1260-06 Time-Share Programs +24Tennessee · Real Estate · English

Chapter 1260-06 governs Time-Share Programs in Tennessee. Originally filed April 17, 1985, effective May 17, 1985, this chapter regulates the sale and operation of time-share interests. Rule 1260-06-.04 (frequently amended, most recently effective November 23, 2023) addresses key time-share requirements. Time-share sales involve specialized disclosure and registration obligations distinct from ordinary real estate transactions.

• ✓Chapter 1260-06 specifically regulates time-share programs and interests
• ✓Rule 1260-06-.04 governs core time-share requirements and is frequently amended
• ✓Time-share transactions carry specialized disclosure and registration duties

Course sponsors must maintain accurate and permanent records on all enrolled students, including all information and ratings used to determine successful completion. Such records must be made available upon request by the Commission or its authorized representative.

• ✓Sponsors must maintain accurate and permanent records on all enrolled students
• ✓Records must include all information and ratings used to determine successful completion
• ✓Records must be made available upon Commission request

Each licensee must provide his file identification number at registration for approved CE or post-licensing courses; failure to do so may result in no credit. Sponsors must submit a roster of successful completers to the Commission within ten working days of course completion, including each student's name and license/file number in an approved format.

• ✓Licensees must provide their file identification number at registration or may not receive credit
• ✓Sponsors must submit a completion roster to the Commission within ten (10) working days of course completion
• ✓The roster must include each student's name and license/file identification number in a Commission-approved format

A licensee whose license is suspended more than thirty (30) days for failure to maintain E&O insurance must provide proof of complying coverage and pay penalty fees: for lapse over 30 but within 120 days — $200.00 if the carrier back-dated coverage to show continuous coverage, or $400.00 if not back-dated; for lapse over 120 days but less than six (6) months — $500.00; for lapse of six (6) months up to one (1) year — $500.00 plus $100.00 per month (or portion) for months six through twelve.

• ✓30–120 day lapse: $200.00 if back-dated to show continuous coverage, $400.00 if not
• ✓120 days to under 6 months lapse: $500.00 penalty fee
• ✓6 months to 1 year lapse: $500.00 plus $100.00 per month for months 6 through 12

A principal broker must ensure at all times that all affiliated licensees hold required E&O insurance; failure constitutes inadequate supervision. There is no penalty to the principal broker if, within thirty (30) days of an affiliate's suspension, the affiliate provides complying proof of insurance OR the principal broker releases the affiliate.

• ✓Principal broker must ensure all affiliates carry required E&O insurance at all times
• ✓Failure to ensure E&O coverage constitutes failure to exercise adequate supervision
• ✓No penalty if within 30 days the affiliate provides proof of insurance or the broker releases the affiliate

Upon revocation of a license under T.C.A. § 62-13-112 for failure to maintain E&O insurance, an individual seeking reissuance must reapply (including all application fees), pay the applicable penalty fees, pass all required examinations unless waived by the Commission, and meet current education requirements unless waived.

• ✓Must reapply for licensure and pay all application fees
• ✓Must pay the applicable penalty fees and pass all required exams (unless waived)
• ✓Must meet current education requirements (unless waived)

After the 30-day period, if the affiliate has neither provided proof nor been released, the Commission authorizes a formal hearing but also offers a consent order to settle informally. If reinstatement/release occurs more than 30 but within 120 days after suspension: $200.00 if the carrier back-dated coverage, $400.00 if not. If more than 120 days after suspension: $1,000.00 civil penalty. If the broker rejects the consent order, an administrative law judge sitting alone hears the matter under the Uniform Administrative Procedures Act.

• ✓30–120 day resolution: consent order of $200.00 (back-dated) or $400.00 (not back-dated)
• ✓Over 120 days: consent order civil penalty of $1,000.00
• ✓Rejection of consent order results in a hearing before an administrative law judge under the UAPA

Each managing agent must furnish specified information on the Commission's prescribed form, including office details, the programs managed, the developer, and the financial institution holding owner funds. Changes must be reported.

• ✓Must furnish principal office address and telephone number and responsible managing employee's name
• ✓Must identify the time-share program(s) being managed and the developer's name and address
• ✓Must provide name/address of the financial institution holding funds collected from owners for common expenses and maintenance repairs
• ✓Must promptly report any change in submitted information to the Commission

Chapter 1260-07 governs Vacation Lodging Services in Tennessee. This is the newest chapter, originally filed March 4, 2013, effective June 2, 2013. Rule 1260-07-.04 was amended effective September 23, 2025. This chapter regulates the business of providing vacation lodging services, a distinct area of real estate-related activity requiring compliance with specific TREC rules.

