Tennessee Real Estate License Law, Rules, and Commission Regulations
Licensing and supervision
The Tennessee Real Estate Commission (TREC) regulates brokers and affiliate brokers under the Real Estate Broker License Act. An affiliate broker must be sponsored by a licensed broker and cannot operate independently. A broker is responsible for supervising affiliates, advertising, trust accounts, and transactions. Licensing requires age, education, examination, background check, and fees; renewal requires continuing education. Unlicensed assistants may do clerical work but may not negotiate, solicit, or give advice requiring a license.
Conduct, trust funds, and discipline
TREC rules address advertising (use the firm name), brokerage relationship disclosures, recordkeeping, and trust accounts. Trust funds must be deposited promptly and kept separate; commingling and conversion are serious violations. Commissions may be paid only to licensed persons or entities, not to unlicensed referral sources. Grounds for discipline include fraud, misrepresentation, trust-fund violations, undisclosed dual agency, and failure to supervise. Know the complaint and disciplinary process, and the possibility of recovery-fund relief for certain consumer losses.
Worked rule
A closing gift or referral fee is offered to an unlicensed friend who sent a buyer. Do not pay it; compensation for brokerage services generally requires a license. A clerical assistant may prepare files and answer the phone, but may not negotiate terms. Rule of thumb: “License the activity, supervise the affiliate, and receipt every trust dollar.”