GREC REnews, Vol. 2, Issue 6 (June 2006)

Georgia Real Estate Commission

GREC RENEWS

Volume 2, Issue 6 June 2006

2006 Dates to Note
June 21, 2006 Trust Account Class Dekalb Board of Realtors 770-493-6100
July 13, 2006 Trust Account Class Atlanta Board of Realtors 800-633-3583
August 29, 2006 West Georgia Board of Realtors (770) 949-9966
GREC Disciplinary Sanctions

INSIDE THIS ISSUE:

Paying Affiliated

Licensees

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Broker Management 2

Paying Commissions to Affiliated Licenses
In the late 1970s and early 1980s many salespersons and associate brokers began to want to have their real estate commissions paid to a corporation or partnership in order to receive certain perceived business and tax advantages. Later, when Georgia created the limited liability company business entity, it was added to that list. Since the License Law permitted commissions to be paid only to licensed persons, the legislature changed the law to require such business entities also to be licensed as salespersons or associate brokers. That law (a) restricted the business entity to having only one licensed individual affiliated with the entity and (b) required that the licenses of both that entity and the individual licensee to be affiliated with the same broker.
That system worked well for many years. However, it did not permit more than one licensee to be an owner of such a business entity. Thus, family members working for the same team or teams could not have their commissions paid to a single such firm. For several years the Commission has sought to find a way to accommodate those differing methods of business operation. The new law eliminates the dual license requirement and permits such payments when the brokerage firm maintains and retains a written agreement that:
1. authorizes the firm to pay the commission to the unlicensed business entity,
2. affirms that the individual licensee affiliated with the firm owns more than a 20 percent interest in the unlicensed business entityt,
3. provides that the individual licensee earned the commission in behalf of the firm, and
4. affirms that the unlicensed business entity does not perform real estate brokerage activity. O.C.G.A. Section 43-40-25 (b) (17) (c):
Effective July 1, 2006, the License Law will no longer require a separate license for such business entities to be able to receive real estate commissions. On July 1, 2006, any such licenses already issued will terminate; and the Commission will issue no new such licenses. Brokers and their affiliate licensees who want their commissions paid to a separate business entity must then enter into new agreements as required by subparagraph (C) above.

Focus on Terminology:
"Hectare"
Georgia Real Estate Commission Suite 1000, International Tower 229 Peachtree Street N.E. Atlanta, GA 30303-1605

Good News!
Real estate licensees and appraisers can now view a complete listing of all education course titles on their record. On the homepage, click on "Check Your Education." You will need your license number and will create your own password to access the course titles.
Check periodically to ensure that the school has entered all courses you have taken in the Commission's records. If a course is not in the Commission's records, contact the school at which you took the course. The Commission cannot help you get it on the record.
All the required 24 hours of courses must be in the Commission's records prior to your renewal. If all courses are not in your record, you can only renew to inactive status.
Access this new feature by clicking below: http://www.grec.state.ga.us/greab/renew&online/Online_Broker_Trans_Instruction.html
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Georgia Real Estate Commission
Suite 1000, International Tower 229 Peachtree Street N.E. Atlanta, GA 30303-1605
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Volume 2, Issue 6
How Many Agents Can One Broker Truly Manage? June 2006
No matter what number you pick, the firm's broker (also known as the "qualifying broker") is responsible for the actions of all of them. The license law stipulates many of the responsibilities required of a firm's broker.
All the real estate brokerage activities of the firm must be under the direct management and supervision of a broker (or qualifying broker). The firm's broker may elect to delegate any of the management duties, but the broker is still ultimately responsible for the acts of the person to whom such duty is delegated. The firm's broker is also responsible for the actions (including violations of the license laws and rules) of any licensee operating under him/her unless the broker is able to prove all of the following: (1) The broker had reasonable procedures in place to supervise affiliates' actions; (2) The broker did not participate in the violation; and (3) The broker did not ratify the violation. The firm's broker is responsible for establishing and continually enforcing procedures for: Reviewing all of the following for compliance with laws, rules and regulations: all advertising; all listing contracts, leases, sales contracts, management agreements, and offers to buy, sell, lease, or exchange real property secured or negotiated by the firm's associates within 30 days of the date of the offer or contract; and the firm's trust accounting practices (The Broker must have signatory powers on all trust accounts that the firm maintains.); Ensuring that the firm: utilizes only licensed personnel to perform those acts requiring licensure; compensates only those licensees that are actively licensed with the firm; and disburses monies from trust accounts properly; Providing: programs of study and review of appropriate laws and rules for licensees; safekeeping for all records related to real estate transactions; providing written policies and procedures for licensed personnel; and having a written agreement with each affiliated licensee specifying how the licensee will be paid for work during the time of the affiliation and for work begun but not completed prior to leaving the firm. The primary mission of the Real Estate Commission is to protect and safeguard the public interest. The firm's broker helps to achieve that mission by providing appropriate management authority to licensees and the public in real estate transactions handled by the firm. Click here to read the wording of the law on broker responsibility at Section 43-40-18.

Focus on Terminology: "Hectare"
The Hectare is a metric measurement for land. The Hectare is approximately 2.471 acres of land, equivalent to approximately 107,637 square feet.

GREC

Some Real Estate firms claim they have 100 or more Brokers in the company. How can that be?
Each firm has only one broker, or qualifying broker. The license law makes all agents licensed with the firm either salespersons or associate brokers (one who has completed the broker's prelicense course and passed the state exam for brokers but does not choose to be a firm's broker). The firm's broker may authorize an affiliated associate broker or salesperson to act as an office manager or to perform other managerial functions. However, the responsibility for all real estate brokerage activity of the firm remains with the broker. For example, if a salesperson or associate broker office manager handles trust funds improperly, the Commsison may seek to discipline the licenses of both the office manager and the firm's broker.
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