Selling Real Estate Without a License
Is it legal to sell real estate without a license.
Below you will find the definition of the term “Broker” as defined in the Georgia State Statutes as provided for the year 2024. The definition, itself, primarily references O.C.G.A. 43-40-1, as a list of activities reserved by law for the duties and responsibilities of individuals licensed by the state to broker the commerce of real estate.
(2) "Broker" means any individual or entity issued a broker's real estate license by the Georgia Real Estate Commission pursuant to Chapter 40 of Title 43. The term "broker" includes the broker's affiliated licensees except where the context would otherwise indicate.
Below a various notations offered by the Lexis Nexis Law database on sources to provide greater insight on legal issues surrounding the above statute. The references for which are inline and provided with the notation.
"Broker" includes person receiving compensation for referral.
Those who merely refer one person to another are exempted from licensure requirement; however, if a fee, commission, or other valuable consideration is promised or intended to be paid for the referral service, by definition, the referral agent is a broker and must be licensed. Berchenko v. Fulton Fed. Sav. & Loan Ass'n, 244 Ga. 733, 261 S.E.2d 643, 1979 Ga. LEXIS 1320 (1979), superseded by statute as stated in Oconee Inv. Group, LLC v. Turk, 344 Ga. App. 31, 807 S.E.2d 512, 2017 Ga. App. LEXIS 561 (2017).
Real estate work without license is unlawful.
Ga. L. 1973, p. 100, �?1 (see now O.C.G.A. �?43-40-30) provides that any person who performs any single act, as defined in Ga. L. 1973, p. 100, �?1 (see now O.C.G.A. �?43-40-1), without being licensed shall be in violation of the law. Krizan v. Newman & Co., 246 Ga. 214, 271 S.E.2d 135, 1980 Ga. LEXIS 1060 (1980).
Because Georgia's statutory scheme regulating brokers was enacted pursuant to its police power to protect the public interest, an agreement to pay a brokerage fee, entered into with an unlicensed broker, is void and unenforceable. Amend v. 485 Props., LLC, 401 F.3d 1255, 2005 U.S. App. LEXIS 3586 (11th Cir. 2005).
Chapter does not create a legal cause of action, but conduct condemned may serve as basis for judicial action under other statutes by recognizing certain minimum standards for persons engaged in the real estate business. Kimball Bridge Rd. v. Everest Realty Corp., 141 Ga. App. 835, 234 S.E.2d 673, 1977 Ga. App. LEXIS 2084 (1977).
Below is a list of activities reserved by law that comprise the duties and responsibilities of real estate brokers. Performing any of these acts with expectation of receiving “valuable consideration” is considered to be in violation of state law.
(2) "Broker" means any person who, for another, and who, for a fee, commission, or any other valuable consideration or with the intent or expectation of receiving the same from another:
(A) Negotiates or attempts to negotiate, or assists in procuring prospects for the listing, sale, purchase, exchange, renting, lease, or option for any real estate or of the improvements thereon;
(B) Holds himself or herself out as a referral agent for the purpose of securing prospects for the listing, sale, purchase, exchange, renting, lease, or option for any real estate;
(C) Collects rents, assessments, or other trust funds or attempts to collect rents, assessments, or other trust funds;
(D) Is employed by or on behalf of the owner or owners of lots, time-share intervals, or other parcels of real estate at a salary, fee, commission, or any other valuable consideration to sell such real estate or any part thereof in lots or parcels or intervals or other disposition thereof;
(E) Engages in the business of charging an advance fee or contracting for collecting of a fee, other than an advertising fee, in connection with any contract whereby he or she undertakes primarily to promote the sale of real estate either through its listing in a publication issued primarily for such purpose, or for referral of information concerning such real estate to brokers, or both;
(F) Auctions or offers or attempts or agrees to auction real estate;
(G) Buys or offers to buy, sells or offers to sell, or otherwise deals in options to buy real estate;
(H) Performs property management services or community association management services;
(I) Provides or attempts to provide to any party to a real estate transaction consulting services designed to assist the party in the negotiations or procurement of prospects for the listing, sale, purchase, exchange, renting, lease, or option for any real estate or the improvements thereon; or
(J) Advertises or holds himself or herself out as engaged in any of the foregoing.
Through our experience with several attorneys, we have discovered there is some confusion over the legality of selling real estate without a license, regardless of it being so clearly defined in the state’s statutes. After deliberation, we resolved to attribute much of this confusion to the following opinion issued by the Georgia Attorney General in 1953, which gives variance on individuals who casually refers someone to a property they are aware of being sold. The legality of this being hinged upon the referrer not receiving compensation for his referral. As stated in O.C.G.A. 43-40-1, this compensation can come in the form of a “fee, commission, or any other valuable consideration.”2. So, compensation is not exclusively required to take place in monetary form.
Person who procures a purchaser for real estate, but who does not accept any compensation therefor, does not violate law requiring all real estate dealers to first procure a license, notwithstanding fact that such person does charge a fee for services in procuring a loan incident to purchase of such property. 1952-53 Ga. Op. Att'y Gen. 410.