Georgia Agency under BRRETA
The Brokerage Relationships in Real Estate Transactions Act (commonly known by the acronym BRRETA) functions as the structural foundation of every real estate transaction in Georgia. Prior to its enactment, the line between who represented whom was dangerously blurred, leading to lawsuits built on misunderstood loyalties. BRRETA stripped away this ambiguity by establishing a rigorous framework that governs the relationships between real estate licensees and consumers in Georgia. By mandating explicit boundaries for representation, duty, and disclosure, it ensures that when a property changes hands, all parties understand exactly where professional loyalties lie.
In the past, a buyer might assume a real estate agent worked for them simply because the agent was friendly, drove them to showings, or answered their questions. BRRETA explicitly extinguishes this assumption: Georgia real estate law strictly prohibits implied agency relationships. You cannot become someone's agent by accident, by implication, or merely by performing helpful acts.
Furthermore, the flow of money does not dictate the flow of loyalty. Under BRRETA, the payment of a real estate commission does not automatically create an agency relationship between a broker and a consumer. A buyer’s agent might be paid from the seller’s proceeds at closing, but their fiduciary loyalty remains entirely with the buyer.
To represent a client, you must have a contract. A written agency agreement between a broker and a client under BRRETA is called a brokerage engagement.
Crucial Rule: BRRETA requires all real estate agency agreements in Georgia to be in writing [1.1.4]. Without ink on paper, there is no agency.
Because real estate agreements cannot float indefinitely, a brokerage engagement in Georgia must contain a specific expiration date. But what happens if an agent and a client use a poorly drafted form that leaves the expiration date blank? The law provides a strict backstop: a brokerage engagement lacking a specific termination date automatically expires exactly one year from the creation date under BRRETA.
Before a client even signs this engagement, you have a duty of transparency. A real estate broker must disclose to a prospective client the types of agency relationships offered by the brokerage firm prior to signing an agreement. Consumers need to know their options before they are legally bound. Ultimately, Georgia real estate licensees must disclose their actual agency relationships to all parties prior to the execution of a purchase contract.
If BRRETA prohibits implied agency, what is your legal status if you are helping a buyer write an offer on a house, but they refuse to sign a brokerage engagement?
Under the law, a broker providing real estate services without a written agency agreement is classified as a transaction broker.
A transaction broker is a facilitator. As a transaction broker, you do not represent any party as a client in a real estate transaction. Instead, a transaction broker treats all parties in a real estate transaction strictly as customers.
Because a customer is not a client, the services you can provide are heavily restricted. A transaction broker is legally limited to performing ministerial acts for the parties in a real estate transaction. Ministerial acts are routine tasks that do not require a real estate licensee to exercise professional judgment or skill.
Think of ministerial acts as administrative routing rather than strategic advising. If a buyer asks you what they should offer on a property, answering that requires professional judgment—you cannot do it as a transaction broker. However, the following actions safely qualify as ministerial acts:
- Providing a list of local property inspectors to a buyer.
- Providing a list of local mortgage lenders to a buyer.
- Providing a list of local real estate attorneys to a buyer.
- Filling in the blanks on a standard real estate contract form without offering legal advice.
You act as the scribe and the directory, not the strategist.
When a brokerage is highly successful, it is mathematically inevitable that a buyer represented by the firm will want to purchase a listing represented by the same firm. This creates a structural conflict of interest. BRRETA addresses this through two distinct mechanisms: Dual Agency and Designated Agency.
Dual Agency
Dual agency occurs when a single brokerage firm represents two opposing clients in the same real estate transaction. If you are the sole agent representing both the seller trying to get the highest price and the buyer trying to pay the lowest price, you are operating as a dual agent.
Because it is inherently dangerous to represent competing interests, dual agency is legal in Georgia exclusively with the informed, written consent of all parties involved in the transaction.
This is not a mere checkbox. The informed consent document for dual agency must explicitly state that the broker will represent clients with adverse interests. Furthermore, a real estate client has the absolute legal right to refuse consent to dual agency without incurring any penalty.
If both parties consent, the dual agent must walk a very tight ethical rope. A dual agent is strictly prohibited from disclosing confidential information to the opposing party. You cannot tell the buyer the seller is facing foreclosure, nor can you tell the seller the buyer is pre-approved for $50,000 above the asking price.
Designated Agency
To bypass the paralyzing restrictions of dual agency, a brokerage will frequently use designated agency.
Designated agency occurs when a broker assigns one affiliated licensee to represent the seller and a different affiliated licensee to represent the buyer in the same transaction. BRRETA explicitly defines designated agency as legally distinct from dual agency.
