1260-03-.01 Rental Location Agency License +21Tennessee · Real Estate · English

Any individual or firm (partnership, corporation, or association) that operates as a Rental Location Agency in Tennessee must obtain a special license from the Tennessee Real Estate Commission before beginning operations. Licensed real estate brokers and salespersons employed by licensed brokers are exempt from this requirement. Applicants must furnish proof of honesty, integrity, and business organization through a special application.

• ✓Each individual or firm other than licensed real estate brokers or salespersons employed by licensed brokers must obtain a special license to operate as a Rental Location Agency
• ✓Applicants must furnish proof to the Commission of honesty, integrity, and business organization via a special application before beginning operations
• ✓The Commission may require the applicant to personally appear for an oral examination or interview

No person is eligible for examination or licensure unless two (2) years have passed from the date of expiration of probation, parole or conviction, or from the date of release from incarceration, whichever is later. This restriction applies to all felonies and to misdemeanors involving theft of money, services, or property. An applicant denied by the Commission is ineligible for reconsideration for six (6) months from the denial date.

• ✓Two (2) years must pass from expiration of probation, parole, conviction, or release from incarceration (whichever is later)
• ✓Restriction applies to all felonies and misdemeanors involving theft of money, services, or property
• ✓A denied applicant cannot be reconsidered for six (6) months from date of denial

If within the past ten (10) years an applicant was convicted of, pled nolo contendere or guilty to any felony or a misdemeanor involving theft of services/money/property, or had disciplinary sanctions imposed by any occupational licensing body, the applicant must complete a prescribed form, submit certified copies of court dispositions or disciplinary orders, and appear before the Commission. The applicant must ensure the presence of their principal broker.

• ✓Applicant must complete a Commission-prescribed form with relevant conviction/plea/sanction information
• ✓Applicant must submit certified copies of court dispositions or disciplinary orders
• ✓If the court has no record, applicant must submit a letter from the court clerk stating the absence of records
• ✓Applicant must appear before the Commission with their principal broker per Rule 1260-01-.19

Applicants for both the affiliate broker and broker examinations must follow the procedures published by the testing vendor approved by the Tennessee Real Estate Commission, including appointments for testing, required information, and submission deadlines. Passing the examination does not automatically qualify a person for licensure.

• ✓Affiliate broker and broker applicants must follow the approved testing vendor's published procedures
• ✓An applicant who passes an examination is not necessarily qualified for licensure

Notwithstanding the two-year waiting period, a person holding a certificate of employability under T.C.A. § 40-29-107 shall not be denied a license based solely on past criminal activity. Instead, that person must appear before the Commission, which considers on a case-by-case basis whether to grant or deny the license.

• ✓A certificate of employability prevents denial based solely on past criminal record
• ✓The applicant must still appear before the Commission for a case-by-case determination

No licensee may engage in any real estate activity in an office unless there is a principal broker devoted to the full-time management of that office. Licensees may only be engaged by a qualified principal broker.

• ✓No real estate activity in any office without a principal broker devoted to full-time management
• ✓A licensee may only be engaged by a principal broker engaged primarily in the real estate business
• ✓The principal broker must be accessible during normal daytime working hours

For all purposes of Chapter 1260-06, the definitions of terms are those contained in the Tennessee Time-Share Act of 1981, as amended (T.C.A., Title 66, Chapter 32). Candidates must know that time-share terminology derives from this statute unless context requires otherwise.

• ✓Definitions come from the Tennessee Time-Share Act of 1981 (T.C.A. Title 66, Chapter 32)
• ✓Definitions apply unless the context otherwise requires
• ✓Authority is T.C.A. §§ 66-32-121 and 66-32-102

Chapter 1260-07 governs only persons who perform vacation lodging services and vacation lodging service firms. The scope is defined and governed under T.C.A. § 62-13-104(b). Candidates must understand that these rules are a distinct set applying specifically to vacation lodging (short-term/resort rental) activities rather than general real estate brokerage.

