Unit 3 Flashcards
Who needs to be licensed?
Unless specifically exempted, anyone who acts or claims to act in any way as a real estate broker, affiliate broker, time-share salesperson or acquisition agent in the state of Tennessee must first obtain the proper license from the Commission.
Activities you may not perform without a license.
make cold calls by telephone or in person to potential client
show properties for sale and/or lease to prospective purchasers
host public open houses, licensee open houses, home show booths or fairs
answer questions concerning properties listed with the firm, except information contained on the listing agreement as limited by the principal broker
prepare promotional material or advertising of properties for sale or lease without the approval of the principal broker
discuss or explain listings, contracts, offers, or other similar matters with persons outside the firm
be paid on the basis of real estate activity, such as percentage of commission or any amount based on listings, sales, etc.
act as a go-between with a seller and buyer such as when an offer is being negotiated
negotiate or agree to any commission split or referral fee on behalf of a licensee
Sue to collect compensation for performing any service that only a licensee is allowed to perform.
Be employed or compensated by a licensed broker for performing any activity requiring licensure. However, a licensed broker may compensate a broker licensed in another state if that nonresident broker has not conducted any negotiations in Tennessee for which the commission is paid.
Conduct any of the following activities, for valuable consideration and on the behalf of the owner of lots or other parcels of real estate:
solicit, negotiate or attempt to solicit or negotiate the listing, sale, purchase, exchange, lease or option to buy, sell, rent or exchange for any real estate, improvements on a parcel of real estate, or any time-share interval collect rents or attempt to collect rents auction or offer to auction real estate advertise or hold out that one is engaged in any of the foregoing
Exemptions from licensure.
property owners representing themselves in a transaction
attorneys-in-fact acting under a power of attorney from an owner or lessor
attorneys-at-law providing legal services
resident managers acting for a broker or owner– but duties must be limited to supervision, showing, leasing, and collecting of rents and deposits; no negotiating of rents, deposits, or leases
corporations acting through an authorized officer to engage in a transaction involving real estate owned by the corporation– but the officer may not receive compensation based on the value of the real estate involved
individuals who work for firms that provide vacation lodging services– but the firm must have a firm license
Activities you may perform without a license.
answer the phone and forward calls
give information on the listing agreement as limited by the broker
fill out and submit listings to any multiple listing service
follow up on loan commitments after a contract has been negotiated
assemble closing documents
secure public information from courthouses, utility districts, etc.
have keys made for company listings
write ads for approval of licensee and principal broker and place ads
receive, record and deposit earnest money, security deposits and advance rents under direct supervision of principal broker
type contract forms for approval by licensee and principal broker
monitor licenses and personnel files
compute commission checks
place signs on property
order repairs as directed by the license
prepare fliers and promotional information for approval by licensee and principal broker
deliver documents and pick up keys
place routine phone call on late rent payments
schedule appointments for licensee to show listed property
gather information for a comparative market analysis
hand out objective written information on a listing or rental
give a key to a prospect or unlock property
disclose the current sales status of a listed property
Types of licenses.
Broker
Affiliate Broker
Time Share Salesperson
Acquisition Agent
Procedures for obtaining a license.
be of good character
satisfy educational, residency, age and experience requirements
submit application for examination on the prescribed form, along with necessary documentation of education and specified fee
pass the appropriate licensing examination
file application for the appropriate license within six months of passing the examination (twelve months for a time-share license), along with necessary forms and documents and fees.
Good Character.
Show evidence of a good reputation for honesty, trustworthiness, integrity and competence to transact the business of broker, affiliate broker or time-share salesperson in such manner as to safeguard the interest of the public.
Provide a sworn statement from the prospective employing broker to the effect that the applicant is honest and trustworthy, and that the broker will actively supervise and train the applicant.
Complete a form, “Application for decision regarding prior criminal conviction(s) and/or disciplinary sanction(s),” available from the Commission web site. The form asks questions concerning:
convictions and pleas for being charged with a criminal offense other than a traffic violation (includes DUI)
discipline by any state or federal licensing agency or regulatory authority
lateness of child support payments by more than two months
probation status (Commission policy is that a person will not be considered for licensure until two years after the expiration of probation, parole, conviction, or release from incarceration, whichever is later in time. This policy applies to all felonies and to misdemeanors involving the theft of money or property.)
An affirmative response to any of these questions requires the applicant to furnish further information and records and request a hearing from the Commission.
Education.
a high school degree or a general educational development certificate
satisfactory completion of sixty (60) classroom hours in real estate at a school, college, or university approved by the Commission, including thirty (30) classroom hours covering the basic principles of real estate
satisfactory completion of a Commission-approved thirty (30) hours of education in specified areas including contract writing, handling consumer deposits, listing property, agency disclosures, or other areas designated by the Commission
(Prior to January 1, 2005, this requirement was to be satisfied within six months AFTER receiving the license; failure to comply caused the license to expire automatically after six months.)
Applicants for a broker’s license must provide proof of:
satisfactory completion of one hundred twenty (120) classroom hours in real estate (before or after receipt of an affiliate broker’s license) at a school, college, or university approved by the Commission, including thirty (30) classroom hours covering office or brokerage management
Applicants for a time-share salesperson’s license must provide certification by the prospective employing broker that the applicant has completed a thirty (30) hour training program consisting of instruction in the fundamentals of the Tennessee Time-Share Act and related topics
Exemptions from the prelicensing education requirement
A college degree with a major in real estate, provided:
the transcript shows completion of at least one 3 hour course (30 classroom hours) in real estate principles/fundamentals a minimum of two more courses totaling at least 60 hours of classroom instruction in real estate
A law degree, provided:
the law school transcript shows completion of at least one 3 hour course (30 instruction hours) in real property at least 60 other hours of instruction in contracts and agency
Residency, age and experience.
