Tennessee Real Estate Commission

							Tennessee Real Estate
    Commission




      2010 Seminar
             Housekeeping
 We welcome refreshments but not the litter!

 Question and Answer period allotted at the
  end of the seminar!!

 Please silence mobile phones!!!
    TREC 2010 SEMINAR SCHEDULE




   June 24- SMTAR, Lewisburg @ 9:00am
   August 19- Upper Cumberland, Cookeville @ 9am & 1pm
   August 20- Chattanooga Association, Chattanooga @ 9am & 1pm
   September 21- MAAR, Memphis @ 1pm & 5pm
   September 22- Central West, Jackson @ 9am & 1pm
   October 22- GNAR, Nashville @ 9am & 1pm
   November 18- NETAR, Gray @ 9am & 1pm
   November 19- KARR, Knoxville @9am & 1pm
      TREC 2010 SEMINAR
 INTRODUCTIONS
 – Eve Maxwell, TREC Executive Director
 – Robyn Ryan, TREC Legal Counsel
 – Steve McDonald, TREC Education Director
 – Stewart Prather, Chief Legal Counsel, Rice
   Insurance Services Company, LLC
        TREC Commissioners
 Isaac W. Northern, Jr.    Wendell Alexander-
  – (Chairman)               Dresden
  Memphis                   Carol Tate- Memphis
 Allen Woods, (Vice-       David Flitcroft-
  Chairman) - Nashville      Knoxville
 Michelle Haynes-          William “Bear”
  Gallatin                   Stephenson- Clinton
 Grover Collins-           Valerie Joh-
  Lewisburg                  Kingsport
     TREC Commission Meetings
   Attend (2) day meeting = 8 Hour CE Credit
   September 1,2 Jackson
   October 7, 8 Sevier County
   November 3, 4 Nashville
   December 1, 2 Nashville
          TREC 2010 SEMINAR
 (2) Hours CE Credit
 Topics Covered today-
  –   Law, Rule, and Policy Updates
  –   Education
  –   Risk Management
  –   Complaints
  –   Errors and Omissions Coverage
  –   Questions and Answers
Tennessee Real Estate Commission
 Our Purpose:
  »To license and regulate real estate brokers and
   affiliate brokers, real estate firms, rental location
   agents, time-share salespersons and developments,
   vacation clubs and vacation lodging services.

 Our Mission:
  »The mission of the Tennessee Real Estate
  Commission is to protect the public through
  establishment and administration of minimum
  requirements for candidates and licensees, effective
  professional education of licensees and enforcement
  of professional conduct.
        TREC EDUCATION
 16 CE Hours every 2 years: TREC Core (6)
  + (10) elective
 Affiliate brokers who were licensed
  BEFORE July 1, 1980 do not owe education
 Modifier “Grandfather” does not owe
  education
 http://verify.tn.gov
 (Spoken "Verify<dot>TN<dot>Gov")
         TREC EDUCATION
 License Status: Active and Retired

 Inactive =         Renewable License

 Grandfather

 Test and reapply
        LICENSE RENEWAL
 www.tennesseeanytime.org/cirens
  – Enter your 6 digit license number OMITTING
    2501 or 2502
  – IF your license is ACTIVE, enter your FIRM zip
    code. Enter home zip code for any other status.
  – Follow the prompts for payment.
  – ALL PAYMENTS WILL BE PROCESSED
    REGARDLESS OF DEFICIENCES
  – Print your confirmation as receipt
             TREC CORE 2011/2012
              Now SIX (6) HOURS
   TREC Law, Rule, and Policy Update
   Disclosure
     – Mold
     – Acts of Nature
     – Flood Plain
     – Suppression
     – Stigmatized Properties
   Contracts
     – Residential
     – Commercial
   Principal Broker Supervision
   Agency
   Ethics
   Fair Housing
   Marketing
     – Gifts and Prizes
     – Advertising
         Gifts and Prizes



 TCA § 62-13-302(a)(b)
 Rule 1260-2-.33 (1)(a)(b) 1,2,3,4
New Rule 1260-05.12 Continuing Education