• ✓The rules in Chapter 1260-07 apply only to persons who perform vacation lodging services and vacation lodging service firms
• ✓The scope is defined and governed under T.C.A. § 62-13-104(b)

The Rules of the Tennessee Real Estate Commission are divided into seven chapters under the 1260 designation. Understanding which chapter governs which topic helps candidates locate applicable rules. Chapter 1260-01 covers Licensing; 1260-02 covers Rules of Conduct; 1260-03 covers Rental Location Agents; 1260-04 covers Rules of Procedure for Hearing Contested Cases; 1260-05 covers Educational Requirements; 1260-06 covers Time-Share Programs; and 1260-07 covers Vacation Lodging Services.

• ✓Chapter 1260-01 governs Licensing requirements
• ✓Chapter 1260-02 governs Rules of Conduct
• ✓Chapter 1260-05 governs Educational Requirements
• ✓Chapter 1260-06 governs Time-Share Programs and 1260-07 governs Vacation Lodging Services

The Tennessee Real Estate Commission is located at 500 James Robertson Parkway, Nashville, Tennessee 37243-1151. The Commission's rules were originally certified under Chapter 491 of the Public Acts of 1974. The TREC is the state agency responsible for administering and enforcing real estate licensing law and rules in Tennessee.

• ✓TREC is headquartered in Nashville, Tennessee at 500 James Robertson Parkway
• ✓The Commission's original rules derive from Chapter 491 of the Public Acts of 1974
• ✓TREC administers licensing, conduct, education, and enforcement rules

The Tennessee Real Estate Broker License Act of 1973 (as amended) requires satisfactory completion of certain real estate courses by applicants for and holders of broker or affiliate broker licenses. Chapter 1260-05 establishes standards and procedures governing the establishment and operation of courses, programs, and schools designed to satisfy educational requirements, and establishes guidelines for licensees obtaining required education.

• ✓Satisfactory completion of certain real estate courses is required for broker and affiliate broker licenses
• ✓The chapter governs establishment and operation of courses, programs, and schools that satisfy education requirements
• ✓Authority derives from T.C.A. §§ 62-13-106, 62-13-203, and 62-13-309

The Tennessee Real Estate Commission's Chapter 1260-04 covering Rules of Procedure for Hearing Contested Cases does not contain independent procedural rules. Instead, it directs that all procedures for hearing contested cases are governed by the Rules of the Secretary of State found in Chapter 1360-04-01. Exam candidates should understand that contested case hearings before the Commission follow the Uniform Administrative Procedures Act framework administered through the Secretary of State's rules.

• ✓Rules of Procedure for Hearing Contested Cases are found in the Rules of the Secretary of State, Chapter 1360-04-01
• ✓The Tennessee Real Estate Commission does not maintain separate contested case procedure rules under Chapter 1260-04

Chapter 1260-04 derives its authority from Tennessee Code Annotated Section 4-509. The original chapter was filed November 22, 1978, and became effective January 8, 1979. An administrative correction to the chapter reference was made on November 28, 2022. This reflects the legal foundation under which the Tennessee Real Estate Commission conducts contested case proceedings.

• ✓Authority for the chapter is T.C.A. Section 4-509
• ✓Original chapter filed November 22, 1978, effective January 8, 1979, with an administrative correction on November 28, 2022

Each individual employee of a licensed rental location agency must obtain a separate license and complete a similar license application before beginning employment. This individual license is issued, renewed, or transferred on the same basis as all other TREC licenses.

• ✓Each individual employee of a licensed rental location agency must obtain a separate license and complete a similar application before beginning employment
• ✓Changes of business address are considered transfers of license
• ✓Retirements of license will not be allowed

Before transferring a time-share interval and no later than the date of any sales contract, the developer must obtain from the purchaser a signed and dated receipt for the public offering statement (including amendments and supplements). This ensures the buyer acknowledged receipt of required disclosures under T.C.A. § 66-32-112.

