Chapter 1, Unit 8: Violations & Penalties

Property Management Violations

-It is also a violation of license law to fail to deliver to a property owner terminating a management contract within 30 days of the termination, or another time period as the management contract provides: 1. A complete and accurate record of all transactions and funds handled during the period of the contract and not previously accounted for 2. All records and documents received from the property owner or received on the behalf of the owner 3. Any funds held on behalf of the property owner

Issuing Citations

-A citation issued by the Commission might include any of the following actions: 1. A reprimand or censure in the case of minor offenses 2. Periodic reports from an independent accountant on a designated trust account 3. Required attendance at an applicable educational program or programs 4. Fines of up to $1,000 for a single violation 5. Fines of up to $5,000 for multiple violations -The Commission could choose to suspend or revoke a license. However, suspensions and revocations are only used for serious violations and must always include a hearing prior to the action being imposed. Remember that a suspension is temporary, but a revocation is permanent. -Note: If a person's license is revoked, "permanent," doesn't necessarily mean "forever." The individual can apply for a new license, after a minimum wait time of 10 YEARS.

Conduct of an Investigation

-If evidence is found, regarding a minor infraction, a citation might be issued and a fine imposed, as discussed earlier in this unit. -If evidence is found of a more serious violation, the case is then referred to the attorney general, and a formal hearing is scheduled. At this point, the licensee has the opportunity to hire an attorney for representation, if he or she so chooses. -As we said a few screens earlier, a hearing is held whether or not the licensee chooses to/is able to attend it. -After the hearing is completed, the hearing officer must then report the "findings of fact" to the Real Estate Commission. At this point, the Commission determines what disciplinary action would be appropriate for the violation.

The Final Step

-If there are any sanctions imposed against the licensee, this is when the right to appeal the decision is applicable. If the licensee decides to appeal, the sanctions will not be imposed until the appeals are exhausted. -If a license is either revoked or suspended for more than 60 days, the licensee's name is required by law to be published on the Georgia Real Estate Commission website. This information is permitted to be shared with real estate commissions in other states.

Sanctions

-In the event that a licensee has previously been sanctioned by the Commission or by any other state's real estate brokerage licensing authority, the Commission can consider any prior sanctions in determining the severity of a new sanction, which may be imposed upon a finding that the licensee has committed an unfair trade practice, that the licensee has violated any provision of this chapter, or that the licensee has violated any of the rules and regulations of the commission. -If a licensee fails to comply with or to obey a final order of the Commission, this may be cause for the suspension or revocation of the individual's license (after the opportunity for a hearing has been given). -Whenever a licensee acts in a real estate transaction as a principal or as an officer, employee, or member of a firm or any other entity acting as a principal, the Commission may impose any sanction permitted by this chapter if the licensee commits any unfair trade practice or violates any other provision of this chapter or any rules and regulations in such a transaction. -Whenever a community association manager, a salesperson, or an associate broker violates any provision of this chapter or any rules or regulations in the performance of any duty or act of a broker or any rules and regulations, either with the proper delegation of that duty or act by the broker or without the broker's authorization, the Commission may impose any sanction permitted under this chapter on the license of such community association manager, salesperson, or associate broker.

Other Violations

-Inducing any person to alter, modify, or change another licensee's fee or commission for real estate brokerage services without that licensee's prior written consent violates Georgia license law. -It is also a violation for a person to fail to obtain a person's agreement to refer that person to another licensee for brokerage or relocation services and to inform such person being referred whether or not the licensee will receive a valuable consideration for that referral.

