Source: https://www.bfvlaw.com/committing-the-commission-crime-acting-as-an-unlicensed-real-estate-broker-in-georgia/
Timestamp: 2019-04-18 22:37:27+00:00

Document:
In 2015, Fortune ranked the Atlanta-Sandy Springs-Marietta metropolitan area fifth on a predicted list of the country’s hottest real estate markets in 2016. With so many transactions occurring within Atlanta’s metropolitan area, individuals and businesses, not otherwise operating in the real estate sphere, may, by chance, find themselves in the middle of a real estate transaction.
Having brought two parties together, these individuals and businesses may find it only natural to negotiate for a commission, referral fee or other compensation contingent upon the success of the transaction. However, without a Broker’s license, an individual or business looking to receive any such compensation from the transaction may be guilty of a crime and also subject to penalties and fines.
#1: What constitutes a Broker under Georgia law?
#2: What activities require a Broker license?
Under Georgia law, any person who (i) intends or is promised to receive “any valuable consideration” and (ii) offers, agrees or actually negotiates or attempts to negotiate, or assists in procuring prospects, for the listing, sale, purchase, exchange, renting, lease, or option for any real estate or improvements thereon, must be a licensed Broker. The Georgia Code also lists a number of other activities that can only be performed by a licensed Broker if offered or performed with the intent of or upon the promise of receiving commission.
#3: What penalties/fines could an individual face by acting as a Broker without a license?
An individual who acts as a Broker without a license from the State of Georgia can be charged with a misdemeanor. The Commission can impose a fine not to exceed $1,000 for each violation of the statute, with each day that a person practices in violation of Georgia law constituting a separate violation. Other violations include: (a) acting for more than one party in a real estate transaction, (b) making any substantial misrepresentation, or (c) attempting to perform any act authorized by law to be performed only by a Broker. The Commission can also issue a cease and desist order against the violator.
The Attorney General also has the right to bring an action to enjoin such illegal conduct in the Superior Court.
#4: What rights would an individual forfeit by acting as a Broker without a license?
Similarly, an unlicensed individual acting as a licensed Broker would not have any rights to lien the subject property under the Broker’s lien law. This is relevant with respect to an individual’s ability to enforce the payment of the referral fee if a dispute arises.
#5: Who can be a Broker in Georgia?
#6: What is the intended purpose of the Georgia laws regarding Brokers?
If you have brought together a real estate buyer and seller, or landlord and tenant, or have been involved in contract negotiations involving real estate, and expect to receive any form of compensation (no matter how it is labeled), you must be a licensed Realtor. Anything less, you may find yourself with an unenforceable claim or agreement or, much worse, guilty of a crime.
If you’re uncertain whether an arrangement you may have meets the criteria for unlicensed broker activity, please contact Lawrence Kasmen (lkasmen@bfvlaw.com) or Ruari O’Sullivan (rosullivan@bfvlaw.com) in Berman Fink Van Horn’s real estate transactions department for guidance.
 Chris Matthews, These Will Be the Hottest Real Estate Markets in 2016, Fortune (December 3, 2015, 12:07 p.m.), http://fortune.com/2015/12/03/best-real-estate-markets/.
 O.C.G.A. § 43-40-1; O.C.G.A. § 43-40-30. Activities that can only be performed by a licensed Broker if offered or performed with the intent of or upon the promise of receiving commission, include: (1) holding oneself out as a referral agent for the purpose of securing prospects for the listing, sale, purchase, exchange, renting, lease, or option for any real estate; (2) collecting rents, assessments, or other trust funds or attempting to collect rents, assessments, or other trust funds; (3) being employed by or on behalf of the owner or owners of lots, time-share intervals, or other parcels of real estate at a salary, fee, commission, or any other valuable consideration to sell such real estate or any part thereof in lots or parcels or intervals or other disposition thereof; (4) engaging in the business of charging an advance fee or contracting for collecting of a fee, other than an advertising fee, in connection with any contract whereby he or she undertakes primarily to promote the sale of real estate either through its listing in a publication issued primarily for such purpose, or for referral of information concerning such real estate to brokers, or both; (5) auctioning or offering or attempting or agreeing to auction real estate; (6) buying or offering to buy, selling or offering to sell, or otherwise dealing in options to buy real estate; (7) performing property management services or community association management services; (8) providing or attempting to provide to any party to a real estate transaction consulting services designed to assist the party in the negotiations or procurement of prospects for the listing, sale, purchase, exchange, renting, lease, or option for any real estate or the improvements thereon; or (9) advertising or holding himself or herself out as engaged in any of the foregoing. O.C.G.A. § 43-40-1; O.C.G.A. § 43-40-30.
 Amend v. 485 Props., LLC, 401 F. 3d 1255, 1258 (11th Cir. 2005) (quoting O.C.G.A. [Section] 43-43-24(a) (2016)).
 See Amend v. 485 Props., LLC, 401 F. 3d 1255, 1258-60 (11th Cir. 2005).
 Amend v. 485 Props., LLC, 401 F. 3d 1255, 1259 (11th Cir. 2005) (quoting Padgett v. Silver Lake Park Corp., 149 S.E. 180 (Ga. 1929)).
 O.C.G.A. § 43-40-8(c) (West, Westlaw through Ga. Law 322, approved 2016).
 Amend v. 485 Props., LLC, 401 F. 3d 1255, 1259 (11th Cir. 2005) (quoting Northside Realty Assocs., Inc. v. MPI Corp., 265 S.E. 2d 11, 12 (Ga. 1980)).

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