Georgia Real Estate Commission GREC RENEWS Volume 3, Issue 8 August 2007 2007 Dates to Note U Trust Account Seminar September 19, 2007 Athens Area HTU Association UTH (706) 353-1126 October 18-19, 2007 Georgia Instructor Training Workshop (GIT) Macon, GA GREC Disciplinary HTU Sanctions UTH INSIDE THIS ISSUE: Real Estate Commissioner 1 Crossing the Line 2 Focus on Terminology: "Ministerial Acts" Georgia Real Estate Commission Suite 1000, International Tower 229 Peachtree Street N.E. Atlanta, GA 30303-1605 Georgia Real Estate Commissioner Appointed The Commission has selected Jeffrey T. Ledford as Georgia 's new Real Estate Commissioner. The Real Estate Commissioner serves as the executive officer of the Commission and the Georgia Real Estate Appraisers Board. In that capacity Mr. Ledford will oversee the day to day operations of the Commission and the Appraisers Board. A native Georgian, Mr. Ledford is a graduate of Georgia State University. He has been serving as Georgia 's Deputy Real Estate Commissioner since January of 2004. He holds both a real estate brokerage license and an appraiser classification. Prior to joining the Commission's staff Mr. Ledford had ten year's experience as a regulator in Georgia State government. Upon being told of his selection, Mr. Ledford stated: "In light of the very good candidates considered, I especially appreciate the Commission's confidence in my abilities and look forward to validating their decision. While I plan no major changes in the Commission's operations for the immediate future, I do plan to work aggressively with the Commission, the Board, the staff, and licensees to implement the Agency's Strategic Plan effectively. I support particularly that Plan's provisions for (1) devoting more resources to reduce the backlog of pending investigations and to fight mortgage fraud, (2) enforcing the state and federal laws for which the Agency is responsible in a fair and effective manner, (3) providing more information to licensees and the public on the Agency's web site, (4) increasing the Agency's use of technology in order to regulate in a cost effective manner, and (5) working with educators and practitioners to improve education of licensees so that they can provide the consuming public with better service." Crossing the Line By nature, real estate agents want to be helpful especially if their assistance will insure the specific real estate transaction will close. However, an occasional review of the type of support a licensee can provide to a customer has merit. Since the licensee has no agency relationship with the customer, his/her level of permitted assistance is limited. Providing help to a customer can create a dual agency situation. BRRETA states "examples of ministerial acts which can be performed by the transaction broker on behalf of any of the parties in a real estate transaction "If you must use your judgment, expertise or give advice, it is probably not a service you should be providing to a customer. include without limitatio1n the following: 10-6A-14. HTU (a) UTH continued on page 2... Georgia Real Estate Commission Suite 1000, International Tower 229 Peachtree Street N.E. Atlanta, GA 30303-1605 You can sign up to receive the GREC RENEWS electronic newsletter each month by visiting the GREC website or CLICK HERE HTU TO SIGN UP UTH RENews HTU Newsletter Comments or Suggestions Click Here Crossing the Line Volume 3, Issue 8 August 2007 ... continued from page 1 (1) Identifying property for sale, lease, or exchange; (2) Providing real estate statistics and information on property; (3) Providing pre-printed real estate form contracts, leases, and related exhibits and addenda; (4) Acting as a scribe in the preparation of real estate form contracts, leases, and related exhibits and addenda; (5) Locating architects, engineers, surveyors, inspectors, lenders, insurance agents, attorneys, and other professionals; and (6) Identifying schools, shopping facilities, places of worship, and other similar facilities on behalf of any of the parties in a real estate transaction." These are not services that require much training or any judgment. Some other services are not so clear. For instance, if the licensee representing the seller collects information on zoning for the buyer/customer, what if he/she does not get all the necessary information for that specific use and the buyer has relied on the licensee? If the licensee starts interpreting the information and providing suggestions for the rezoning process (or whatever other situation), the licensee has probably crossed the line into dual agency. In other words the licensee is now developing an agency relationship with the customer while he/she already has such a relationship with the seller. Following are some examples of how the license may inadvertently extend the relationship beyond a customer status: Offering to research and collect sensitive data Running spreadsheets at various scenarios or prices Recommending a specific attorney or other professional Making suggestions to the customer without the client's consent or knowledge Assisting with loan applications Besides being in violation of the license law, it also becomes an ethical issue at some point in the transaction since any service requiring advice and/or judgment should be provided only to the client. The best way to stay in line is to remember who the client is at all times and keep his/her interest foremost. Often the other party has a licensee already looking out for his/her interest, so concentrate on the relationship with the client. (Remember the Client is the Seller if you have the Listing and the Buyer is the Customer. In you represent the Buyer in a Buyer agency, the buyer is the client and the seller is the customer.) GREC Focus on Terminology: "Ministerial Acts" Whether an individual is the Customer or the Client will dictate what kind of services the licensee may legally and ethically provide. Licensees can only perform "Ministerial Acts," for the Customer (the party with whom they have no agency relationship). In Webster's New Collegiate Dictionary, the term Ministerial is defined "an act done after ascertaining the existence of a specified state of facts in obedience to a legal order without exercise of U personal judgment or discretion. " BRRETA lists examples of ministerial acts. U Think before you act for the customer. 10-6A-14. (a) HTU UTH 2