Unit 4 Flashcards
License administration
Just as the Commission has the power to issue licenses, it has the power to take them away. By controlling the reissuing of licenses, and by determining the status of a license, it regulates the ongoing behavior of licensees and protects the public.
License administration means, therefore:
setting requirements for maintaining and renewing one’s license, depending on its status
setting the status of a license, which regulates what the licensee may, may not, and must do
License maintenance
To maintain a license, there are requirements concerning:
Errors and Omissions insurance
License display
Sign display
Notification of change of status, name or address
Other requirements are addressed in more detail in the chapters on Documents and Trust/Escrow funds.
Errors and Omissions insurance
The Commission requires each licensee to carry Errors and Omissions insurance to cover liability for licensed activities.
A license cannot be renewed unless proof of coverage is provided.
Coverage is not required for a licensee whose license is in retired or inactive status.
The Commission contracts with a provider to make Errors and Omissions insurance available to each licensee and determines the required coverage.
The requirement is void if the Commission is unable to obtain coverage.
Licensees have the option of obtaining insurance independently.
Persons who hold firm licenses have the option of carrying firm insurance in addition to the policies for individuals in the firm.
License display requirements
The license of a broker and of each affiliate broker under contract to that broker must be prominently displayed in the broker’s principal place of business.
A broker may not post his or her license at a telephone answering service or conduct the major part of his or her real estate business through an answering service.
A Tennessee licensee who holds a nonresident license issued in another state must file copies of the license with the principal broker and the Real Estate Commission.
Sign display requirements
Licensed principal broker:
Must display a sign, in compliance with local ordinances, outside the broker’s office stating clearly that the broker is engaged in the real estate business. This requirement holds true even if the office is the broker’s home.
Licensed real estate firm:
Must conspicuously display on the outside of the firm’s place of business a sign which contains the name of the real estate firm.
The name displayed must be the name of the firm as registered with the Commission.
Affiliate brokers:
Do not have to display signs at their broker’s office.
All licensees:
May not post signs on any property advertising themselves as real estate agents unless the firm’s name appears on the sign in letters equal to or larger than the size of the licensee’s name.
Inactive status
A licensee in inactive status may not engage in any act requiring licensure.
In inactive status, the broker or affiliate broker remains subject to the educational requirements for renewal.
If the inactive licensee wishes to remain inactive for any portion of a subsequent license renewal period, the licensee must pay the required renewal fee prior to the license expiration date.
A licensee who is ineligible for temporary retirement of the license (because of educational requirements) may have the license placed in “inactive” status by making a written request with the proper form, accompanied by the license, and the change of status fee.
When the licensee provides proof of completion of continuing education sufficient to meet the licensee’s current requirements, the license status is automatically changed from inactive to retired.
Retired status
No retired licensee may engage in any act requiring licensure.
Temporary retirement is only permitted if all educational requirements have been completed.
A licensee may temporarily retire his or her individual or firm license by making written request accompanied by the license and the fee for change of status.
If the retiree wishes to remain in retirement for any portion of a subsequent license renewal period, the retiree must pay the required renewal fee prior to the license expiration date.
The retiree is responsible for advising the Commission of the retiree’s current mailing address.
Expired status
All licenses expire two years from the date the license was issued or renewed, unless the licensee makes timely payment of a renewal or retirement fee, and complies with any prerequisite or condition to licensure or renewal.
An expired license may be reinstated without examination within sixty (60) days after the expiration date if the licensee:
provides proof of compliance with prerequisites or conditions
pays any penalty fee arising from the failure to comply
pays an additional penalty fee; not more than one hundred dollars ($100) per month
After the sixty-day period, a licensee desiring reinstatement must reapply for licensure unless the Commission:
waives reexamination or additional education requirements for the applicant, or
reinstates the license subject to the applicant’s compliance with other conditions the commission may prescribe, including payment of a penalty fee, in addition to the penalty fee for reinstatement within the sixty-day period
Suspended and revoked status
No one with a suspended or revoked license may engage in any activity requiring licensure.
