Real Estate License Definitions

Affiliate Broker Qualifications

• Requires 60 hours of education, plus a 30-hour "Course for New Affiliates" before licensing.

Acquisition Agent

• Needs special licensure to promote attendance at timeshare presentations, which must occur off-site.

Adverse Fact

• Licensees must disclose conditions negatively impacting a property.

Affiliate Broker

• A licensee providing real estate services under a licensed broker.

Broker

• An intermediary who negotiates transactions for consumers, earning fees or commissions.

Client

• A party in a transaction with a specific written agency agreement with the broker.

Customer

• Any party not classified as a client but who receives services from a real estate agent.

Designated Agent

• A licensee assigned by a managing broker to represent a party in a transaction.

Dual Agent

• A licensee contracted to represent multiple parties within a specific transaction.

Facilitator (Transaction Broker)

• Assists parties in a transaction without formal representation; known as a transaction broker in Tennessee.

Timeshare Salesperson

• A licensee exclusively selling timeshare properties.

Material

• Any significant statement or fact that could influence a reasonable person's transaction decisions.

Exemptions to Licensure

• Certain individuals can engage in real estate transactions without a license, including property owners (FSBO), attorneys, and trustees.

Penalties

• Acting as a licensed real estate agent without a license is classified as a Class B misdemeanor.

Civil Penalties

• Violations can incur a fine of $50 to $1,000 per day.

Tennessee Real Estate Broker License Act of 1973

• Established to protect the public from unscrupulous real estate practices.

Creation of TREC

• Comprised of 9 members appointed by the governor, including 7 real estate agents and 2 from unrelated industries, with required representation from different regions and demographics.

TREC Meetings

• The commission holds monthly meetings, with at least one meeting annually in each grand division of Tennessee.

Executive Director

• Must pass the broker's exam and possess a college degree; serves a 4-year term.

General Counsel

• Must be a licensed attorney in Tennessee with an accredited law degree.

Notice & Hearing

• Procedures for handling complaints against applicants, including responses and potential hearings.

Refuse, Suspend, or Revoke

• The commission may take action against licenses based on misrepresentations, fraud, or violations of regulations.

Qualifications - Prerequisites for Licensing

• Must demonstrate honesty and competency; brokers require 36 months of active affiliate broker experience and additional education.

Continuing Education Requirements

• License renewal mandates ongoing education: 16 hours for affiliate brokers and 120 hours for brokers over specific periods.

Unlicensed Real Estate Employees (Cannot Do)

• Prohibited from direct interaction regarding listings, negotiating transactions, and making cold calls.

Unlicensed Real Estate Employees (Can Do)

• Allowed tasks include phone answering, submitting listings, document preparation, advertising, and assistance with closing processes.

Types of Advertising

• Includes various media forms; physical promotional items like pens and hats are not considered advertising.

Advertising Requirements

• Must include the company name and phone number, ensuring firm identification is prominent.

Offers to Purchase

• Licensees are required to present all written offers and promptly deliver executed copies to involved parties.

Commingling

• Mixing personal and client funds in the same bank account violates ethical standards.

Trust Money

• Funds belonging to clients that must be managed appropriately by the licensee.

Escrow/Trust Accounts

• Brokers must maintain separate accounts for client funds and keep meticulous records.

Depository and Account Requirement

• Earnest money deposits must be labeled clearly, with immediate transfer by affiliate brokers.

Interest: Non-Liquid Valuables as Earnest Money

• Interest-bearing accounts are permitted; non-liquid items may serve as earnest money if all parties agree.

Time Requirements for Deposit of Funds

• Trust money should be deposited promptly upon contract acceptance unless otherwise specified.

Duty Owed to All Parties

• Licensees must exercise skill, maintain confidentiality, disclose adverse facts, and provide timely information.

Duties of Real Estate License

• Agents must inform clients of their disclosure rights and any known adverse facts about a property.

Exempt Property Transfer

• Transfers exempt from licensing include court orders, certain family transfers, or properties unoccupied for 3 years.

Adequate Facilities Tax

• A development tax levied by local governments.

Development

• Involves various construction activities that modify land use or improve structures.

Impact Fee

• A charge imposed by local governments related to new development costs.

Sinkhole

• A geological formation due to erosion that can affect property surface stability.

Bylaws

• Governing rules for homeowner associations outlining management and operational procedures.

Planned Unit Development (PUD)

• A large area developed under a unified plan that does not conform to traditional zoning regulations.

Restrictive Covenant

• Legal limitations or conditions placed on the use of property, defining what can or cannot occur on the land.

Facilitator

• A licensee assisting parties in a transaction without formal representation, modeled as a neutral participant.