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TREC staff outlines bills in play: wholesaling, grandfathered CE, MLS rules and 'less-is-more' changes
Summary
TREC staff highlighted pending bills that could change continuing-education rules for grandfathered brokers, permit some forms of wholesaling with written disclosures, and make broader changes to commission procedure and MLS governance.
Tennessee Real Estate Commission staff delivered a legislative update Feb. 6 highlighting multiple bills filed this session that, if enacted, would alter licensing requirements, industry practices and commission procedures.
Summary of bills presented - Continuing education for grandfathered principal brokers (HB0700 / SB0886): This bill would remove the CE exemption for principal brokers who were licensed before Jan. 1, 2005 if they supervise affiliate brokers; staff noted the change would require those previously exempt principal brokers to complete the statutory CE hours when supervising affiliates.
- Wholesaling statute (SB0909 / HB0781): Sponsors drafted a definition of "equitable interest" and permitted certain wholesaling behaviors if the buyer discloses in writing the buyer's equitable interest to any potential assignee and notifies the seller of the intention to wholesale within three days of assignment. Counsel advised this language could limit the commission’s ability to pursue unlicensed-activity cases for some wholesaling scenarios and shift enforcement to civil actions for disclosure failures.
- Diversity/exclusion prohibition (SB1235 / HB1237): A bill to prohibit governmental bodies from discriminatory practices based on race, color, ethnicity or national origin. Staff explained the measure includes waiver of sovereign immunity and could require the commission to remove statutory language that currently directs the agency to "strive" for minority and age representation in appointments; staff noted potential exposure to litigation if a commission appointment practice were challenged.
- Professional freedom of religion act (HB0226 / HB0470): This would bar governmental entities from adverse action against professionals for religious or moral expression in nonprofessional settings and would prohibit MLS or broker organizations from conditioning MLS access on organizational membership or charging higher MLS fees to nonmembers; the bill creates a civil cause of action for violations.
- "Less Is More" administrative changes (HB1330 / SB1316): An administration bill that would, among other changes, remove the statutory requirement for the commission to meet in each grand division each year, extend exam/application expiration from six months to two years for some items, and permit the commission to accept a 30-hour CE course in lieu of retesting for some reinstatements. Staff noted details would require rule updates if the bill passes.
Staff cautions and next steps Legal staff emphasized that bills are in draft form and may be amended before passage. Counsel noted that the wholesaling provision would not sit inside the Real Estate Broker Act but instead sit elsewhere in state law; if enacted, it could remove some unlicensed-activity enforcement options for wholesalers who meet the statutory disclosure requirements. Staff said they will monitor amendments, provide analysis for commissioners when bills move to committee, and provide drafts for regulatory changes if required.
Ending note: staff offered to circulate bill numbers and sponsor names for commissioner review and will return updates as the legislature advances bills.
