Georgia Real Estate License Law: Trust Funds and Discipline

Georgia real estate license law is found in Title 43, Chapter 40 of the Official Code of Georgia Annotated, and the Georgia Real Estate Commission (GREC) enforces it. The statute and the Commission’s rules control who can broker property transactions in the state, what education and background checks apply, how client money must be held, and what conduct will cost you a license. What follows is the working shape of those rules for anyone entering the profession, moving up to broker, or trying to stay compliant.

Who Qualifies for a License

For a salesperson license, O.C.G.A. § 43-40-8(b) requires you to be at least 18, hold a high school diploma or equivalent, and complete 75 instructional hours in a Commission-approved salesperson course before sitting for the state exam.1Justia. Georgia Code 43-40-8 – Qualifications of Licensees; Course of Study for Licensed Salespersons; Lapse; Reinstatement; Renewal; Continuing Education; Standards for Courses GREC also runs a character review, and criminal history can produce a denial without a hearing.

Broker qualifications sit in O.C.G.A. § 43-40-8(c). You must be at least 21, be a Georgia resident (unless you satisfy the nonresident rules in § 43-40-9), and have held an active salesperson license for at least three of the five years immediately before applying.1Justia. Georgia Code 43-40-8 – Qualifications of Licensees; Course of Study for Licensed Salespersons; Lapse; Reinstatement; Renewal; Continuing Education; Standards for Courses Five years of active broker status elsewhere is an alternative way to meet the experience threshold. On top of the experience, you need 60 instructional hours in a Commission-approved broker course and a passing score on the broker exam, which is only available after the coursework and experience requirements are met.

What You Submit With the Application

Passing the exam gets you to the application, not through it. Before GREC issues the license, you assemble:

  • A Georgia Crime Information Center (GCIC) criminal history report from a local police department or sheriff’s office, dated no more than 60 days before you file. Nonresidents provide the equivalent from their home state.2Georgia Real Estate Commission. GREC/GREAB Background Clearance
  • A lawful presence affidavit under O.C.G.A. § 50-36-1, signed and sworn, with at least one secure and verifiable identification document.3Georgia General Assembly. Georgia Code 50-36-1 – Verification Requirements, Procedures, and Conditions
  • A sponsoring broker affiliation. Salespersons and associate brokers must work under a licensed broker, who completes the affiliation section certifying that a written compensation agreement exists as required by GREC Rule 520-1-.07(5).4Georgia Real Estate Commission. GREC Change Application

The exam itself is administered by PSI and has a national portion and a Georgia-specific portion, both of which you must pass. The fee runs about $119, subject to change at registration.5PSI. Secure and ARELLO-Accredited Real Estate Exams Most applicants file the full application package at the testing center immediately after passing; mailed applications are also accepted. GREC processes a complete application within 15 business days, though anything triggering a background investigation takes longer.6Georgia Real Estate Commission. GREC Open a Firm The salesperson license issuance fee is $170, paid by cashier’s check or money order to the Georgia Real Estate Commission.7Georgia Real Estate Commission. Real Estate Reciprocal Application Incomplete applications get returned, so verify the sponsoring broker’s firm name and license number before you file.

Keeping the License Active

Within the first year of holding an original salesperson license, you must complete a 25-hour Commission-approved post-license course. Miss that window and the license lapses automatically; you have to surrender the wall certificate and pocket card.1Justia. Georgia Code 43-40-8 – Qualifications of Licensees; Course of Study for Licensed Salespersons; Lapse; Reinstatement; Renewal; Continuing Education; Standards for Courses A lapse is not a disciplinary suspension; you simply cannot practice until you cure it.

After that first year, licenses renew on a four-year cycle, with the renewal date falling on the last day of your birth month. Active-status renewal requires 36 hours of continuing education during the renewal period, at least three of which must cover license law.8Legal Information Institute. Georgia Code of Rules and Regulations 520-1-.05 – Maintaining a License The renewal fee is $125, reduced to $100 if you file online.

If Your License Lapses

You can bring a lapsed license back, but the cost and the requirements climb the longer you wait. GREC uses three tiers:9Georgia Real Estate Commission. GREC Individual Reinstatement Fees

  • Within two years of lapsing, no pre-license coursework is needed. Active status requires making up the continuing education that would have applied during the lapsed period. The reinstatement fee is $225 if you apply within four months of the missed renewal date, and rises by $25 for each additional month.
  • Between two and five years, you must retake the appropriate pre-license course or pass the state qualifying exam before reinstating.
  • More than five years out, you start over as an original applicant.

Any criminal convictions or disciplinary actions during the lapsed period must be disclosed on the reinstatement application. Nondisclosure is grounds for denial.

