Agency and Disclosure Issues
Seven state items, the joint-largest area, come from part 4 of the license act, which replaced common-law agency for Tennessee licensees on January 1, 1996.
How Agency Is Created, and the Default Position
Tenn. Code Ann. 62-13-401 provides that a licensee may serve any party with or without an agency relationship, and that until the licensee enters a specific written agreement establishing agency the licensee is a facilitator and not an agent or advocate of any party. An agency or subagency relationship shall not be assumed, implied, or created without a written bilateral agreement setting its terms, though negotiating and executing an exclusive agency or exclusive right to sell listing does establish agency with the seller. Section 62-13-402 makes an engaged licensee a limited agent functioning as intermediary in negotiations, and section 62-13-408 provides that part 4 supersedes common law where the two are inconsistent.
Duties to Everyone and Duties to the Client
Tenn. Code Ann. 62-13-403 lists the duties owed to all parties: diligently exercise reasonable skill and care; disclose adverse facts of which the licensee has actual notice or knowledge; maintain confidentiality of information obtained before disclosure of a written agency agreement; provide services with honesty and good faith; disclose timely and accurate public-record market condition information when requested; timely account for trust fund deposits and other property received; and refrain from self-dealing or recommending affiliated services without prior disclosure and written consent. Section 62-13-404 adds the client duties: obey lawful instructions within the scope of the agreement, be loyal to the client's interests, and, unless specifically and individually waived in writing, schedule showings, receive and promptly forward all offers and counteroffers, answer negotiation questions within the licensee's expertise, and advise on post-execution steps to closing.
Disclosing Status, Interest, and Material Facts
Tenn. Code Ann. 62-13-405(a) requires verbal disclosure of facilitator, agent, subagent, or designated agent status to an unrepresented buyer or seller before any real estate services are provided. Subsection (b) requires written confirmation before preparation of an offer for an unrepresented buyer, and before execution of a listing agreement or presentation of an offer for an unrepresented seller, whichever comes first, with a signed receipt carrying the limitations notice and the Commission's address and telephone number. Subsection (d) requires immediate disclosure of the licensee's role to any other licensee in the transaction. Rule 1260-02-.11 requires full disclosure of a licensee's true position before acquiring an interest in listed property and requires all licensees to identify themselves as licensees when buying or selling for themselves. Tenn. Code Ann. 66-5-207 removes any cause of action against an owner or licensee for not disclosing that the property was the site of a homicide, felony, or suicide, or an occurrence with no effect on the structure, or that an occupant had HIV.
Designated Agency, Facilitators, and Dual Agency
Tenn. Code Ann. 62-13-406 lets a managing broker appoint a licensee as designated agent of a party to the exclusion of all other licensees in the firm, and provides that the managing broker is not a dual agent where a designated agent does not represent another party to the same transaction. There is no imputation of knowledge or information among clients, the managing broker, and designated agents. Section 62-13-102(9) defines the facilitator, including the election in subparagraph (B) under which a written agency agreement may provide that a licensee becomes a facilitator rather than a dual agent, provided notice is given to buyer and seller immediately and confirmed in writing before the contract is executed. Section 62-13-102(8) defines dual agency, and section 62-13-312(b)(7) makes it a ground for discipline to act for more than one party without the knowledge and consent in writing of all parties for whom the licensee acts. Section 62-13-405(e) exempts commercial transfers and leases, public auctions, residential properties of more than four units, and residential leases from sections 62-13-403, 62-13-404, and 62-13-405.
Keep going: the full Tennessee Real Estate Broker guide covers every section of the exam. Tennessee Real Estate Broker Exam Study Guide (2026) — PDF + EPUB, $19.99 · 14-day refund →
State-specific details
State exam facts
- State regulator
- Tennessee Real Estate Commission (TREC)
- Exam vendor
- PSI
- Prelicensing education
- 120 classroom hours, including 30 hours covering office or brokerage management
- Passing score
- 75% on each portion
- Scored questions
- 125
- Time limit
- 240 minutes
Who regulates real estate brokers in Tennessee?
The Tennessee Real Estate Commission (TREC), within the Department of Commerce and Insurance, licenses brokers and affiliate brokers under the Tennessee Real Estate Broker License Act of 1973 (Tenn. Code Ann. tit. 62, ch. 13). TREC contracts with PSI to deliver the licensing exams.
What experience do I need before the Tennessee broker exam?
Tenn. Code Ann. § 62-13-303(c) requires a broker applicant to certify 120 classroom hours in real estate, including 30 hours covering office or brokerage management, and — for anyone licensed as an affiliate broker after May 12, 1988 — to have held an active real estate license for at least 36 months, or 24 months with a baccalaureate degree with a major in real estate. Within three years of the original broker license, § 62-13-303(h) requires a further 120 classroom hours.
How is the Tennessee broker exam structured?
PSI bulletin 511 sets the broker exam at 125 scored items in two independently passed portions: a 75-item national portion scored to 80 points in 150 minutes, and a 50-item Tennessee state portion (50 points) in 90 minutes. You need 75% on each — 60 of 80 national points and 38 of 50 state items. Do not use the Affiliate Broker column printed beside it in the same bulletin; that tier is 80 national items and 40 state items at 70%.
What is on the Tennessee broker state portion?
PSI bulletin 511 sets nine areas for the Broker tier: Duties and Powers of the Real Estate Commission (6 items), Licensing Requirements (5), Advertising and Marketing (7), Broker/Affiliate Relationships (6), Handling of Documents and Record Keeping (6), Handling of Trust/Escrow Funds (7), Other Improper Activities and Consumer Protection (3), Agency and Disclosure Issues (7), and Special Areas of Practice (3). Advertising, trust and escrow funds, and agency are the joint-largest at 14% each, so most of your study time belongs in Tenn. Code Ann. tit. 62, ch. 13 and TREC rules 1260-01 and 1260-02.
Sources: https://test-takers.psiexams.com/api/content/bulletin/511, https://www.tn.gov/commerce/regboards/trec.html, https://publications.tnsosfiles.com/rules/1260/1260.htm
In the Tennessee Real Estate Broker guide: A 60-question national practice exam, with a key that explains all four options and not just the right one. Practice here stays free.