Tennessee Defaults to Facilitator Status Not Fiduciary Duty

Tennessee defaults licensees to facilitator status with no fiduciary duty, and the TREC exam tests where that default ends and agency begins.

The TREC governs real estate licensing in Tennessee. The PSI exam tests 40 state specific questions alongside 80 national questions, with a minimum passing score of 70%. Three topics account for the bulk of missed points on the Tennessee state portion: the facilitator default and when it shifts to agency, the TREC's specific disciplinary penalty schedule, and Tennessee's two-tier time-share rescission window. When I taught pre-licensing courses, the facilitator default was the topic that filled my office hours. Nobody expected it and almost nobody had studied it.

Agency Law (Single/Dual/No)

Tennessee's "facilitator" default status is the single most-missed concept on the state portion. Most national courses never teach that a licensee can work with both parties carrying no fiduciary obligation unless a specific written agreement creates agency.

Tennessee defaults licensees to "facilitator" status with no fiduciary duty, the exam tests when dual agency triggers versus when designated agency prevents it.

The PSI exam will present a scenario with two parties and one licensee and ask which agency status applies based on what agreements were signed and when. Know the exact written agreement requirement that converts facilitator status into a fiduciary relationship, and know what happens when the same agent has written agreements with both buyer and seller.

Disciplinary Powers

Tennessee's TREC disciplinary framework sets a specific maximum fine per offense, and the exam tests that dollar threshold alongside the complaint procedures. General knowledge that "fines exist" won't answer questions that require you to know the ceiling amount.

TREC can fine up to $1,000 per offense, revoke licenses, and seek injunctions, the exam tests specific penalty ranges and complaint procedures students rarely memorize closely enough.

The PSI exam asks which disciplinary actions TREC can take and under what circumstances it can seek injunctive relief. Know the $1,000 per-offense limit, the grounds for revocation versus suspension, and how the formal complaint process is initiated. These details are specific to Tennessee's licensing statute.

The TREC's authority to seek injunctions is a Tennessee-specific provision that national prep courses skip entirely, but it appears on the exam because it distinguishes Tennessee's enforcement tools from those in most other states. The exam doesn't reward overthinking on this: know the ceiling, know the grounds, know the sequence.

Time-Share Act

Tennessee's Time-Share Act creates two different rescission periods depending on whether the buyer physically toured the property, and candidates who know only one period will fail the scenario questions that hinge on which applies.

Tennessee gives buyers a 10 day rescission period if they toured the property or 15 days if they did not, the exam exploits that two-tier cancellation window.

Time-share regulations appear on several southeastern state exams. Kentucky governs time-share sales under its own consumer protection statutes, and Arkansas tests time-share regulations as a distinct topic. Tennessee's Time-Share Act has specific registration, disclosure, and rescission requirements that differ from both neighboring states.

The PSI exam will give you a fact pattern and ask which rescission period applies. Know that whether the buyer toured the property is the trigger for the 10-day versus 15-day split, and know what disclosure must be made before the rescission right runs.

Tennessee's Time-Share Act also imposes registration requirements on developers that the exam tests separately from the buyer rescission rules. Treat these as two distinct topics rather than one.