National Section - Chapter 1 Flashcards
Regulates real estate brokerage in TN
TN Real Estate Brokers License Act of 1973
Rules of the TREC
assist the commission in carrying out its duties
What Act empowers the TREC to make whatever rules necessary
License Act
List of TREC rules
licensing, rules of conduct, rental location agents, rules of procedure for hearing contested cases, education requirements, time share programs
The Commission’s official manual includes:
conveyance of property, time share program and VC, human rights
Who appoints commissioners and how long do they serve?
The governor, 5 years
How many members are in TREC?
9
What is the breakdown of TREC members?
7 members - brokers for at least 5 years, 2 members - from outside the real estate industry residing in different grand divisions of the state, 3 members - each from the eastern, middle and western grand divisions
What can TREC not do?
set fees or commissions for real estate contracts or transactions
What is the timeline for complaints to TREC?
2 years from the date of alleged violation or discovery, 10 days after the completion of a successful prosecution of the illation as a criminal offense
A revoked license cannot be reissued unless _ members of TREC vote to reissue
6
If a licensee pleads guilty or is convicted of any offense, the licensee must notify TREC within _ days
60
A licensee’s license is auto revoked _ days after a licensee’s conviction less a written request for a hearing
60
What misdemeanor has someone committed when they act as a broker, AB, time share person, or acquisition agent without the appropriate license?
Class B
Real estate recovery fund has a min balance of
$500,000
How is the Real estate recovery fund funded?
fees charged to applicants for original licensure as a broker, AB, time share person
What does the real estate recovery fund pay out if a licensee is found in violation of the Act?
to an individual for actual or compensatory damages, up to $15,000/transaction
a max of $30,000 on behalf of any individual licensee
Who does the Act NOT apply to?
property owners representing themselves, attorneys in fact or at law, resident managers acting for broker/owner, corporations acting through authorized office, individuals who work for firms that provide vacation lodging services
A broker can maintain more than one branch office in that state if
additional firm license for each branch and each branch must be under supervision of broker licensed at that address
Requirements for AB license
character, education (high school and 90 hours), age, 45 days in state, 70% on exam, $100 new or $80 renewed
Requirements for Broker
education of 120 hours, 24 months experience, 75% pass on exam
Requirements to maintain a license
E&O insurance, license display, sign display, notification of change of status, name or address
Expired license may be reinstated without exam within 60 days if the licensee
provides E&O insurance, pays penalty fee for failure to comply, and additional penalty fee
AB to Broker responsibilities
obtain and sell listings, follow policies and employment provisions, and promote ethics and broker’s reputation
Broker to AB responsibilities
provide data, office support, compensation and training, uphold ethics, policies, and employment agreement, supervise and train
Licensee may engage in real estate activities only in an office where there is a principal broker who:
devotes full time to the management in the office and is engaged primarily in the real estate business and accessible during normal business hours
Licensees must notify TREC in writing within _ days after any change of location with their new business address and pay the established fee
10
All ads must be
under the direct supervision of the principal broker and list the firm name and number
If a web site provides access to MLS listings through the web site rather than by sending the user to another web site
the web site owner’s firm name and number must appear on each page of the site, if the web site displays thumbnails of multiple listings there must be a disclaimer
Discriminatory ads are a violation of
the TN Human Rights Act
contract that is legally enforceable by virtue of meeting certain requirements of contract law
valid
requirements of valid contracts
competent parties, mutual consent, valuable consideration, legal purpose, and voluntary good faith act
contracts ___ have to be in writing to be valid and enforceable
do NOT
Statute of frauds states that a contract must be in writing to be enforceable if it involves:
sale of goods $500+ or the sale of real estate, or a lease for a term of 1 year +
what agreement is governed both by agency law and contract law
listing agreement
Listing agreements must
be in writing, have a termination date, and specify a selling price
List of contracts that must be in writing
exclusive right to sell/agency/right to represent buyer, lease for more than a year, purchase contract, employment contract
What can TN brokers NOT prepare?
deeds, installment sales contracts, mortgages or deeds of trust, or title documents
_ records must specifically show the depositor and payee of the fund and the date of deposit and withdrawal
escrow
What can be maintained electronically?
transaction docs and records
Failure to _ may lead the division to pursue legal remedies
permit access to records
The TREC requires what disclosure in addition to the purchase agreement
agency disclosure
What is the essence of the agency relationship?
trust, confidence, and mutual good faith
Duties licensee owes to clients
obey all lawful instructions, be loyal to their interests, assist them by scheduling showings, receiving offers, answering questions, advising on necessary forms and procedures
Duties licensees owe ALL parties to the transaction
reasonable skill and care, disclose any adverse facts, maintain confidentiality, accounting
What agency in is legal in TN but should be avoided?
designated dual agency
In this agreement a licensee is engaged to represent a buyer in the purchase of fa property to the exclusion of all other licensees
exclusive buyer representation agreement
Owner of a residential property must make a property condition disclosure if
the transfer is a sale, exchange, land sales contract or lease with option to buy, the property consists of 1-4 dwelling units, site built or non site built
makes it a class B misdemeanor to commit any unfair or deceptive act in any trade or commerce
TN Consumer Protection Act
Occurs when an agent cannot place the interests of their client first
conflict of interest
Primary areas where conflicts of interest may occur are
net listings (illegal in TN), dual agency (if undisclosed) and buying/selling for one’s own account
Occurs when a licensee denies the full and equal enjoyment of the goods and services on the grounds of a protected class status
discrimination
compensation for the referral of a potential buyer, seller, lessor or lessee of real estate
referral fee
allows a real estate licensee to solicit a referral fee but does not necessarily mean that the licensee has a legal right to be paid a referral fee
reasonable cause
The max compensation to an individual for actual or compensatory damages is
$15,000/transaction
Ownership or leasehold estate in property devoted to a time share fee, tenants in common, time span ownership, interval ownership, and a time share lease
Time Share Estate
Arrangement for time share intervals project where use is subject to a schedule on a periodic basis occurring annually over any period of time in excess of 1 year
time share program
Program in which a purchaser obtains a recurring right to use and occupy accommodations in more than one site through the mandatory use of a reservation system
vacation club
Time share registration is not required if
owner of the time share is other than the developer or time share project is located entirely outside of TN
What are exempt from the rules against discriminatory housing practices?
owner occupied of properties of 1-2 dwellings, housing that has n occupancy of 90% of units by at least 1 person who is age 55+
TN has no requirements for _ testing
radon
