RE/MAX Agent Responsibilities
Please review the following agent responsibilities for rental and property management situations. Additional detail can be found in the RMAA Policy and Procedures Manual. Property Management Responsibilities Any Associate dealing in property management shall:
Property Management CE Courses
Properties Owned and Managed by a RMAA agent or associate broker.
Rental Applications
Move-In, Move-Out Inspection Form
Security Deposits Security Deposits should be held by the landlord unless the Company is under a Property Management Agreement with the Landlord. The appropriate GAR form should be used in any lease where the Company is the Holder of the security deposit. In the rare situations where the Company is to be identified as the Holder of the Security Deposit while NOT managing the property, the Associate must:
Lease Purchase Agreements Not Recommended Broker advises against the use of Lease Purchases in relation to a real estate transaction. In situations where a tenant wants to establish a right to purchase rented property, it is best to execute a Residential Lease and an Option Agreement. Broker Corner July 14, 2023
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We often see special stipulations submitted by a buyer regarding low appraisals . A typical special stipulation sets a high price that a buyer will pay, but not a low price that the seller will accept. Listing agents can protect their seller against being forced to sell based on a very low appraisal. Consider the following scenario.
A property is under contract for $735,000 with the following special stipulation: “Buyer agrees to pay $5,000 over the appraised price if the property does not appraise for the offer price.” The property does not appraise for the offer price and instead appraises at $660,000. Does the Seller have to sell the property and at what price? Because a special stipulation controls over previous inconsistent content in a contract, the special stipulation changes the price that the buyer pays. The appraised price is $660,000, so the seller has to sell at $665,000, $70,000 less than the original contract price. If the seller refuses to sell at $665,000 and goes to court, a court would likely agree with $665,000. To protect your seller, a better special stipulation should include both a low price a seller will accept and a high price that a buyer will pay. If you are representing the seller, counter with this language to set a low price: Buyer agrees to purchase the property for $5,000 over the appraised price. Notwithstanding the above, the purchase price shall not be more than $____________ nor less than $_____________. Source: Weissman Academy, Seth Weissman, Secrets of Safeguarding You and Your Seller. The Brokerage Relationships in Real Estate Transactions Act (BRRETA) requires licensed agents in Georgia disclose known material adverse facts or defects pertaining to the physical condition of the property that can not be observed by routine inspection. Sellers, unless they are licensed agents, are not similarly required under BRETTA. There is no corresponding statute or legislation governing the conduct of an unlicensed seller. However, under Georgia case law, a seller does have a duty to disclose defects in the property that the seller knows of or should have known of and that a buyer would not have observed upon a reasonably diligent inspection of the property. If a defect is discovered that a seller should have disclosed, the seller can be sued in a civil action for fraud. There are 4 basic elements that must be proved in a case for fraud for non-disclosure.
The GAR Seller’s Property Disclosure Statement includes the question “Have there been any inspections of the Property in the past year?” If the answer is yes, the seller is not obligated to provide the report, but if there are defects in the report that have not been repaired, smart agents and sellers should disclose. Most buyers will request the other inspection reports anyway and not enter into a contract without first reviewing them. Examples of Situations That Require Disclosure of a Bad Report.
Smart alternatives to dealing with a bad inspection report.