 Office Broker Management course is not
  post licensing or CE for affiliates
 Used ONLY towards the 120 hours required
  to sit for the broker’s exam
 16 hours of CE are required each renewal
  period from Brokers licensed after 1/1/2005
 You have your own personal expiry date
                RECIPROCITY
   Arkansas
   Connecticut
   Georgia
   Iowa
   Louisiana
   Massachusetts
   Mississippi
   New Mexico
   North Carolina
   North Dakota
   South Dakota
   Virginia
   West Virginia
          TREC NEW RULES
             Eve Maxwell
 Follow along with your complimentary copy.
  Changes paraphrased for each rule.
Rule 1260-02-.02 Termination of Affiliation
 The key is for the PRINCIPAL BROKER to
  go ahead and send the TREC 1 Form to
  TREC even if the licensee plans to retire or
  transfer
 PRINCIPAL BROKER needs to end
  supervisory responsibility for future acts
  Rule 1260-02-.02 Termination of
             Affiliation
 New rule requires that the TREC 1 Form
  and appropriate fee be received and
  processed by TREC before a licensee can
  engage in any activities which fall under the
  definition of Broker set forth in TCA § 62-13-
  102(4)(A)(B)
  Rule 1260-02-.02 Termination of
             Affiliation
 A PRINCIPAL BROKER can not refuse to
  grant a release to a licensee or refuse to
  give a licensee his/her license when license
  has been demanded EVEN IF licensee has
  an outstanding obligation to the firm
  Rule 1260-02-.02 Termination of
             Affiliation
 Affidavit for Release- found on TREC
  Website
 Affidavit for Release is used when
  PRINCIPAL BROKER is unable to sign
  licensee TREC 1 Form
 PRINCIPAL BROKER will complete and
  submit to TREC a TREC 1 Form if licensee
  is unable to sign a release
  Rule 1260-02-.02 Termination of
             Affiliation
 PRINCIPAL BROKER can file TREC 1 Form
  if licensee can not be reached or if the
  licensee refuses to execute TREC 1 Form.
 Once TREC receives TREC 1 Form the
  PRINCIPAL BROKER will be relieved of
  supervisory responsibility
   Rule 1260-02.09 Deposits and
          Earnest Money
 Rental deposits must be held in an escrow
  account separate and apart from any other
  escrow account which the Principal Broker
  and firm have
 Terms of the contract dictate Broker
  responsibility
 Terms and conditions of executed contract
  govern the relationship of the parties
    Rule 1260-02.09 Deposits and
           Earnest Money
 Name and address of any third party holding
  escrow money shall be disclosed in contract
 Contract shall describe the terms and
  conditions which will allow the holder of
  escrow funds to disburse funds
 Broker shall be relieved of responsibility for
  funds upon receipt of the funds by the
  specified escrow agent
   Rule 1260-02.09 Deposits and
          Earnest Money
 PRINCIPAL BROKER at a minimum
  – Checked out escrow entity
  – Received receipt for the funds deposited with
    escrow agent
  – Has some entered into an agreement with the
    third party escrow agent
  – Funds must be disbursed in 21 calendar days or
    must be interpleaded
    Rule 1260-02.09 Deposits and
           Earnest Money
 21 days begins upon date of receipt of
  written request for disbursement
 21 day time frame should be placed in any
  agreement with a third party holder of funds
 Interplead the funds if both parties can not
  agree
   Rule 1260-02-.12 Advertising
 “Owner/Agent” must be disclosed at the time
  of offer
 The provision stating “Owner/Agent” in
  advertising has been removed
 Owners must agree to a third party
  advertising their property. This can be put in
  the listing agreement or separate agreement
  with the owner.
   Rule 1260-02-.12 Advertising
 Firm name and telephone number must
  conspicuously appear on each webpage
  even if the firm advertising is not the listing
  firm
 All listing information must be current and
  accurate
 Consumer must be able to identify
  advertising firm and advertising telephone
  number
   Rule 1260-02-.12 Advertising
 Sufficient disclosure on the face value of a
  guarantee must stated
 Consumer must be able to know if they
  qualify for an offer
 Conditions and trigger terms must be stated
   Rule 1260-06-.04 Disclosure of
         Rescission Rights

 Every public offering statement and every
  contract for the sale of a timeshare internal
  must state conspicuously and immediately
  above the space reserved for the signature
  of the purchaser.
 Refer to the new rule handout for statement
     Rule 1260-6-.11 Renewal of
            Registration
 Timeshare registration programs shall
  expire one (1) year from registration
  approval date
 Invalid if not renewed
 Executive Director shall notify registrant by
  mail the deadline and fee for renewal
              TREC ISSUES

