Transcription
Real Estate Principles of GeorgiaLesson 18:Georgia Real EstateLicense Law5151 of 104 Copyright 2006, Rockwell Publishing, Inc.Real Estate CommissionThe Georgia Real Estate Commission:administers the real estate license law. May grant or deny licenses May hold disciplinary hearings and imposepenalties May charge and collect fees516 Copyright 2006, Rockwell Publishing, Inc.Real Estate Commission Composed of six commissioners appointedby Governor and confirmed by Senatey Five must be licensees with five years’experience in Georgiay One must have background in consumerprotection with no connection to realestate industryy Serve part-time for five-year terms516 Copyright 2006, Rockwell Publishing, Inc.1
Real Estate CommissionReal Estate Commissioner is hiredby Commission to act asCommission’s executivey Not a member of Commissionitselfy May not have interest in any realestate businessy If Commissioner or any staffmember has a real estatelicense, it must be inactive516 Copyright 2006, Rockwell Publishing, Inc.Real Estate Commission Commission is authorized by law to implement rules and regulations in order toadminister the license law.All rules and regulations implemented by theCommission must be based on existinglicense law.Anyone may petition the Commission to pass,amend, or repeal a rule.Anyone may request declaratory ruling.Requests must be in writing and notorized.517 Copyright 2006, Rockwell Publishing, Inc.Real Estate Commission Authority of Commission does notextend to internal real estate companymatters or disputes between brokers.517 Copyright 2006, Rockwell Publishing, Inc.2
Real Estate LicensingWhen license is requiredA real estate license is required whenengaging in certain activities:y on behalf of another person,y for compensation or in expectation of afee, commission, or other compensation.517 Copyright 2006, Rockwell Publishing, Inc.Real Estate LicensingWhen license is requiredActivities include:y Negotiating for the listing, sale, purchase,exchange, rent, lease or option for anyreal estate;y Acting as referral agent;y Collecting rents, assessments, or othertrust funds517 Copyright 2006, Rockwell Publishing, Inc.Real Estate LicensingWhen license is requiredy Being employed by owner of lots or timeshares to sell real estate;y Charging advance fees to promote thesale of real estate;y Auctioning real estate;y Buying or selling options in real estate;518 Copyright 2006, Rockwell Publishing, Inc.3
Real Estate LicensingWhen license is requiredy Performing property management orcommunity association managementservices;y Providing consulting services to assist withnegotiation or procurement of prospects forsale of real property; andy Advertising or holding herself out asengaged in any of the above.518 Copyright 2006, Rockwell Publishing, Inc.Real Estate LicensingWhen license is not requiredLicense law includesexemptions for:y Property owners,spouses, generalpartners of partnerships,landlords, or prospectivebuyers, when buying,selling, or leasing theirown property;y Managers of federallysubsidized complexes;518 Copyright 2006, Rockwell Publishing, Inc.Real Estate LicensingWhen license is not requiredy Person acting underrecorded power ofattorney;y Attorney engaged inpractice of law;y Person acting under courtorder;y Government official oremployee, in performanceof official duties;519 Copyright 2006, Rockwell Publishing, Inc.4
Real Estate LicensingWhen license is not requiredy Employee of utility company, on behalf ofcompany;y Property manager authorized by owner;y Full-time community association manager;y Referral agent who receives no fee;519 Copyright 2006, Rockwell Publishing, Inc.Real Estate LicensingWhen license is not requiredy Employee of broker hired to provide certainproperty management services;y Manager of property with occupancy periodsshorter than 90 days;y Person performing only physical maintenance; ory Certified public accountant performing his duties.519 Copyright 2006, Rockwell Publishing, Inc.Real Estate LicensingActing without a license Exemptions do not apply to licensees or topersons using exemptions in order to evadelicensing requirements. Acting as a licensee without a license (orexemption) is a misdemeanor. Real Estate Commission can issue a cease& desist order. Violating this order can resultin a fine of 1,000 per transaction and eachday person continues.520 Copyright 2006, Rockwell Publishing, Inc.5