Only Latent or Hidden Defects Need Be Disclosed by the Seller Georgia law only requires a seller to disclose latent, or hidden, defects. If the defect has been corrected such that it is no longer a defect, the seller arguably has no general duty under common law to disclose the fact that at one time the condition may have been defective. The law does not require sellers to disclose every past repair made to their homes; rather, they must inform potential buyers of current defects of which they are aware. Weissman, Seth. The Red Book on Real Estate Contracts in Georgia (pp. 832-836). BookBaby. Kindle Edition. You Tube Safe Real Estate video with Seth Weissman We often see exhibits to contracts that are not properly incorporated into
contracts. The exhibits may not be referenced in the body of the contract or may not have correct identifying numbers or letters (labels). Whenever we see exhibits that we believe are incorrectly incorporated or attached, we ask that you amend the contract to include them. This is critical if the parties intend for the unincorporated exhibit to have any legal significance. No matter how important a document is, if it is not legally attached to the body of the contract, it has no legal significance. Think about a Seller Property Disclosure, a loan contingency or a Community Association Disclosure that is not incorporated or attached. Yikes. The parties cannot rely on the content to resolve a dispute. The list of problems that can arise is infinite. GAR makes it easy. In the GAR Purchase and Sale Agreement at section 8, page 8, it states: All exhibits and/or addenda attached hereto, listed below, or referenced herein are made a part of this Agreement. The list includes documents often incorporated as Exhibits, as well as an “Other” category, with a space for the identifying letter or number assigned to the exhibit. Exhibits can also be referenced in Special Stipulations and be incorporated into the contract. This is basic contract law. The same is true in non-GAR purchase agreements and non-real estate contracts. This simple language can be used in non-GAR contracts to incorporate documents:Special Stipulation for Attaching Exhibits: The following [NAME OF DOCUMENT] between ______ and ______, dated ____ and attached to this Agreement as Exhibit ___ is hereby incorporated into this Agreement in its entirety. Reference: Weissman, Seth. The Red Book on Real Estate Contracts in Georgia (pp. 145-146). BookBaby. Kindle Edition. Broker Corner 6/23/23 Agents from the same brokerage often find themselves participating in the same transaction. Different situations result in different relationships.
In the first situation, a RE/MAX Around Atlanta (RMAA) agent represents the seller of a property as a client. Another RMAA agent represents the buyer as a customer. Question: What is the relationship of the buyer’s agent to the seller? Answer: Both the buying agent and the selling agent are representing the client. The agency section of the GAR Purchase and Sale Agreement was tweaked in 2023 to clarify exactly this situation. The Purchase and Sale Agreement clarifies that if the same brokerage firm is representing one party as a client and another party as a customer, then all of the agents in the transaction are technically representing the party with whom the brokerage firm has a client relationship. This is because agency relationships are determined by who the Broker is representing, rather than who the affiliated agent is working with. You’ve probably noted that the agency language in the GAR Purchase and Sale Agreement distinguishes between the two by stating that an agent “is working with” a customer and that an agent “is representing” a client. A client of the Broker, RE/MAX Around Atlanta, is the client of every affiliated agent in RMAA. The second situation is Designated Agency. In a designated agency, both the seller’s agent and the buyer’s agent work for the same agency and are both representing their parties as clients. The designated agent for the buyer owes the same duties to the buyer as if the agent was acting only as a buyer’s agent. Similarly, the designated agent for the seller owes the same duties to the seller as if the agent was acting only as the seller’s agent. With designated agency, each designated agent is prohibited from disclosing to anyone other than his or her broker any information requested to be kept confidential by the client (unless the information is otherwise required to be disclosed by law). Therefore, designated agents may not disclose such confidential information to other agents in the company. The broker is also prohibited from revealing any confidential information he or she has received from one designated agent to the other designated agent, unless the information is otherwise required to be disclosed by law. Confidential information is defined as any information that could harm the client’s negotiating position which information the client has not consented to be disclosed. In Georgia, designated agency is defined by state statute not to be dual agency. The third situation is Dual Agency. With Dual Agency, there is no 2nd agent from the same brokerage. Instead, a single agent (or team) is representing both the buyer and the seller as clients. The RMAA agent would have agency agreements with both parties to represent them both as clients in the same transaction. We see this happening when an agent has a buyer client that has executed a Buyer Brokerage and that buyer wants to buy a listing in which the same agent represents the seller. In these situations, neither party is exclusively represented as in a designated real estate agency. Dual Agency Requires the Consent of Both Parties Georgia law allows real estate brokers to act as dual agents if they first get the written consent of both parties. The written consent must contain the following: (1) a description of the types of transactions in which the licensee will serve as a dual agent; (2) a statement that as a dual agent, the licensee represents two clients whose interests could be different or even adverse; (3) a statement that the dual agent will disclose all adverse material facts regarding the transaction known to the dual agent to all parties to the transaction except for information that is made confidential by request of another client and that is not allowed or required by law to be disclosed; (4) a statement that the licensee will disclose to each client in the transaction the nature of any material relationship the licensee or his or her broker have with other clients in the transaction other than incidental to the transaction; (5) a statement that the client does not have to consent to the dual agency; and (6) a statement that the client’s consent has been given voluntarily and that the client has read and understood the brokerage engagement agreement. This special consent is required because of the potential for conflicts of interest in dual agency transactions. Dual Agency can be very tricky. RMAA does not offer Dual Agency unless an unavoidable situation requires it. If that happens, the situation must be discussed with an RMAA Broker for individual permission for the dual agency transaction and, of course, consent must be given, per the above paragraph, by each party. Tax assessments for 2022 have been mailed to homeowners. Pricing surged in 2020 and 2021. In Cobb County, the average yearly sales price increased from $345,000 in 2020 to $396,000 in 2021. That’s a $50,000 increase in 1 year. You’ve probably gotten calls from clients alarmed at the increases in the assessments.
