David, a Tennessee affiliate broker, receives a referral fee from a mortgage company every time he refers a client to that lender. He does not disclose this arrangement to his clients. TREC investigates. In addition to potential federal RESPA violations, which Tennessee-specific disciplinary ground is most directly implicated?
Correct Answer
A) Misrepresentation and undisclosed conflicts of interest, which are grounds for disciplinary action under Tennessee license law
Under Tenn. Code Ann. § 62-13-312, a licensee's failure to disclose a financial interest or conflict of interest — such as receiving undisclosed referral fees from a lender — constitutes misrepresentation and a breach of the duty owed to the client. This is a ground for TREC disciplinary action, as licensees owe clients a duty of honesty and full disclosure of any financial arrangements that could affect the licensee's advice.
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More Practice Of Real Estate Questions
In Wyoming real estate practice, an associate broker or salesperson is not associated with a responsible broker at renewal. What should the licensee remember?
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In Wyoming real estate practice, a salesperson applicant age is reviewed. What should the licensee remember?
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