Real Estate LicensingOut-of-state licensees A licensee licensed in another state may beable to obtain a Georgia license withouttaking the exam if that state has a reciprocalagreement with Georgia Real EstateCommission. Georgia Real Estate Commission makes finaldecision on requirements for out of stateapplicants. Copyright 2006, Rockwell Publishing, Inc.Real Estate LicensingOut-of-state licensees Out-of-state licenseesmay participate inGeorgia transactions:y By referring a client fora fee, so long as nobrokerage services areprovidedy By working with aGeorgia broker in asingle transaction,under writtenagreement521 Copyright 2006, Rockwell Publishing, Inc.SummaryReal Estate Licenses License law Real estate activities Exempted activities Copyright 2006, Rockwell Publishing, Inc.6
Real Estate LicensingTypes of licensesFour types of real estate licenses:y Broker’s licensey Associate broker’s licensey Salesperson’s licensey Community associationmanager’s license521 Copyright 2006, Rockwell Publishing, Inc.Types of LicensesBroker’s licenseBroker’s license: Authorizes licensee toengage in all activities for which a license isrequired.y Brokers may employ affiliated licensees(associate brokers and salespersons).521 Copyright 2006, Rockwell Publishing, Inc.Types of LicensesBroker’s license Broker may operateindependently asqualifying broker of soleproprietorship.521 Copyright 2006, Rockwell Publishing, Inc.7
Types of LicensesBroker’s license Broker may act as qualifyingbroker of another businessentity (partnership,corporation, etc.).y The firm will be issued twolicenses: one in qualifyingbroker’s name, one incompany’s name.521 Copyright 2006, Rockwell Publishing, Inc.Types of LicensesAssociate broker’s licenseAssociate broker: Licensed broker who worksfor another broker, instead of operating herown brokerage.521 Copyright 2006, Rockwell Publishing, Inc.Types of LicensesSalesperson’s licenseSalesperson’s license:Authorizes person toengage in activitiesunder broker’ssupervision.y Salesperson can’t actdirectly for principal(buyer/seller) intransaction.y Salesperson may onlyreceive compensationfrom broker.521 Copyright 2006, Rockwell Publishing, Inc.8
Types of LicensesCommunity association managersAuthorizes licensee to provide only managementservices for community (i.e., homeowners) association. Cannot list or sell real estate.522 Copyright 2006, Rockwell Publishing, Inc.Real Estate LicensingQualifications for licenseSalesperson applicant must:yyyybe at least 18 years old;have a high school diploma or equivalent;have completed a 75-hour prelicensingcourse (or accredited college equivalent);andhave passed a written examination.Community association manager applicantstakea 25-hour prelicensing course instead.522 Copyright 2006, Rockwell Publishing, Inc.Real Estate LicensingQualifications for licenseBroker’s applicant must:yyyyybe at least 21 years old;have a high school diploma orequivalent;have been licensed for at least threeyears as a salesperson or communityassociation manager in Georgia or astate with similar requirements;have taken a 60-hour broker’sprelicense course; andpassed a written exam. Copyright 2006, Rockwell Publishing, Inc.5239
Real Estate LicensingReal estate examination The salesperson andcommunity associationmanager exams areobjective multiplechoice questions andrequire a score of 75%to pass. The broker’s exam isbased on simulationexercises.523 Copyright 2006, Rockwell Publishing, Inc.Real Estate LicensingReal estate examination Qualifying veterans may have a 5point credit and disabled veteransmay have a 10 point credit. Proofof service is required. Copyright 2006, Rockwell Publishing, Inc.Real Estate LicensingApplying for license Broker’s licenses arealways issued as inactive,until the broker starts hisown firm or becomes aqualifying broker.523 Copyright 2006, Rockwell Publishing, Inc.10