Commission Violations

-It is also a violation of the license law to pay a commission or compensation to any person for performing the services of a real estate licensee if that person is not appropriately licensed or is not cooperating as an appropriately-licensed nonresident. However, nothing contained in this subsection or any other provision of this Code section is construed to prohibit the payment of earned commissions: 1. To the estate or heirs of a deceased real estate licensee when such deceased real estate licensee had a valid Georgia real estate license in effect at the time the commission was earned and at the time of his or her death 2. To a citizen of another country acting as a referral agent, if that country does not license real estate brokers and if the Georgia licensee paying such commission or compensation obtains and maintains reasonable written evidence that the payee is a citizen of the other country, is not a resident of this country and is in the business of brokering real estate in the other country

The Real Estate Commission's Authority

-One of the most significant responsibilities of the Georgia Real Estate Commission is the handling of licensees who might commit violations of the license law. -The Commission has the authority to initiate investigations concerning licensees or to conduct investigations about licensees requested in sworn written statements by others. In addition, when the Commission is investigating a "lesser" violation, it has the authority to issue citations and skip the normal hearing process. -Note: If the Commission chooses to bypass the normal hearing process and just issue a citation, it IS within the licensee's rights to contest the violation and request a hearing. -The Commission has adopted a policy for dealing with violations and has also adopted a list of maximum fines for typical violations.

Denial of Applications

-The Commission can deny applications for licenses to anyone who has been convicted of any of the following: 1. Fraud 2. Forgery 3. Embezzlement 4. Obtaining money under false pretenses 5. Theft 6. Extortion 7. Conspiracy 8. Other offenses involving moral turpitude -If a licensee is convicted of any of these offenses, the Commission must be notified immediately. -After 60 days, the license will automatically be revoked, unless the licensee has requested a hearing. After the hearing, the Commission can then decide what action is appropriate.

Investigations of Complaints

-The Commission may investigate any license whenever anyone files a sworn, written request OR upon its own motion. -Keep in mind that the Commission may investigate not just licensees, but the actions of any application for licensure, or real estate courses or instructors approved by the Commission. -An investigation generally follows these steps: 1. The case is assigned to a Commission investigator. 2. The investigator gathers evidence. This person does have the authority to utilize subpoenas when necessary in this process. 3. Once the investigation is finished, a report will be given to the Commissioner, indicating whether evidence of a possible violation exists.

Commission Hearings

-The Georgia Real Estate Commission Rule addresses hearings before the Commission. This rule says that prior to the Commission censuring a licensee or before revoking or suspending a license, it must provide an opportunity for a hearing for that license holder. Unless otherwise agreed to by the Commission, all such hearings must be held in the county of domicile of the Commission. -If any licensee or applicant fails to appear at any hearing after reasonable notice, then the Commission may proceed to hear the evidence against such licensee or applicant, and take action as if that licensee or applicant had been present. -A notice of hearing, initial or proposed decision, or final decision of the Commission in a disciplinary proceeding must be served upon the licensee or applicant by personal service or by certified mail, return receipt requested, to the last known address of record with the Commission. If such material is returned marked "unclaimed" or "refused," or is undeliverable and if the licensee or applicant cannot, after diligent effort, be located, the Real Estate Commissioner will be deemed to be the agent for that licensee or applicant to fulfill the purposes of the law. In such a case, service upon the Real Estate Commissioner is considered to be service upon the licensee or applicant. -Any person who has exhausted all administrative remedies available within this chapter and who is still not satisfied with the final decision in a contested case is entitled to judicial review. This initial judicial review of a final decision of the Commission must be available solely in the superior court of the county of domicile of the Commission.

Requisites for Maintenance of Action

-Under the Georgia Real Estate Commission Regulation 43-40-24, the following are requirements regarding bringing about or maintaining action against a licensee in Georgia: 1. No one is permitted to bring about or maintain any action in the courts for an alleged violation, unless he can prove that the person was a licensed broker in Georgia at the time the alleged cause of action arose. 2. Brokers cannot bring about or maintain action: -For the collection of compensation an alleged violation, without and proving that any person acting in the broker's behalf was so licensed in Georgia at the time the alleged cause of action arose. -Against another broker (nor can any affiliated licensee do the same against the broker holding his or her license) for the collection of compensation without alleging and proving that he or she was a licensee in Georgia at the time the alleged cause of action arose. 3. ,The Commission (by and through its Commissioner) is permitted to bring an action for any violation of the license law, regulations or rules.

