Ga. Comp. R. & Regs. R. 520-1-.06 - Brokerage Relationships

(1) Brokerage Engagements.

(a) Each exclusive brokerage agreement must fully set forth its terms and have a definite expiration date.

(b) At the time of securing a brokerage engagement, the licensee securing it must furnish each person signing it a true copy thereof.

(c) The Commission prohibits the acceptance by brokers of net brokerage engagements and hereby makes it obligatory upon the broker, when securing the brokerage engagement, to add the broker's fee thereby notifying the client of the gross price of the property and the broker's services.

See also O.C.G.A.§§ 43-40-2 & 43-40-25.

(2) Management Agreements.

(a) Every written property management agreement or other written authorization to manage real property between a broker and the owners of the real property shall:

1. Identify the property to be managed;

2. Contain all the terms and conditions under which the property is to be managed;

3. Specify the terms and conditions on which the broker will remit property income to the owner and on which the broker will provide periodic written statements of property income and expenses to the owner, provided that the periodic written statements shall be submitted to the owner on at least an annual basis;

4. Specify which payments of property related expenses are to be made by the broker to third parties and how such payments are to be funded;

5. State the amount of fee or commission to be paid and when the fee or commission will be paid;

6. Specify whether security deposits and prepaid rents will be held by the broker or the owner;

7. Contain the effective date of the agreement and its termination date;

8. Provide the terms and conditions for termination of the property management agreement by the broker or the owner of the property; and

9. Contain signatures of broker and owner or their authorized agent.

(b) The licensee shall give to the owner or the owner's authorized agent a legible copy of every written property management agreement or other written authorization to manage real property at the time the signature of the owner is obtained; and the licensee's broker shall retain a copy.

See also O.C.G.A. §§ 43-40-2, 43-40-25, & 43-40-25.1.

(3) Fidelity Bond or Insurance Required for Community Association Management. Any broker who provides community association management services as defined in O.C.G.A. Section 43-40-1 and who collects, maintains, controls, has access to, or disburses community association funds shall be covered at all times under a fidelity bond or fidelity insurance policy that complies with the requirements of paragraph (a) below unless such broker at no time collects, maintains, controls, has access to, or disburses community association funds totaling more than $60,000.00;

(a) Any fidelity bond or fidelity insurance policy required by this rule shall:

1. be written by an insurance company authorized to write such bonds or policies in this state;

2. cover the maximum amount of funds that the broker providing community association management services collects, maintains, controls, has access to, or disburses at any time the bond or insurance policy is in effect, provided that at no time shall coverage be less than an amount equal to the sum of three months assessments due from all the members of the association or associations managed by the broker plus the amount of reserve funds that the community association or associations require the broker to maintain;

3. name the community association(s) as an additional named insured;

4. cover the broker and all partners, officers, licensed affiliates, and employees of the broker and may cover other persons collecting, maintaining, controlling, having access to, or disbursing community association funds as well; and

5. provide that the insurance company issuing the bond or policy may not cancel, substantially modify, or refuse to renew the bond or policy without giving thirty days prior written notice to the broker and to the community association; except that in the case of non-payment of premiums, no less than ten days prior written notice shall be given.

(b) Each broker shall maintain a separate fidelity bond or fidelity insurance policy for each community association for which the broker provides community association management services and collects, maintains, controls, has access to, or disburses community association funds or such alternate fidelity coverage as is acceptable to the Commission.

(c) Each broker shall maintain a copy of each fidelity bond or fidelity insurance policy along with a current certificate of each such bond or insurance policy showing current coverage and shall provide a copy thereof to the community association.

See also O.C.G.A. §§ 43-40-2.

(4) Disclosure of Brokerage Relationships.

(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.

(b) A licensee shall make or cause to be made a written disclosure to both buyer and seller or to both lessor and lessee, as the case may be, revealing the party or parties for whom that licensee's firm is acting as agent or dual agent and from whom that licensee's firm will receive any valuable consideration for its efforts as agent in the transaction. If the licensee's firm is not acting as an agent for either party, then the licensee shall make a written disclosure revealing from whom the licensee's firm will receive any valuable consideration for its efforts in the transaction. The written disclosures required by this paragraph must be made in a timely manner, but in any event not later than the time that any party first makes an offer to purchase, to sell, to lease, or to exchange real property.

(c) Real estate licensees shall not pay a fee or commission to a licensee representing another party to a transaction except with the full knowledge and written consent of all parties.

See also O.C.G.A. §§ 43-40-2 & 43-40-25.

Notes

Ga. Comp. R. & Regs. R. 520-1-.06

O.C.G.A. Secs. 43-40-2, 43-40-25.

Original Rule entitled "Closing" adopted as ER. 520-1-0.1-.06. F. and eff. July 12, 1973, the date of adoption. Amended: Permanent Rule entitled "Offers to Purchase" adopted. F. Dec. 7, 1973; eff. Dec. 27, 1973. Repealed: New Rule of same title adopted. F. May 12, 1978; eff. June 1, 1978. Repealed: New Rule of same title adopted. F. Nov. 12, 1981; eff. Dec. 2, 1981. Amended: Authority changed. F. Aug. 5, 1982; eff. Nov. 1, 1982, as specified by the Agency. Amended: Rule retitled "Offers". F. Apr. 7, 1994; eff. Apr. 27, 1994. Repealed: New Rule entitled "Brokerage Relationships" adopted. F. Nov. 12, 2003; eff. Dec. 2, 2003.