Real Estate LicensingApplying for license A licensee may obtain alicense on the day theexam is passed. An applicant for an activesalesperson orcommunity associationmanager’s license musthave a SponsoringBroker Statement.524 Copyright 2006, Rockwell Publishing, Inc.Real Estate LicensingApplying for license All applicants must obtain and submit criminalhistory reports. Exam results are only good for one year. Salesperson candidate must apply for licensewithin 3 months of exam or pay double fees.524 Copyright 2006, Rockwell Publishing, Inc.Real Estate LicensingApplying for license A licensee cannot beginworking until the brokerreceives a wall licensecertificate.y The certificate must bedisplayed at thebrokerage as long asthe licensee works forthat brokerage.524 Copyright 2006, Rockwell Publishing, Inc.11
Real Estate LicensingLicense renewalLicense renewal will be required every fouryears at the end of the month in which thelicensee’s birthday occurs.y Must pay a renewal fee and submit proofof continuing education.524 Copyright 2006, Rockwell Publishing, Inc.Real Estate LicensingLicense renewalContinuing education: Licenseesmust complete 24 hours ofcontinuing education every fouryears.y A new salesperson must alsotake a 25-hour post-licensecourse within one year ofbecoming licensed for the firsttime.y 25-hour post-license courseequals 6 hours continuingeducation.524 Copyright 2006, Rockwell Publishing, Inc.Real Estate LicensingLicense Lapse If your Georgia license lapsed due toyour failure to take the 1st year postlicense course requirement:y Reinstate by completing the course within6 months of lapse date IF applicantenrolled for post-license within 1st twelvemonths of licensure.y If not, applicant will have to first completea post-license course then retake thestate exam.526 Copyright 2006, Rockwell Publishing, Inc.12
Real Estate LicensingLicense Lapse If your Georgia license lapsed due tofailure to pay renewal feesy If lapsed for less than 10 years, applicantmay elect to retake the exam or tocomplete certain education and paypenalty fees.y If lapsed more than ten years, applicantmust submit proof of having met thecurrent education requirements and stateexam must be retaken.526 Copyright 2006, Rockwell Publishing, Inc.Real Estate LicensingInactive LicensesLicensee may apply for inactivelicense status.y Inactive licensee may notengage in real estateactivities.y Inactive licenses are held byRE Commission.y Licensee may remaininactive indefinitely.y If license was inactive for twoyears or more, additionalcontinuing ed will be neededto reactivate.526 Copyright 2006, Rockwell Publishing, Inc.Real Estate LicensingChange in address or name Licensees must notifyCommission of anychange in mailingaddress, residenceaddress, or name.y Notice must be givenwithin one month ofchange, even forinactive licenses.526 Copyright 2006, Rockwell Publishing, Inc.13
SummaryTypes of Licenses Broker’s license Associate broker’s license Salesperson’s license Affiliated licensees License renewal Inactive status Continuing education Copyright 2006, Rockwell Publishing, Inc.Regulation of Business PracticesGeorgia regulates business practices ofbroker and affiliated licensees in:y brokerage officesy affiliation and terminationy broker’s supervisory responsibilitiesy trust fundsy recordkeepingy advertisingy handling transactions526 Copyright 2006, Rockwell Publishing, Inc.Regulation of Business PracticesBrokerage officesA Broker must conduct business under thename in which the license was issued.A broker must maintain an office. If officelocation changes, the broker must notifyCommission within 30 days.A brokerage may have an unlimited number ofbranch offices.y The broker is responsible for acts oflicensees in any branch office.y Branch offices may or may not be run by areal estate licensee.526 Copyright 2006, Rockwell Publishing, Inc.14
