Tennessee License Law
A Tennessee principal broker is audited by TREC and a shortage is found in the trust account. This most likely indicates:
AThe bank made an error in the broker's favor
BCommingling or conversion of client funds — both are serious violations✓ Correct
CThe broker received too many earnest money deposits
DAn administrative error in the TREC audit process
Explanation
A trust account shortage indicates that client funds have been improperly used, commingled, or converted. This is one of the most serious violations in Tennessee real estate law and can result in immediate license suspension and potential criminal charges.
Related Tennessee Tennessee License Law Questions
- The Tennessee REALTORS® (formerly the Tennessee Association of REALTORS®) differs from TREC in that:
- TREC's authority to regulate real estate in Tennessee is derived from which type of government power?
- Tennessee license law requires that a real estate brokerage agreement (listing or buyer representation) must:
- In Tennessee, an affiliate broker must work under:
- Which of the following would be grounds for TREC to deny a license application?
- Which of the following requires a Tennessee real estate license?
- A Tennessee licensee who changes principal brokers must:
- A Tennessee principal broker who opens a new branch office must:
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