Tennessee License Law
Under Tennessee law, the practice of a licensee purchasing property from a client for resale at a profit without disclosing their intent is:
APermitted as a normal business practice
BProhibited and constitutes a breach of fiduciary duty✓ Correct
CAllowed if the licensee has been inactive for 30 days
DPermitted only in commercial transactions
Explanation
A licensee who purchases property from a client for resale at a profit without disclosing this intent violates the fiduciary duty of loyalty and the requirement for full disclosure. This is a serious ethical and legal violation under Tennessee license law.
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Key Terms to Know
Fiduciary Duty
The highest legal duty an agent owes to a principal — requiring the agent to act in the principal's best interest above all others.
LienA financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
AgencyA legal relationship in which a licensee (agent) acts on behalf of a principal (buyer or seller) in a real estate transaction.
Buyer's AgentA real estate licensee who represents the buyer's interests in a transaction, owing fiduciary duties to the buyer.
Math Concepts
State-Specific Concepts
License Law
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