Regulation of Business PracticesAffiliation and termination When a licensee affiliates witha broker, the parties must signwritten employment agreementaddressing:y compensation duringemployment;y compensation for unfinishedtransactions when leavingbrokerage; andy what listings and clients thelicensee may take whenleaving brokerage.527 Copyright 2006, Rockwell Publishing, Inc.Regulation of Business PracticesAffiliation and termination Relationship between broker and affiliatedlicensee may be terminated at any time byeither party. Broker must immediately return license toCommission or to the licensee’s newbroker.y Once license is released, licensee hasone month to affiliate with newbrokerage or switch to inactive status.527 Copyright 2006, Rockwell Publishing, Inc.Regulation of Business PracticesBroker’s supervisoryresponsibilities A broker must establish procedures for:y reviewing all advertising for compliancewith license law;y providing education about license law;528 Copyright 2006, Rockwell Publishing, Inc.15
Regulation of Business PracticesBroker’s supervisoryresponsibilitiesy reviewing all contractsnegotiated bylicensees;y reviewing trustaccounts;y ensuring that activitiesrequiring a license areperformed only bylicensees;528 Copyright 2006, Rockwell Publishing, Inc.Regulation of Business PracticesBroker’s supervisoryresponsibilitiesy ensuring that trustaccount disbursementsare made properly;y maintaining all recordsproperly;528 Copyright 2006, Rockwell Publishing, Inc.Regulation of Business PracticesBroker’s supervisoryresponsibilitiesy providing licensed staff with writtenpolicies and procedures;y ensuring that all licensees have writtenemployment agreements; andy ensuring that someone with managementauthority is available to assist.528 Copyright 2006, Rockwell Publishing, Inc.16
Regulation of Business PracticesBroker’s supervisoryresponsibilities A broker who fails to supervise affiliated licenseesmay be liable for their violations of license law,unless:y the broker had reasonable procedures forsupervising the licensee;y the broker did not participate in the violation; andy the broker did not ratify the violation.528 Copyright 2006, Rockwell Publishing, Inc.Independent Contractorvs.Employee Copyright 2006, Rockwell Publishing, Inc.Regulation of Business PracticesReal estate assistants A licensee may hire an assistant for administrativetasks, but an unlicensed assistant may not, amongher activities:yyyyycold call,host open houses,show property,answer questions about a listing, orhandle trust funds. Real Estate assistant must have employmentcontract signed by assistant, licensee, and broker.529 Copyright 2006, Rockwell Publishing, Inc.17
Regulation of Business PracticesTrust fundsMost common reasonfor disciplinary actionis the mishandling oftrust funds.Trust funds: moneyor valuablestemporarily entrustedto a broker by clientsor customers.530 Copyright 2006, Rockwell Publishing, Inc.Regulation of Business PracticesTrust fundsy Earnest money deposit iscommon example of trust funds.y Commissions and generaloperating funds are not trustfunds.530 Copyright 2006, Rockwell Publishing, Inc.Regulation of Business PracticesTrust funds When a licensee receives trust funds, shemust turn the funds over to the broker assoon as practically possible.y The broker must deposit the funds into atrust account.y A licensee acting in her own transactionstill must turn over any earnest money fordeposit in trust account.530 Copyright 2006, Rockwell Publishing, Inc.18
Trust FundsAvoiding comminglingBroker must maintain trust account (orescrow account) for funds held on behalf ofclients and customers.y Trust funds must always be deposited intotrust account.y Broker’s own money may not becommingled, or deposited in trust account.530 Copyright 2006, Rockwell Publishing, Inc.Trust FundsAccount requirementsRequirements for trust accounts:y Federally insured checking accounty Commission must be notified ofaccount’s location and numbery Commission must be able to audit atany timey May be interest-bearing (parties mustgive written consent as to whoreceives the interest)530 Copyright 2006, Rockwell Publishing, Inc.Trust FundsAccount requirements Exception to ruleagainst commingling:y Broker may maintainenough personalfunds in account tomeet minimumbalance requirementor to pay servicecharges (or leavecommission funds intrust account forsame purpose)531 Copyright 2006, Rockwell Publishing, Inc.19
