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What Tennessee law covers landlord-tenant relations? ✔✔Tennessee has the Uniform Landlord and Tenant Act for residential rentals. This law is designed to simplify, clarify, modernize, and revise the laws governing the rental of dwelling units and the rights and obligations of both landlords and tenants and to encourage them to maintain and improve the quality of housing. In addition, the law ensures that the right to the receipt of rent is inseparable from the duty to maintain the premises. Anyone who manages even one unit should have a copy of this law and consult it frequently. The days have gone by when a landlord or manager could simply change the locks and toss a tenant's belongings into the street. Today, the tenant has enforceable rights, and if the landlord violates these rights, the landlord may be faced with financial penalties. Is there a special license required for brokers to be property managers? ✔✔There is no license just for property managers in Tennessee, unless they are engaged in rental/leasing management of property of others. If so, they come under the Tennessee Real Estate Broker License Act of 1973. A resident manager hired by the owner, the broker, or an employee of the broker is exempt only if the duties they perform do not include negotiation of leases or security deposits. Do all leases have to be in writing? ✔✔To receive legal recognition in the judicial system, the Tennessee Code requires that all lease agreements over one year be in writing. Thus, an oral lease for less than a year is enforceable. However, this is important to remember: If it's in writing, you have a prayer; if it's oral, it's just air. It is best to get any lease in writing. What specific procedures must a landlord follow to evict a tenant? ✔✔The landlord must send a written notice to the tenant specifying the breach of the agreement and stating that the rental agreement will terminate 30 days from the date of receipt of the notice. If the breach is not remedied in 14 days, the rental agreement terminates in accordance with the notice.
What are the requirements for holding a security deposit (i.e., type of account, interest, limits on use, repayment, etc.)? ✔✔All such deposits must be placed in an account used only for that purpose in any bank or other lending institution subject to regulation by the state of Tennessee or an agency of the U.S. government. The tenant must be informed of the location of the separate account. What courts handle landlord-tenant disputes? ✔✔General session courts and circuit courts hear landlord-tenant disputes. What is the name of the Tennessee real estate regulatory body? ✔✔Instead of having a Commissioner to regulate real estate activity, Tennessee has a nine-member body that makes up the Tennessee Real Estate Commission (TREC). It is created within the Division of Regulatory Boards of the Tennessee Department of Commerce and Insurance. How many members are on the Tennessee Real Estate Commission? ✔✔TREC consists of nine members, three of whom are appointed from each grand division or the state: east, middle, and west. They serve a five-year term and may be reappointed only once Seven of the members must he licensed brokers or affiliate brokers who have been principally engaged in the real estate business in the state for at least five years. The other two must be persons who are not engaged in the real estate business, nor can they be in the business of real estate finance or development. These two are commonly called public members, though that term is not defined in the law, How long may they serve? ✔✔Commission members serve a five-year term and may be reappointed only once The governor appoints the members. The governor may remove members for willful neglect of duty. misconduct or in competency.
- Attorney at law while performing duties as an attorney
- Resident manager for an owner or broker or an employee of the broker with limited authority
- Officer of a corporation authorized to handle real estate matters for the corporation, as long as he or she is salaried Does Tennessee recognize licensure in other states? ✔✔Reciprocity agreements exist between Tennessee and states that have licensing requirements similar to those of Tennessee and where similar recognition and courtesies are extended to each other Tennessee will reciprocate with any state that will agree to reciprocate with Tennessee. Tennessee has reciprocity agreements with 21 states, including most of Tennessee's bordering states. Licensed nonresidents in these reciprocity states may be granted a Tennessee license without passing Tennessee's examination. (It is important to note that these agreements change from time to time. For complete current regulations contact the specific state regulatory body.) However, the licensee's brokerage has to have an active place of business within his or her home state and the requesting licensee's broker must have a valid Tennessee license. In addition, applicants must prove "active" licensure (by examination) in the reciprocal state and have no charges pending against them. The licensee must complete an application form, sign an affidavit indicating familiarity with Tennessee license Law, and sign an irrevocable consent that lawsuits and actions may be brought against him or her in the proper court of any Tennessee county in which a cause of action may arise. Simply stated, if a legal action is initiated, the licensee cannot request a change of venue. If the home-state license of a nonresident Tennessee licensee is revoked or suspended. the licensee must notify TREC. A hearing may be held to determine whether similar disciplinary action should he taken against the Tennessee licensee. What is the difference between an affiliate broker and a principal broker? ✔✔a.) An affiliate broker is typically a sales person b.) A principal broker is responsible for all licensees in their firm c.) A principal can also be a sales person