• ✓Chapter 1260-07 regulates vacation lodging services
• ✓This is the most recently created chapter (effective June 2, 2013)
• ✓Rule 1260-07-.04 was amended effective September 23, 2025

If a broker acts as closing agent, the broker must provide copies of the closing documents to each customer or client.

• ✓A broker acting as closing agent must provide copies of closing documents
• ✓Copies must go to each customer or client

By applying for Commission approval of any real estate course, the applicant agrees to permit periodic inspections and monitoring by the Commission or its authorized representative to evaluate facilities, course content, instructor performance, or any other relevant aspect of administration and conduct.

• ✓Applying for course approval constitutes agreement to permit periodic inspections and monitoring
• ✓Inspections may evaluate facilities, course content, instructor performance, and administration

No broker or affiliate broker may directly or indirectly purchase or acquire any interest/option in property listed with them or their company, or property they were approached about, without first making full disclosure of their true position to the owner or prospective purchaser. After acquiring such interest, full disclosure must be made to prospective purchasers who tender offers.

• ✓Must make full disclosure of true position before purchasing/acquiring interest in listed property
• ✓After acquiring personal interest, must disclose true position to prospective purchasers who tender offers
• ✓All licensees must identify themselves as a licensee when buying or selling property for themselves

An exchange agent may disclose the information required by T.C.A. § 66-32-122(f) in any clear and understandable format, but the statement must be filed with the Commission by a set annual deadline.

• ✓Exchange agent may use any clear and understandable format for required disclosures
• ✓Disclosures required under T.C.A. § 66-32-122(f)
• ✓Statement must be filed with the Commission on or before July 1 of each year

Any initial applicant required to submit fingerprints for a criminal background check under T.C.A. § 62-13-303 must submit them electronically. The applicant satisfies the requirement by having a state-contracted private company transmit classifiable prints directly to the TBI and FBI, which forward a report to the Commission. All fingerprints and associated processing fees are at the applicant's expense, and applicants remain responsible for application fees.

• ✓Initial applicants must submit fingerprints in an electronic format
• ✓Prints are transmitted by a state-contracted company directly to the TBI and FBI
• ✓The applicant pays all fingerprint processing and application fees

Besides new applicants for broker, affiliate broker, time-share salesperson, or acquisition agent licenses, 'initial applicants' include any former licensee who must reapply for reissuance and any person who previously held (but no longer holds) an affiliate broker license when applying for a broker license (excluding those whose affiliate license is inactive or retired). If prints are unclassifiable (cannot be read/used to identify the person), the Commission may refuse to issue the license, and the applicant pays any TBI/FBI resubmission fees.

• ✓Former licensees reapplying for reissuance are treated as initial applicants requiring fingerprints
• ✓A person who previously held but no longer holds an affiliate license applying for a broker license must fingerprint (unless prior license is inactive/retired)
• ✓Unclassifiable prints may result in refusal to issue a license; applicant pays resubmission fees

Any material change in information furnished in connection with a course approval application—including course content, instructors, and facilities—must be submitted to and approved by the Commission before taking effect.

• ✓Material changes to application information must be submitted to the Commission before taking effect
• ✓Material changes include course content, instructors, and facilities changes
• ✓Prior Commission approval is required before the change takes effect

An application to register a time-share program must be submitted on the prescribed form or online, and must include statutory information plus copies of sales/legal documents, zoning compliance evidence, and sales agent details.

• ✓Application submitted on prescribed form or through online submission
• ✓Must include information required by T.C.A. § 66-32-123(a)
• ✓Must include copies of sales contract, deed, and all other written materials used in normal sales
• ✓Must include evidence of compliance with local zoning laws
• ✓Must include the name and address of the sales agent to be employed by the developer

A developer of a time-share project not substantially completed must include additional documentation demonstrating financial capacity and construction/escrow arrangements to assure completion.

• ✓Must include a certified estimate of the cost to complete the project with supporting documentation
• ✓Must include sufficient evidence of financial capacity to cover such cost
• ✓Must include copies of any construction contracts executed for the project
• ✓Must include the escrow agreement under T.C.A. § 66-32-113 or documents for alternate financial assurances
• ✓Must include any other materials the Commission requires to confirm the project will be substantially completed

A developer whose project is subject to an underlying blanket lien or encumbrance must include documents protecting non-defaulting purchasers under T.C.A. § 66-32-128.

