Grace is a Tennessee Affiliate Broker whose license is currently on inactive status. Her former client, Mark, contacts her directly to ask for advice about whether to accept a purchase offer on his home. Grace verbally advises Mark that the offer price is fair and he should accept it. Mark follows her advice and accepts the offer. Under Tennessee law, which of the following most accurately describes Grace's situation?
Correct Answer
B) Grace violated Tennessee licensing law by performing real estate activities while on inactive status
Under Tenn. Code Ann. § 62-13-302 and TREC regulations, a licensee on inactive status may not perform any real estate brokerage activities. Advising a client on whether to accept a purchase offer is a substantive real estate activity that requires an active license. The fact that the advice was verbal and uncompensated does not exempt Grace from the licensing requirement. Inactive status means the licensee has suspended their ability to practice, and any real estate activity—even unpaid—while on inactive status constitutes a violation.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
Antitrust violations in real estate occur when competing brokerages or agents engage in practices that restrain trade, reduce competition, or harm consumers through collusion. These violations are governed by the Sherman Antitrust Act and can result in severe penalties.
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