Tennessee Practice: Escrow and Firm Supervision
Tennessee practice centers on proper handling of earnest money and the principal broker's supervision of the firm. This chapter reviews escrow rules and day-to-day conduct standards.
Escrow and Earnest Money
A Tennessee firm must deposit earnest money in a separate escrow or trust account and disburse it only as the agreement and TREC rules permit. The principal broker is responsible for the account and its records; commingling client funds or improper disbursement can lead to discipline.
Firm Structure and Supervision
An affiliate broker's license hangs with the principal broker, who supervises the affiliate's activities and is responsible for the firm's compliance. Compensation flows through the firm, and an affiliate may not accept payment directly from a client outside the firm.
Advertising and Conduct
Advertising must be truthful, not misleading, and identify the firm as required. Licensees must comply with fair housing, avoid misrepresentation, and disclose adverse facts. TREC enforces these standards through investigations and discipline.