Applicants for all types of licenses must show proof that:
they are at least 18 years old
Applicants for the broker’s and affiliate broker’s licenses must show proof that:
they have lived in the state for 45 days (62-13-303)
Applicants for a time-share salesperson license must show proof that:
they reside in the state
Applicants for the broker’s license must additionally show proof of experience as follows:
if licensed as an affiliate broker after May 12, 1988, proof the applicant has held an active real estate license for at least thirty-six (36) months, or, if the applicant holds a baccalaureate degree with a major in real estate, for at least twenty-four (24) months
if licensed as an affiliate broker on or before May 12, 1988, satisfactory proof that the applicant has been engaged as a real estate licensee for at least twenty-four (24) months, or, if the applicant holds a baccalaureate degree with a major in real estate, for at least twelve (12) months
Licensing examinations
Required type of exam:
the exam is written unless the Commission grants special permission for an oral examination for a person with a physical handicap
Fee:
the candidate pays the required fee to the exam vendor
the current fee for all examinations is fifty-five dollars
Passing score:
The test vendor determines the minimum passing requirement for licensees in accordance with procedures approved by the Tennessee Real Estate Commission.
Currently, candidates seeking licensing for affiliate broker, time-share salesperson and acquisition agent must achieve a score of 70%. Broker candidates must achieve a score of 75%.
An applicant for the broker or affiliate broker license must apply to the Commission for the appropriate license within six (6) months of passing the examination. Otherwise, the applicant must retake and pass the examination to be eligible for a license.
An applicant for the time-share salesperson or acquisition agent license has twelve months to apply for the license after passing the exam.
Passing the examination does not guarantee that the applicant will be issued a license.
Failure:
An unsuccessful applicant will be given a written analysis of his or her test results and must follow reexamination procedures published by the testing service.
A licensee who fails to pass the examination may be re-tested according to the rules of the Commission.
Part II
Exam Topics:
The examination for broker and affiliate broker includes:
Business ethics
Composition
Arithmetic
Elementary principles of land economics and appraisal
Closing statements
General knowledge of state statutes relating to deeds, mortgages, trust deeds, contracts of sale, leases and other related matters
The provisions of Tennessee Real Estate Broker License Act
The examination for time-share salesperson and acquisition agent includes:
the fundamentals of the time-share business
The Tennessee Time-Share Act
Relevant parts of the Real Estate Broker Act and related topics
Penalties:
Any applicant detected cheating during an examination loses the right to have the examination graded and may be subject to further action by the Commission.
Exemption:
An applicant who holds a license from another state may be excused from the ‘‘Uniform Principles of Real Estate’’ portion of the examination if the applicant:
has successfully completed an examination approved by the Tennessee Real Estate Commission
has attained at least the minimum passing score requirement on the ‘‘Uniform Principles’’ portion of the examination
Non-resident requirements
A non-resident licensed in another state may apply for a Tennessee broker or affiliate broker license. The Commission is not obligated to issue or renew such a license.
Tennessee has reciprocity agreements with twenty-two other states, each of which may have different qualifications.
A non-resident applicant does not need to maintain a place of business in Tennessee, provided the applicant maintains a place of business in the other state and regularly engages in the real estate business.
For the Commission to issue a license, the applicant must:
have qualified for the license held in the other state by written examination
meet the qualifications for licensure in Tennessee
certify to having read the provisions of the Act and the rules and regulations promulgated under it
be from a state that offers the same right of licensure without written examinations to licensees of Tennessee (reciprocity)
file a consent that legal actions may be taken against the applicant in any proper court in the state of Tennessee and will be valid and binding
provide Errors and Omissions insurance
Licensing fees
The fees for issuing licenses, to be paid to the Commission are:
for an original license: one hundred dollars
for renewal of a license: eighty dollars
Firm licenses
Each office and branch office must have:
a real estate firm license
a principal broker
a fixed location with adequate facilities for affiliated licensees
At the time of applying for a firm license, the broker must furnish proof that:
the firm’s escrow account has been properly established
the office complies with zoning laws and ordinances
Similarly vacation lodging service must have:
a firm license, but is not required to have a licensed real estate broker supervising the business
one person designated to be responsible for meeting training and continuing education requirements
an escrow account maintained in accordance with regulations
A real estate firm license held by a real estate broker is deemed to satisfy the license requirements for a vacation lodging service.
Branch offices
If the broker maintains more than one office within the state:
there must be an additional firm license for each such branch office
each branch office must be under the supervision of a broker licensed at that address
A licensee is deemed to maintain a ‘‘branch’’ if the licensee:
advertises the office in any manner for the purpose of attracting the public
has a mail drop at the office which is registered with and served by the United States Postal Service
invites or solicits telephone calls to the office
A model home or a modular unit used for soliciting business is not a branch office if:
advertising of the location and/or telephone number is only done in conjunction with advertising of the main firm office and complies with the statutes, rules and regulations of the Commission
it does not have a mail drop
it is not the sole sales office for the firm
it is not used by unlicensed individuals to perform any act requiring licensure
the principal broker of the main firm office adequately supervises licensees operating from it