»Septic Issues
  – § 66-5-212
  – Seller acknowledges the presence of any
    known exterior injection well and the
    acceptance of such tests by the department of
    environmental and conservation
  – Seller on or after May 20,2009 shall disclose
    whether any single family residence has been
    moved from an existing foundation to another
    foundation.
              TREC ISSUES

»KEYS to Short Sales/ REO
  – Communication is KEY
  – Deadlines and complete submitted packages
    are KEY
  – Licensees act as KEY messengers for the
    lender in Short Sales and REO
  – Short sales are controlled by the KEY lender
  – Disclosing to buyer the AS IS status is KEY
  – Arms Length Affidavit are KEY in attempt to
    curb fraud
  – All closing payments must be on HUD
    settlement statement
            TREC ISSUES

» Short Sales/ REO INSPECTIONS
  – ALWAYS GET AN INSPECTION
  – Inspect for: MOLD, PESTS, ASBESTOS,
    BUILDING PERMITS, QUALITY OF BUILDING
    MATERIALS, UNLICESNSED
    CONTRACTORS, WATER DAMAGE,
    PROBLEM SIGNS, EXISTENCE OF ALL
    PIPING AND SYSTEMS
  – ALWAYS GET AN INSPECTION
  – ALWAYS GET AN INSPECTION
             TREC ISSUES

»FORECLOSURE SCAMS
 – Company claims to pay lender
 – Lender will modify loan instead of working with
   a company that has a “relationship” with a
   lender
 – Quit Claim deeds!!!!
 – Company will find a tenant for the property
 – Company asks for a wire or transfer of funds
 – Bogus claims with upfront fees
                TREC ISSUES

»FORECLOSURE SCAMS
 – TCA § 47-18-5401 and -5402
    Prohibits upfront payment of fees by homeowners to
     anyone assisting with loan modifications
    Defines “foreclosure consultant”
    Foreclosure consultant shall not collect monies until
     all services have been completely provided
    Fees and services must be specified
    Three (3) business day right of cancellation
        If you see this situation with a client, advise them to contact
        a HUD trained advisor, Tennessee Attorney General, FTC,
        and the BBB!!
            TREC ISSUES
 TCA § 66-5-213 PUD Disclosure
 Planned Unit Development
 Restrictive covenants, homeowner bylaws,
  and master deed available upon request
 Buyer has ability to be fully informed
  regarding the business of the condo prior to
  purchase
             TREC ISSUES
 TCA § 62-13-309(g)
 A principal broker shall act as broker for two
  (2) firms as long as they are in same
  “location”
 “location” means located at and use the
  same physical address
             Robyn Ryan
 How to Make Sure A Complaint is Filed
  Against YOU
                                                                  Misrep.
                                 Complaint Percentage Breakdown
    Misrep.         5    4%               2% 0% 0%                Advertising
                                        0% 1% 2% 3%
  Advertising       1    0%                        0%
                                                        2% 1%     Misconduct
  Misconduct        8    3%                             1% 0%
                                                                  Audit
Audit Violations    1    0%                                       Violations
                                                                  Fraud
     Fraud         14    5%

   Contract         1    1%                                       Contract

Earnest Money       9    4%                                       Earnest Money

  Disclosure        2    2%                                       Disclosure


 Management         5    1%                                       Management


  Unlicensed        1    0%                                       Unlicensed


                                                                  E&O
     E&O           385   79%

                                                                  Application
  Application       0    0%

     Other          7    1%                                       Other

                                88%
   TOTALS          439   100%
  How to Make Sure a Complaint is
         Filed Against You
 Errors and Omission Insurance
   – TCA § 62-13-112
   – Rule 1260-1-.15
   – Principal Brokers are held responsible too
 Contract Matters
   – TCA § 62-13-403(1)
 Copies
   – TCA § 62-13-312(8)
 Response to a filed complaint
   – Jurisdiction?
   – Allegations under the Broker’s Act?
   – Time period expired?
   – Just bold statements?
   – Is it before the correct licensing board?
  How to Make Sure a Complaint is
         Filed Against You
 Earnest Money Issues
   –   TCA § 62-13-321 and § 62-13-312(5)
   –   An escrow account is a must
   –   Records are kept for three (3) years
   –   Rule 1260-2-.09
 Supervision of Affiliates
   – Must be engaged primarily in the business
   – Accessible during business hours
 Advertising
 Miscellaneous
Tennessee Real Estate
 Errors & Omissions
     Insurance
            Stewart L Prather
  Rice Insurance Services Company, LLC
   Administrator for Continental Casualty Co.

         Email: sprather@risceo.com