For most business owners, a real estate transaction will be the single largest financial event within their business operations. The stakes are high and there are countless issues to consider before a business owner buys or sells real estate, or enters into a lease transaction.
One place to begin the process is to utilize a real estate professional. In 1994, the Georgia General Assembly passed a statute outlining the use of real estate brokers in the state. The statute is known as The Brokerage Relationships in Real Estate Transactions Act (“BRRETA”).
BRRETA’s effective scope “govern[s] the relationships between sellers, landlords, buyers, tenants, real estate brokers and their affiliated licensees to the extent not governed by specific written agreements between and among the parties.” BRRETA requires that brokers exercise “reasonable care” in discharging all of the duties spelled out in BRRETA.
BRRETA defines the duties of brokers to “customers” and “clients”. Further, it speaks to brokers’ obligations where brokers are engaged with sellers and buyers (“dual agency”). Understanding the limits of the broker’s responsibilities is crucial before undertaking a real estate transaction with the benefit of a broker’s representation.
Commonly, brokers are referred to as “agents:” understanding, however, that brokers do not have fiduciary relationships or fiduciary duties to any party.
Many of the general provisions governing your relationship with a real estate broker spelled out in BRRETA can be modified by written agreement.
Real estate brokers bring a vast amount of experience and knowledge to any real estate transaction. As part of your consideration of which broker to utilize, be sure to understand the scope of that broker’s representation and all of the duties and obligations that come along with it.