Tennessee law gives the Tennessee Real Estate Commission (TREC) a list of 21 reasons it can refuse, suspend or revoke a real estate license. They sit in one place, T.C.A. § 62-13-312(b), and most core courses teach them as “the 21 ways to lose your license.” Here they are grouped by topic and numbered the way the statute numbers them, each in plain words with an example of what it looks like in real life. The examples are illustrations, not real cases.
The Commission can act on its own or on a written, sworn complaint. Besides a reprimand, suspension or revocation, it can fine a licensee for each separate violation, and it can treat each day a violation continues as a new one.
Honesty with the public
1. Substantial and willful misrepresentation
Telling a buyer something material that is not true, and knowing it. Example: telling a buyer a new interstate exit is “going in right there” when the road project is only an idea on a planning map.
2. Promises you will not or cannot keep
A promise made to get someone to sign, when you know you cannot deliver it or never meant to. Example: promising a buyer you will get a septic letter before closing, and never ordering one.
3. A pattern of misrepresentation
Not one slip but a continued, flagrant course of false statements or false promises, by you, your agents or your advertising. Example: ads that keep claiming “20 years of experience” and sales records you do not have.
4. Misleading or untruthful advertising
That includes using the word REALTOR®, a trade name or a membership logo you are not entitled to. Example: calling yourself a REALTOR® after letting your association membership lapse. A modern version: posting an AI-written listing description without checking it, when it invents a feature the house does not have. You signed it, so it is your statement.
Other people’s money and paperwork
5. Not accounting for or remitting money
Earnest money and any other funds that belong to someone else have to be handled, accounted for and paid over within a reasonable time. Example: a contract that says earnest money was received when none was ever deposited.
6. Not keeping records for three years
The firm must keep the records of every transaction for three years. Example: a broker shreds old files to save on storage.
7. Representing more than one party without written consent
Acting for both sides needs the written consent of everyone involved. Example: writing a buyer’s offer on your own listing without the written consents in place.
8. Not giving everyone a copy of what they signed
Every person who signs a contract gets a copy at the time they sign. Example: mailing the seller their copy “later,” and it never arrives.
9. A listing, offer or contract with no end date
Every listing agreement, sales contract and offer needs a definite termination date. Example: a buyer asks you to leave the offer’s deadline blank, and you do.
10. Talking someone into breaking a contract for your own gain
Inducing a party to break a contract so you can substitute a new one, out of malice or for your own benefit. Example: calling your sellers to move their listings to your new firm before you have even told your broker you are leaving.
How you get paid
11. An affiliate broker taking pay from anyone but their broker
Affiliate brokers are paid through their own principal broker, full stop. Example: a builder offers to pay you directly to skip the firm, or a team leader pays the team’s buyer agents out of a personal account.
17. Undisclosed commissions, rebates or profits
Any commission, rebate, compensation or profit has to be disclosed. Example: a builder requires a “consulting fee” on every sale, paid to a relative, and nobody tells the buyer.
18. Buying a listing without saying so
If you, or someone acting for you, want an interest in a property you have listed, you must tell the owner. Example: buying a listed tract “for your father” and quietly taking an option on half of it.
Crimes, fair housing and the rules themselves
12. Certain criminal convictions
A conviction, or a plea of guilty or no contest, for forgery, embezzlement, obtaining money under false pretenses, bribery, theft, extortion, conspiracy to defraud or similar crimes. A no-contest plea still counts. Under the same section a license is revoked automatically 60 days after a conviction unless the licensee asks for a hearing.
13. Violating fair housing law
Breaking a law that prohibits discrimination in selling or renting real estate. The Tennessee statute names race, color, religion, sex and national origin; the federal Fair Housing Act adds disability and familial status. Example: an ad that offers “special consideration” to buyers of one race. Describe the home, never who should live in it.
14. Breaking the licensing law, a TREC rule or a Commission order
The catch-all for the rest of the chapter and every rule TREC adopts. Example: a broker keeps working listings while his license is suspended.
19. Practicing law without a license
Filling in a standard form is your job. Drafting legal documents or giving legal advice is not. Example: writing restrictive covenants for a seller who is splitting land into lots.
20. Improper, fraudulent or dishonest dealing
The broadest one: any other conduct, of a similar or different character, that is improper, fraudulent or dishonest. Example: a listing agreement that pays the agent “everything over $90,000” on a house that then sells for $92,000.
21. Violating the Tennessee Time-Share Act
Licensees who sell time-shares are held to the Tennessee Time-Share Act of 1981 and its rules, too.
For principal brokers
15. Not supervising your affiliate brokers
The principal broker answers for the agents under them. Example: an agent’s ad runs without the firm’s name and phone number. TREC has also treated an affiliate’s lapsed errors-and-omissions insurance as a supervision failure by the principal broker.
16. Holding up an agent who is leaving
When an affiliate broker transfers or leaves, the broker has to complete the paperwork within a reasonable time. Example: refusing to release a license until the agent pays for yard signs or returns files.
What it costs
TREC’s penalty rule (Rule 1260-02-.32) sets civil penalties of up to $1,000 for each separate violation, with a minimum of $50 to $300 depending on which ground was broken. Someone acting as a broker with no license at all faces a flat $1,000 per violation. Each day a violation continues can count as a separate violation, and the fine can come on top of a suspension or revocation, not instead of it.
One more that is not on the list of 21 but suspends licenses every renewal cycle: letting your errors-and-omissions insurance lapse. In early 2025 TREC suspended licensees who had not shown proof of a current policy, and fined principal brokers whose affiliates were not covered.
How to keep your license
- Put it in writing. Consents, disclosures, money received and every promise you make.
- Read what you publish. Ads, listing remarks and anything an AI tool drafts for you. Your name is on it.
- Let money move through the firm. No side payments, no unreported fees.
- Know where your job ends. Legal questions go to a Tennessee attorney; tax questions go to a tax professional.
- Keep learning. Our Best Practices for AI as a Realtor and Advanced Realtor Course cover how to use new tools without walking into items 1, 3, 4 and 13. See every class on the courses page.
Sources
- T.C.A. § 62-13-312, grounds for discipline
- TREC Rule 1260-02-.32, civil penalties
- TREC newsletter, Winter 2025 (E&O suspensions and broker penalties)
General information about Tennessee law as of October 2026, not legal advice. Statutes and rules change; check the current text, and talk to a Tennessee attorney about your own situation.