1.3 Georgia License Types and Broker Supervision

Georgia License Types

Georgia issues several license classes, each with a defined scope of authority.

Salesperson

A salesperson may list, show, negotiate, and present offers — but only in the name of and under the supervision of a sponsoring broker. A salesperson cannot operate independently, cannot collect compensation directly from a client, and cannot supervise other licensees. All commissions flow through the broker, who then pays the salesperson.

Associate Broker

An associate broker has earned a full broker license but elects to affiliate under another broker rather than open a firm. While affiliated, the associate broker is supervised like a salesperson and is compensated through the sponsoring broker.

Qualifying Broker

Every firm must name a qualifying broker — the individual broker legally accountable for the firm's trust accounts, advertising, recordkeeping, and supervision of every affiliated licensee. The qualifying broker is the person GREC holds responsible when something goes wrong.

Community Association Manager (CAM)

Georgia issues a separate CAM license for managing homeowner and condominium associations. CAMs are regulated by GREC and, where they perform brokerage-type acts, work under a broker.

Broker Supervision

Georgia places the supervisory burden squarely on the broker.

Written Policies

Firms must maintain written policies covering:

• Supervision of affiliated licensees
• Trust (escrow) fund handling and reconciliation
• Advertising standards (every ad must identify the firm)
• Transaction review and document retention (minimum three years)

Vicarious Liability

A broker is vicariously liable for licensee conduct within the scope of the license. Even if the broker was unaware of a salesperson's misconduct, the broker can be disciplined when the harm flowed from inadequate supervision — for example, failing to review a salesperson's advertising or escrow handling.

Exam trap: "The broker did not know" is not a defense when the violation resulted from a supervision failure. Watch for answer choices that excuse a broker purely on lack of knowledge.

Firm Structures

Georgia allows brokerage through several business forms, each requiring a licensed broker in control.

In a corporation or LLC, the designated/qualifying broker — not the corporate shell — bears personal responsibility for compliance and supervision. The entity itself must be registered with GREC before operating.

Branch Offices

A broker operating from more than one location must:

1. Notify GREC in writing of each branch location.
2. Ensure adequate supervision at every branch.
3. Maintain transaction records at the main office or the branch.

A branch may be supervised by the qualifying broker personally or by a competent associate broker or salesperson granted supervisory authority by the qualifying broker.

License Display and Pocket Card

Transferring Between Brokers

When a salesperson or associate broker changes firms, the sequence matters:

1. The releasing (terminating) broker notifies GREC, releasing the affiliation.
2. The new broker files transfer paperwork to assume sponsorship.
3. The licensee may not practice in the gap between release and the new affiliation taking effect.
4. A fresh background check is generally not required for a prompt transfer.

Worked scenario: A salesperson verbally agrees to join a new firm and begins showing homes before the releasing broker has notified GREC. That salesperson is practicing without a sponsoring affiliation — a violation — and any commission earned in the gap is unenforceable. The fix: wait until the transfer is on record with GREC.

Exam trap: A licensee is never "between brokers and still working." The instant the affiliation ends, the license goes inactive for practice purposes until the new sponsorship is recorded.

Trust (Escrow) Funds and the Broker

The single biggest source of supervision discipline is trust-fund mishandling, so the exam pairs it tightly with broker responsibility:

• Earnest money and other client funds must go into a designated trust/escrow account, separate from the broker's operating funds.
• Mixing client money with firm money is commingling; using it for the broker's own purposes is conversion — a basis for revocation and a Recovery Fund claim.
• The qualifying broker is responsible for trust-account reconciliation even if a bookkeeper or salesperson handles deposits day to day.
• Records of every transaction must be retained for at least three years and produced to GREC on demand.

Worked scenario: A salesperson accepts a $5,000 earnest-money check and holds it in a desk drawer over a long weekend instead of delivering it to the broker for prompt deposit. Even though no money was stolen, the delay violates trust-fund rules, and the broker is exposed for failing to train and supervise. The corrective control is a written policy requiring same-business-day delivery of all earnest money to the broker.

Exam tip: When a question describes client money sitting anywhere other than the firm's trust account, the answer almost always turns on the broker's supervisory duty, not just the salesperson's individual fault.