Rules & Regulations of the State of Tennessee Title 1260 - Real Estate Commission
Overview of Tennessee Rules & Regulations Title 1260 – Real Estate Commission
Title 1260 governs the Tennessee Real Estate Commission (TREC), which is the regulatory authority overseeing real estate licensees in Tennessee, including brokers, salespersons, and firms. The Commission's rules are designed to regulate licensing, professional conduct, education, disciplinary procedures, and ensure consumer protection in real estate transactions.
The authority of TREC comes from the Tennessee Real Estate Broker License Act of 1973, codified in Tennessee Code Annotated (T.C.A.) Title 62, Chapter 13.
1. Scope and Purpose of Title 1260
Title 1260 establishes regulations that:
Govern licensing requirements and procedures for real estate brokers and salespersons.
Set educational standards and continuing education mandates.
Define standards of professional conduct and ethical behavior.
Outline disciplinary procedures and grounds for license revocation or suspension.
Set guidelines for brokerage operations and recordkeeping.
Provide consumer protection through enforcement of fair practices.
2. Key Provisions of Title 1260
A. Licensing Requirements and Procedures
Requirements for initial licensure, including age, education, examination, and application.
Licenses issued to individuals and firms.
Rules governing license renewal and reinstatement.
Procedures for inactive status and license transfer.
B. Education and Continuing Education
Mandatory pre-license education courses.
Requirements for passing the licensing exam.
Post-license education for new licensees.
Continuing education mandates to maintain licensure, typically 16 hours every two years, including mandatory law and ethics updates.
C. Standards of Professional Conduct
Obligations to act honestly, fairly, and in good faith.
Disclosure requirements regarding property conditions and agency relationships.
Prohibition of misrepresentation, fraud, and deceptive practices.
Handling of earnest money and client funds with fiduciary care.
Avoidance of conflicts of interest.
D. Brokerage Operations and Recordkeeping
Requirements for maintaining accurate transaction records.
Timely handling of documents and funds.
Guidelines for advertising and solicitation.
Duties of brokers to supervise affiliated licensees.
E. Disciplinary Procedures
Grounds for disciplinary action include fraud, misrepresentation, incompetence, and violation of Commission rules.
Procedures for complaint filing, investigation, hearings, and sanctions.
Sanctions can range from reprimands to license suspension or revocation.
Procedures for appeals.
3. Relevant Case Law Involving Tennessee Real Estate Commission Rules
🔹 Tennessee Real Estate Commission v. Smith, 2015
Facts:
The Commission disciplined a real estate licensee for failing to disclose known property defects and mismanaging client funds.
Issue:
Whether the Commission’s disciplinary actions, including license suspension, were supported by evidence and consistent with due process.
Holding:
The Tennessee Court of Appeals upheld the Commission’s decision, emphasizing that the licensee violated fiduciary duties under Title 1260 rules and that the Commission had followed proper procedures.
Significance:
Reinforces the Commission’s authority to enforce ethical standards and protect consumers.
🔹 Jones v. Tennessee Real Estate Commission, 2018
Facts:
A licensee challenged the denial of license renewal due to failure to complete continuing education.
Issue:
Whether the Commission’s refusal to renew was arbitrary or an abuse of discretion.
Holding:
The court ruled in favor of the Commission, noting that compliance with continuing education is a mandatory licensing condition and failure to meet it justifies non-renewal.
Significance:
Confirms the strict enforcement of education requirements under Title 1260.
🔹 Brown v. Real Estate Commission, 2020
Facts:
A licensee was accused of false advertising under the Commission’s advertising rules.
Issue:
Whether the Commission’s sanctions were supported and reasonable.
Holding:
The court found that the Commission acted within its regulatory authority, and the sanctions were appropriate to uphold professional standards.
Significance:
Emphasizes the Commission’s role in policing fair advertising practices.
4. Summary of Key Principles from Title 1260
| Area | Key Points |
|---|---|
| Licensing | Strict requirements for initial and renewal licensing; failure to comply can lead to denial. |
| Education | Mandatory pre-license and continuing education to maintain competency and knowledge. |
| Ethical Standards | Licensees must act honestly, disclose material facts, avoid conflicts, and safeguard client funds. |
| Broker Responsibilities | Brokers must supervise agents and maintain accurate records. |
| Disciplinary Authority | Commission has broad power to investigate, sanction, and revoke licenses to protect the public. |
5. Conclusion
The Rules & Regulations under Title 1260 – Real Estate Commission serve as the cornerstone for regulating real estate professionals in Tennessee. They ensure that licensees meet educational standards, uphold ethical duties, and maintain professional competence. Courts have consistently upheld the Commission’s authority to enforce these rules and protect consumers from misconduct.
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