Broker-in-Charge Lena operates a real estate firm in Nashville. One of her affiliate brokers, Todd, is found to have made fraudulent misrepresentations to a buyer without Lena's knowledge or approval. Under Tennessee license law, which of the following best describes Lena's potential liability to TREC?
Correct Answer
B) Lena may face disciplinary action if TREC finds she failed to adequately supervise Todd's activities as required by her BIC responsibilities.
Under Tenn. Code Ann. § 62-13-101 et seq., a Broker-in-Charge (BIC) has a statutory duty to supervise the activities of all affiliate brokers working under their license. If TREC finds that Lena failed to implement adequate supervisory procedures or oversight — even if she did not personally participate in Todd's fraud — she may face disciplinary action for failure to supervise. The BIC designation carries significant supervisory responsibility.
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Related Topics & Key Terms
Key Terms:
Related Concepts
In real estate, the distinction between an independent contractor and an employee determines tax treatment, liability, and the level of control a broker may exercise over the agent's daily activities. Most real estate agents operate as independent contractors.
Florida real estate licenses must be renewed biennially, and sales associates have specific post-license education requirements for their first renewal.
License requirements are the mandatory qualifications—including pre-licensing education, examination, and background checks—that a person must satisfy before legally practicing real estate. These requirements are established and enforced by each state's real estate commission.
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