Agency Disclosure in Tennessee: What Counts as "In Writing"

Tennessee takes a firm position on real estate agency: it is never assumed. Under Tenn. Code Ann. § 62-13-401, an agency relationship cannot be assumed, implied, or created without a written bilateral agreement. Absent one, the licensee is treated as a facilitator, not an agent or advocate for any party. Disputes about who represented whom tend to start there, and the paperwork often decides them.

In a disputed transaction, the written trail comes first: which agreements exist, which disclosures were given, who signed them, and when. Memories about who was working for whom tend to drift once money is at stake. The file usually does not.

Three different writings that get confused

Much of the trouble comes from treating separate documents as interchangeable. There are at least three kinds of writing in play.

• The agency agreement itself. A listing agreement or buyer representation agreement is what creates an agency relationship. Without it, there is no agency.
• The disclosure of status. When a licensee personally assists an unrepresented buyer or seller, Tenn. Code Ann. § 62-13-405 requires the licensee to disclose whether they are acting as a facilitator, agent, subagent, or designated agent, and to confirm that disclosure in writing with a signed receipt.
• Specific confirmations and consents. Under Tenn. Code Ann. § 62-13-312, acting for more than one party without the knowledge and written consent of all parties is a ground for discipline. When a licensee becomes an in-house facilitator, that status is to be confirmed in writing before the contract is executed (Tenn. Code Ann. § 62-13-102). A licensee entering an exclusive buyer representation agreement must confirm certain points to the buyer in writing under TREC Rule 1260-02-.36, including whether the buyer would owe a commission on a purchase made without that licensee.

The statute is explicit that the disclosure of status is not a substitute for a written agency agreement. A signed disclosure form showing "agent" does not, by itself, make the licensee anyone's agent.

Timing is where files fail

Section 62-13-405 builds the disclosure around specific moments. The licensee must disclose their status verbally to an unrepresented buyer or seller before providing any real estate services. With an unrepresented buyer, the disclosure must then be confirmed in writing before an offer to purchase is prepared. With an unrepresented seller, it must be confirmed before the listing agreement is signed or an offer is presented, whichever comes first.

The licensee must also obtain a signed receipt from the party who received the disclosure. That receipt carries required content, including notice of the time limit for filing a complaint with the Real Estate Commission and the Commission's address and phone number. A receipt dated after the offer was written, or one that never got signed, leaves a gap that is hard to explain later.

The statute also reaches the other side of the deal. On initial contact with another licensee in the same prospective transaction, a licensee must disclose their role. If that role changes, the licensee must immediately notify the other licensees and the parties.

What counts as "in writing"

Tennessee's Uniform Electronic Transactions Act provides that an electronic record satisfies a law requiring a writing, and an electronic signature satisfies a law requiring a signature (Tenn. Code Ann. § 47-10-107), in transactions where the parties have agreed to conduct business electronically. A properly e-signed disclosure through a transaction platform is generally on solid ground.

The harder cases are informal ones. A text that says "just so you know, I represent the seller" may help show that a verbal disclosure happened. It is a poor stand-in for a written confirmation with a signed receipt containing the content the statute requires. The question is not only whether something was written down. It is whether the writing says what the law requires, was signed by the right person, and came at the right time.

Designated agency and dual agency

Under Tenn. Code Ann. § 62-13-406, a managing broker may appoint a licensee who has a written agreement with a party as that party's designated agent, either by specific appointment or by written company policy. When that is done properly, the broker is not treated as a dual agent and what one designated agent knows is not automatically treated as known by the other. In a dispute, the question becomes whether the appointment or company policy actually exists in writing and covers the transaction.

Representing more than one party in the same transaction without the knowledge and written consent of all parties is a ground for discipline under § 62-13-312. Acting for both sides is different from a facilitator assisting both sides without representing either. In a dispute, the question is which one the licensee was actually doing, and whether the file shows written consent if it was the first.

The scope of the rules

The disclosure requirements in § 62-13-405 do not apply to commercial transfers or leases, public auctions, residential property of more than four units, or residential leases and rentals. That exemption sits in § 62-13-405 itself. The written-agreement rule in § 62-13-401 and the duties in § 62-13-403 are separate provisions and are not part of it.

Why the role matters even without agency

Facilitator status does not mean a licensee owes nothing. Under Tenn. Code Ann. § 62-13-403, a licensee who provides real estate services owes all parties duties that include reasonable skill and care, disclosure of adverse facts the licensee actually knows, honesty and good faith, and timely accounting for funds. In Pettitt v. Williamson (Tenn. Ct. App. 2008), the Court of Appeals found no agency relationship without a written agreement, but held there was a genuine factual question about whether the broker had acted as a facilitator owing those duties. The absence of agency paperwork ended one question and opened another.

Keeping the file defensible

Licensees must preserve transaction records for three years after the transaction is consummated under § 62-13-312, and TREC Rule 1260-02-.40 requires electronically kept records to be readily accessible in an organized format within 24 hours of a Commission request. If a complaint arrives, the agency disclosures and their receipts are among the first documents that will be read. When a broker complaint turns into a records problem covers how that review tends to unfold.

Whether the paperwork holds up depends on the specific documents, dates, and conduct in the transaction. If you are a licensee, managing broker, buyer, or seller dealing with a dispute over agency status in Tennessee, my office can review the file with you.

Educational disclaimer: This article provides general Tennessee educational information only and is not legal advice for any specific transaction, complaint, or dispute.