Broker and Affiliate Relationships
Six state items cover how licensees attach to a firm, how they are paid, what supervision the principal broker owes, and what happens when the affiliation or the principal broker ends.
Compensation Flows Through the Firm
Tenn. Code Ann. 62-13-312(b)(11) makes it a ground for discipline for an affiliate broker to accept a commission or any valuable consideration for licensed acts from anyone except the licensed broker with whom the licensee is affiliated. Section 62-13-302(a) is the other half: a licensed broker may not employ or compensate a person who is not a licensed broker or affiliate broker, though a Tennessee broker may pay a broker licensed in another state where the nonresident conducts none of the negotiations in Tennessee. Rule 1260-02-.41(2) applies the same restriction to licensees advertising as a team, and rule 1260-02-.39 confirms that commissions earned under a principal broker remain payable after a transfer, retirement, broker release, expiration, or the licensee's death.
Permitted Affiliations
Rule 1260-02-.01(1) forbids any licensee to engage in real estate activity in an office unless a principal broker is devoted to the full time management of that office. Paragraph (2) permits a licensee to be engaged only by a principal broker who is engaged primarily in the real estate business and accessible during normal daytime working hours. Rule 1260-01-.04(1) forbids a principal broker to let a supervised licensee work without a valid license and errors and omissions coverage, and rule 1260-01-.04(3) routes every change of affiliation or status through the firm's principal broker.
Supervision and Its Limits
Tenn. Code Ann. 62-13-312(b)(15) makes failing to exercise adequate supervision over the activities of a licensed affiliate broker its own ground for discipline, and subdivision (b)(16) adds failing within a reasonable time to complete the administrative measures the Commission requires on a transfer or termination. Discipline is not vicarious, though: section 62-13-310(c) provides that an affiliate broker's unlawful act or violation may not be cause for suspending or revoking the license of the broker with whom the affiliate is affiliated. Rule 1260-01-.16(2) makes the principal broker's failure to ensure that affiliated licensees carry errors and omissions insurance a failure to supervise, with a thirty-day window to cure or release. Rule 1260-02-.41 forbids a principal broker to delegate supervision to a team and reserves designated agency appointments to the principal broker.
Change of Affiliation, Listings, and Loss of the Principal Broker
Rule 1260-02-.02(1) ends the principal broker's supervisory responsibility for a licensee's future acts on the Commission's receipt of the release form or online submission. Paragraph (2) gives the licensee ten days to complete the administrative measures for a change of affiliation or retirement and bars any activity defined in section 62-13-102 until the change is received and processed. Paragraph (4) forbids the departing licensee to take or use property listings or buyer representation agreements secured through the firm unless the principal broker specifically authorizes it in writing, and paragraph (5) requires a demanded release to be granted promptly. Rule 1260-02-.38 requires notice within ten days of the death, resignation, termination, or incapacity of a principal broker, allows the firm at most thirty days of operation without one, and permits a single thirty-day extension so a new principal broker is in place by the sixty-first day.
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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
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