Cornerstone Realty is a Tennessee brokerage firm. Affiliate broker Marcus is representing the seller of a home listed at $415,000. Affiliate broker Dana, who works at the same firm, brings a buyer client who wants to make an offer on that same property. The broker-in-charge, Sandra, formally assigns Marcus to represent the seller and Dana to represent the buyer. Which of the following statements best describes the legal status of this arrangement under Tennessee law?
Correct Answer
A) This is a valid designated agency arrangement, and Sandra must ensure both parties receive the TREC-approved Agency Disclosure form reflecting the designated agency relationship
Under Tenn. Code Ann. § 62-13-401 et seq., Tennessee expressly recognizes designated agency as a lawful alternative to dual agency. When a broker-in-charge assigns different affiliate brokers within the same firm to represent each party, each affiliate broker owes full fiduciary-like duties exclusively to their designated client. The TREC-approved Agency Disclosure form must be provided to both parties reflecting this designated agency status, ensuring compliance with Tennessee's mandatory disclosure requirements.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An agency relationship created by a clear, explicit agreement between the principal and agent, either orally or in writing.
The highest legal obligation of trust and confidence owed by an agent to their principal, requiring the agent to act solely in the principal's best interest.
An agency relationship where the agent agrees to act on behalf of the principal without receiving compensation.
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