Tennessee Realtor State Practice Exam

What consequence might a broker face for failing to supervise an unlicensed assistant?

1. Fines from the local board

2. No consequences

3. License suspension

4. Civil lawsuits

The correct answer is: License suspension

A broker could face serious consequences for failing to supervise an unlicensed assistant, which can include license suspension. In real estate, brokers have a fiduciary responsibility to oversee their staff, including unlicensed assistants. If an unlicensed assistant is found to be engaging in activities that require a license, such as negotiating contracts or dealing with clients directly, the broker may be held accountable for failing to enforce licensing laws. This oversight is critical, as it ensures compliance with regulatory standards that govern real estate practices. Failure to provide adequate supervision can lead to disciplinary actions by the state real estate commission, which may evaluate the broker's adherence to legal and ethical standards. License suspension is one of the more severe repercussions, indicating that the broker's license to operate in real estate could be temporarily revoked due to their negligence in supervising their staff. In maintaining compliance with the law, brokers are expected to take active steps to manage their team effectively, ensuring that all activities comply with licensing requirements. This ensures not only legal compliance but also protects the interests of clients and the integrity of the real estate profession.