• ✓Applies when project is subject to an underlying blanket lien or encumbrance
• ✓Must include copies of non-disturbance agreements, subordination agreements, lien releases, bonds, or other financial arrangements
• ✓Arrangements must protect non-defaulting purchasers per T.C.A. § 66-32-128

All advertising must be under the direct supervision of the principal broker and list the firm name and firm telephone number on file with the Commission. The firm name must appear in letters the same size or larger than a licensee's name or any team/group name. Advertising referring to an individual licensee must use their licensed name.

• ✓All advertising must be under direct supervision of the principal broker and list firm name and firm phone number
• ✓Firm name must appear in letters the same size or larger than a licensee's or team's name
• ✓Cannot post a for-sale sign or advertise another licensee's listing without written authorization from owner/agent or listing agent/broker

No licensee may advertise in a false, misleading, or deceptive manner. Prohibited examples include advertising only the franchise name without the firm name, teams/groups using terms like 'Realty,' 'Company,' 'LLC,' 'Inc.,' 'Associates' that imply independence from the firm, or webpages linking to an unlicensed entity engaged in activities requiring licensure.

• ✓Cannot advertise only the franchise name without the firm name
• ✓Teams/groups cannot use terms (Realty, Company, LLC, Inc., Associates) implying independence from the firm/principal broker
• ✓Cannot have a webpage linking to an unlicensed entity that appears to perform activities requiring licensure

All advertising promoting a licensee or the sale/lease of real property must conform to the rule. Advertising includes print, radio, TV, signs, flyers, letterheads, e-mail signatures, websites, social media, and streaming recordings. It excludes promotional items like hats, pens, notepads, t-shirts, name tags, business cards, and charitable event sponsorships. 'Firm name' means the entire licensed firm name or the licensed d/b/a name.

• ✓Advertising includes signs, flyers, letterheads, e-mail signatures, websites, social media, and streaming recordings
• ✓Advertising excludes promotional items (hats, pens, t-shirts, business cards) and charitable/community event sponsorship
• ✓Firm name means the entire licensed firm name or licensed d/b/a name

A licensee using a franchise trade name or advertising as a cooperative group member must clearly indicate their name, firm name, and firm telephone number (as registered with the Commission) adjacent to specific properties advertised, and on business cards, contracts, or other transaction documents using the franchise name.

• ✓Must indicate name, firm name, and firm phone number adjacent to specific properties when using a franchise/cooperative name
• ✓Franchise trade name on business cards/contracts must include name, firm name, and firm phone number as registered

On websites, the firm name and firm phone number must conspicuously appear on each page, and pages displaying outside database listings must state some listings may not belong to the firm. For social media, firm name and phone must be no more than one click away. Listing information must be kept current and accurate (applies to First Generation advertising, not third-party syndication).

• ✓Firm name and phone must conspicuously appear on each website page; outside-database pages need a disclaimer
• ✓Social media firm name and phone must be no more than one click away from the viewable page
• ✓Listing information must be kept current and accurate for First Generation advertising

Unsubstantiated selling claims and misleading statements or inferences are strictly prohibited. Any offer, guaranty, or warranty made to induce someone into an agency relationship or contract must be in writing and disclose all pertinent details on its face.

• ✓Unsubstantiated selling claims and misleading statements/inferences are strictly prohibited
• ✓Offers, guaranties, or warranties inducing an agency relationship/contract must be in writing with all pertinent details disclosed

The Commission may withdraw course approval for violations of the chapter or law, materially inaccurate or misleading application information, dissemination of false information, possession or distribution of Commission examination questions, or an instructor's performance being so deficient as to significantly impair the course value (with notice and opportunity to correct).

• ✓Approval may be withdrawn for violating chapter provisions or applicable law
• ✓Approval may be withdrawn for materially inaccurate/misleading application info or dissemination of false info
• ✓Possessing, revealing, or distributing Commission examination questions is grounds for withdrawal
• ✓Deficient instructor performance requires adequate notice and opportunity to correct before withdrawal

To protect the public from confusion, the Commission may refuse to issue a new firm license with a name that is the same or confusingly similar to an existing firm. Commission staff reviews all firm name applications; if rejected, the applicant may appeal to the Executive Director, then in writing to the Commission, whose decision is final. The Commission expects applicants to research legal restrictions and will not determine ownership, trademark, copyright, or other legal protections for a name.

• ✓The Commission may refuse a firm name that is the same or confusingly similar to an existing firm
• ✓Rejection may be appealed to the Executive Director, then to the Commission whose decision is final
• ✓The Commission does not evaluate ownership, trademark, or copyright of proposed names

Time-share program registrations expire one year after approval and become invalid unless renewed. The Executive Director notifies registrants in advance, and applications have strict filing deadlines with consequences for late filing.