This is a perfect opportunity to let your clients (or your whole database) know that you can help them through the process of understanding the tax bill, determining if the assessment is reasonable and, if it is not, help them through the appeals process. You’ll earn some well-deserved points for customer service. When people are ready to buy or sell, they’ll think of agents that have gone above and beyond for them. Consider making this a yearly service. Make appointments. Get face to face. If an appeal is successful, it’s good for the current year plus 2 years, so you’ll have a good reason to call in 2026, too. The process of appealing a property assessment is fairly easy. You can walk clients through the initial process of submitting an appeal. The comparable properties are generally already on the county website and auto-populate the forms. You just help the homeowner choose which properties to use as comps. Even if the decision is that the assessment is fair and no appeal needs to be filed, you have performed a valuable service and you’ll be remembered for it! The Process Tax Assessments are sent in May or June and the Tax Bill is sent in August. Any appeals to the property assessment must be submitted within 45 days of the date shown on the assessment. If an appeal is filed late, the original tax assessment is final. Although there may be some differences, most counties in Georgia follow the same procedures of assessment, appeal and billing. Tax bills are based on the Fair Market Value (FMV) of the property. The tax assessment is 40% of the FMV. The assessment multiplied by the millage rate yields the tax bill. Millage rates are determined county by county. If the millage rate goes up and the FMV stays the same, the tax bill will increase. If both the FMV goes up and the millage rate goes up, the tax bill will increase even more. Homeowners do not have any power to change the millage rate. It is set by the Board of Tax Commissioners in each county. However, if a homeowner has received an assessment that is believed to be high, it can be appealed. The question is: Could I sell my house for the assessed value? Property Tax Relief Grant As an aside, there has been some tax relief in 2023. The Property Tax Relief Grant was signed in March, 2023 giving homeowners an $18,000 reduction on assessed values of homesteads. There is nothing the consumer needs to do so long as the property is a homestead. The one time relief grant has to be approved every year so it would have to be passed again for future years. Good to know and good to tell your clients. How to Appeal an Annual Notice of Assessment The number of days to file an appeal of an annual assessment in Georgia is within 45 days of the date located in the upper right-hand corner of the assessment notice. Most counties in Georgia has an on-line appeal process. Appeals can also be mailed or personally delivered. Grounds for appealing a valuation are:
What Reduction Can (Should) Be Requested? Of course, if comparable sales show an over-assessment, it is the homeowner’s right to ask for a reduction of the amount of the over assessment. If it is a large difference, it may take more time and consideration. It is said by some that requesting a small reduction of 3-5% of the assessment will likely be more successful. Even though winning an appeal of a smaller reduction may not seem like much, a successful appeal is locked in (by law) for the current year and for the next 2 years. If there are more market surges, that locked in value may be worth a lot more 2 years into the future. If homeowners have a recent professional appraisal that is lower than the county’s assessment, they don’t need to go through the comparable process. The appraisal can be sent without comparable properties (the appraisal already has them). The homeowner will most likely get a reduction to the appraisal amount without further process. Gwinnett County is typical. This is their process: When an appeal is received the appraisal staff will review the appeal. An Amended Notice of Assessment can be accepted or rejected. The homeowner has 30 days from the date on the notice to reject the amended value and continue the appeal to the Board of Equalization, then to a settlement conference. The last step is a formal hearing. For more information, go to the tax assessor’s website for the county you need. And start contacting your database. The clock is ticking. Note: Cheryl King, closing attorney with Thomas and Brown, also wrote a newsletter on Tax Appeals with additional details To read her newsletter and access her residential real estate SmartStips.com, click https://www.linkedin.com/pulse/appealing-property-taxes-georgia-cheryl-conner-king/. 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. This is RE/MAX Around Atlanta’s Generative AI use policy. Generative AI is a field that is still extremely new, and it requires thoughtful communication and discussion to determine the most effective approach in this rapidly evolving field. It has massive potential in certain use-cases as well as key limitations we need to understand. While content and advice generated using AI may sound great and save time, there is an inherent risk of bias and inaccuracy. You are encouraged to learn more and experiment, but exercise caution when using it in your business. If you have any thoughts or feedback, please contact a Broker/Owner or In-House Counsel.
