2.3 Agency Disclosure Requirements and Forms

Two Different Disclosures — Don't Confuse Them

Georgia tests two distinct disclosure obligations, and the exam loves to mix them up:

1. Relationship (agency) disclosure — who the broker represents. Governed by O.C.G.A. § 10-6A-9.
2. Property-condition disclosure — what is physically wrong with the property. Governed by O.C.G.A. § 10-6A-5(b)(2).

1. Disclosing the brokerage relationship (§ 10-6A-9)

A broker who represents a client must disclose that relationship to the other party (and to the other broker) before the other party discloses confidential information — in practice, when negotiations begin or when showing the client's property. The disclosure is commonly delivered on a Georgia Association of REALTORS® brokerage/agency disclosure form, sometimes attached as an exhibit to the purchase agreement.

2. Disclosing adverse material facts about physical condition (§ 10-6A-5)

Agents (whether representing the seller or acting for a customer) must disclose adverse material facts pertaining to the physical condition of the property and improvements that the agent knows and that could not be discovered by a reasonably diligent inspection by the buyer. Examples: a known active roof leak, a foundation crack the seller patched and painted over, prior flooding the seller described to the agent, or known environmental contamination.

Georgia is often called a caveat emptor (buyer beware) state because the seller has limited statutory disclosure duties, but the agent's § 10-6A-5 duty to reveal known physical defects still applies. The agent is not, however, required to discover hidden defects — only to disclose those actually known.

Exam Tip: 'Material fact' under BRRETA means physical condition. Anything purely psychological (a death, a haunting reputation) is handled by a different statute, below.

Who delivers the disclosure, and how

The relationship disclosure may be made by the agent who has the relationship or by the cooperating agent on the other side, and it may be oral or written — but the prudent (and tested) practice is written, on a standardized form, because a broker must be able to prove the disclosure was made. A buyer's agent showing a listing, for example, should confirm in writing to the listing broker that the buyer is a client. Failure to disclose timely can expose the broker to a GREC complaint and to liability if a party relied on the broker as a neutral source while the broker secretly represented the other side.

Stigmatized Property: O.C.G.A. § 44-1-16

Georgia law expressly protects owners, brokers, and affiliated licensees from liability for failing to volunteer 'stigma' facts. Under O.C.G.A. § 44-1-16, no cause of action arises against an owner or a real estate licensee for failing to disclose that the property was:

• the site of a homicide, felony, or other crime;
• the site of a suicide or a death by accidental or natural causes; or
• previously occupied by a person infected with a disease (such as HIV) not known to be transmitted through occupancy.

The critical nuance the exam tests

Silence about a stigma is protected, but a knowing lie is not. If a prospective buyer asks a direct question about a death or felony on the property, the licensee must answer truthfully (or decline to answer); the licensee may not make a false statement. The shield covers omission, not misrepresentation.

Federal Overlay: Lead-Based Paint

For homes built before 1978, the federal Residential Lead-Based Paint Hazard Reduction Act requires sellers/landlords to give buyers the EPA pamphlet, disclose known lead hazards, and provide a 10-day inspection opportunity. This federal duty applies in Georgia regardless of the state's caveat-emptor posture.

Record Retention (GREC Rule)

The Georgia Real Estate Commission (GREC) requires brokers to keep transaction records — brokerage engagements, agency disclosures, sales contracts, closing statements, leases, and trust-account records — for at least three years. Records may be stored at the main office, a branch, or in a secured electronic system.

Disclosure Quick-Reference