Where this fits on the exam
| Official syllabus topic | State Laws and Rules: Substantive Regulations; Unfair Practices |
|---|---|
| Official PSI group | State Laws and Rules |
| Published group count | 16 of the 52 Georgia questions |
| Exam portion | Georgia salesperson supplement |
| Source edition | PSI Georgia Candidate Information Bulletin dated July 1, 2026 |
The Rule
PSI publishes 16, 21, and 15 items for the three Georgia groups. It does not publish a guaranteed subtopic count. The statute, current GREC rule, contract, or other cited primary authority controls each lesson.
The lesson
Written broker notice
Before acting as principal in the listed capacities, an affiliated licensee must advise the broker in writing, including when acting through an entity in which the licensee has an interest.
Transaction disclosure
A licensee selling or leasing owned property must clearly disclose the principal role and insert the required clause in the contract.
Advertising legend
Principal advertising must disclose that the party holds a real estate license or display the Georgia real estate license number in the permitted form.
Inactive licensees
Inactive status does not erase licensed status for principal-advertising disclosure and does not authorize brokerage for others.
Decision rule
Georgia rule and national contrast
Worked Georgia example
Scenario. An inactive salesperson advertises a personally owned rental as a private landlord and omits any license disclosure.
Reason it through. Inactive status stops brokerage activity for others but does not erase the license disclosure required in principal advertising.
Answer. The advertisement must include the required license legend or Georgia license number.
Common exam traps
- Assuming inactive means unlicensed
- Disclosing only after contract acceptance
- Ignoring entity ownership
- Advertising as a private party without the required legend
Original practice questions with detailed explanations
These are original instructional questions mapped to the July 1, 2026 PSI outline. They are not copied from PSI or a live examination. Choose an answer before opening the explanation.
Question 1An affiliated salesperson plans to buy a rental house as a personal investment. What must happen before the salesperson acts?
- A. Nothing, because personal deals fall outside the license law
- B. The seller must hire a separate broker for the sale
- C. The salesperson must advise the broker in writing
- D. GREC must approve the purchase in advance
Show answer and explanation →
Answer: C. The salesperson must advise the broker in writing
A licensee buying, selling, leasing, or optioning property as a principal must first advise the broker in writing, including when acting through an entity in which the licensee has an interest. The license follows the person into personal deals. The outside-the-law answer is the trap, since licensed status is a material fact even when no client is involved.
- A. Incorrect. Principal transactions still carry duties tied to the person's licensed status.
- B. Incorrect. The seller is not required to hire a separate broker merely because the buyer is licensed.
- C. Correct. An affiliated licensee must advise the holding broker in writing before acting as a principal.
- D. Incorrect. The rule calls for written notice to the broker, not advance purchase approval from GREC.
Question 2An inactive salesperson advertises a personally owned rental as a private landlord, with no mention of the license. What does the rule require?
- A. Nothing, because inactive status ends the license duties
- B. The ad must note the license or show the license number
- C. The ad must name a sponsoring broker as the listing firm
- D. Nothing, as long as the owner leases the unit directly
Show answer and explanation →
Answer: B. The ad must note the license or show the license number
Inactive status stops brokerage for others but does not erase licensed status for principal advertising. The ad must carry the required license legend or the Georgia license number. The first answer looks plausible because inactive licensees cannot practice, but the disclosure rule still applies.
- A. Incorrect. An inactive license remains a license, so principal-advertising disclosure duties continue.
- B. Correct. The owner must use the required license disclosure legend or Georgia license number in the ad.
- C. Incorrect. An inactive owner does not have an active sponsoring firm to identify as the listing brokerage.
- D. Incorrect. Handling the lease directly does not remove the licensed owner's advertising disclosure duty.
Question 3A licensee sells a lot the licensee owns to an unrepresented buyer. How must the licensed status be handled in the transaction?
- A. Disclosed clearly, with the required contract clause
- B. Disclosed only if the buyer asks whether the seller is licensed
- C. Kept private, since licensed status does not affect price
- D. Mentioned verbally at closing, after the contract is signed
Show answer and explanation →
Answer: A. Disclosed clearly, with the required contract clause
A licensee selling or leasing owned property must clearly disclose the principal role and include the required clause in the contract. Licensed status is a material fact the buyer should know before agreeing. The only-if-asked answer confuses this rule with situations where a truthful answer is owed only on a direct question.
- A. Correct. The licensee must clearly disclose licensed status and include the required contractual disclosure.
- B. Incorrect. The disclosure duty applies without waiting for the buyer to ask.
- C. Incorrect. Licensed status is material even in a sale of the licensee's own lot.
- D. Incorrect. Waiting until closing leaves the buyer uninformed when entering the contract.
Ready to move on?
You are ready for the next lesson when all of these are true.
- Identify when an affiliated licensee must notify the broker in writing before a personal transaction.
- Recognize the licensed-status disclosure required in principal advertising.
- Explain why inactive status does not erase principal-disclosure duties.
- Answer the practice questions without looking back, then explain why the other choices fail.
- Explain the worked example in your own words and identify the fact that decides the answer.
- Retest this topic on another day in a mixed question set.
Recommended next lesson
Continue with Maintaining, Renewing, Reinstating, and Changing a Georgia License. Principal deals come up throughout a career, and the next lesson covers keeping the license itself in order: birth-month renewal in the fourth year, CE, the lapse windows, and the ten-day and one-month notice deadlines.
Return to the State Laws and Rules hub for the complete official branch and the full lesson list for this Georgia group.