Other people's money, other people's secrets
Three duties account for most discipline: handling funds, keeping confidences, disclosing defects.
Earnest money goes to the broker
Money belonging to others must go into a designated trust account in the broker's name at a federally insured institution.
Worked example: a salesperson takes a $5,000 earnest money check. She delivers it to the broker promptly, who deposits it into the trust account. Georgia rule: the broker deposits it by the deadline in the agreement or, if none is stated, within 5 banking days after the broker's acceptance, under GREC Rule 520-1-.08(3) and O.C.G.A. 43-40-20.
Holding the check until closing puts client funds outside the broker's accountability; a personal account is commingling and, if spent, conversion. The broker answers for every dollar in trust.
Disputed earnest money
A broker may never unilaterally decide entitlement to disputed funds. With buyer and seller both demanding a $10,000 deposit, the routes are:
- Hold the funds until the parties agree in writing.
- Interplead the funds into court.
- Follow the statutory disbursement procedure. Georgia rule: O.C.G.A. 43-40-25(b)(29) permits disbursement under the agreement, a court order, or a reasonable interpretation of the contract after written notice and an opportunity to object.
Releasing it to the favored party skips that notice, the operating account is commingling, and an even split is unauthorized.
Confidentiality outlasts the deal
Confidentiality survives the end of the agency relationship indefinitely, unlike the other agency duties. A client's motivation and financial condition are what O.C.G.A. 10-6A-5 protects, so six months after closing the agent tells a curious neighbor nothing. Believing the duty ends at closing is the most common misconception, and telling another licensee is still a disclosure.
Material defects are never confidential
Known material adverse facts about physical condition are never confidential. A seller's instruction to conceal an annually flooding basement does not bind the agent, who must disclose it and owes every party honesty and fair dealing under O.C.G.A. 10-6A-5(b). The seller completes the disclosure statement, and no known false statement may stand.