Unit 2 Flashcards
Purpose and duties of the Commission
The mission of the Tennessee Real Estate Commission is to protect the public through establishment and administration, with regard to:
minimum requirements for candidates and licensees
effective professional education of licensees
enforcement of professional conduct
Established by the state legislature in 1951, the Tennessee Real Estate Commission is the State Regulator of real estate licensees. The Commission is created within the Division of Regulatory Boards of the Tennessee Department of Commerce and Insurance. It is a judicial body, and its members are immune from civil liabilities, as long as they perform their duties in good faith according to the Act. If an action is filed against them, they are defended by the attorney general of the state.
The Tennessee Real Estate Commission licenses and registers:
real estate brokers and affiliate brokers
real estate firms
rental location agents
time-share salespersons and developments
vacation clubs and vacation lodging services
The Commission also:
enacts rules addressing professional conduct and standards of practice
conducts hearings concerning violations of the Act, and imposes penalties
administers a Real Estate Recovery Fund for the protection of the public
Purpose of Commission members
Commissioners are appointed by the governor for a term of five years.
The Commission consists of nine (9) members, each of whom must be a resident of Tennessee and be of good moral character.
In addition, the Commission must include:
seven members who have been principally engaged as a licensed broker or affiliate broker in Tennessee for at least five years prior to the date of appointment
two members from outside the real estate industry, specifically not engaged in the businesses of real estate broker, affiliate broker, real estate financing or real estate development; these two must reside in different grand divisions of the state
three members each from the eastern, middle and western grand divisions of the state
The Commission also:
chooses a chair and a vice chair from among its members
appoints an executive director for a term of four years; this individual must have passed the broker’s examination for the state of Tennessee
appoints a full-time director of education; the director of education must be a college graduate
Commission powers
The Commission:
Meets as often as it sees fit for carrying out its responsibilities. A majority of the Commission constitutes a quorum at any Commission meeting.
Is empowered to carry out the provisions of the Tennessee Real Estate Act, which include issuing, revoking and suspending licenses.
May make whatever bylaws, rules and regulations are reasonably necessary for its purposes.
May incorporate and establish canons of ethics and minimum acceptable standards of practice for licensees in its rules and regulations.
May file a complaint for violation of the Real Estate Act before any court of competent jurisdiction.
May take the necessary legal steps to enforce the provisions of the Real Estate Licensing Act and collect the penalties provided.
May not set fees or commissions for real estate contracts or transactions.
May regulate schools and courses established to meet the educational requirements of the Act.
May request any court having jurisdiction over an individual to stop that individual from violating any provision of the License Act.
Complaints, notifications, hearings
Hearings and judicial review of any contested case of violation of the act are governed by the provisions of the Uniform Administrative Procedures Act (Title 4, Chapter 5).
Before refusal, suspension or revocation of a license:
The Commission must notify the accused applicant or licensee in writing of its receipt of a complaint.
The accused applicant or licensee has ten days to file an answer to the complaint with the Commission and with the complainant.
The Commission investigates and determines whether to set a hearing. If it decides the complaint is improper or there is no reasonable cause that the violation occurred, it will publish an order to that effect.
A majority vote of the Commission must be reached to revoke or suspend a license. If the complainant has also filed a complaint in a court of law and the matter is pending, the Commission may withhold its decision until the court action has been concluded.
Filing of complaints
On receipt of a verified complaint in writing charging a licensee with a violation of the Act, the Commission may investigate the facts and hold a hearing for reprimand or for the suspension or revocation of a license.
A complaint to the Commission must be filed within the longer of:
two years from the date of commission of the alleged violation or the complainant’s discovery of the violation
the applicable statute of limitations if the violation also constitutes a criminal offense
ten days after the completion of a successful prosecution of the violation as a criminal offense
Disciplinary actions and procedures
The Commission has the authority to suspend, revoke or downgrade a license.
If a party sues a licensee in a competent court claiming injury from the licensee’s actions as a licensed real estate professional, and if the party obtains a judgment or decree:
The court may revoke the licensee’s license. Such a revoked license cannot be reissued unless six members of the Commission vote to reissue it.
If a licensee pleads guilty or is convicted of any offense listed in the License Act, the licensee must:
notify the Commission within sixty days of the conviction
provide certified copies of the conviction
The licensee’s license is automatically revoked sixty days after a licensee’s conviction unless the licensee makes a written request to the commission for a hearing during that sixty-day period. Following a hearing, the Commission may impose any sanction permitted by the Licensing Act.
If the Commission finds a licensee has obtained a license by false representation or by fraudulent act or conduct, or is guilty of one of the prohibited acts in performing activities subject to regulation under the Licensing Act, the Commission may:
refuse to issue the license
suspend or revoke the license
In addition, the Commission may order the downgrading of a broker’s license to “affiliate broker” status.
If the Commission revokes or suspends a license, any school or instructor approval which the licensee holds, is also revoked. Likewise, if a licensee surrenders a real estate license, any school or instructor approval the licensee may hold is revoked.
Civil penalties
Anyone who acts as a broker, affiliate broker, time-share salesperson or acquisition agent without the appropriate license has committed a Class B misdemeanor.
A person who violates the license requirement is liable for at least the amount of any money received for the illegal services and as much as three times the amount, as determined by a competent court.
If the violator is a corporation, the corporation is ineligible to be licensed for a year following conviction.
The Commission may, in a lawful proceeding respecting any person required to be licensed by the Commission, (in addition to or in lieu of any other lawful disciplinary action), assess a civil penalty for each separate violation of a statute, rule, or order pertaining to the Commission. The schedule of penalties, listed in the Rules of the Real Estate Commission, ranges from fifty dollars ($50.00) to one thousand dollars ($1,000.00) per violation.
The Commission may fine a person who is required to be licensed by the Commission, but acts without a license one thousand dollars for each violation. Each day of a violation may be considered a separate violation.
Real Estate Recovery Fund
The Real Estate Act establishes a real estate education and recovery account for the protection of the public against harmful actions by licensees.
The fund:
Must maintain a minimum balance of five hundred thousand dollars ($500,000) at all times.
Is funded by a fee charged to applicants for original licensure as a broker, affiliate broker or time-share salesperson. If the commission refuses to issue a license, this fee is returned to the applicant.
May also be funded by an additional fee, not to exceed thirty dollars ($30.00), as a condition for renewal of an individual’s license.
If a licensee is found in violation of the Real Estate Act, or of any rule under the Act, the fund pays out, at the direction of a court order:
To an individual for actual or compensatory damages, up to fifteen thousand dollars ($15,000) per transaction.
A maximum of thirty thousand dollars ($30,000) on behalf of any individual licensee.
If the Commission suspends or revokes the license of the licensee found in violation, the license may not be reinstated until the licensee has repaid the full amount plus interest to the fund.
The Commission may use Recovery Fund earnings to pay for such activities as preparing training and informational materials for licensees, holding seminars, evaluating continuing education courses, and publishing a newsletter.