This is an elegant solution. Under BRRETA, the managing broker in a designated agency transaction is not classified as a dual agent. Because the two agents are kept legally separate, a designated agent owes full fiduciary duties solely to the specific client assigned to that agent. They can strategize, advise, and advocate fiercely for their respective clients.
However, this only works if the firm's internal firewall is absolutely secure. A managing broker in a designated agency scenario must strictly prevent the sharing of confidential information between the two designated agents. They cannot use the same filing cabinet, and they cannot discuss the transaction at the office water cooler.
Whether representing a client or assisting a customer, BRRETA requires real estate brokers to exercise ordinary skill and care in performing professional duties. This duty extends heavily into how information and offers are managed.
Offer Management
A real estate broker must present all written offers to a client in a timely manner. This applies equally to negotiations; you must present all written counteroffers to a client in a timely manner. Even if the offer is absurdly low, it is the client's decision to reject it, not yours.
Crucially, this duty does not vanish the moment a contract is signed. A real estate broker must continue presenting all written offers to a seller client even after a property is under contract (often held as backup offers in case the primary deal falls through).
Material Facts and Physical Defects
In any transaction, information asymmetry exists—the seller knows the house better than the buyer. BRRETA requires you to level the playing field. A real estate broker must disclose all known adverse material facts regarding the physical condition of a property to all parties in the transaction.
What constitutes an adverse material fact regarding a property?
- Structural defects: (e.g., a failing foundation, severe termite damage).
- Environmental contamination: (e.g., black mold, radon gas, buried and leaking oil tanks).
However, BRRETA limits your liability to what is hidden. A broker is only obligated to disclose physical property defects that a buyer could not reasonably discover through a standard diligent inspection. If a bedroom is missing its ceiling and the sky is visible, you do not have to formally disclose it—a diligent buyer will see it. If the defect is hidden behind drywall, and you know about it, you must disclose it.
Neighborhood Conditions
The property line is not the limit of your disclosure obligations. BRRETA requires real estate brokers to disclose known adverse material facts affecting the surrounding neighborhood.
To prevent this from becoming an infinite geographical burden, the law provides a hard mathematical boundary: the mandate to disclose adverse neighborhood conditions applies exclusively to facts located within a one-mile radius of the subject property. If you know a commercial zoning change will permit a loud manufacturing plant a half-mile away, you must disclose it. If the plant is two miles away, you have no legal duty to disclose it under BRRETA.
Who gets this information? A real estate broker must disclose adverse neighborhood facts to all clients involved in the transaction, and equally, must disclose adverse neighborhood facts to all customers involved in the transaction.
The Liability Shield for False Information
Real estate agents are conduits of information, often relying on data provided by sellers, appraisers, or municipal records. What happens if you pass along a seller's claim that the roof is three years old, but it is actually fifteen years old?
BRRETA provides a safe harbor: a broker is exempt from liability for communicating false information to a party if the broker did not actually know the information was false. However, to maintain the liability exemption for communicating false information, a broker must reveal the original source of the inaccurate information to the receiving party (e.g., "According to the seller's disclosure document, the roof is three years old").
Real estate is not just about concrete and contracts; it is deeply personal. Your handling of human secrets and relationships is strictly regulated.
Client Confidentiality
When a brokerage engagement ends, your lips remain sealed. A broker must maintain client confidentiality indefinitely after the termination of the brokerage engagement.
There are only two ways this seal can be broken legally:
- A broker is permitted to disclose confidential client information if the client grants explicit permission for the disclosure.
- A broker is legally required to disclose confidential client information if a court order mandates the disclosure.
Conflicts of Interest
Fair judgment requires objectivity. Therefore, a real estate licensee must formally disclose any material personal relationship with a client that could impair fair judgment (such as representing a close friend or business partner). Similarly, a real estate licensee must formally disclose any material familial relationship with a client that could impair fair judgment (such as listing your parent's home).
Stigmatized Properties and Neighborhood Secrets
Not all defects are physical. Properties can carry psychological defects, often referred to as stigmas.
In Georgia, the law sides heavily with the seller's privacy regarding tragedies. Georgia law does not require real estate licensees to proactively disclose that a property was the site of a homicide. Similarly, Georgia law does not require real estate licensees to proactively disclose that a property was the site of a suicide.
However, you cannot lie. A real estate licensee must truthfully answer direct questions from a consumer regarding a property's stigmatized history if the licensee knows the factual truth. If a buyer directly asks, "Did someone pass away in this house?" and you know a murder occurred, you must answer truthfully.
Finally, buyers often ask agents about the safety of a neighborhood, specifically regarding local residents. Under BRRETA, a real estate broker is not legally required to discover the presence of registered sex offenders in a neighborhood. This burden of research rests entirely on the buyer, and a prudent agent will simply direct the buyer to the state's public registry rather than attempting to investigate the matter themselves.