• ✓Receipt must be obtained before transfer and no later than the date of any sales contract
• ✓Receipt must be signed and dated by the purchaser
• ✓Receipt must specify the number of pages in the public offering statement as filed with the Commission
• ✓Developer must retain the receipt for four (4) years from its date

To obtain a designated agent license, an applicant must have a high school diploma or general education diploma (GED) and must provide certified proof of completing eight (8) hours of pre-licensing education. These are baseline prerequisites for licensure as a designated agent in vacation lodging services.

• ✓Applicants must have obtained a high school diploma or general education diploma
• ✓Applicants must have certified proof of completion of eight (8) hours of pre-licensing education

Applicants cannot be considered for licensure until two (2) years have passed from the date of expiration of probation, parole, or conviction, or from the date of release from incarceration, whichever is longer. This restriction applies to all felonies and to misdemeanors involving theft of money, services, or property. If the Commission denies an applicant who appears requesting licensure, that applicant cannot be reconsidered for six (6) months from the date of denial.

• ✓Two (2) years must pass from expiration of probation, parole, conviction, or release from incarceration, whichever is longer
• ✓Restriction applies to all felonies and to misdemeanors involving theft of money, services, or property
• ✓A denied applicant is not eligible for reconsideration for six (6) months from the date of denial

Chapter 1260-01 establishes the licensing requirements for Tennessee real estate professionals. The chapter has been amended numerous times, with recent significant amendments to rules 1260-01-.01, .15, .16, and .19 effective September 23, 2025. Candidates should be aware that licensing rules govern the qualifications, application, and issuance of real estate licenses. Rule 1260-01-.01 (general licensing provisions) has been amended repeatedly, reflecting its foundational importance.

• ✓Chapter 1260-01 governs all licensing requirements in Tennessee
• ✓Rule 1260-01-.01 contains core licensing provisions and has been frequently amended
• ✓The most recent licensing amendments became effective September 23, 2025

The original licensing rules 1260-01-.01 through 1260-01-.09 were repealed in 1980 and replaced with a new chapter effective April 27, 1980. Rule 1260-01-.03 was repealed by Public Chapter 440 effective July 1, 1985. This history demonstrates that licensing requirements are subject to legislative change through both TREC rulemaking and direct legislative action (Public Chapters).

• ✓Licensing rules may be changed both by TREC rulemaking and by legislative Public Chapters
• ✓Rule 1260-01-.03 was repealed by Public Chapter 440 effective July 1, 1985
• ✓Original rules 1260-01-.01 through .09 were repealed and replaced in 1980

To terminate affiliation, a licensee or principal broker must submit a completed Transfer, Release and Change of Status Form (TREC Form 1) or complete an online submission. If using TREC Form 1, it must be hand-delivered, mailed, e-mailed, or submitted on a Commission-designated form. The principal broker's supervisory responsibility for future acts terminates upon the Commission's receipt of the release or online submission.

• ✓Submit completed TREC Form 1 or online submission to terminate affiliation
• ✓Principal broker's supervisory responsibility ends upon Commission's receipt of the release form or online submission
• ✓Principal broker must retain a copy of the executed form or online submission confirmation

Within ten (10) days after the date of release, the licensee must complete required administrative measures for change of affiliation or retirement. The licensee may not engage in any activities defined in § 62-13-102 until a change of affiliation is received and processed by the Commission.

• ✓Complete change of affiliation or retirement within 10 days after release
• ✓Licensee cannot practice until change of affiliation is received and processed by the Commission
• ✓Failure to comply may result in disciplinary action

An online transfer is recognized as complete when the transfer request is completed online and confirmation is printed, but only if the receiving principal broker verified the licensee has an active Tennessee license and current E&O insurance before submission, and the submission is complete with electronic signature and payment received.

