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
Brokerage Relationships in Real Estate Transactions Act (BRRETA)
Important: This content covers Georgia-specific agency law. You should complete the National Real Estate Exam Prep first, as agency concepts are also tested on the national portion.
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?