National Section - Chapter 1

Question 1

Regulates real estate brokerage in TN

Answer 1

TN Real Estate Brokers License Act of 1973

Question 2

Rules of the TREC

Answer 2

assist the commission in carrying out its duties

Question 3

What Act empowers the TREC to make whatever rules necessary

Answer 3

License Act

Question 4

List of TREC rules

Answer 4

licensing, rules of conduct, rental location agents, rules of procedure for hearing contested cases, education requirements, time share programs

Question 5

The Commission’s official manual includes:

Answer 5

conveyance of property, time share program and VC, human rights

Question 6

Who appoints commissioners and how long do they serve?

Answer 6

The governor, 5 years

Question 7

How many members are in TREC?

Answer 7

9

Question 8

What is the breakdown of TREC members?

Answer 8

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

Question 9

What can TREC not do?

Answer 9

set fees or commissions for real estate contracts or transactions

Question 10

What is the timeline for complaints to TREC?

Answer 10

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

Question 11

A revoked license cannot be reissued unless _ members of TREC vote to reissue

Answer 11

6

Question 12

If a licensee pleads guilty or is convicted of any offense, the licensee must notify TREC within _ days

Answer 12

60

Question 13

A licensee’s license is auto revoked _ days after a licensee’s conviction less a written request for a hearing

Answer 13

60

Question 14

What misdemeanor has someone committed when they act as a broker, AB, time share person, or acquisition agent without the appropriate license?

Answer 14

Class B

Question 15

Real estate recovery fund has a min balance of

Answer 15

$500,000

Question 16

How is the Real estate recovery fund funded?

Answer 16

fees charged to applicants for original licensure as a broker, AB, time share person

Question 17

What does the real estate recovery fund pay out if a licensee is found in violation of the Act?

Answer 17

to an individual for actual or compensatory damages, up to $15,000/transaction

a max of $30,000 on behalf of any individual licensee

Question 18

Who does the Act NOT apply to?

Answer 18

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

Question 19

A broker can maintain more than one branch office in that state if

Answer 19

additional firm license for each branch and each branch must be under supervision of broker licensed at that address

Question 20

Requirements for AB license

Answer 20

character, education (high school and 90 hours), age, 45 days in state, 70% on exam, $100 new or $80 renewed

Question 21

Requirements for Broker

Answer 21

education of 120 hours, 24 months experience, 75% pass on exam

Question 22

Requirements to maintain a license

Answer 22

E&O insurance, license display, sign display, notification of change of status, name or address

Question 23

Expired license may be reinstated without exam within 60 days if the licensee

Answer 23

provides E&O insurance, pays penalty fee for failure to comply, and additional penalty fee

Question 24

AB to Broker responsibilities

Answer 24

obtain and sell listings, follow policies and employment provisions, and promote ethics and broker’s reputation

Question 25

Broker to AB responsibilities

Answer 25

provide data, office support, compensation and training, uphold ethics, policies, and employment agreement, supervise and train

Question 26

Licensee may engage in real estate activities only in an office where there is a principal broker who:

Answer 26

devotes full time to the management in the office and is engaged primarily in the real estate business and accessible during normal business hours

Question 27

Licensees must notify TREC in writing within _ days after any change of location with their new business address and pay the established fee

Answer 27

10

Question 28

All ads must be

Answer 28

under the direct supervision of the principal broker and list the firm name and number

Question 29

If a web site provides access to MLS listings through the web site rather than by sending the user to another web site

Answer 29

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

Question 30

Discriminatory ads are a violation of

Answer 30

the TN Human Rights Act

Question 31

contract that is legally enforceable by virtue of meeting certain requirements of contract law

Answer 31

valid

Question 32

requirements of valid contracts

Answer 32

competent parties, mutual consent, valuable consideration, legal purpose, and voluntary good faith act

Question 33

contracts ___ have to be in writing to be valid and enforceable

Answer 33

do NOT

Question 34

Statute of frauds states that a contract must be in writing to be enforceable if it involves:

Answer 34

sale of goods $500+ or the sale of real estate, or a lease for a term of 1 year +

Question 35

what agreement is governed both by agency law and contract law

Answer 35

listing agreement

Question 36

Listing agreements must

Answer 36

be in writing, have a termination date, and specify a selling price

Question 37

List of contracts that must be in writing

Answer 37

exclusive right to sell/agency/right to represent buyer, lease for more than a year, purchase contract, employment contract

Question 38

What can TN brokers NOT prepare?

Answer 38

deeds, installment sales contracts, mortgages or deeds of trust, or title documents

Question 39

_ records must specifically show the depositor and payee of the fund and the date of deposit and withdrawal

Answer 39

escrow

Question 40

What can be maintained electronically?

Answer 40

transaction docs and records

Question 41

Failure to _ may lead the division to pursue legal remedies

Answer 41

permit access to records

Question 42

The TREC requires what disclosure in addition to the purchase agreement

Answer 42

agency disclosure

Question 43

What is the essence of the agency relationship?

Answer 43

trust, confidence, and mutual good faith

Question 44

Duties licensee owes to clients

Answer 44

obey all lawful instructions, be loyal to their interests, assist them by scheduling showings, receiving offers, answering questions, advising on necessary forms and procedures

Question 45

Duties licensees owe ALL parties to the transaction

Answer 45

reasonable skill and care, disclose any adverse facts, maintain confidentiality, accounting

Question 46

What agency in is legal in TN but should be avoided?

Answer 46

designated dual agency

Question 47

In this agreement a licensee is engaged to represent a buyer in the purchase of fa property to the exclusion of all other licensees

Answer 47

exclusive buyer representation agreement

Question 48

Owner of a residential property must make a property condition disclosure if

Answer 48

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

Question 49

makes it a class B misdemeanor to commit any unfair or deceptive act in any trade or commerce

Answer 49

TN Consumer Protection Act

Question 50

Occurs when an agent cannot place the interests of their client first

Answer 50

conflict of interest

Question 51

Primary areas where conflicts of interest may occur are

Answer 51

net listings (illegal in TN), dual agency (if undisclosed) and buying/selling for one's own account

Question 52

Occurs when a licensee denies the full and equal enjoyment of the goods and services on the grounds of a protected class status

Answer 52

discrimination

Question 53

compensation for the referral of a potential buyer, seller, lessor or lessee of real estate

Answer 53

referral fee

Question 54

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

Answer 54

reasonable cause

Question 55

The max compensation to an individual for actual or compensatory damages is

Answer 55

$15,000/transaction

Question 56

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

Answer 56

Time Share Estate

Question 57

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

Answer 57

time share program

Question 58

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

Answer 58

vacation club

Question 59

Time share registration is not required if

Answer 59

owner of the time share is other than the developer or time share project is located entirely outside of TN

Question 60

What are exempt from the rules against discriminatory housing practices?

Answer 60

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+

Question 61

TN has no requirements for _ testing

Answer 61

radon