All active licensees must carry E&O insurance
Before you read
Test yourself first: 5 questions
Question 1 of 5
Under Tennessee's brokerage statute, which describes a 'customer' as opposed to a 'client'?
Answer: A. In Tennessee, a client is represented and owed the agency duties (loyalty, confidentiality, obedience, etc.), while a customer is not represented. To customers, a licensee still owes honesty, fairness, and disclosure of known material adverse facts about the property.
Question 2 of 5
A Tennessee licensee knows the home's basement floods after heavy rain, but the seller's disclosure omits it. What is the licensee's obligation?
Answer: B. While Tennessee retains elements of caveat emptor, a licensee has a statutory duty to disclose known adverse material facts (latent defects not readily observable) about the property's condition to the buyer. The licensee cannot hide behind the seller's incomplete disclosure when the licensee personally knows of a material defect.
Question 3 of 5
Under Tennessee's agency law, which statement about the duties owed to a client versus a customer is correct?
Answer: B. In Tennessee, a client (the party the licensee represents under an agency agreement) is owed the full agency duties including loyalty, obedience, and confidentiality. A customer (an unrepresented party the licensee deals with) is owed the statutory duties of honesty, fairness, reasonable care, and disclosure of known adverse material facts, but not loyalty or confidentiality.
Question 4 of 5
Which agency licenses and regulates real estate licensees in Tennessee?
Answer: A. The Tennessee Real Estate Commission (TREC) licenses and regulates real estate licensees in Tennessee. (Note: Texas also abbreviates its commission TREC.)
Question 5 of 5
Which agency is responsible for regulating real estate licensees and enforcing license law in Tennessee?
Answer: A. The Tennessee Real Estate Commission (TREC) is the state body that licenses and regulates real estate brokers and affiliate brokers and enforces the license law.
Keep the streak going with more questions like these, each with a full rationale.
Must-know rules
- Regulator: Tennessee Real Estate Commission (TREC)
- Entry license = 'affiliate broker'
- Pre-license: 90 hours (60 Principles + 30 new affiliate)
- All active licensees must carry E&O insurance
- Designated agency under the Broker License Act
- Residential Property Condition Disclosure
Tennessee (TREC) — Key Facts: FAQs
Is Tennessee (TREC) — Key Facts 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.
