Where this fits on the exam
| Official syllabus topic | State Laws and Rules: 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
Misrepresentation
A false statement or concealment of a material fact can be a disciplinary ground. Actual-knowledge language matters when the governing provision includes it.
Money and records
Failure to account, remit, safeguard, document, or lawfully disburse funds threatens public protection and can support discipline.
Interests and compensation
A licensee's ownership, agency role, compensation source, rebate, or referral interest may require timely written disclosure.
Competence and cooperation
Repeated negligence, practice beyond competence, failure to supervise, or refusal to cooperate with lawful investigation can trigger regulatory action.
Decision rule
Georgia rule and national contrast
Worked Georgia example
Scenario. A licensee knowingly advertises a house as having a new roof after the seller says the roof is 18 years old.
Reason it through. The advertisement contains a material false statement and the licensee has actual knowledge of the truth. Broker approval would not cure it.
Answer. The conduct supports discipline for misleading advertising and misrepresentation.
Common exam traps
- Replacing elements with moral intuition
- Assuming broker approval cures a violation
- Confusing trade-association discipline with GREC discipline
- Ignoring actual-knowledge wording
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 1A salesperson's ad says a listing has a new roof. The seller had told the salesperson the roof is 18 years old, and the broker approved the ad before it ran. How is GREC likely to view the ad?
- A. It is acceptable because the broker approved it before it ran.
- B. It is a matter for the local REALTOR association, not GREC.
- C. It can support discipline for misleading advertising.
- D. It is a violation only if a buyer relies on it and loses money.
Show answer and explanation →
Answer: C. It can support discipline for misleading advertising.
Knowingly making a material false statement, including in an advertisement, is a ground for discipline in Georgia. The salesperson knew the roof was 18 years old, so the ad is a knowing misrepresentation. Broker approval does not cure a false ad, which is the trap in the first choice.
- A. Incorrect. Broker approval cannot make a knowingly false roof claim truthful.
- B. Incorrect. GREC can enforce license-law violations regardless of a REALTOR association's separate role.
- C. Correct. The salesperson knowingly advertised a material false fact about the roof.
- D. Incorrect. Discipline for this knowing false statement need not wait for a buyer's actual loss.
Question 2A broker puts a tenant's security deposit into the firm's operating account to cover payroll and plans to replace it next month. No one has lost money yet. Can GREC discipline the broker?
- A. Yes, because mishandling trust funds is a ground even before any loss.
- B. No, because GREC acts only after a consumer suffers an actual loss.
- C. No, because the broker plans to replace the full amount next month.
- D. Only after the tenant sues the broker and wins a court judgment.
Show answer and explanation →
Answer: A. Yes, because mishandling trust funds is a ground even before any loss.
Failing to safeguard, deposit, or account for money belonging to others is a disciplinary ground on its own. Moving the deposit into the operating account is the violation, whatever the plan to repay it. The completed-loss answer looks plausible, but license law protects the public before harm happens.
- A. Correct. Using a tenant's deposit for payroll violates trust-fund duties before a completed consumer loss.
- B. Incorrect. Trust-fund discipline is not conditioned on a consumer first losing money.
- C. Incorrect. An intention to repay does not authorize using trust funds for the firm's expenses.
- D. Incorrect. A tenant's court judgment is not required before GREC addresses misuse of trust funds.
Question 3A salesperson recommends a repair company to a buyer client without mentioning that the salesperson's spouse owns the company and will profit from the job. What is the main problem?
- A. Licensees are not allowed to recommend any repair companies.
- B. Only a broker, not a salesperson, may recommend a vendor.
- C. There is a problem only if the repair work turns out poorly.
- D. The salesperson failed to disclose a personal interest.
Show answer and explanation →
Answer: D. The salesperson failed to disclose a personal interest.
Georgia can discipline a licensee who hides an interest in a deal or a source of compensation, because the client cannot weigh the advice without knowing who benefits. Recommending vendors is allowed, so the first two choices are wrong. The poor-work answer confuses a disclosure violation with a quality complaint.
- A. Incorrect. Vendor recommendations are allowed when relevant interests and compensation are properly disclosed.
- B. Incorrect. A salesperson may recommend a vendor within the brokerage role, subject to required disclosure.
- C. Incorrect. The undisclosed financial connection is a problem even if the repairs are satisfactory.
- D. Correct. The spouse's ownership creates a personal financial interest the client needs to know.
Ready to move on?
You are ready for the next lesson when all of these are true.
- Recognize misrepresentation, mishandled funds, and undisclosed interests in a scenario.
- Check whether the governing rule requires actual knowledge or another standard.
- Explain why repeated negligence and failed supervision can support discipline.
- 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 Georgia Real Estate Education, Research and Recovery Fund. The Recovery Fund lesson shows what can follow when misconduct like this costs a consumer money: a claimant with a final judgment and a failed collection effort may be paid, and the responsible licensee faces revocation and repayment.
Return to the State Laws and Rules hub for the complete official branch and the full lesson list for this Georgia group.