• ✓Receiving principal broker must verify active TN license and current E&O insurance before online transfer submission
• ✓Online submission must be complete, contain electronic signature, and have payment received to be valid
• ✓An invalid electronic transfer places the affiliated licensee into broker release status

A licensee terminating affiliation shall neither take nor use property listings or buyer representation agreements secured through the firm unless authorized in writing by the principal broker. Upon demand for release, the principal broker must promptly grant it and return the license.

• ✓Cannot take or use firm listings or buyer representation agreements without written authorization from the principal broker
• ✓Principal broker must promptly grant a requested release and return the license to the licensee
• ✓If licensee cannot be located, the principal broker may return the license to the Commission

If the principal broker is deceased, physically unable, or refuses to sign a release, the licensee must submit an Affidavit for Release. If the affiliated licensee is deceased, unable, or refuses to sign, the principal broker must submit a completed TREC Form 1 or online submission. The Commission will not intervene in debt or commission disputes.

• ✓Licensee submits an Affidavit for Release if the principal broker is deceased, unable, or refuses to sign
• ✓Principal broker submits TREC Form 1 or online submission if the licensee is deceased, unable, or refuses to sign
• ✓The Commission will not intervene in settlement of debts, loans, draws, or commission disputes

All examinations are scheduled and administered by the testing vendor. The minimum passing requirement is determined by the testing vendor based on a study of question difficulty for an entry-level licensee, conducted under Commission-approved procedures. Applicants must comply with the vendor's published procedures.

• ✓Examinations are scheduled and administered by the approved testing vendor
• ✓Minimum passing score is set by the vendor based on a difficulty study for entry-level licensees

An applicant may be excused from the 'uniform principles of real estate' portion of the exam if they hold a license in another state, have successfully completed an examination approved by the Commission, and attained at least the minimum passing score on the uniform principles portion of that examination.

• ✓Applicant must hold an out-of-state license and have passed a Commission-approved examination
• ✓Applicant must have attained at least the minimum passing score on the uniform principles portion

Any applicant detected cheating during an examination forfeits the right to grading and may face further Commission action. Applicants who fail receive a written analysis of test results and must follow the testing service's reexamination procedures.

• ✓Cheating results in forfeiture of grading and possible further action by the Commission
• ✓Unsuccessful applicants receive a written analysis and must follow reexamination procedures

The sponsor of any real estate course seeking Commission approval under T.C.A. § 62-13-303 must submit an application on the Commission's prescribed form. The application must be accompanied by supporting documentation about the instructors, content, and schedule.

• ✓Application must include a resume outlining education and experience of the instructor(s)
• ✓Application must include a detailed description of the course content
• ✓Application must include the projected teaching schedule and any other information the Commission reasonably requests

When a developer is required by T.C.A. § 66-32-113 to place buyer funds into an escrow account, that account must be held in Tennessee by an independent bonded escrow company or insured financial institution. The escrow agent must be truly independent of the developer.

• ✓Escrow account must be held in this state by an independent bonded escrow company or insured financial institution
• ✓Escrow agent may NOT be the developer
• ✓Escrow agent may NOT be an employer or employee of the developer
• ✓Escrow agent may NOT be a project broker or sales agent for any time-share property of the developer
• ✓Escrow agent may NOT be a person controlling, controlled by, or under common control with a developer

When a developer is permitted under T.C.A. § 66-32-113(d) to withdraw buyer payments prior to substantial completion, the funds may only be used for construction costs of the improvements comprising the time-share project.

• ✓Withdrawn funds may only pay for construction costs of the improvements comprising the project
• ✓'Construction costs' means expenses reasonably incurred in building, furnishing, and landscaping the project
• ✓Construction costs include architectural, engineering, finance, and legal fees
• ✓Withdrawal only permitted prior to substantial completion under T.C.A. § 66-32-113(d)

Each escrow agent must maintain separate records for each time-share project in accordance with generally accepted accounting principles (GAAP). Records must track ownership and financial detail of the trust account.