Can there be more than one broker in any given office? ✔✔Real estate licensees start out with an affiliate broker's license working under the direct supervision of an employing, principal broker. Tennessee law requires that a person must have been actively licensed as an affiliate broker for at least 36 months if licensed after May 12. 1988. This time may be reduced to 24 months or 12 months, respectively. if the applicant has a baccalaureate degree with a major in real estate. There is only one principal broker in any office. When the license law refers to a broker it is referring to this individual. The other licensees in the office may hold either an affiliate brokers' licenses or a broker's license affiliated with the principal broker. The principal broker may be the owner or a manager. The broker is responsible for the trust account and for the real estate activities conducted by the associates in this office. The public has the right to know that there is a person in charge locally. Even if the office is owned by another entity in another city, the local broker is responsible for the trust moneys held by' that office and the activities of each person licensed in that office. All brokerage contracts are in the name of the broker Can a corporation or partnership receive a real estate license? ✔✔A partnership association or corporation may be granted a firm license. At least one member, who will be the principal broker has to hold a broker's license. The basic requirements for a real estate license are: An applicant must be al least 18 years; of age. The applicant must hold a high school diploma or GED. A copy must be submitted when applying for the original license. In addition, pre-licensing education and testing are required to ensure the applicants competency (discussed below). The applicant must include with the application a sworn statement by tile principal broker certifying the-in the broker's opinion. the applicant is honest and trustworthy' and that the broker will actively supervise and train the applicant during the period that the license remains in effect. The applicant does not have to be a U.S. citizen. Tennessee requires a 45-day residency in the state. However, a person may be licensed under a Tennessee broker if he or she does not live farther than 50 miles from the broker's office, even if the applicant lives in another state What reasons permit the Real Estate Commission to deny a license? ✔✔Qualified applicants for a Tennessee real estate license must neither have been rejected for licensure in Tennessee or any- other state prior to the dale of application nor be on parole or probation. Applicants may be disqualified if they' have had a real estate license revoked in Tennessee or any other state. Applicants can also be
situation of a licensee who hires a licensed personal assistant, both must be licensed under the same broker. These rules also apply to brokers working under a principal broker. What are specific requirements for an applicant to obtain an affiliate brokers license? ✔✔Qualified applicants for licensure as an affiliate broker must successfully complete a Commission-approved course in real estate principles and practices that consists of at least 60 hours of real estate principles to take the real estate examination. A school official must complete the Pre-license Verification Form that the applicant must present at the time of the exam. As of January 1, 2005, prior to the affiliate license being issued, the affiliate broker candidate must complete a 30 Course for New Affiliates. List the additional requirements to become a broker ✔✔The broker candidate must have been actively licensed as an affiliate broke for at least 36 months if originally licensed after May 12, 1988. Qualified applicants for a broker's license must complete Commission approved courses of at least 120 classroom hours (including the 60 classroom hours required to obtain an affiliate broker's license). Thirty of the 120 hours must be in the course office or brokerage management. TREC approval is necessary before the applicant can schedule a broker's exam. This approval may take up to four weeks. Who administers the real estate exam? ✔✔A Commission-contracted provider Psychological Services, Inc. (PSI), currently conducts the real estate examination. PSI offers computerized testing through a network of testing centers in the state. The Affiliate Broker's exam is made up of 120 questions: 40 relating to Tennessee licensing laws and 80 pertinent to general real estate principles and practices Affiliate brokers must achieve a scaled score of 70 on each portion to pass. The Broker's exam is made up of 130 questions: 50 relating to Tennessee licensing laws and 80 pertinent to general real estate principles and practices Affiliate brokers must achieve a scaled score of 75 on each portion to pass. The computerized examination is designed to establish the competency of the applicant to protect the interests of the public. As long as the Commission provides a uniform, standardized exam, the Commission is required to provide the examinees only their scaled score as well as a breakdown of the number correct in each subject area.
Who pays for the exam? ✔✔The candidate pays the examination fee directly to the testing service at the time of registration. The Commission, along with the testing service, establishes the examination fees, based on .PSI's administration costs. Currently the fee is $55. May a candidate who fails the exam retake it? ✔✔A person who fails to pass either portion of the real estate exam is allowed to reschedule after 24 hours and after payment of the examination fee. The score or the passed portion is good for two retakes or six months, whichever comes first. What is the next step after the person passes the exam? ✔✔On successful completion of the exam, the applicant receives a passing notice and a Commission-approved application at the test site. Candidates who pass the exam must file for a license with the Commission within six months from the dale the examination was passed. If not filed within this time, the candidate must retake and pass the exam to obtain a license. Prior to the affiliate license being issued, the affiliate broker candidate must complete a 30 Course for New Affiliates. How are license fees determined? ✔✔The Commission sets fees for licensing based on the administrative costs of sustaining the Commission. Included in those costs are the per diem, expenses, and travel allowance for Commission members. Also included are office facilities, supplies, and equipment: staff assistance; and the establishing and maintaining of a real estate education program. (Currently (2005), the first license fee is $100, which is not prorated. All real estate licenses expire on December 31 of each even-numbered year. The renewal fee is $80. Can the first-time applicant ask for an inactive license? ✔✔No, initial applicants are not allowed to file for an "inactive" license. The applicant must first receive an active license which may then be placed on inactive status. However, there nothing preventing a licensee from placing their license in inactive status immediately after being licensed. Individuals whose licenses are on inactive status with TREC are not required to carry errors arid omissions insurance.