Trust FundsTrust account procedures Broker must maintain manual or electronicaccounting system that includes the followingdetails for each deposit:y names of parties (buyer and seller),y amount and date of deposit,y identification of property involved, andy amount, payee, and date of each check.531 Copyright 2006, Rockwell Publishing, Inc.Trust FundsTrust account procedures Reconciliation: process ofcomparing trust fund balance toindividual transactions.y Georgia law requires brokersto reconcile trust accountbalances each month.y Reconciliation records must bemaintained at least threeyears.532 Copyright 2006, Rockwell Publishing, Inc.Trust FundsDisbursementsDisbursement may be made: upon rejection or withdrawalof offer, at closing, with written consent of allparties, after making reasonableinterpretation of contract, oras directed by court order.532 Copyright 2006, Rockwell Publishing, Inc.20
Trust FundsCommissions paid from accounts A commission payable to a broker may bepaid directly from a trust account if:y in a sales transaction, the transaction hasclosed or the closing date has passed,y in a lease transaction, possession hasbeen delivered to the tenant, ory by written agreement from all parties.532 Copyright 2006, Rockwell Publishing, Inc.Trust FundsProperty Management Two separate trust accounts:1. Security deposits must be held in anindependent trust account.2. Rental payments & other operatingfunds must be held in separate trustaccount.532 Copyright 2006, Rockwell Publishing, Inc.Regulation of Business PracticesRecordkeepingBroker generally required to keep copies ofall documents from real estate transactions:y listing agreementy buyer agency agreementy purchase agreementy lease or rental agreementy trust account recordsy closing statements533 Copyright 2006, Rockwell Publishing, Inc.21
Regulation of Business PracticesRecordkeepingDocuments must bekept for three yearsafter closing date.y Must be availablefor inspection.y Commission mayaudit the records.533 Copyright 2006, Rockwell Publishing, Inc.Regulation of Business PracticesAdvertisingFalse advertising is a violation of license law;no ad may be misleading or misrepresentany property, sale terms, services, orpolicies.533 Copyright 2006, Rockwell Publishing, Inc.Regulation of Business PracticesAdvertisingAll advertising bylicensees must be underdirect supervision ofbroker, and the brokerand property ownermust give writtenconsent to theadvertisement.533 Copyright 2006, Rockwell Publishing, Inc.22
Regulation of Business PracticesAdvertisingBlind ad: Advertisement that fails to include nameof broker and licensee, or fails to indicate ad wasplaced by licensee.y Prohibited in Georgia.y May not apply when licensee advertises her ownproperty for sale, but she must disclose that sheis a licensee.y Active licensees must have written permission ofbroker to advertise own property without usingbroker’s name.533 Copyright 2006, Rockwell Publishing, Inc.Regulation of Business PracticesCommissions A licensee must have avalid real estate license tocollect a commission forreal estate services.y Cannot bring suit for acommission withoutproof of licensure.533 Copyright 2006, Rockwell Publishing, Inc.Regulation of Business PracticesHandling transactionsLicense law regulates how licensees serveclients and customers in a transaction.During negotiations, licensee must presentall written communications from one party tothe other.A licensee must give parties a copy of everydocument they sign.534 Copyright 2006, Rockwell Publishing, Inc.23
Regulation of Business PracticesHandling transactionsLicense law states that alllisting agreements andbuyer agency agreementsmust contain a definiteexpiration date.Brokers who manageproperties must havewritten propertymanagement agreementswith property owners.534 Copyright 2006, Rockwell Publishing, Inc.Regulation of Business PracticesFidelity bond A broker who providescommunity associationmanagement services, and isresponsible for 60,000 ormore in communityassociation funds, mustmaintain a fidelity bond.535 Copyright 2006, Rockwell Publishing, Inc.Regulation of Business PracticesDisclosure of Relationships A licensee must disclosein writing, before offer ismade, to all parties:y for whom the licenseeis working, andy from whom the licenseewill receivecompensation.535 Copyright 2006, Rockwell Publishing, Inc.24
