Acting Without a License; Cease and Desist Order; Judicial Review; Effect of Code Section on Other Remedies

1. Law
2. Georgia Code
3. Professions and Businesses
4. Real Estate Brokers and Salespersons
5. Acting Without a License; Cease and Desist Order; Judicial Review; Effect of Code Section on Other Remedies

1. Any person who, directly or indirectly, with the intention or upon the promise of receiving any valuable consideration, offers, attempts, or agrees to perform, or performs, any single act defined in paragraph (2) of Code Section 43-40-1, whether as a part of a transaction or as an entire transaction, shall be deemed a licensee within the meaning of this chapter. The commission of a single such act by a person who is required to be licensed under this chapter but who is not so licensed shall constitute a violation of this chapter.
2. It shall be unlawful for any person, directly or indirectly, to engage in or conduct the business of, or advertise or hold himself or herself out as engaging in or conducting the business of, or act in the capacity of, a licensee within this state without first obtaining a license as provided in this chapter unless such person is exempted from obtaining a license under Code Section 43-40-29.
3. Notwithstanding any other provisions of law to the contrary, the commission may issue a cease and desist order prohibiting any person from violating the provisions of this chapter by engaging in the practice of a real estate broker without a license. Such cease and desist order shall be final ten days after it is issued unless the person to whom such order is issued requests a hearing before the commission.
4. The violation of any cease and desist order of the commission under subsection (c) of this Code section shall subject the person violating the order to further proceedings before the commission, and the commission shall be authorized to impose a fine not to exceed $1,000.00 for each transaction constituting a violation of such order. Each day that a person practices in violation of this chapter shall constitute a separate violation.
5. Initial judicial review of the decision of the commission entered pursuant to this Code section or an action for enforcement of such decision shall be available solely in the superior court of the county of domicile of the commission.
6. Nothing in this Code section shall be construed to prohibit the commission from seeking remedies otherwise available by statute without first seeking a cease and desist order in accordance with the provisions of this Code section.

(Ga. L. 1925, p. 325, § 1; Ga. L. 1931, p. 231, § 1; Code 1933, § 84-1401; Ga. L. 1943, p. 572, § 1; Ga. L. 1949, p. 943, § 2; Ga. L. 1950, p. 278, § 1; Ga. L. 1953, Nov.-Dec. Sess., p. 166, § 1; Ga. L. 1956, p. 404, § 1; Ga. L. 1965, p. 629, § 1; Code 1933, § 84-1402, enacted by Ga. L. 1973, p. 100, § 1; Ga. L. 1985, p. 360, § 19; Ga. L. 1988, p. 1395, § 4; Ga. L. 1989, p. 1619, § 10; Ga. L. 1990, p. 650, § 9; Ga. L. 1995, p. 1216, § 10.)

Cross references.

- False or fraudulent advertising, § 10-1-420 et seq.

JUDICIAL DECISIONS

Contracts made without having obtained a license are illegal and void, and there can be no recovery for services rendered. Drake v. Parkman, 79 Ga. App. 679, 54 S.E.2d 714 (1949).

When a former employee alleged that the employee was entitled to quantum meruit against the former employer for having found a buyer for the employer's property, for which the employer had orally indicated that the employer would reward the employee, but the employee failed to raise in the trial court that the employee was a referral agent who was exempt from the real estate licensing statutes pursuant to O.C.G.A. § 43-40-29(a)(9), the issue was not reviewable on appeal; thus, summary judgment under O.C.G.A. § 9-11-56(c) was granted to the employer as the employee was not licensed under O.C.G.A. §§ 43-40-1(2)(A) and43-40-30(a). The true nature of the exchange was a sale of real estate and an agreement was prohibited by the licensing statutes; accordingly, it could not be the basis of a quantum meruit claim. Everett v. Goodloe, 268 Ga. App. 536, 602 S.E.2d 284 (2004).

Legislative intent to require license of one who procures purchasers for compensation.

- By enacting Ga. L. 1973, p. 100 (see O.C.G.A. §§ 43-40-1,43-40-29, and43-40-30), the legislature intended to require a person to obtain a license before procuring real property purchasers in return for compensation. Berchenko v. Fulton Fed. Sav. & Loan Ass'n, 149 Ga. App. 526, 254 S.E.2d 745, aff'd, 244 Ga. 733, 261 S.E.2d 643 (1979).