How is a license renewed? ✔✔The brokers and affiliate broker must complete 16 hours of continuing education every two years and pay the license renewal fee of $80. Some brokers may be exempt from the continuing education requirements if licensed as a broker prior to January 1, 2005. Affiliate Brokers are not required to receive continuing education during their first licensing period. The fee is due no later than November 1st of each even-numbered year. The license actually expires on December 31. There is a post licensing educational requirement of an additional 120 hours within three years of the original licensing for brokers. What are the consequences if the license is not timely renewed? ✔✔Tennessee allows for the payment of the renewal fee within 60 days after November 1st of each even-numbered year but with a penalty fee of $25. If the licensee fails to renew within the 60-day period, the license expires (void). Current TREC policy is to permit the license to be reinstated with the payment of a $100 penalty per month or partial month up until June 30. Thereafter, reexamination is required. However, because the license expired on December 31 no real estate business can be conducted until a new "active" license is issued. In other words, the grace period is to renew; but not to act. Who keeps track of each license? ✔✔Each affiliate's license must be displayed in the broker's office. Each licensee is responsible for maintaining active licensure and for fulfilling renewal duties. Is it legal for a licensee to buy and/or sell property for his or her own portfolio? ✔✔Yes. However, before buying, selling, or leasing real estate in Tennessee, licensees must give written disclosure to all parties of any ownership or interest that they have or will have in the transaction. All licensees (including inactive licensees) who list their property must include on the listing language that clearly indicates that the owner is a licensed agent. On the purchase agreement, the licensee must include a disclosure that the purchaser is a licensed agent buying for resale or profit. A licensee is allowed to purchase property from seller-clients or to sell his or her own property to buyer-clients only if the licensee includes a clearly written disclosure in either the listing or purchase agreement describing the licensee's true position to the other party. A written disclosure is also required when the licensee acts
on behalf of his or her immediate family. The rule extends to when the licensee acts on behalf of the brokerage or any organization or business entity in which the licensee has an interest. May licensees sell or buy property for themselves without going through their brokers? ✔✔In Tennessee, licensed agents are allowed by Commission rule to sell their own property without broker participation. If no brokerage fees are to be paid and it is strictly a "by owner" transaction, and if licensees do not function as licensees in any capacity throughout the transaction, then they could advertise their property without including the name of their brokers. The licensee must disclose that he or she has a real estate license. The licensee is not required to identify the firm with which she or he is affiliated, unless that firm is assisting with the transaction. However, to avoid complications with other agents, the licensee must advertise as the owner/agent and should indicate the property is not listed with his/her brokerage Under what conditions may a real estate licensee hire a support person (personal assistant)? ✔✔Many top producers hire a support person(s) to assist them. These assistants may be licensed or not licensed. Because the principal broker is responsible for all activities within the office. the broker must consent to the hiring of a personal assistant by the licensee. Who is legally responsible for the activities performed by the personal assistant? ✔✔Ultimately the principal broker is responsible for the activities performed by a personal Assistant. If the personal assistant is employed by an affiliate broker, then that individual will share in the responsibility. A licensed personal assistant may perform any real estate activity. Unlicensed personal assistants may not perform activities for which a license is required. What are some of the activities that an unlicensed person may perform? ✔✔TREC has Issued Commission policy statement #93-CPS-001 revised Oct. 4, 1995 that spells out what an unlicensed assistant can and cannot do. Under the direct supervision of a licensee. Tennessee law permits unlicensed assistants to answer the telephone and provide listing information to other licensees as well
- show properties for sale and/or lease to prospective purchasers;
- independently host public open houses, licensee open houses, or home show or fair booths;
- answer questions concerning properties listed with the firm except for information contained on the listing agreement as limited by the broker;
- prepare promotional material or advertising of properties for sale or lease without the approval of the supervising broker;
- discuss or explain listings. offers, contracts, or other similar matters with persons outside the firm;
- be paid on the basis of real estate activity, such as a percentage of commission or any amount based on listings, sales, etc.;
- act as a "go-between" with a seller and buyer, as when an offer is being negotiated; or
- negotiate or agree to any commission split or referral fee on behalf of a licensee. What may a licensed personal assistant do? ✔✔Licensed assistants may do anything a licensee may do as long as they do not exceed the scope of authority given by the employer. They must be affiliated with the firm and compensated by the firm for performing activities that require a license.
