2.1 Brokerage Relationships in Real Estate Transactions Act (BRRETA)
Key Takeaways
- BRRETA (O.C.G.A. § 10-6A) governs all brokerage relationships in Georgia real estate transactions
- A written brokerage engagement agreement is required to create a client relationship in Georgia
- Georgia recognizes four types of relationships: client, customer, dual agency, and designated agency
- Brokers must disclose their agency relationship at the first substantive contact with a party
- BRRETA requires brokers to have written office policies regarding dual agency and designated agency
The Brokerage Relationships in Real Estate Transactions Act (BRRETA), found in O.C.G.A. § 10-6A, is Georgia's primary law governing real estate agency relationships. BRRETA defines the duties, obligations, and disclosures required in real estate transactions.
Key BRRETA Definitions
| Term | Definition |
|---|---|
| Client | Party who has entered into a written brokerage engagement with a broker |
| Customer | Party not represented by the broker but for whom ministerial acts may be performed |
| Dual Agent | Broker representing both parties in the same transaction |
| Designated Agent | Licensee assigned to represent only one party to the exclusion of all others |
Creating Agency Relationships
In Georgia, a written brokerage engagement agreement is required to establish a client relationship. Key requirements:
- Must be in writing and signed by both broker and client
- Must specify the type of representation (buyer or seller agency)
- Must disclose the broker's policy on dual agency
- Must describe compensation arrangements
Exam Tip: A verbal agreement is NOT sufficient to create a client relationship in Georgia. The relationship must be in writing to be enforceable.
Client vs. Customer
Client Relationship
- Created by written brokerage engagement
- Broker owes fiduciary duties
- Broker represents the client's interests
- Confidential information is protected
Customer Relationship
- No written engagement required
- Broker performs only ministerial acts
- No fiduciary duties owed
- Can be created verbally or in writing
Ministerial Acts for customers include:
- Providing property information
- Scheduling showings
- Presenting offers (without advice or negotiation)
- Answering factual questions
Required Disclosures Under BRRETA
First Substantive Contact
At first substantive contact with a party, brokers must disclose:
- The broker's relationship (if any) with the other party
- Whether the broker represents the buyer, seller, or both
- The broker's policy on dual agency
First substantive contact is defined as the first discussion about:
- Specific property needs or desires
- Financial qualifications
- Motivation to buy or sell
- Specific properties
What is NOT First Substantive Contact
- Casual conversation at an open house
- Providing basic property information
- Answering general questions about the market
Brokerage Engagement Agreement Requirements
The written brokerage engagement must include:
| Required Element | Description |
|---|---|
| Type of Representation | Buyer agency, seller agency, or dual |
| Compensation Terms | How and when the broker is paid |
| Duration | Start and end dates of the agreement |
| Duties and Services | What the broker will provide |
| Dual Agency Policy | Whether the brokerage permits dual agency |
| Designated Agency Policy | Whether the brokerage permits designated agency |
Broker's Duties to Clients
Under BRRETA, a broker owes clients these duties:
- Loyalty - Put client's interests first
- Obedience - Follow lawful instructions
- Disclosure - Reveal all material facts
- Confidentiality - Protect private information
- Accounting - Handle funds properly
- Reasonable Care - Act competently and diligently
Broker's Duties to Customers
A broker owes customers only:
- Honesty and fair dealing
- Disclosure of adverse material facts about the property's physical condition
- Performance of ministerial acts as agreed
Under Georgia's BRRETA, what is required to create a client relationship with a broker?
At what point must a Georgia broker disclose their agency relationship to a party?