Before you read
Test yourself first: 5 questions
Question 1 of 5
A Tennessee licensee receives a complaint-based investigation from TREC for alleged mishandling of escrow funds. TREC's authority in such a matter includes:
Answer: B. TREC has administrative authority to investigate and discipline licensees, including suspending or revoking a license, for violations such as escrow mishandling, following appropriate due process.
Question 2 of 5
Which of the following is a core power of the Tennessee Real Estate Commission?
Answer: D. TREC's authority is administrative: it promulgates rules to implement the license law, issues and renews licenses, and imposes discipline such as fines, suspension, or revocation. It does not set tax rates, decide zoning, or bring criminal prosecutions.
Question 3 of 5
In Tennessee, which body is empowered to investigate complaints against licensees and to suspend or revoke a real estate license for violations of the license law?
Answer: A. The Tennessee Real Estate Commission (TREC) administers and enforces the real estate license law, including investigating complaints and imposing discipline such as suspension or revocation. Private trade associations like a local board of REALTORS can enforce their own codes but cannot revoke a state license.
Question 4 of 5
A Tennessee licensee tells a buyer that a neighborhood is 'changing' and steers minority buyers away from certain streets. Beyond federal fair housing law, how would TREC most likely treat this conduct?
Answer: A. Steering and other discriminatory practices constitute improper, fraudulent, or dishonest dealing and are grounds for TREC discipline, in addition to violating fair housing law. TREC can act on conduct that demonstrates a licensee is unfit, including discrimination.
Question 5 of 5
A Tennessee broker uses earnest money being held in escrow to pay the firm's office rent, intending to repay it before closing. Under TREC standards, this conduct constitutes:
Answer: C. Using money held in trust for the broker's own purposes is conversion, a serious violation regardless of intent to repay. It is more severe than commingling and can result in license revocation and other discipline by the Commission.
Keep the streak going with more questions like these, each with a full rationale.
What you need to know
When a violation is found, TREC can impose discipline ranging from a written reprimand to suspension or revocation of a license, and it may add civil penalties and required education. Tennessee also maintains an Education and Recovery Fund that can reimburse consumers for uncollectible court judgments arising from a licensee's fraud or misrepresentation, subject to statutory limits, and a licensee who triggers a payout can be revoked until the fund is repaid.
Tennessee License Discipline & Enforcement: FAQs
Is Tennessee License Discipline & Enforcement on the real estate exam?
Yes. State License Law is a scored domain on the Tennessee real estate licensing exam, and this topic appears in the state license-law portion.
Is this cheat sheet free?
Yes — every page on Cinna RE's resource library is free to read, print and share. The app adds practice questions, mock exams and a readiness score.
Does Tennessee test this differently?
Tennessee applies its own license law on top of the national portion. This page covers the Tennessee rules specifically, which is what the state section of your exam tests.