Anyone performing any act defined in this section without being licensed violates the law. Krizan v. Newman & Co., 246 Ga. 214, 271 S.E.2d 135 (1980).

Licensed broker may recover commission although unlicensed according to law of property's situs.

- General rule is that if a broker is licensed according to the laws of the state where the broker's contract of employment is made the broker may recover a commission even though not licensed according to the law of the situs of the property. Paris v. Cooper, 158 Ga. App. 212, 279 S.E.2d 507 (1981).

There is no legal requirement that a real estate broker or salesperson also be a member of a board of realtors. Nixon v. Gwinnett County Bd. of Realtors, Inc., 249 Ga. 862, 295 S.E.2d 78 (1982).

Unknowing client of unlicensed broker may recover back commission paid.

- When one enters into a real estate brokerage contract with another who has not procured a license to do business as a broker, and pays a commission to the person acting in the capacity of a real estate broker, without knowing that the person had not obtained a license, one may recover back the commission so paid. Grant v. Elder, 146 Ga. App. 64, 245 S.E.2d 341 (1978).

Attorney prohibited from recovering fee representing commission.

- Attorney was prohibited from enforcing client's single promise to pay an attorney a lump-sum fee in the amount of ten percent of the sale price of the client's property when a part of the consideration for the client's promise was illegal because the attorney was not a licensed real estate broker. Starr v. Robinson, 181 Ga. App. 9, 351 S.E.2d 238 (1986).

Unlicensed participant held not broker's agent.

- Facts did not support allegation that unlicensed participant in sale of realty was the agent of a real estate broker. Thus, the trial court properly granted the broker's motion for summary judgment. Holtzendorf v. Seckinger, 195 Ga. App. 177, 393 S.E.2d 13 (1990), cert. denied, 195 Ga. App. 898, 393 S.E.2d 13 (1991).

Unlicensed person may not recover commission.

- Person acting as a real estate broker who has failed to obtain a license from the Georgia Real Estate Commission is precluded by such failure from recovering compensation under a contract for services rendered in procuring a sale of real estate. Padgett v. Silver Lake Park Corp., 40 Ga. App. 199, 149 S.E. 179 (1929).

When broker's associate not licensed, broker cannot recover associate's commission.

- Because the plaintiff did business as a real estate broker and one of the plaintiff's associates transacted business without a license, the plaintiff is precluded from recovering a commission on the contract. Lee v. Moseley, 40 Ga. App. 371, 149 S.E. 808 (1929).

Cited in Newborn v. Trust Co. Bank, 148 Ga. App. 70, 251 S.E.2d 45 (1978); MPI Corp. v. Northside Realty Assocs., 151 Ga. App. 516, 260 S.E.2d 499 (1979); Northside Realty Assocs. v. MPI Corp., 245 Ga. 321, 265 S.E.2d 11 (1980); Krizan v. Newman & Co., 153 Ga. App. 337, 265 S.E.2d 68 (1980); Wanamaker v. Esther Wynne Realty Assocs., 163 Ga. App. 338, 294 S.E.2d 581 (1982).

OPINIONS OF THE ATTORNEY GENERAL

Referral agents must be licensed unless the agents can establish that the agents are entitled to the exempt status as set forth in former Code 1933, § 84-1403 (see now O.C.G.A. § 43-40-29(a)(9)). 1980 Op. Att'y Gen. No. 80-115.

RESEARCH REFERENCES

ALR.

- Implied contract of employment of real estate broker to procure customer, 49 A.L.R. 933.

Application and effect of statute relating to real estate brokers as regards broker from out of state, 86 A.L.R. 640; 159 A.L.R. 274.

Want of license as affecting broker's recovery of compensation for services, 169 A.L.R. 767.

Validity of statute or ordinance requiring real estate brokers to procure license, 39 A.L.R.2d 606.

Single or isolated transactions as falling within provisions of commercial or occupational licensing requirements, 93 A.L.R.2d 90.

Validity and construction of license tax or fee, or business privilege or occupational tax, on persons renting or leasing out real estate, 93 A.L.R.2d 1136.

Revocation or suspension of real estate broker's license for violation of statutes or regulations prohibiting use of unlicensed personnel in carrying out duties, 68 A.L.R.3d 530.

Recovery back of money paid to unlicensed person required by law to have occupational or business license or permit to make contract, 74 A.L.R.3d 637.

Right of attorney, as such, to act or become licensed to act as real estate broker, 23 A.L.R.4th 230.

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