The Tennessee Real Estate Commission (TREC) receives a complaint that an Affiliate Broker, Lisa, accepted a commission payment directly from a buyer she represented. Lisa argues that she earned the commission and is entitled to it. Under Tennessee law, which statement correctly describes how Lisa may receive compensation?
Correct Answer
A) Lisa may only receive compensation through her affiliated broker, not directly from a client
Under Tenn. Code Ann. § 62-13-302, an Affiliate Broker may only receive compensation through their affiliated broker. Direct payment from a client to an Affiliate Broker, regardless of written agreement or disclosure, is prohibited. All compensation must flow through the broker, who then pays the Affiliate Broker according to their agreement.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A tie-in arrangement is an illegal antitrust practice in which a seller conditions the purchase of one product or service on the buyer's agreement to purchase a separate product or service.
A trust account, also called an escrow account, is a separate bank account maintained by a broker to hold funds belonging to others, such as earnest money deposits, security deposits, or other client funds.
Advertising regulations govern how real estate licensees may market properties and services, requiring truthful, non-deceptive advertising that includes proper identification of the brokerage.
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