TN REAL ESTATE SALESPERSON: TREC & LICENSE LAW CHEAT SHEET

TREC STRUCTURE & AUTHORITY

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LICENSE REQUIREMENTS

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RECOVERY ACCOUNT (High-Yield)

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Claim Process: Court judgment → uncollectible → certified mail notice to licensee → TREC pays → license suspended

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GROUNDS FOR DISCIPLINE

Common violations: Fraud | Commingling/conversion | Unlicensed practice | Antitrust | Trust account violations

Disciplinary tools: Denial | Suspension | Revocation | Probation | Civil penalty

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TRUST ACCOUNT RULES ⚠️

• Separate account required (no commingling with firm funds)

• TREC may audit anytime (no notice required)

• Earnest money: 3 business days to deposit in TN

• Net listings: Legal in TN but discouraged

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ADVERTISING COMPLIANCE

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ANTITRUST (Sherman Act)

Per se violations (always illegal):

• Price fixing

• Market allocation

• Group boycotts

Real estate context: Cannot agree with competitors on commission rates or market territory.

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PROPERTY MANAGEMENT LICENSING

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BROKER UPGRADE (Affiliate → Broker)

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CONFUSING PAIR: Reinstatement Timing

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Element	Detail
Commission Members	9 total: 7 licensed + 2 public; 5-year terms; Governor appoints
Legal Foundation	T.C.A. 62-13 (statute) + Chapter 1260 Rules
Key Unique Feature	Recovery Account for client claims
Requirement	Detail
Pre-license Hours	90 total: 60 basic + 30 new affiliate course
Application Window	Within 1 year of exam pass
License Term	2 years
CE Requirement	16 hours per cycle (3-hour Core mandatory)
Sponsoring Broker	Required; license displays at principal broker office
Reinstatement (<1 yr)	Fees + CE only
Reinstatement (>1 yr)	Re-apply + re-test
Threshold	Amount
Per Transaction Limit	$15,000
Per Licensee Limit	$30,000
Minimum Fund Balance	$500,000
Rule	Detail
Brokerage Name	Required in ALL ads
Team Names	Must include brokerage name
Unlicensed Assistants	Cannot be identified as agents
Item	Rule
License Required?	YES
Separate PM Agreement?	YES
Habitability Duty	Landlord responsible
Security Deposits	Must follow state law
Requirement	Detail
Experience	3 years active as affiliate
Additional Hours	90 hours required
Scenario	Action
License lapsed < 1 year	Pay fees + complete CE
License lapsed > 1 year	Re-apply + re-test + CE

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KEY EXAM POINTS

✓ TREC has 9 members (not 7, not 11) ✓ Recovery Account is NOT insurance — it's a fund that suspends the licensee's license when paid ✓ Trust account audits need NO advance notice ✓ Net listings legal in TN but ask about on exams (often tested as "discouraged") ✓ Earnest money: 3 business days to deposit (TN-specific) ✓ CE requirement: 16 hours per 2-year cycle (3-hour Core non-negotiable)

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WHAT TO MEMORIZE

Recovery limits: $15K/transaction, $30K/licensee, $500K minimum balance

Pre-license: 90 hours (60+30)

License term: 2 years, 16 CE

Upgrade requirement: 3 years + 90 hours

Earnest money: 3 business days deposit window

Discipline triggers: Fraud, commingling, conversion, unlicensed practice, antitrust