What is Generative AI? For the purposes of this policy document, Generative AI refers to technology and tools that can create content like a human, and as a consequence, perform tasks that mimic humans. The type of content (text, images, video, etc.) does not matter, nor does the underlying model/technology that enables the functionality. Popular Generative AI include, but are not limited to,: Chat GPT by OpenAI, and services powered by them Bard by Google DALLE by OpenAI Various AI powered chatbots Best Practices 1. Never upload personal information, customer/client data, or confidential information to any AI model. 2. Never send or publish AI generated content without thorough human review, regardless of whether the audience is internal or external. 3. Do not use generative AI as the sole source for research purposes. They are famous for“hallucinating” false information. Always verify with a second source. 4. Be sure that any content generated by AI does not violate license law, fair housing law or copyright law (be especially cautious with images that may resemble or be modeled using copyrighted images). 5. Keep a record of when you’re using an AI tool. 6. Be vigilant of legal topics (intellectual property, privacy, etc.) surrounding generative AI, and exercise caution. KEY TAKEAWAY: Regardless of whether content originated from Generative AI, YOU are entirely responsible for it as the author, as if you created it yourself. May 24, 2023 We are often asked why we ask for contact information in purchase agreements.
It’s all about sending and delivering notices that are legally sufficient. First, it is important to understand the difference between a Client and a Customer. Clients vs. Customer All brokerage relationships fall into one of two broad categories: (1) broker-client relationships; and (2) broker-customer relationships. In a broker-client relationship, the real estate broker is representing the client and is acting as his or her legal agent in buying, selling, or leasing property. In Georgia, a broker- client relationship can only be formed by the parties entering into a written agreement. The other type of brokerage relationship is known as a broker-customer relationship. With this type of relationship, the broker is not representing the customer in a legal or agency capacity. However, the broker can still work with the customers and help them by performing what are known as ministerial acts. These include, for example, identifying property for sale or lease, providing pre- printed real estate form contracts, preparing real estate contracts at the direction of the customer, and locating lenders, inspectors, and closing attorneys on behalf of the customer. It does not include delivery of notices. What are Notices? If a document only requires the signature of the sender, it’s a notice. If it requires signatures of both parties, it’s an agreement. Notices have to be delivered to an email or physical address or fax included in the contact. There are many notices given in the life of a contract and, of course, in the death of a contract. Think about unilateral 8 day extensions, notice to proceed with financing, counter offers, unilateral termination of contracts, notices from a landlord to a tenant (and vice versa) and exercise of options. The list goes on. Delivery of Notices to Clients If you have an executed Seller Brokerage Engagement Agreement or a Lease Listing/Management Agreement, the Seller or Landlord is your client. The same is true for a Buyer Brokerage Agreement or a Tenant Brokerage Agreement. You can therefore accept legal notices on behalf of your clients, but you may only deliver them to clients in person or to any physical address, e-mail address and/or facsimile number specifically included in the signature block of the agreement. If a physical address (not a PO Box) is in the Address for Receiving Notice section of the signature block, you can mail a Notice to a client. If an email address or a fax number is included, you can email or fax a notice to the client. A telephone number doesn’t work (but a fax number does). If there is no appropriate contact information for delivering a notice to your client, you have to hand deliver. If the client is on the West Coast, you may be on an airplane. And that is why it is so important to include the right contact information for clients in signature blocks. Notices to Customers If you do not have a written agreement with a party or if you have a written agreement that makes the party your customer, you cannot accept notices for them. Examples are the Authorization to Show Unlisted Property and the Agreement to Work with the Buyer as a Customer. Both are customer relationships, even though they are written. If you are representing the opposite party, you have to rely on