• ✓Registration expires one (1) year from the date it was approved and is invalid after that date unless renewed
• ✓Executive Director must notify registrant by mail at least one (1) month before expiration of the deadline and fee
• ✓Renewal application must be filed on or before the expiration date
• ✓Renewal application must explain changes in previously filed information (but does not obviate rule 1260-06-.05)
• ✓If renewal is not timely filed, developer must submit a new application to reinstate the registration

Any applicant appearing before the Commission to obtain a license must also ensure the presence of their principal broker (or intended principal broker). No such appearance will be heard by the Commission without the presence of that principal broker.

• ✓Applicants appearing for a license must ensure their principal broker (or intended principal broker) is present
• ✓The Commission will not hear the appearance without the principal broker present

The Commission may assess civil penalties of $0–$1,000.00 for each separate violation of a statute, rule, or order, in addition to or in lieu of other disciplinary action. This applies to licensed persons and to unlicensed persons required to be licensed as brokers. Each day of a continued violation may constitute a separate violation.

• ✓Civil penalty is $0–$1,000.00 for each separate violation of a statute, rule, or order
• ✓Penalties apply to both licensed persons and unlicensed persons required to be licensed
• ✓Each day of a continued violation may constitute a separate violation

In determining penalty amounts, the Commission may consider whether the amount is a substantial economic deterrent, the circumstances leading to the violation, the severity and risk of harm to the public, economic benefits gained by the violator, and the interest of the public.

• ✓Factors include deterrent effect, circumstances, severity/risk of harm, economic benefit gained, and public interest
• ✓The Commission has discretion to weigh these factors when setting penalty amounts

A distance education course using printed materials may be approved if students are provided a manual or printed materials; a comprehensive course outline, completion requirements, and faculty availability information are provided; it contains at least six written exercises submitted periodically to the instructor, graded, and returned; and if the class provides more than eight hours of credit, a comprehensive final exam or equivalent is executed before the sponsor submits the roster.

• ✓Students must be provided a manual or other printed materials
• ✓The course must contain at least six (6) written exercises submitted periodically, graded, and returned
• ✓Courses over eight (8) hours of credit require a comprehensive final exam executed before roster submission

Specific fees apply to time-share filings under the Time Share Act. Candidates should memorize the exact dollar amounts and the rule that fees are non-prorated and non-refundable.

• ✓Registration of any timeshare program or vacation club: $750.00
• ✓Renewal of any time share program or vacation club: $500.00
• ✓Request for exemption from registration: $250.00
• ✓Fees are not prorated and are not refundable

Affiliate brokers (license issued on or after July 1, 1980) and brokers (license issued on or after January 1, 2005) must complete at least sixteen (16) hours of continuing real estate education during the immediately preceding two-year license period to be eligible for renewal, unless the license was temporarily retired for the entire preceding period. The office/brokerage management course is not approved as a post-licensing or CE course for affiliate brokers.

• ✓Affiliate brokers and brokers must complete at least 16 hours of CE during the preceding two-year license period for renewal
• ✓Temporarily retired licensees (T.C.A. § 62-13-318) for the entire preceding period are exempt
• ✓The office/brokerage management course will not be approved as a post-licensing or CE course for affiliate brokers
• ✓A licensee will not receive CE credit for classroom hours completed during a prior license period

Continuing education credit will be given for approved classroom hours completed during the twelve (12) months immediately preceding the original date of licensure. The Commission may designate specific required CE topics at its discretion.

• ✓CE credit is given for approved classroom hours completed during the 12 months immediately preceding the original licensure date
• ✓The Commission may designate a portion of required CE to consist of specific topics

An applicant meeting T.C.A. § 4-3-1304(d)(1) may be issued a license upon application and payment of fees if the other state's requirements are substantially equivalent to Tennessee's. If not substantially equivalent but achievable through additional acts, the Commission may issue a temporary permit allowing full-license services for a set period to complete requirements. After completion, a full license is issued dated back to the temporary permit's original issuance date with an expiration as if originally issued.

• ✓Military applicants with substantially equivalent out-of-state licenses may be licensed upon application and fees
• ✓A temporary permit may be issued when requirements are not yet substantially equivalent but can be met
• ✓Upon completion, the full license is dated back to the temporary permit's original issuance date

A temporary permit is issued for less than a full renewal cycle and expires on the date set by the Commission, not subject to renewal except through timely completion of substantial-equivalency requirements or a good-cause extension. If an extension causes the permit to exceed a renewal cycle, the holder must file a renewal application with documentation, fees, and continuing education. Military education, training, or experience is accepted toward qualifications if determined substantially equivalent to the required education/training/experience.

