Wednesday June 20, 2018 at 9:30am. A copy of the rule can be found on the Board's website or at the Board's office. Anyone interested in commenting should attend or send comments to the board prior to this meeting. Please visit the website for more specific instructions.

What do you think? Do you think the education requirements should be reduced? Do you think the time in the field, learning to be an appraiser should be cut in half for residential appraisals and reduced from 30 months to 18 months for commercial appraisers?

How many license categories are there for real estate appraisers in Georgia?

If you answered FIVE you would be correct. Trainee Registered Licensed Certified Residential Certified General

Many states only have THREE categories eliminating the Registered and the Licensed categories.

What is the difference in Trainee and Registered?

Trainee is our newest category. This category was separated out from Registered to identify appraisers who are on a

track to advance to higher classifications. This category requires the appraiser to take a Supervisory Appraiser course

and align themselves with a Supervisory Appraiser. The Supervisory Appraiser must also take this class and must

register the Trainee appraiser under his/her license number on the GREAB website.

Registered appraisers are typically individuals who are not interested in advancing and do all non-federally related

appraisal work quite often they are real estate agents or insurance agents who wish to perform real estate

appraisals as well.

If you are a registered appraiser and are looking to or are in the process of advancing you must have taken the

Supervisory Appraiser class and you must be registered under one or more Supervisory Appraisers on thePaGgeR2 EAB website or you are in violation of the rule and may not receive experience credit.

As always, I welcome your comments and feedback.

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