Tennessee Agency

Tennessee Agency Relationships ## Why This Matters on the Exam Tennessee agency is one of the highest-priority topics on the TN-specific portion of the exam, accounting for roughly 10–14 questions. Getting agency types, fiduciary duties, and disclosure timing right is essential to passing. --- ## Overview: What Is Agency? In real estate, agency is the legal relationship in which a licensee (the agent) represents a client (the principal) in a transaction. The type of agency relationship determines what duties the agent owes — and Tennessee law is very specific about this. --- ## Fiduciary Duties: OLD CAR When you represent a client, you owe them the highest level of duty — fiduciary duties. Use the acronym OLD CAR to remember them: | Letter | Duty | What It Means | |--------|------|---------------| | O | Obedience | Follow lawful client instructions | | L | Loyalty | Client's interests above all others, including your own | | D | Disclosure | Share all material information with your client | | C | Confidentiality | Protect client's sensitive information — even after the relationship ends | | A | Accounting | Account for all funds received | | R | Reasonable Care | Apply professional skill and diligence | ### Duties Owed to Customers (Non-Clients) Even parties you do not represent still deserve fair treatment. To customers, you owe: - Honesty and fair dealing - Disclosure of material facts - Proper accounting of funds > Key distinction: Clients get fiduciary duties (OLD CAR). Customers get honesty and material facts — nothing more. --- ## Tennessee Agency Types Tennessee recognizes five distinct agency relationships. Knowing which requires written agreements and what duties…