Agency and Disclosure Under Tennessee Law
The Tennessee Real Estate Broker License Act and TREC rules govern how licensees represent consumers, including designated agency and the required disclosures. This chapter explains the recognized relationships and the principal broker's compliance role.
Agency Relationships and Disclosure
Tennessee licensees must disclose their agency status to consumers. A licensee may represent the seller, the buyer, or, in limited circumstances, both, and must provide the required written disclosures so the consumer understands who is representing them. Tennessee also recognizes a facilitator/transaction role in which the licensee assists the parties without representing either as an agent. Early, accurate disclosure lets consumers make informed choices before sharing confidential information.
Designated Agency
Tennessee recognizes designated agency, in which the principal broker assigns one affiliated licensee to represent the buyer and a different affiliated licensee to represent the seller in the same transaction. This lets each party receive individual representation within one firm while the principal broker manages confidentiality. When one licensee would represent both parties, that dual arrangement requires the informed written consent of both parties, and the licensee must not disclose one party's confidential information to the other.
The Broker's Supervisory Duty
The principal broker is responsible for ensuring that affiliated licensees deliver required disclosures on time, keep client information confidential, and follow the license law. A failure by an affiliate broker can expose the principal broker to discipline, which is why the broker exam emphasizes agency compliance and supervision. Licensees must also avoid giving legal advice, which is the unauthorized practice of law.