• ✓A temporary permit lasts less than a full renewal cycle and is not routinely renewable
• ✓Extensions may be granted for good cause; extended permits beyond a cycle require a renewal application with CE
• ✓Substantially equivalent military education, training, or experience counts toward licensure qualifications

A licensee who is a member of the national guard or a reserve component called to active duty, whose license expires during activation, is eligible to renew upon release without late fees/penalties, without continuing education (when military duty prevented it and a waiver was submitted, or the person performed the licensed occupation during military duty with documentation), and without other similar renewal acts. Eligibility lasts six (6) months from release from active duty, and supporting documentation of activation may be required.

• ✓Activated military licensees may renew after release without late fees or penalties
• ✓CE may be waived if military duty prevented it (waiver submitted) or the person performed the occupation during duty
• ✓Renewal eligibility lasts six (6) months from release from active duty with supporting documentation

A licensee may offer a gift, prize, or valuable consideration as an inducement to purchase, list, or lease real estate only if made under the firm's sponsorship and approval, and in writing signed by the licensee disclosing all pertinent details including specifications, fair market value, time/place of delivery, and any requirements the purchaser or lessor must satisfy.

• ✓Gift/prize offers require firm sponsorship and approval, and must be in writing signed by the licensee
• ✓Written offer must disclose specifications, fair market value, time and place of delivery, and any requirements
• ✓Disclosure of all pertinent details is required for gift, prize, or valuable consideration inducements

A licensee may not give or pay cash rebates, cash gifts, gift cards, cash prizes, or similar cash-based incentives in a real estate transaction, except a gift card may be offered at an open house for other licensees or as a closing gift. Closing gift cards may not be used in advertising to induce business.

• ✓Cash rebates, cash gifts, gift cards, cash prizes, and similar cash incentives are generally prohibited
• ✓Exceptions: gift card at an open house for other licensees, and gift card as a closing gift
• ✓Closing gift cards may not be used in advertising to induce business

If a licensee fails to comply with a prerequisite/condition or pay a renewal fee before expiration but provides proof of full compliance (including payment of the renewal fee) within sixty (60) days after expiration, they only pay a penalty fee of fifty dollars ($50.00) per thirty (30) day period, or portion thereof, from the time of expiration, with no further obligations.

• ✓Compliance within 60 days after expiration requires only a $50.00 penalty per 30-day period (or portion)
• ✓Full proof of compliance including renewal fee payment is required with no further obligations

If a licensee fails to renew/comply within sixty (60) days after expiration, they must sign a Reinstatement Order and complete requirements: provide proof of compliance with all prerequisites including renewal fee, and pay penalties. For expiration more than 60 but within 120 days: $50.00 per 30-day period from expiration. For more than 120 days but within one (1) year: additionally $100.00 per 30-day period beginning on the 121st day. Penalties accrue from the first day after expiration until the Reinstatement Order is signed, compliance is received, and all fees are paid. The reinstated license is issued back to the original expiry date.

• ✓Licensee must sign a Reinstatement Order and prove compliance including renewal fee payment
• ✓60–120 days: $50.00 per 30-day period; over 120 days to 1 year: additional $100.00 per 30-day period from the 121st day
• ✓Penalties accrue from the first day after expiration until all requirements are satisfied; license reissued to original expiry date

If a license has been expired for more than one (1) year, the individual must reapply for licensure, meet current education requirements, and pass all required examinations.

• ✓Expiration over one (1) year requires reapplying for licensure
• ✓The individual must meet current education requirements and pass all required examinations

If a licensee fails to renew within sixty (60) days after expiration due to personal or family health issues and seeks a medical waiver, they must provide a signed doctor's statement attesting to the nature and length of the illness and submit a signed statement explaining the lapse. If granted, renewal fees must be paid and all other conditions met, but late penalty fees are not assessed. Submitted information becomes public record unless otherwise prohibited by law.

• ✓Medical waiver requires a signed doctor's statement and a signed statement explaining the lapse
• ✓If granted, renewal fees and other conditions apply but no late penalty fees are assessed
• ✓Submitted information becomes public record unless prohibited by law

An exclusive buyer representation agreement engages a licensee to represent a buyer to the exclusion of all other licensees. When entering such an agreement, the licensee must advise and confirm in writing that the buyer should arrange all property viewings through the licensee, should inform other licensees they are represented, and whether the buyer owes a commission if they purchase without the licensee's assistance.

• ✓Buyer should make all viewing/inspection arrangements through the licensee and not directly contact other licensees
• ✓Buyer should immediately inform any other licensee they contact that they are represented
• ✓Must disclose in writing whether the buyer owes a commission if they buy through another licensee or directly from an owner