Handling Client Money

Mishandling trust funds is one of the quickest routes to losing a Georgia license. O.C.G.A. § 43-40-20 requires any broker who accepts earnest money, security deposits, rents, or other client funds to maintain a separate, federally insured trust or escrow account at a Georgia financial institution. Client funds go there and cannot be mixed with the broker’s personal or business money.10Justia. Georgia Code 43-40-20 – Trust or Escrow Accounts

A broker who does not currently handle trust funds is not required to keep the account open in advance, but once trust funds arrive in a transaction the broker has one business day to open the required account. GREC must be notified of the bank name and account number for every trust account. A properly designated trust account is protected from attachment or garnishment, which is one of the reasons strict compliance matters to clients as well as licensees.

Written Brokerage Agreements and the Net Listing Ban

GREC Rule 520-1-.06 requires every exclusive brokerage engagement to be in writing, contain all material terms, and carry a definite expiration date. That covers listing agreements, buyer broker agreements, tenant representation contracts, and property management agreements. Each signing party gets a true copy at the time of signing.11Georgia Secretary of State. Georgia Real Estate Commission Rules and Regulations – Chapter 520-1 Licensure and Brokerage

Georgia also prohibits net listings, in which the broker keeps everything above a minimum price set by the seller. The commission must instead be added to the listed price so the client sees both the gross price and the brokerage cost.

Conduct That Triggers Discipline

O.C.G.A. § 43-40-25(b) lists over 30 specific unfair trade practices. The recurring complaints tend to involve:12Justia. Georgia Code 43-40-25 – Violations by Licensees, Schools, and Instructors; Sanctions; Unfair Trade Practices

  • Commingling client funds with the licensee’s own money, even briefly.
  • Failing to disclose an agency relationship to all parties in a timely manner.
  • Representing more than one party in a transaction without written consent from everyone involved.
  • Misleading advertising that misrepresents property features, values, terms, or the licensee’s affiliation.
  • Failing to account for or turn over money belonging to others.

The statute also folds federal Fair Housing Act prohibitions directly into Georgia license law. Refusing to show property, steering buyers toward or away from neighborhoods, and discriminatory statements in advertising are all treated as unfair trade practices that draw state discipline in addition to any federal consequences.

Penalties the Commission Can Impose

Under O.C.G.A. § 43-40-25(a), the Commission has a wide range of sanctions available once a violation is substantiated:

  • A written reprimand that remains on the licensee’s record.
  • Required completion of a specific course in real estate brokerage.
  • Periodic trust-account audit reports from an independent accountant.
  • Fines up to $1,000 per violation, capped at $5,000 per proceeding unless the parties agree otherwise.
  • Reimbursement of the Commission’s administrative, investigative, and legal costs.
  • Restrictions on the scope of the license.
  • Suspension for a set period or indefinitely, with conditions attached to reinstatement.
  • Demotion, in which a broker or associate broker license is revoked and a salesperson license is simultaneously issued.
  • Revocation.

The demotion option is unusual. Most states either suspend or revoke, but Georgia can pull someone out of a supervisory role and leave them able to practice under a broker’s oversight.

Federal Rules That Also Bind Georgia Licensees

Several federal statutes carry their own penalties and can also produce state discipline through § 43-40-25.

RESPA

The Real Estate Settlement Procedures Act prohibits giving or receiving any fee or “thing of value” in exchange for referring business tied to a federally backed mortgage loan. “Thing of value” is defined broadly and reaches trips, discounts, special loan terms, and the chance to participate in a money-making program. No written agreement is required; a pattern of referrals tied to compensation is enough.13Consumer Financial Protection Bureau. Prohibition Against Kickbacks and Unearned Fees Cooperative brokerage arrangements, bona fide payments for services actually performed, and normal promotional activity are permitted, provided the payment bears a reasonable relationship to the market value of the services. Related records must be kept for five years.

Lead-Based Paint Disclosure

For any residential property built before 1978, sellers, landlords, and their agents must disclose known information about lead-based paint hazards before a contract or lease is signed. The agent provides the EPA pamphlet “Protect Your Family From Lead In Your Home,” includes a lead warning statement in the contract, and gives buyers a 10-day window to conduct a paint inspection or risk assessment. A signed disclosure is retained for three years.14U.S. Environmental Protection Agency. Real Estate Disclosures About Potential Lead Hazards Housing built after 1977, properties certified lead-free, foreclosure sales, and short-term leases of 100 days or less are exempt.

Fair Housing

Because Georgia license law incorporates Fair Housing prohibitions into its unfair trade practices list, a refusal to show property based on race, religion, sex, disability, familial status, or national origin, along with steering and discriminatory marketing, produces both federal exposure and state discipline. Federal civil penalties heard by a HUD Administrative Law Judge can reach over $23,000 for a first offense, and state-level discipline is imposed separately.