Tennessee affiliate broker Denise is hosting an open house for a listed property. A visitor, Carl, stops by and asks general questions about the neighborhood and the home's square footage. Denise answers his questions but does not discuss Carl's budget, financing, or desire to purchase. Is Denise required to present the Agency Disclosure form to Carl at this point?
Correct Answer
C) No, because the conversation has not yet risen to the level of first substantive contact
Under Tenn. Code Ann. § 62-13-405, the disclosure obligation is triggered at 'first substantive contact,' which involves discussion of specific real estate needs, financial qualifications, or motivation to buy or sell. Carl's questions about the neighborhood and square footage are general inquiries that have not risen to the level of substantive contact. Denise is not yet required to present the Agency Disclosure form, though she should be prepared to do so the moment the conversation becomes substantive.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An agency relationship created by the conduct or actions of the parties rather than by a written or oral agreement.
The legal obligation to reveal information that could affect a party's decision to enter into or the terms of a real estate transaction.
The extent of power and actions an agent is authorized to perform on behalf of the principal, as defined by the agency agreement.
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