• ✓Records must be kept per generally accepted accounting principles
• ✓Separate records required for each time-share project
• ✓Records must show owner's name, identification of the interval, and amount/date of deposit
• ✓Records must show amount, date, and payee of each check drawn on the trust account
• ✓The Commission may examine and copy relevant records at all reasonable hours

The designated agent must supervise all employees of the firm and be reasonably available to manage and supervise each vacation lodging service office during regular business hours. The designated agent is also responsible for maintaining the vacation lodging service escrow account. These duties emphasize supervisory and fiduciary accountability.

• ✓The designated agent is responsible for supervising all employees of the firm
• ✓The designated agent must be reasonably available to manage and supervise each office during regular business hours
• ✓The designated agent is responsible for maintaining the vacation lodging service escrow account

Chapter 1260-02 sets forth the Rules of Conduct governing the professional behavior of Tennessee real estate licensees. These rules define proper and improper practices, disclosure obligations, handling of client funds, and other ethical requirements. Rule 1260-02-.12 (frequently amended, most recently effective April 22, 2021) addresses key conduct standards. New conduct rules 1260-02-.18 through .21 were added effective October 18, 2015.

• ✓Chapter 1260-02 establishes ethical and professional conduct standards for licensees
• ✓Rule 1260-02-.12 governs core conduct obligations and is frequently updated
• ✓Rules 1260-02-.18 through .21 were added in 2015 to address additional conduct matters

The Rules of Conduct have evolved substantially. Rules 1260-02-.04 and 1260-02-.34 were repealed effective September 23, 2025, while amendments were made to rules 1260-02-.01, .02, .10, .32, .33, and .38. Candidates must study the currently effective rules of conduct, since older repealed rules no longer apply. The conduct rules cover advertising, escrow/trust account handling, and required disclosures.

• ✓Rules 1260-02-.04 and 1260-02-.34 were repealed effective September 23, 2025
• ✓Rules of Conduct cover advertising, trust/escrow handling, and disclosures
• ✓Candidates must rely on currently effective conduct rules, not repealed versions

No principal broker may permit a broker, affiliate broker, or time-share salesperson under supervision to engage in the real estate business unless that person holds a valid license and is covered by errors and omissions (E&O) insurance. Each licensee is individually responsible for satisfying all legal requirements to retain their license, including paying fees and completing real estate education.

• ✓Principal broker cannot allow unlicensed or uninsured persons to engage in real estate business
• ✓Each licensee is individually responsible for paying fees and completing required education
• ✓E&O insurance coverage is required to engage in the real estate business

Each licensee in a firm must obtain any desired change of affiliation or status through the firm's principal broker. All Tennessee licensees holding nonresident licenses issued in other states must file copies of such licenses with the Commission and with their principal broker. Time-share salespersons may only participate in time-share transactions when affiliated with a firm affiliated with a registered time-share project.

• ✓Changes of affiliation or status must be processed through the firm's principal broker
• ✓Copies of nonresident licenses must be filed with the Commission and the principal broker
• ✓Time-share salespersons must be affiliated with a firm connected to a registered time-share project

Courses must incorporate methods for determining successful completion. Minimum attendance is 80%, but 100% if the course is eight or fewer classroom hours. Provisions must exist to make up missed classes. A 70% minimum passing requirement and comprehensive final exam are required if a course exceeds eight classroom hours; courses of eight hours or less taken by affiliate brokers or brokers may be approved for CE or post-licensing credit without a comprehensive final exam.

• ✓Minimum attendance is 80%, or 100% if the course is eight (8) or fewer classroom hours
• ✓Courses over eight (8) classroom hours require a 70% minimum passing grade and comprehensive final examination
• ✓Courses of eight hours or less may be approved for CE/post-licensing credit without a comprehensive final exam

Each hour of classroom instruction required by T.C.A. § 62-13-303 shall consist of fifty (50) minutes of actual instruction.