the information in the signature block. You will be thankful if you remember to have the customer include their contact information in the signature block. Notice to a Represented Party Of course, notice to a represented party can be sent to that party’s agent. That agent is responsible for delivery to their client. References: The ABCs of Agency. GAR CB01 Purchase and Sale Agreement. GAR F201 RE/MAX Around Atlanta encourages all sellers to complete the GAR Seller’s Property Disclosure Statement Exhibit (SPD) to avoid any disclosure issues. If the seller has not occupied the property, the Seller should complete the Seller’s Disclosure of Latent Defect(s) Exhibit. To avoid broker liability, t is imperative that the sellers themselves complete the exhibit. The broker or agent should never complete the exhibit for the seller. In Georgia, a buyer cannot make a claim against the seller’s broker for false statements that were made by the seller in the seller’s disclosure statement - unless the seller’s broker knows the representations to be false. Neither can the buyer sue the seller’s agent for fraud when the seller fails to disclose concealed defects in the property.
Seller’s Agreement in the SPD The SPD includes directions on how sellers should fill out the statement and how buyers should use the exhibit. In completing the disclosure statement, the seller agrees to do the following: (1) answer all questions in reference to the property (which, unless noted, shall include any improvements); (2) leave no questions unanswered; (if the sellers cannot answer, they should use the additional explanations section to explain) (3) answer all questions fully and accurately based upon the best knowledge and belief of all sellers in the purchase and sale agreement. (All sellers must sign the SPD) (4) fully explain in the “additional explanations” paragraph any questions to which the answer is “yes,” referencing the number of the question for which the additional explanation is being given; and (5) promptly revise the statement and provide a copy of the same to the buyer and any broker involved in the transaction if, before closing, there are any material changes in the answers to any of the questions. How Buyers Should Use the SPD Buyers are advised that the disclosure statements should be the starting point for a buyer’s investigation rather than the entire investigation. Caveat emptor or buyer beware is still the law in Georgia. Therefore, if an inspection reveals an issue or concern that would cause a reasonable buyer to investigate further, the buyer will likely be out of luck if the buyer chooses not to do so. The disclosure statement language to buyers is as follows: The answers of Seller below should not be a substitute for Buyer conducting a careful, independent evaluation of the Property. Caveat emptor or buyer beware is the law in Georgia. Buyers are expected to use reasonable care to identify defects in the Property and satisfy themselves that the Property is suitable for Buyer’s needs and purposes. If an independent evaluation of the Property reveals potential problems or areas of concern that would cause a reasonable buyer to investigate further, Buyer may not have legal recourse if Buyer fails to investigate further. GAR has created substantially similar property disclosures for Condominiums (GAR Form F304), for New Construction (GAR Form F310), for Lots and Land (GAR Form F307) that are tailored to those situations. The Seller Property Disclosures Must Be Attached to the Purchase and Sale Agreement. The “Entire Agreement” Clause The Seller Property Disclosure must be attached to the Purchase and Sale Agreement for a buyer to be able to bring successful claims against sellers for breach of contract if sellers make material misrepresentations in the property disclosure statements. This is based upon the “entire agreement clause” (also known as a “merger clause”). The entire agreement clause establishes that the final written agreement between the parties represents the entire agreement of the parties and that the parties are only relying on what is written in the contract. Consequently, an entire agreement clause bars a buyer from relying on alleged misrepresentations not contained in the written agreement. Active Concealment of Defects The Georgia Court of Appeals recently held that buyers could successfully sue the sellers for facts falsely stated in the property disclosure statement, even if the statement was not made part of the contract, if the sellers actively concealed the damage. References: Weissman, Seth. The Red Book on Real Estate Contracts in Georgia (pp. 755-763). BookBaby. Kindle Edition. Seller’s Property Disclosure Statement Exhibit GAR F301 Broker Corner May 10, 2023 |
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