Tennessee Real Estate Broker Exam — All Questions

A buyer signs a Tennessee time-share purchase contract without having made an on-site inspection of the project. The rescission notice the Commission requires in that contract gives the buyer a cancellation period of:

• a.five (5) days from the date of the signing
• b.ten (10) days from the date of the signing
• c.fifteen (15) days from the date of the signing✓
• d.thirty (30) days from the date of the contract signing

Tenn. Comp. R. and Regs. 1260-06-.04 requires a boldface, conspicuous statement in every public offering statement and in every contract for the sale of a time-share interval, immediately above the purchaser's signature line, telling the buyer that a contract to purchase a time-share interval may be cancelled within ten days from the date of signing where the buyer has made an on-site inspection of the project before signing, and within fifteen days from the date of signing where the buyer has not made such an inspection. The rule, amended effective November 23, 2023, lets the buyer cancel by hand delivery, by prepaid United States mail postmarked within the period, or by time-stamped electronic mail. Rule 1260-06-.02 separately requires the developer to obtain a signed and dated receipt for the public offering statement and to keep it for four years.

A resident manager employed by a Tennessee broker to run an apartment complex is exempt from licensure only if the manager's duties stop short of:

• a.negotiating the amounts of security deposits or rentals, or negotiating leases✓
• b.showing vacant residential units at the complex to prospective tenants
• c.collecting monthly rent payments from tenants already in occupancy
• d.supervising the on-site maintenance staff employed at the complex

Tenn. Code Ann. section 62-13-104(a)(1)(E) exempts from licensure a resident manager for a broker or an owner, or an employee of a broker, who manages an apartment building, duplex, or residential complex where the person's duties are limited to supervision, exhibition of residential units, leasing, or collection of security deposits and rentals from the property. The subdivision then draws the line: the resident manager or employee shall not negotiate the amounts of security deposits or rentals and shall not negotiate any leases on behalf of the broker. Showing units, collecting rent, and supervising staff are inside the exemption; negotiating terms is licensed activity. A firm holding rental money is also bound by rule 1260-02-.09(12), which requires lease-related trust money to sit in one or more escrow accounts separate from the sales escrow account.

Tenn. Code Ann. section 62-13-405(e) exempts certain transactions from the agency disclosure requirements of sections 62-13-403, 62-13-404, and 62-13-405. Which transaction is exempt?

• a.The sale of a single-family residence
• b.The sale of a residential duplex
• c.The lease of a commercial building✓
• d.The sale of a vacant residential lot

Tenn. Code Ann. section 62-13-405(e) provides that real estate transactions involving the transfer or lease of commercial properties, the transfer of property by public auction, the transfer of residential properties of more than four units, or the lease or rental of residential properties shall not be subject to the disclosure requirements of sections 62-13-403, 62-13-404, and this section. A commercial lease therefore falls outside those duties, as does an apartment building of five units or more. A single-family sale, a duplex sale, and a vacant residential lot sale are all ordinary residential transfers of four units or fewer and remain fully subject to the licensee duties and the written agency confirmation. The residential property condition disclosure in title 66, chapter 5, part 2 runs on its own track and reaches sales of one to four dwelling units.