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2021 Op. Tenn. Att'y Gen. 1 (2021)

handle is hein.sag/sagtn0182 and id is 1 raw text is: STATE OF TENNESSEE OFFICE OF THE ATTORNEY GENERAL January 15, 2021 Opinion No. 21-01 Disbursement of Real Estate Commissions Ouestion 1 Does Tenn. Code Ann. § 62-13-312(b)(11) allow for any person or entity, other than an affiliate real estate broker who is affiliated with a licensed principal real estate broker, to disburse a commission, or any valuable consideration, for the performance of the acts specified in the Tennessee Real Estate Broker License Act? Opinion 1 Yes. Nothing in Title 62, Chapter 13, prohibits a licensed principal real estate broker from delegating to a title company or other party the authority to disburse commissions. Ouestion 2 Does an agency relationship created by Tenn. Code Ann. § 62-13-401, or by common contractual or agency law, allow a licensed principal real estate broker to contractually delegate the broker's duty to disburse a commission, or any valuable consideration, for the performance of the acts specified in the Tennessee Real Estate Broker License Act? Opinion 2 Yes. A licensed principal real estate broker may contractually delegate the broker's duty to disburse a commission or other consideration for a real estate transaction. ANALYSIS Taken together, the two questions posed may be restated as asking in essence whether the principal real estate broker must personally disburse the commission(s) associated with a real estate transaction or whether the principal broker may contractually delegate the disbursement of commissions to a third party. The short answer to that question is yes, the principal broker may contractually delegate to a third party, such as a title company, the duty and authority to disburse the commission in a given transaction. The Tennessee Real Estate Broker License Act creates a licensing category for a real estate broker and a separate licensing category for an affiliate real estate broker. The Tennessee Real Estate Commission (TREC) is the state agency responsible for administering the Act's licensing provisions. See Tenn. Code Ann. § 62-13-203(a).

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