Lease Transaction Brokerage, Security Deposits and Move-In Inspections

Brokerage Representation
There are 4 specific Landlord Representation exhibits provided by GAR. Exclusive Lease Listings have to be entered into FMLS. Non-Exclusive Lease Listings do not.  If RMAA will be handling Property Management, the Exclusive Leasing/Management and the Services to be performed forms are used. These are the Links.
F122 Exclusive Leasing Listing Agreement
F125 Non-Exclusive Leasing Listing Agreement
F128 Exclusive Leasing/Management Agreement (06.01.23 revision)
F131 Services to be Performed by a Manager Exhibit


Leases do not require the Affiliated Business Arrangement Disclosure (ABAD), the Recommendations for Buyers or the Wire Fraud Warning.

Security Deposits
Security Deposits should be held by the landlord unless the Company is under a Property Management Agreement with the Landlord.  If a security deposit is held by the landlord, it needs to be held in a trust account established for that purpose in any bank or lending institution subject to regulation by the state of Georgia or any agency of the United States, unless the landlord is exempt from this regulation. Exempt landlords are those who own 10 or fewer properties (either by themselves or in the name of their spouse or minor children) and who are natural persons and where the property is not being managed by a third party.  A property that is owned by an LLC is not owned by a natural person.  Therefore, an LLC landlord must place security deposits into an escrow account. 

Exception: Rarely, RMAA is asked to hold a security deposit while NOT managing the property.  In that case, consult the RMAA Policy Manual for approval, required special procedures and special stipulation.  

Exception: Some agents do have individual trust accounts.  If so, they must be registered with the Georgia Real Estate Commission (GREC) on the appropriate forms and report once a month to the Broker a reconciled bank statement showing the disposition of all security deposits or trust funds held in or disbursed from that account.  RMAA strongly urges all agents to allow RMAA to hold any rental trust funds in its escrow account.  

Properties Owned or Managed by an RMAA Associate
Any properties owned by an RMAA agent must be managed either through RMAA or through an approved property management firm.  You must consult a member of the Broker team if a property is to be managed through an outside property management company for approval and for proper procedures.

Move-In, Move-Out Inspection Form and Timing of the Security Deposit
The Move-In, Move-Out Inspection Form is a requirement for every lease.  Either the Long Form or the Short Form can be used. The Landlord has the burden of proving any damage by the tenant. If there is no Move In Agreement where RMAA is holding the Security Deposit, there is no basis for withholding any of the Security Deposit.  Associates should also recommend that the landlord and tenant take pictures of the property’s condition prior to leasing it and attach them to the Move-In Statement if warranted. Associates should never complete the Move-In, Move-Out Agreement on behalf of a landlord or tenant.

The body of the lease states that the Move-In, Move-Out Inspection Form is provided to the tenant prior to the tenant “tendering a Security Deposit” and is attached as an exhibit.  Agents sometimes define the initial payment by the tenant as a reservation deposit or application deposit that converts to the security deposit when the Move-In Agreement is provided to the tenant. There are no cases that either confirm or reject that procedure.  

When representing the tenant, the Move-In, Move-Out Inspection Form should be requested prior to the tenant tendering a security deposit.  When representing the landlord, it is best practice to have the landlord complete the document upon listing so that it can be provided to any potential tenants.  
F910 Move In/Move Out Condition Report (Long Version)
F911 Move-In Inspection Report (Short Form)
F912 Move-Out Inspection Report (Short Form)


Tenant Representation 
Tenants can be clients or customers.  Generally, an agent will be representing a tenant as a client when showing properties listed by others. (Showing properties to tenants without the protection of an Exclusive Tenant Brokerage Agreement can be costly and non-productive.) On the other hand, an agent might be working with a prospective tenant as a customer when the RMAA agent is the lease listing agent for the property. The duties of an agent to customers versus clients can be reviewed in CB01 The ABC's of Agency.  

The Agency Exhibit linked below should be used when a lease is on a non-GAR form.  It includes the required legal disclosures (license numbers, RMAA agency information) which are often omitted in non-GAR leases.  It should be added to the lease as an exhibit. 

F134 Exclusive Tenant Brokerage Agreement
F137 Non-Exclusive Tenant Brokerage Agreement
F140 Agreement to Work with Tenant as a Customer
F143 Agency Exhibit (Owner/Landlord and Tenant)

Lead Based Paint Disclosure Exhibit (LBP) Required
Just as in Purchase and Sale Agreements, an LBP Exhibit must be included with leases for properties built prior to 1978 and the tenant provided with a copy of the lead-based paint brochure prior to the tenant and landlord entering into a binding lease agreement. 
The exhibit for leases is slightly different from the one for sales, so the proper exhibit (F918) should be used. 

F918 Lead-Based Paint Exhibit (Leases) 
CB04 Lead-Based Paint Pamphlet

Additional detail in the Lease for Residential Property and the Lease for Lease Purchase Exhibit is covered in a separate Broker Corner.​