License Law Violations

1. Negotiating a sale, exchange, or lease of real estate directly with an owner, a lessor, a purchaser, or a tenant if the licensee knows that such owner or lessor has a written outstanding contract in connection with such property, granting an exclusive agency or an exclusive right to sell to another broker or that such purchaser or tenant has a brokerage agreement with another broker. 2. Indicating that an opinion given to a potential seller, purchaser, landlord, or tenant regarding a listing, lease, rental, or purchase price is an appraisal unless such licensee holds an appraiser classification in accordance with appraisal licensing requirements. 3. Performing or attempting to perform any of the acts of a licensee on property located in another state without first having been properly licensed in that state or otherwise having complied fully with that state's laws regarding real estate brokerage. 4. 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.

Disciplinary Actions

-Under the Georgia Real Estate Commission Rule 43-40-25, whenever a license, a school approval, or an instructor approval has been obtained by false or fraudulent representation OR whenever a licensee, an approved school, or an approved instructor has been found guilty of a violation of the law, the Commission has the power to take one or a combination of the following disciplinary actions. 1. Refuse to grant or renew a license to an applicant. 2. Administer a reprimand. 3. Suspend any license or approval for a definite period of time or for an indefinite period of time in connection with any condition that may be attached to the restoration of the license or approval. 4. Revoke any license or approval. 5. Revoke the license of a broker, qualifying broker, or associate broker and simultaneously issue that licensee a salesperson's license. 6. Impose on a licensee, applicant, school approval, or instructor approval monetary assessments in an amount necessary to reimburse the Commission for the administrative, investigative, and legal costs and expenses incurred by the Commission in conducting any proceeding authorized under this chapter or the "Georgia Administrative Procedure Act". 7. Impose a fine not to exceed $1,000 for each violation of this chapter or its rules and regulations with fines for multiple violations limited to $5,000 in any one disciplinary proceeding or such other amount as the parties may agree. 8. Require completion of a course of study in real estate brokerage or instruction. 9. Require the filing of periodic reports by an independent accountant on a real estate broker's designated trust account. 10. Limit or restrict any license or approval as the Commission deems necessary for the protection of the public.

Community Association Management Violations

1. Attempting to perform any act authorized by this chapter to be performed only by a broker, associate broker or salesperson while licensed as a community association manager 2. Attempting to sell, lease, or exchange the property of any member of a community association to which a licensee is providing community association management services without the express written consent of that association to do so 3. Failure to deliver to a community association terminating a management contract within 30 days of the termination, or within another time period as the management contract provides: a. A complete and accurate record of all transactions and funds handled during the period of the contract and not previously accounted for b. All records and documents received from the community association or received on the behalf of the association c. Any funds held on behalf of the community association

Contract Violations

1. Failing to include a fixed date of expiration in any written listing agreement and failing to leave a copy of that agreement with the principal 2. Failing to deliver, within a reasonable time, a completed copy of any purchase agreement or offer to buy or sell real estate to the purchaser and to the seller 3. Failure by a broker to deliver to the seller, at the time the transaction is consummated, a complete, detailed closing statement showing all of the receipts and disbursements handled by the broker for the seller or failure to deliver to the buyer a complete statement showing all money received in the transaction from that buyer and how and for what the money was disbursed (Note: The broker must retain the true copies of such statements in the broker's files) 4. Making any substantial misrepresentations 5. Acting for more than one party in a transaction without the express written consent of all parties to the transaction, also known as undisclosed dual agency