Regulation of Business PracticesDisclosure of RelationshipsA licensee acting as a principal in atransaction must disclose that she islicensed.535 Copyright 2006, Rockwell Publishing, Inc.SummaryRegulating Business Practices Brokerage offices Affiliation and termination Broker’s supervisory responsibilities Trust funds Commingling Recordkeeping Advertising Copyright 2006, Rockwell Publishing, Inc.Real Estate LicensingDisciplinary actionReal Estate Commission enforces licenselaw through disciplinary action.A licensee who fails to comply with the law,or any rules created under the law, may besubject to discipline.536 Copyright 2006, Rockwell Publishing, Inc.25
Disciplinary ActionGrounds for disciplinary actionUnfair PracticesGrounds for disciplinary actioninclude:y acquiring license by fraud ormisrepresentation;y engaging in discriminatorybehavior;y intentional misrepresentation;536 Copyright 2006, Rockwell Publishing, Inc.Disciplinary ActionGrounds for disciplinary action:Unfair Practicesy failing to account for trust funds;y commingling trust and business funds;y accepting or giving undisclosedcommissions;536 Copyright 2006, Rockwell Publishing, Inc.Disciplinary ActionGrounds for disciplinary action:Unfair Practicesy accepting compensation from anyoneother than the licensee’s broker;y acting as agent and undisclosed principal;y indicating that an opinion of value is anappraisal (unless he is an appraiser);536 Copyright 2006, Rockwell Publishing, Inc.26
Disciplinary ActionGrounds for disciplinary action:Unfair Practicesy paying a commissionto unlicensedperson;y failing to includeexpiration date inlisting;y failing to delivercompleted copy ofoffer;536 Copyright 2006, Rockwell Publishing, Inc.Disciplinary ActionGrounds for disciplinary action:Unfair Practicesy failing to deliver completed closingstatements;y acting as a dual agent without consent;y demonstrating incompetence ordishonesty;536 Copyright 2006, Rockwell Publishing, Inc.Disciplinary ActionGrounds for disciplinary action:Unfair Practicesy failing to maintain records for threeyears;y falsifying any portion of a contract;andy failing to disclose an agencyrelationship.537 Copyright 2006, Rockwell Publishing, Inc.27
Disciplinary ActionProceduresDisciplinary actionbegins withinvestigation, eitherbegun by theCommission on itsown or in response toa complaint.538 Copyright 2006, Rockwell Publishing, Inc.Disciplinary ActionProceduresIf a minor infraction occurred, the licensee willbe issued a citation. A citation may order additional realestate education or impose a fine. A licensee may request hearingwithin 30 days of service to contestthe citation.538 Copyright 2006, Rockwell Publishing, Inc.Disciplinary ActionProceduresA licensee charged with a serious infractionis entitled to a hearing.538 Copyright 2006, Rockwell Publishing, Inc.28
Disciplinary ActionProcedures The licensee mustreceive written notice ofdate, time, and locationof hearing, and astatement of charges. Licensee may berepresented by counseland may presentevidence.538 Copyright 2006, Rockwell Publishing, Inc.Disciplinary ActionSanctions The Commission may impose sanctions, including:y reprimand,y refusal to grant or renew license,y license suspension,y license revocation,y fine of up to 1,000 per violation or 5,000 formultiple violations, ory completion of real estate courses.538 Copyright 2006, Rockwell Publishing, Inc.Disciplinary ActionCriminal prosecution Violations of license law are misdemeanors.y Prosecution will be handled by prosecutingattorney in county where violation occurred,not the Commission.539 Copyright 2006, Rockwell Publishing, Inc.29
Disciplinary ActionCriminal prosecutionAnyone injured by a licensee’s actions mayfile a civil lawsuit for damages. The Commission cannot award damages toinjured parties.539 Copyright 2006, Rockwell Publishing, Inc.Disciplinary ActionNotification of legal action A licensee must notify theCommission after the finaldisposition of any court oradministrative case that:y names the licensee, andy is related to a violation oflicense law The licensee mustnotify the Commissionwithin10 days.539 Copyright 2006, Rockwell Publishing, Inc.Disciplinary ActionReal Estate Education, Research &Recovery FundInjured party may sue licensee in civilcourt, but judgment is worthless if licenseehas no money or other assets. Georgia maintains Real Estate Education,Research, and Recovery Fund forreimbursing people injured by a licensee’sacts/omissions in real estate transaction.y Funded by portion of license application. 539 Copyright 2006, Rockwell Publishing, Inc.30
