Georgia Real Estate Broker Exam — All Questions

An affiliated licensee of a Georgia firm violates the license law. Under O.C.G.A. § 43-40-18(b) the qualifying broker escapes responsibility only by demonstrating that the broker:

• a.Was not personally present for the transaction and learned of the violation afterward
• b.Had reasonable supervisory procedures in place, did not participate, and did not ratify it✓
• c.Reported the violation to the Commission promptly after the affiliate disclosed it to him
• d.Required the affiliate to carry errors and omissions coverage naming the firm as insured

Subsection (b) makes a broker or qualifying broker responsible for an affiliated licensee’s violations “unless the broker is able to demonstrate that such broker: (1) Had reasonable procedures in place for supervising the affiliate’s actions; (2) Did not participate in the violation; and (3) Did not ratify the violation.” All three elements are required, and the burden sits on the broker. Absence from the closing table proves none of them, and while GREC Rule 520-1-.07(2)(c) does require the broker to notify the Commission of violations, reporting after the fact is not the defense subsection (b) describes. Insurance shifts money, not license-law responsibility. Subsection (d) adds that a broker who delegates any management duty remains responsible for the acts of the person to whom it was delegated.

O.C.G.A. § 43-40-18(c)(3) requires a Georgia broker or qualifying broker to review the firm’s listing contracts, leases, sales contracts, management agreements and accepted offers within:

• a.30 days of the date of the offer or contract✓
• b.10 days of the date of the offer or contract
• c.60 days of the date of the offer or contract
• d.The current calendar quarter in which the offer or contract falls

Paragraph (c)(3) makes the broker responsible for establishing, implementing and continuing procedures for “reviewing for compliance with this chapter and its rules and regulations all listing contracts, leases, sales contracts, and management agreements … and any offer to buy, sell, lease, or exchange real property accepted within the time limit of said offer secured or negotiated by the firm’s associates. This review shall take place within 30 days of the date of the offer or contract.” The same subsection lists nine other standing duties, among them reviewing all advertising, systematic review of trust accounting practices, ensuring proper trust disbursements, safekeeping of the records the chapter requires be kept, and giving all licensed personnel written policies and procedures.

Which statement about the qualifying broker of a Georgia real estate firm is correct under O.C.G.A. § 43-40-18(e)?

• a.The qualifying broker may delegate trust account signature authority to the firm’s bookkeeper
• b.The qualifying broker must have signatory powers on all trust accounts the firm maintains✓
• c.The qualifying broker of a limited liability company must be a person outside the company
• d.The qualifying broker of a corporation must own a majority of the corporation’s shares

Subsection (e) ends with the flat requirement that “the broker or qualifying broker of any real estate firm must have signatory powers on all trust accounts which the firm maintains.” The rest of the subsection sets who may serve: a sole proprietorship must be owned entirely by a licensed broker; a partnership’s qualifying broker must be a partner; a limited partnership’s must be the general partner; a limited liability company’s must be a member, or a manager where the articles or a written operating agreement vest management in managers; and a corporation’s must be an officer. So the qualifying broker is an insider, not an outsider, and officer status rather than share ownership is what the statute asks of a corporation. Signature authority is the broker’s own and cannot be handed to unlicensed staff — GREC Rule 520-1-.07(6)(f) bars support personnel from holding or collecting trust monies at all.

The qualifying broker of a Georgia corporation resigns without warning. Under GREC Rule 520-1-.07(3) the firm must:

• a.Secure a new qualifying broker within 30 days or cease all real estate brokerage activity until it does
• b.Cease all real estate brokerage activity immediately and surrender the firm license to GREC
• c.Secure a new qualifying broker within 60 days or cease all real estate brokerage activity until it does✓
• d.Continue operating under the departing broker’s license until the license period ends

Rule 520-1-.07(3)(a) provides that when the qualifying broker of a partnership, limited liability company or corporation “dies, resigns, or is discharged unexpectedly, the partnership, limited liability company, or corporation must secure a new qualifying broker within 60 days or cease all real estate brokerage activity until it does secure a new qualifying broker.” Paragraph (b) keeps the firm functioning in the meantime: it must designate a partner, member or officer to sign documents and applications filed with the Commission and to disburse trust funds from the firm’s designated trust accounts as required by contracts authorizing the firm to hold them. The firm therefore neither shuts down on the spot nor coasts on a license that has left the building.

A Georgia firm engages an unlicensed assistant under the task guidelines in GREC Rule 520-1-.07(6). Which task is the assistant permitted to perform?