• ✓One classroom hour equals fifty (50) minutes of actual instruction
• ✓Classroom hour definition applies to all courses required under T.C.A. § 62-13-303

A sixty (60) hour basic principles course is required of all applicants for an affiliate broker license under T.C.A. § 62-13-303. The course must include significant instruction in specified subject areas, and the Commission may add subjects by reasonable written notice.

• ✓A 60-hour basic principles of real estate course is required for affiliate broker license applicants
• ✓Required subjects include the real estate business, agency relationship, contracts, governmental controls, legal aspects, mathematics, valuation, finance, forms, Tennessee laws/rules, and fair housing
• ✓The Commission may require additional subjects by reasonable written notice to the sponsor/instructor

Each course submitted for approval must cover subjects reasonably related to real estate practice and suitably advanced to benefit students, be conducted in an adequate facility, consist of no fewer than two classroom hours, and incorporate methods for determining successful completion.

• ✓Courses must cover subjects reasonably related to real estate practice and be suitably advanced
• ✓Courses must be conducted in a facility with adequate space, seating, and equipment
• ✓Courses must consist of no fewer than two (2) classroom hours

The 'office or brokerage management' course required of broker license applicants under T.C.A. § 62-13-303 must include significant instruction in specified management topics such as management theory, contract review, staffing, recruiting, financial systems, market analysis, expansions, mergers, and governmental controls including the Tennessee Real Estate Broker License Act.

• ✓The office/brokerage management course is required of broker license applicants
• ✓Required topics include management theory, planning, organizing/staffing, recruiting/training personnel, financial systems, and market analysis
• ✓The Commission may add subjects by reasonable written notice to sponsor/instructor

Effective January 1, 1993, the content of all courses approved for continuing education must be directly related to seventeen listed topics. The Commission may add or delete subjects by reasonable written notice.

• ✓CE course content must relate to listed topics including valuation, contracts, agency, financing, license law and rules, property management, fair housing, antitrust, ethics, and professional liability
• ✓The Commission may add or delete any subject by reasonable written notice to sponsor and/or instructor

A candidate for an affiliate broker license may be deemed to have completed the 60-hour basic principles course through a qualifying college/university degree or law degree with specified real estate coursework.

• ✓A college/university degree with a real estate major/concentration plus at least one 30-hour principles course and two more courses totaling 60 hours of real estate instruction qualifies
• ✓A law degree with at least one 30-hour real property course and at least 60 other hours in contracts and agency qualifies

Both agency and individual license applicants are subject to credit, criminal, and background investigations by authorized agents of the Tennessee Real Estate Commission before each license is approved. Office inspections are performed periodically to ensure compliance with the governing law.

• ✓Agency and individual applicants are subject to credit, criminal, and background investigation before each license is approved
• ✓Investigations are performed by authorized agents of the Tennessee Real Estate Commission
• ✓Office inspections are made periodically to assure compliance with Chapter 663 of the Public Act of 1978

Each licensed real estate firm must conspicuously display an outside sign containing the firm name as registered with the Commission. Applications for a license or change of location must be accompanied by written certification of compliance with zoning laws from the proper governmental authority.

• ✓Firm must conspicuously display an outside sign with the registered firm name
• ✓License applications or location changes require written certification of zoning compliance from proper authority

Under T.C.A. § 62-13-309(d), a licensee maintains a 'branch' if the licensee advertises the office to attract the public, has a registered mail drop served by the USPS, or invites/solicits telephone calls to the office.

• ✓A branch exists if the office is advertised to attract the public
• ✓A branch exists if it has a mail drop registered with and served by the USPS
• ✓A branch exists if it invites or solicits telephone calls (e.g., phone directory listing)

Model homes and modular units used for soliciting business are not required to be licensed as branch offices if they meet specific requirements including no mail drop, not being the sole sales office, and proper supervision.

• ✓Model home/modular unit location or phone may only be advertised in conjunction with the main firm office
• ✓The model home or modular unit must not have a mail drop and must not be the sole sales office
• ✓No unlicensed activity is permitted and the principal broker must adequately supervise per T.C.A. § 62-13-312