The Commission may refuse to issue a license, or it may suspend or revoke a license, if it is found that:
the license has been obtained by false representation or by fraudulent act or conduct
the licensee, in performing any activities subject to regulation under the Licensing Act, is guilty of any of the “prohibited acts” (see Chapter 10)
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.
If the Commission revokes or suspends a license, any school or instructor approval, which the licensee holds, is revoked.
Likewise, if a licensee surrenders a real estate license, any school or instructor approval, which the licensee holds, is revoked.
A competent court may revoke a license if:
a party obtains a judgment or decree from the court showing that the party has been injured by a licensee’s actions as a licensed real estate professional
such a revoked license cannot be reissued unless six (6) members of the Commission vote to reissue it
A broker may not have his or her license revoked or suspended on account of any affiliated broker’s violation of the Real Estate Licensing Act.
Downgraded status
The Commission may, as a disciplinary action, order a broker’s license to be downgraded to “affiliate broker” status.
The holder of a valid broker’s license may, on written request to the Commission, exchange the broker’s license for an affiliate broker’s license.
Reactivation of license
A retired, inactive, or downgraded license may be reactivated if:
the license was revoked, suspended or downgraded while the license was retired or in inactive status, merely because educational requirements were not completed within the required time
the educational requirements were completed within two (2) years from the date the license was retired or placed in inactive status, and all additional educational requirements, if any, have been met
the specified reinstatement fees and penalties are paid
Otherwise, a licensee may reactivate from inactive or retirement status by submitting the proper form and paying the fee for a change of status.
Renewal of license
Licenses of all types expire two (2) years from the date of issue or renewal.
The Commission will notify the licensee of the need to submit fees and documentation at least six months before the due date.
Each licensee is individually responsible for satisfying all requirements for retention of the license, including payment of fees and completion of continuing education.
All required documentation and fees must be received by the Commission no later than sixty (60) days before the expiration date.
The necessary documentation shows fulfillment of the education requirements and proof of Errors and Omissions insurance coverage.
Failure to meet the deadline will prevent renewal until the necessary items are received, plus:
A signed Consent Order agreeing to comply with requirements.
A penalty of not more than fifty dollars per month for which the materials are delayed during the period between 60 and 120 days.
An additional penalty of one hundred fifty dollars per month for a period over 120 days but less than a year, plus attendance at a Commission meeting. In lieu of the meeting, the licensee may pay a civil penalty of one thousand five hundred dollars.
If the licensee signs the Consent Order and fails to complete the requirements, a civil penalty of two thousand five hundred dollars is assessed.
Late fees are not assessed if failure to meet the deadline is due to personal or family health issues, documented by a doctor’s statement.
For licenses expired for more than a year, the licensee must reapply for licensure, meet educational requirements, and pass all required examinations, or appear with their principal broker before the Commission to request a waiver of reexamination.
Continuing education requirements
As a requisite for the renewal of a license, a licensee must meet the following:
Continuing education:
Affiliate broker’s license
Every two years, for renewal of an affiliate broker’s license originally issued on or after July 1, 1980, the affiliate broker must satisfactorily complete sixteen classroom hours in real estate courses at any school, college, or university approved by the Commission.
Broker’s license
Within (3) years from the date of issuance of an original broker’s license, (for renewal), the broker must satisfactorily complete an additional one hundred twenty classroom hours in real estate at any school, college, or university approved by the Commission.
Every two years, beginning with the license period immediately after the one in which the licensee completes the one hundred twenty hours of education, the holder of a broker’s license originally issued after January 1, 2005, must satisfactorily complete sixteen classroom hours in real estate courses at any school, college, or university approved by the Commission.
An affiliate broker will not receive continuing education credit for classroom hours completed prior to licensure, or during a prior license period.
Qualifying courses for continuing education
Approved continuing education courses will have content directly related to the following topics:
Valuation of Real Estate Construction-Property condition, energy Contracts Agency Financing Real Estate Investment Real Estate License Law and Rules Property Management Taxation of Real Estate Transaction Closing and Settlement Procedures Land Use, Planning and Zoning Time-shares Type of Property Fair Housing Antitrust Ethics in Real Estate Professional Liability The Commission may add or delete any subject by means of reasonable written notice to the course sponsor and/or instructor.