• a.Host the firm’s Sunday open house while the listing agent covers another showing
• b.Record and deposit earnest money, security deposits and rents for the firm✓
• c.Answer a caller’s questions about how the buyer’s financing and closing will work
• d.Describe the amenities of a listing to a prospective purchaser who telephones the office

Paragraph (6)(e) lists the tasks support personnel may perform, including item 9, “record, and deposit earnest money, security deposits, and rents,” along with answering the telephone, submitting listing data to a multiple listing service, assembling closing documents, installing lockboxes, placing signs and scheduling appointments. Paragraph (6)(f) lists what they may not do, and the three distractors are drawn from it: hosting open houses, answering questions on title, financing or closings other than the time and place, and discussing the attributes or amenities of real estate with a prospective purchaser or lessee. Note the asymmetry in item 9 — they may record and deposit funds, but (6)(f)(11) forbids them to collect or hold deposit monies, rent or anything of value from an owner or prospect. Paragraph (6)(a) makes both the firm and the affiliated licensee responsible for the assistant’s acts.

Every written property management agreement between a Georgia broker and a property owner must, under GREC Rule 520-1-.06(2), specify:

• a.That the broker will indemnify the owner against any loss arising from a tenant default
• b.That the owner will maintain a fidelity bond covering the broker and the broker’s employees
• c.That the agreement may be terminated by the owner only at the end of a lease term
• d.Whether security deposits and prepaid rents will be held by the broker or by the owner✓

Rule 520-1-.06(2)(a) lists nine things every written property management agreement must contain: identification of the property; all terms and conditions of management; the terms on which the broker remits income to the owner and provides periodic written statements of income and expenses, at least annually; which property-related expenses the broker pays to third parties and how those payments are funded; the fee or commission and when it is paid; “whether security deposits and prepaid rents will be held by the broker or the owner”; the effective and termination dates; the terms for termination by either broker or owner; and the signatures of broker and owner. The rule requires that termination terms be stated, not that they be limited to lease boundaries, and it imposes no indemnity or owner-purchased bond. Paragraph (b) requires the licensee to give the owner a legible copy when the owner signs and the broker to retain one.

A Georgia broker who provides community association management services must carry a fidelity bond or fidelity insurance policy under GREC Rule 520-1-.06(3) unless the broker at no time handles association funds totaling more than:

• a.$25,000
• b.$60,000✓
• c.$100,000
• d.$250,000

The rule requires any broker who provides community association management services and who “collects, maintains, controls, has access to, or disburses community association funds” to be covered at all times “unless such broker at no time collects, maintains, controls, has access to, or disburses community association funds totaling more than $60,000.00.” Where coverage is required, paragraph (3)(a) sets its terms: written by an insurer authorized in Georgia; covering the maximum funds handled and never less than three months’ assessments from all members plus any required reserves; naming the association as an additional named insured; covering the broker’s partners, officers, licensed affiliates and employees; and giving 30 days’ written notice before cancellation or non-renewal, or 10 days for non-payment of premium. O.C.G.A. § 43-40-22.1 is the authority behind the rule.

Under O.C.G.A. § 44-7-25, enacted by House Bill 399 and effective July 1, 2025, a landlord who is not a resident of Georgia and owns single-family or duplex residential rental property in the state must:

• a.Register the property locally and name a resident agent for service of process on the owner
• b.Obtain a Georgia real estate license personally before collecting any rent on the property
• c.Employ a Georgia-licensed broker who, if non-resident, must employ someone located in Georgia✓
• d.Deposit all tenant security deposits with the clerk of the superior court of that county

Subsection (a) requires that “any landlord that is not a resident of this state that owns or operates single-family or duplex residential rental properties in this state shall employ a broker licensed pursuant to Chapter 40 of Title 43, that may or may not reside within this state. If the broker does not reside within this state, the broker shall employ at least one person, to be located within this state, who shall be responsible for receiving, coordinating, managing, and responding to communications from tenants of such landlord related to maintenance and other issues related to such properties.” The obligation runs to the landlord and is satisfied by engaging a licensed broker, not by the landlord becoming licensed. Section 1 of the same Act amended § 36-74-30(b) so that a tenant must give a code enforcement officer the name, license number and contact information of a licensed property manager; it did not create a registration scheme, and § 36-74-30(b) still bars local governments from requiring registration of residential rental property.