Disciplinary ActionReal Estate Education, Research& Recovery Fund Maintains minimum 1,000,000yIf funds fall below, then all licenseeswould have to contribute539 Copyright 2006, Rockwell Publishing, Inc.Disciplinary ActionReal Estate Recovery Fund Injured party must first be awarded judgmentin civil court. Injured party must then attempt to collectawarded damages from licensee. If injured party cannot collect appropriatedamages from licensee, he or she may thenappeal to real estate commission recoveryfund.540 Copyright 2006, Rockwell Publishing, Inc.Disciplinary ActionReal Estate Recovery Fund The Recovery Fund will pay up to:y 15,000 for losses in a single transaction,andy 45,000 for losses caused by onelicensee.A licensee’s license is revoked once paymentFrom the Fund is made on his behalf. Licensecannot be reinstated until all of the money isreturned to the Fund with interest.540 Copyright 2006, Rockwell Publishing, Inc.31
SummaryDisciplinary Actions Grounds for disciplinary action Procedures Sanctions Real Estate Recovery Fund Copyright 2006, Rockwell Publishing, Inc.Antitrust LawsFederal antitrust laws impose restrictions onreal estate agent’s behavior towards clients,customers, and other agents.Foundation of antitrust laws: competition isgood for the economy and society.540 Copyright 2006, Rockwell Publishing, Inc.Antitrust LawsSherman Act: federal antitrust lawprohibiting any agreement, includingconspiracy, that has the effect ofrestraining trade.Conspiracy: when two or more peopleor entities participate in a commonscheme that has effect of restrainingtrade.540 Copyright 2006, Rockwell Publishing, Inc.32
Antitrust LawsActivities prohibitedby antitrust laws:y price fixingy group boycottsy tie-inarrangements540 Copyright 2006, Rockwell Publishing, Inc.Antitrust LawsPrice fixingPrice fixing: cooperativesetting of price or price rangesby competing firms.Agents should NEVERdiscuss their commissionrates.y Casual announcement ofbroker changing ratesmight be an antitrustviolation.541 Copyright 2006, Rockwell Publishing, Inc.Antitrust LawsGroup boycottsGroup boycott: Agreementbetween two or more peopleengaged in business toexclude another from fairparticipation.Encouraging other brokersnot to do business with acertain broker could beconsidered a group boycott.541 Copyright 2006, Rockwell Publishing, Inc.33
Antitrust LawsTie-in arrangementsTie-in arrangement: anagreement to sell oneproperty, only on thecondition that the buyeralso purchases adifferent property.Guaranteed sales plan:not a violation of antitrust laws541 Copyright 2006, Rockwell Publishing, Inc.Antitrust Lawsy Georgia has two (2) antitrustlaws: Fair Business Practice Act Uniform Deceptive TradePractices Act542 Copyright 2006, Rockwell Publishing, Inc.Antitrust LawsPenaltiesIndividual licenseeguilty of violatingSherman Act may be:y fined up to onemillion dollars and/ory sentenced to up to 10years in prison.Corporation guilty ofviolating Sherman Actmay be:y fined up to onehundred milliondollars542 Copyright 2006, Rockwell Publishing, Inc.34
Antitrust LawsAvoiding violationsTo avoid antitrust violations, brokers should:y establish fees and listing policies independently;y never use forms with pre-printed commissionrates or imply commission is non-negotiable;y never discuss business plans with competitors;andy never participate in group boycotts or tie-inarrangements.542 Copyright 2006, Rockwell Publishing, Inc.SummaryEarning a Commission Sherman Act Conspiracy Price fixing Group boycotts Tie-in arrangements Copyright 2006, Rockwell Publishing, Inc.35
Real Estate Licensing Inactive Licenses Licensee may apply for inactive license status. yInactive licensee may not engage in real estate activities. yInactive licenses are held by RE Commission. yLicensee may remain inactive indefinitely. yIf license was inactive for two years or more, a
