April 2011 Volume 7 Issue 4 
 
GREC RENews MMoonntthllyyNNeewwslseltetetrteorf 
of thethGe eGoerogrgiaiaRReeaal EstEastetatCeoCmommmisisssioion 
 
This Issue: 
 
Calendar 
 
Audits & Top 10 Violations Mission & Vision of GREC 
 
P. 1-2 P. 2 
 
GREC Brokerage Course & 
HU 
Trust Accounts Class Dates: 
UH 
 May 18 & 19, 2011 Greater Rome Board (706) 295-1727 http://grbor.com/ 
HU 
 June 15 & 16, 2011 Athens Area Association (706) 353-1126 www.realtorsathens.com 
Common Violations Class Dates: 
 May 2, 2011 Georgia Institute of RE 
 May 2, 2011 Savannah Board 
 May 5, 2011 Camden Board 
 May 10, 2011 Greater Augusta Assoc. 
 
Georgia Instructor Training 
 
Workshop Dates: 
 
 May 5 & 6, 2011 
 
GIT - Atlanta 
 
http://www.grec-git.com/ 
 
HU 
 
U 
 
Click here to 
HU 
see GREC Disciplinary Sanctions 
U 
 
Georgia Real Estate Commission Suite 1000 International Tower 229 Peachtree Street NE Atlanta, GA 30303-1605 Phone 404-656-3916 
 
Focus on Terminology 
 
P. 2 
 
Heads Up on Audits 
In addition to investigations initiated by formal complaints, the Georgia Real Estate Commission continues to conduct audits of firms with Trust Accounts. The firms are selected randomly. The Commission also conducts audits of real estate schools. The following audits were conducted in fiscal year 2010 (July to June): 1. Firm Trust Accounts: 454 Audits 2. Approved Schools: 68 Audits 
Random audits are focused mainly on Trust Accounts; however during the review the investigator also examines other areas of brokerage management. In 39% of the audits, the investigator finds broker management issues that need correction. Firm audit issues are often minor and can be corrected through a Letter of Finding without the issuance of a Citation which would involve a fine and education. 
The possibility of a random audit in the future can serve as a useful reminder to conduct your own in-house review of firm policies and procedures to assure compliance with the License Law, Rules, and Regulations. 
Top 10 Violations Found in Firm Audits 
 
Since random audits are primarily 
 
concerned with Trust Accounts, 6 of 
 
the 10 most common violations relate 
 
to Trust Accounts, while the remainder 
 
concern 
 
general 
 
brokerage 
 
management. The top 10 are: 
 
1. Did not have monthly reconciliation 
 
statements on trust liability and 
 
bank balances 
 
2. Failed to property register all Trust 
 
Accounts with GREC 
 
3. Did not include all data required in 
 
the Trust Account Journal 
 
4. Did not maintain a Trust Account 
 
Journal 
 
5. Failed to identify Broker funds in 
 
the Trust Account journal and 
 
monthly reconciliations; failed to 
 
remove Broker funds monthly 
 
except needed for bank charges, 
 
etc.; did not disburse Broker funds from the Trust Account properly 6. Failed to ensure the bank designated accounts holding funds of others as Trust Accounts 7. Failed to maintain the Trust Account in a FDIC insured checking account in an open, active status at all times 8. Conducted business in name(s) other than under the name as registered with GREC 9. Broker failed to have adequate written agreements with all licensed affiliates and they did not include GREC requirements 10. Broker failed to make monthly written explanations of differences in the trust liability and bank balances 
... continued on page 2 
 
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Page1 
 
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or "Practicing Real Estate & Staying Out of 
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Top 10 Violations... 
...continued from page 1 
A random firm audit begins with a questionnaire and can usually be completed without a visit to a firm's office. In a few cases, the investigator comes to the firm's office to complete the audit. The firm's Broker can maintain the documentation and records required for the audit in a digital or electronic format or in a paper form. Whatever form is used, the documents and records must by readily available upon the request of the Commission. 
The Georgia Real Estate Commission School web site has a Resource tab which provides a host of tools to assist the licensee in 
 
GREC RENews April 2011, Volume 7 Issue 4 
understanding and meeting regulatory requirements. In particular, the Broker Management Summary contains ideas to help the Broker monitor the Trust Account(s) and manage the firm's brokerage activities. 
Audits of schools authorized by the Commission to offer education courses are primarily concerned with the administrative requirements. The audit begins with a questionnaire and in most cases can be completed without a visit to the school. Issues that need attention are often minor and can be corrected with a Letter of Finding. While records and documentation related to brokerage activities must be maintained for 3 years, those schools authorized to offer courses for credit must maintain records for 5 years. 
 
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Georgia Real Estate Commission Suite 1000 International Tower 229 Peachtree Street NE Atlanta, GA 30303-1605 Phone 404-656-3916 
 
The Mission and Vision of the Georgia Real Estate Commission and the Georgia Real Estate Appraisers Board 
Mission: To ensure professional competency among real estate licensees and appraisers and to promote a fair and honest market environment for practitioners and their customers and clients in real estate transactions in Georgia. Vision: Georgians who use the services of real estate brokers and appraisers to facilitate real estate transactions will encounter responsive, knowledgeable, and ethical professionals. 
Focus on Terminology: "Compliance" 
The term "compliance" as it relates to regulatory issues means that the process, procedure, or actions must meet the minimum requirements of the laws, rules, or regulations related to that industry. In order to ensure that all real estate licensees conform to those requirements, the Real Estate Commission employs several regulatory tools: 
x conducts random audits x requires reporting for Trust Accounts x initiates and conducts formal investigations as needed x requires the licensee to inform the Commission of information relating to 
his/her brokerage firm Trust Account and brokerage activities x issues Citations and other disciplinary actions such as suspension or 
revocation of a license. The purpose of these activities is to ensure compliance to safeguard the public interest. The Georgia Real Estate Commission currently has 15 staff members dedicated solely to investigations and compliance. 
In addition, all Brokers are required to report any act of non-compliance of the License Law, Rules and Regulations to the Commission. Finally, by nature, the real estate industry itself adapts to encourage best business practices and maintain professionalism. 
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