An out-of-state investor owns eleven Georgia duplexes and manages them through his own management company. Under O.C.G.A. § 44-7-25(b), effective July 1, 2025, the owner-management exemptions in § 43-40-29(a)(7) and (a)(8):

• a.Apply to him, because he owns a controlling interest in the management company
• b.Do not apply to him, so the properties must be managed through a licensed broker✓
• c.Apply to him, because the exemptions turn on ownership rather than residency
• d.Apply to him only while the number of rental units he owns stays below twenty-five

Subsection (b) is short and categorical: “The exemptions set forth in paragraphs (7) and (8) of subsection (a) of Code Section 43-40-29 shall not apply to any landlord that is not a resident of this state that owns or operates single-family or duplex residential rental properties as provided for in subsection (a) of this Code section.” Paragraph (a)(7) is the exemption for an owner, or an owner of a management company whose principals hold controlling ownership of the property, who manages property owned by that person; (a)(8) is the exemption for a full-time employee of the owner. Both are switched off for the non-resident landlord of single-family or duplex rentals, whatever the ownership structure and however many units are involved. The result pairs with subsection (a): management must run through a Georgia-licensed broker.

For renewals on or after July 1, 2025, a Georgia broker or associate broker renewing an active license must complete:

• a.36 hours of continuing education, of which at least 18 must be on broker education topics and 3 on license law✓
• b.36 hours of continuing education, of which at least 6 must be on broker education topics and 3 on license law
• c.54 hours of continuing education, of which at least 18 must be on broker education topics and 3 on license law
• d.36 hours of continuing education, with no subject requirement beyond the 3 hours on license law

GREC Rule 520-1-.05(1)(f), effective July 1, 2025, provides that “a Broker or Associate Broker shall satisfactorily complete at least eighteen (18) hours of continuing education on the topic of Broker education, as detailed in Rule 520-2-.04, during each renewal period.” The 18 hours sit inside the 36 required by (1)(d), not on top of them, and the 3-hour license law requirement in (1)(e) is unchanged. Rule 520-2-.04(6)(g), effective the same day, defines the courses: a minimum of three credit hours, containing subject material only on “training Licensees, supervising Licensees, reviewing Brokerage Agreements, and managing a Firm.” GREC’s education requirements page states the same rule for licensees. Note that the copy of Chapter 520-1 published on rules.sos.ga.gov had not yet been updated to show paragraph (1)(f); GREC’s own adopted-rule document controls.

A Georgia broker manages rental property and keeps tenant security deposits in a designated rental trust account. GREC Rule 520-1-.08(4) requires that:

• a.Security deposits be moved to the owner’s operating account within 30 days of receipt
• b.Security deposits be held in an interest-bearing account with the interest paid to the tenant
• c.Security deposits be credited to the tenant, with the balance kept equal to their total✓
• d.Security deposits be replaced by a surety bond whenever the broker also owns rental units

Paragraph (4)(b) requires that “security deposits, if kept in a designated rental trust or escrow account, must be clearly identified and credited to the tenant and there must always be a balance in the account equal to the total of said security deposits.” Paragraph (4)(a) adds that a bill may be paid on behalf of an owner or association only if enough money is credited and deposited to that owner’s or association’s account to cover it, and paragraph (4)(c) closes the bond route in the opposite direction from the last distractor: “a licensee who manages rental property which the licensee owns must maintain any security deposits collected in a designated trust account and may not post a bond in lieu of maintaining such security deposits in a designated trust account.” Interest belongs to whomever the parties designate in writing before the deposit under Rule 520-1-.08(1)(d), not to the tenant by rule.

A Georgia salesperson asks her broker to sign a release so she can join another firm. The broker believes she owes the firm money on a closed file. Under GREC Rule 520-1-.07(5) the broker must:

• a.Withhold the release until the compensation dispute has been resolved between the parties
• b.Sign the release at once and forward the certificate, a fee dispute being no ground to refuse✓
• c.Withhold the release and file a formal written complaint against the salesperson with GREC
• d.Sign the release only after the salesperson returns every listing she secured for the firm

Paragraph (5)(a) requires a written compensation agreement between broker and affiliate, then says that beyond checking such agreements exist, “the Commission shall not regulate the content of such agreements or enforce the provisions of such agreements. A dispute between licensees as to whether the terms of this agreement have been met shall not be grounds for the broker’s refusal to sign a release and to forward the wall certificate of licensure.” Paragraph (5)(b) requires the broker to sign immediately on request and forward the certificate to the Commission or to the new broker. Paragraph (5)(c) obliges the departing licensee to account for listings, keys, signs and records — but says failure to do so “shall not be grounds for the broker’s refusal to sign a release,” though it is grounds for filing a complaint. Under paragraph (5)(e) the departing licensee may not contact the firm’s clients under an existing engagement without the broker’s written approval.