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Unlocking BRRETA: navigating broker duties and responsibilities in Georgia real estate transactions

3/18/24

By: Brian Goldberg and Zachary H. Waldrop

In Georgia, the Brokerage Relationships in Real Estate Transactions Act, commonly referred to as BRRETA, was enacted to govern the relationships between sellers, landlords, buyers, tenants, and real estate brokers and their affiliated licensees to the extent not governed by specific written agreements between and among the parties. In place of general fiduciary duties, the Act enumerates specific duties which real estate brokers must exercise with reasonable care. O.C.G.A. §§ 10-6A-2(a); see also O.C.G.A. § 10-6A-5; Atlanta Partners Realty, LLC v. Wohlgemuth, 365 Ga. App. 386, 394, 878 S.E.2d 615, 622 (2022), cert. denied (May 31, 2023) (citing Starks v. Carver, 360 Ga. App. 366, 368 (1), 861 S.E.2d 193 (2021)). An important ramification of the lack of a fiduciary duty is that, in the context of a fraud claim, a client cannot justifiably rely on a broker’s representations without exercising their own due diligence. See, e.g., Spies v. Deloach Brokerage, Inc., 169 F. Supp. 3d 1365, 1375-76 (S.D. Ga. 2016). A broker, however, still has statutorily mandated disclosure obligations under BRRETTA. For example, when a broker with an existing brokerage relationship with a customer or client enters into a new brokerage relationship with the customer or client, the broker must timely disclose this new relationship to everyone involved in the contemplated real estate transaction. O.C.G.A. § 10-6A-4(b). 

Generally, a broker has a duty to: (1) perform the terms of the brokerage engagement; (2) promote the interests of the client, including by seeking a sale, purchase, or lease at the price and terms agreed to, timely presenting offers, disclosing to the client all material facts concerning the transaction of which the broker has actual knowledge, advising the seller to obtain expert advice on matters beyond the broker’s expertise, and timely accounting; (3) exercise reasonable skill and care; (4) comply with all requirements of BRRETA and other applicable statutes and regulations; and (5) keep confidential all information received that is made confidential by express request from the client. See O.C.G.A. §§ 10-6A-5(a), 10-6A-6(a), 10-6A-7(a), 10-6A-8(a).  

A. Brokers engaged by sellers and landlords.  

More specifically, for brokers engaged by sellers and landlords, BRRETA effectively provides the same duties and responsibilities for each. In these relationships, BRRETA additionally requires the broker to timely disclose to all parties with whom the broker is working all adverse material facts regarding the property’s physical conditions and physical conditions within one mile of the property that are actually known by the broker and cannot be discovered by a buyer’s or tenant’s reasonably diligent inspection. See O.C.G.A. §§ 10-6A-5(b)(1)-(2), 10-6A-6(b)(1)-(2). Notably, however, BRRETA expressly provides that a broker has no duty to seek to discover such adverse material facts. See O.C.G.A. §§ 10-6A-5(b)(2), 10-6A-6(b)(2). Moreover, while brokers are prohibited from providing false information to prospective buyers or tenants, a broker cannot be liable where it did not have actual knowledge that the information was false and discloses the information’s source to the buyer or tenant. See id. Further, no cause of action may arise against a broker for disclosing information in compliance with subsection (b) of O.C.G.A. §§ 10-6A-5 and 10-6A-6. Additionally, a broker engaged with a seller or landlord cannot be held liable for failure to disclose any matter other than those expressly enumerated in those subsections. See id. Nor can any violation of that subsection create liability for the broker without a finding of fraud perpetrated by the broker. See id. In other words, to be held liable, a broker must have actual knowledge of false information given or facts not disclosed and an intention to deceive another party. Importantly, a broker engaged by a seller or landlord may provide assistance to the buyer or tenant by performing ministerial acts, and performing such ministerial acts will not violate the broker’s engagement agreement with the seller or landlord or form a brokerage engagement with the buyer or tenant. See O.C.G.A. §§ 10-6A-5(c), 10-6A-6(c). Finally, a broker engaged by a seller or landlord may show alternative properties to prospective buyers or tenants without breaching any duty or obligation owed to the seller or landlord. See O.C.G.A. § 10-6A-5(d), 10-6A-6(d). 

B. Brokers engaged by buyers and tenants. 

The duties and responsibilities of brokers engaged by buyers and tenants are very similar to those for brokers engaged by sellers and landlords. The same prohibitions on providing false information exist, as do the protections against a broker’s liability. See O.C.G.A. §§ 10-6A-7(b), 10-6A-8(b). Brokers engaged by buyers or tenants may also similarly provide assistance by performing ministerial acts for the seller and landlord. See O.C.G.A. §§ 10-6A-7(c), 10-6A-8(c). These duties and responsibilities, however, do contain some differences from those for brokers engaged by sellers and landlords. For example, BRRETA requires that a broker engaged by a buyer must timely disclose to a prospective seller, with whom the broker is working as a customer and who is selling property which will be financed by loan assumption or the seller, all material adverse facts, of which the broker has actual knowledge, concerning the buyer’s financial ability to perform the terms of the sale. See O.C.G.A. § 10-6A-7(b).  

In addition, where the transaction is residential, a broker must disclose the buyer’s intent to occupy the property as a principal residence. See id. Similarly, brokers engaged by tenants must timely disclose to a prospective landlord with whom the broker is working all adverse material facts, of which the broker possesses actual knowledge, concerning the tenant’s financial ability to perform the terms of the lease or letter of intent to lease or intent to occupy the property. See O.C.G.A. § 10-6A-8(b). Moreover, a broker engaged by a buyer or tenant does not breach any duty or obligation by showing properties in which the buyer or tenant is interested to other prospective buyers or tenants. See O.C.G.A. §§ 10-6A-7(d), 10-6A-8(d).

C. Other duties enumerated. 

These code sections set forth the general duties and responsibilities for brokers under BRRETA. Other code sections set forth more specific mandates regarding the duration of engagements, disclosures to clients, dual agency, and ministerial acts, etc. See O.C.G.A. §§ 10-6A-9 (duration), 10-6A-10 (disclosures), 10-6A-12 (dual agency), 10-6A-14 (ministerial acts). It is imperative that brokers understand their duties to clients and other parties as, in real estate transactions, questions often arise regarding duties to disclose and conflicting relationships. Sometimes these questions may be difficult to answer. In that case, a broker should consult with an attorney to determine the proper course of action. Regardless, brokers should lean towards caution regarding disclosures and conflicts and never provide false information. 

For more information, please contact Zachary Waldrop at zhwaldrop@fmglaw.com or Brian Goldberg at brian.goldberg@fmglaw.com.