Violations

1. Failure of licensee to place in the custody of the employing broker, as soon after receipt as is practicably possible, any deposit money or other funds entrusted to the licensee by any person dealing with the licensee as the representative of the licensee's broker 2. Filing a listing contract or any document or instrument purporting to create a lien based on a listing contract for the purpose of casting a cloud upon the title to real estate when no valid claim under that listing contract exists 3. Having demonstrated incompetence to act as a real estate licensee in such manner as to safeguard the interest of the public or any other conduct that constitutes dishonest dealing 4. Obtaining a brokerage agreement, a sales contract, or a lease from any owner, purchaser, or tenant while knowing or having reason to believe that another broker has a brokerage agreement with such owner, purchaser, or tenant, unless the licensee has written permission from the broker having the first brokerage agreement. -Note: A licensee is permitted to present a proposal or bid for community association management if requested to do so in writing from a community association board of directors 5. Failing to keep for a period of 3 years a true and correct copy of all sales contracts, closing statements, any offer or other document that resulted in the depositing of trust funds, accounting records related to the maintenance of any trust account required and other documents relating to real estate closings or transactions or failing to produce such documents at the reasonable request of the Commission or any of its agents for their inspection 6. Being or becoming a party to any falsification of any portion of any contract or other document involved in any real estate transaction 7. Conducting the closing of any real estate transaction by any licensee except a broker, unless the licensee acts under the supervision of the employing broker or under the supervision of a practicing attorney with the knowledge and consent of the broker 8. Failing to obtain the written agreement of the parties indicating to whom the broker will pay any interest earned on trust funds deposited into an interest-bearing checking account prior to depositing those funds into the account 9. Failing to disclose in a timely manner to all parties in a real estate transaction any agency relationship that the licensee may have with any of the parties

Unfair Trade Practices

The following are also considered unfair trade practices or license law violations. 1. Intentionally advertising material, which is misleading or inaccurate or which in any way misrepresents any property, terms, values, policies, or services of the business conducted. 2. Failing to account for and remit any money coming into the licensee's possession which belongs to others. 3. Commingling the money or other property of the licensee's principals with the licensee's own. 4. Failing to maintain and deposit in a separate, federally-insured checking account all money received by this broker acting in this capacity, or as escrow agent or the temporary custodian of the funds of others, in a real estate transaction unless all parties having an interest in said funds have agreed otherwise in writing. 5. Accepting, giving, or charging any undisclosed commission, rebate, or direct profit on expenditures made for a principal or any undisclosed commission, rebate, or direct profit for procuring a loan or insurance or for conducting a property inspection related to a real estate transaction. 6. Representing or attempting to represent a real estate employing broker, other than the broker, without the express knowledge and consent of the employing broker. 7. Accepting a commission or other valuable consideration by a licensee from anyone other than the employing broker without the consent of that broker. 8. Acting in the dual capacity of agent and undisclosed principal in any transaction. 9. Guaranteeing or authorizing any person to guarantee future profits that may result from the resale of real property. 10. Placing a sign on any property offering it for sale or rent without the written consent of the owner or the owner's authorized agent and failing to remove such sign within ten days after the expiration of listing. 11. 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

Discriminatory Practices

The following rules have been set forth by federal and/or Georgia fair housing laws. No licensee or employee or agent of any licensee may do any of the following: 1. Refuse to sell, purchase, rent or lease, or otherwise deny to or withhold any housing accommodation from a person because of such person's race, color, religion, sex, handicap, familial status, or national origin; or 2. Discriminate against a person because of such person's race, color, religion, sex, handicap, familial status, or national origin in the terms of the sale, purchase, rental or lease of any housing accommodations, or in the furnishing of facilities or services in connection to this; or 3. Refuse to receive or transmit a bona fide offer to sell, purchase, rent or lease any housing accommodation, from or to a person because of such person's race, color, religion, sex, handicap, familial status, or national origin; or 4. Refuse to negotiate for the sale, purchase, rental or lease of any housing accommodation to a person because of such person's race, color, religion, sex, handicap, familial status, or national origin; or 5. Represent to a person that any housing accommodation is not available for inspection, sale, purchase, rental, or lease when in fact it is so available, or to refuse to permit a person to inspect any housing accommodations, because of such person's race, color, religion, sex, handicap, familial status, or national origin.