The 5-8-12 Newsletter of the Tennessee Association of REALTORS
Editor: Pug Scoville

May 8: Redesigned TAR Web Site Goes Live! [See #5 below]
May 10 – June 13: GRI 413, Sticky Situations (16 hrs. CE) – An E-Class Course & GRI Elective
May 11: Residential Forms Committee Mtg.
May 14-19: NAR Midyear Conference, Washington, DC
For more courses & events:

1. HOT LINE: Can Buyer Get Prior Inspection Report?
2. HOT LINE: A Referral Fee to an Attorney?
3. HOT LINE: Rentals & Lead-Based Paint Disclosures?

4. No DIGEST Next Week
5. Newly-Redesigned TAR Web Site Debuts This Week!
6. Tennessee Ranked Highly by CEOs!
7. Real Estate Is a Dangerous Profession
8. FHA Offers Free Preforeclosure Program Training
9. LOW Mortgage Rates
10. To Ask a Hot Line Question…

NOTE: If you are reading a hard-copy of this DIGEST, and want to access some of the links cited, simply go to to access the current issue with “live” links!

1. HOT LINE: Can Buyer Get Prior Inspection Report?

QUESTION: I have a listing. A home inspection was done by the previous prospective buyer, which I have a copy of. A current prospective buyer’s agent has requested “any and all previous home inspection reports”.  Is this legal/ethical? Can I supply the agent with the reports?

ANSWER: We actually addressed this issue in a DIGEST some time ago. The seller does not own this report. Therefore, they should NOT distribute it to anyone without the permission of the original owner (probably the original buyer). In addition, if the original contract was on a TAR Purchase and Sale Agreement, then it contains the following language which states that the seller will not distribute it to third parties (including future buyers):

“In further consideration of Buyer’s right to legally, properly and in good faith invoke a right to terminate this Agreement pursuant to any specific Buyer contingency as stated herein, Buyer agrees, upon Seller’s request, to provide Seller or Seller’s representative with copies of any supporting documentation which supports Buyer’s right to exercise said contingency, the sufficiency and adequacy of said additional consideration being acknowledged. Any such supporting documents shall be provided for Seller’s benefit only and Seller shall not disseminate the same to third parties.

[SOURCE: TAR’s Legal & Ethics Hot Line Attorneys]

2. HOT LINE: A Referral Fee to an Attorney?

QUESTION: If an attorney refers a client, can they be paid a referral fee? I believe attorneys are exempt from licensing laws. Is this correct?

ANSWER: The language of the Broker’s Act states that “the services rendered by an attorney at law in the performance of duties as such attorney at law” are exempt from licensure. – Tenn. Code Ann. 62-13-104(a)(3).  We have been unable to locate any cases interpreting this. However, TREC has addressed this in the Frequently Asked Questions section of the TREC Manual. It states:

“A lawyer has contacted me and wants to make a referral and receive a referral fee from my firm.  Can I pay him a referral fee?

NO. A lawyer can only receive a referral fee or commission if he is properly licensed as a real estate broker or affiliate and the compensation is paid to him by the licensed real estate firm where he is affiliated.”

See the Official Manual of the Tennessee Real Estate Commission, 2008 Edition, Pg. vii.

[SOURCE: TAR’s Legal & Ethics Hot Line Attorneys]

3. HOT LINE: Rentals & Lead-Based Paint Disclosures?

QUESTION: Is an owner required to provide a tenant with a lead-based paint disclosure?

ANSWER: If the rental is a covered structure (such as housing, property used for schools, daycares, etc.) and was built prior to 1978, then the landlord MUST complete a disclosure. Pursuant to F86, the Lead Based Paint Disclosure for Rental Property: “Federal law mandates that Lessors of housing constructed prior to 1978 must complete certain Lead-Based Disclosure requirements. These should be completed before the Lessee is bound under the contract to lease.”

TAR provides F86 which meets the requirements of the federal law. Violations of this law are regulated by HUD and the EPA. A violation can result in a penalty of up to $11,000 per violation.

[SOURCE: TAR’s Legal & Ethics Hot Line Attorneys]

4. No DIGEST Next Week

Due to NAR’s Midyear Conference next week, there will be no TAR DIGEST. We will return, however, with our May 22 issue!

For those traveling to DC next week, don’t forget about the REALTOR Rally on May 17!

5. Newly-Redesigned TAR Web Site Debuts This Week!

The redesign of TAR’s web site, spearheaded by our able Director of Marketing and Research Buzz Steele, is nearly complete and will be introduced this week! While we will surely encounter some things that need to be “tweaked” or improved as time goes by [true of ALL web sites], it represents a major and needed step forward! We hope you like it!

6. Tennessee Ranked Highly by CEOs

From a Nashville Business Journal article by Eric Snyder:

Tennessee is among the top states in the country in which to do business, according to an annual survey of CEOs by Chief Executive magazine.

According to the survey, Tennessee ranks No. 4 in the U.S., unchanged from last year.

Texas claimed the No. 1 spot, followed by Florida and North Carolina.

CEOs deemed California as the worst state in which to do business, followed by New York, Illinois, Massachusetts and Michigan.
*** END QUOTE ***

[SOURCE: Nashville Business Journal]

7. Real Estate Is a Dangerous Profession

Facts you should know, from safety expert Andrew Wooten:

There were eleven confirmed real estate murders in 2011. With attacks, rapes, murders and suicides, 2011 was the most violent year in the real estate industry.

In 2011:

  • The majority of attacks on real estate professionals occurred in the afternoons on Thursday or Friday.
  • Nearly 30% of attack victims were men.
  • Most attacks did not occur inside major metro areas.
  • Guns were used roughly 50% of the time in attacks.
  • Robbery was the intention going into the attack but frequently resulted in a shooting.

Andrew notes: “We are all busy and preoccupied with work, family and friends. But don’t let our ‘busyness’ keep us from staying safe. By following some simple techniques and taking time to stop and look around, we can drastically decrease the chances of becoming victims.” To visit his Resource page for more tips, etc., go to:

8. FHA Offers Free Preforeclosure Program Training

FHA’s National Servicing Center (NSC) is offering FREE Preforeclosure Program (PFS) Webinar Training for Real Estate Professionals. FHA’s Pre-Foreclosure Sale program (aka short sale), allows a borrower in default to sell his or her home and use the proceeds to satisfy the mortgage debt, even if the proceeds are less than the amount owed.

FHA’s goal is to close the education and communication gap between FHA servicers and real estate professionals to best serve the needs of FHA borrowers, and mitigate loss to the FHA insurance fund. Training and technical assistance will ensure that all partners are provided with correct information on HUD programs and resources available to reduce foreclosures, while fostering an environment that promotes successful implementation of HUD policy and industry best practices.

To assist FHA in identifying local and regional issues, the training is offered in each of HUD’s ten regions. Participants will also have the opportunity to share best practices with other industry participants in their region. This webinar is designed for real estate professionals, but is open to all interested industry participants.  The training for HUD Region 4 – that includes Tennessee – is scheduled for Wed., May 16, 1-3PM Central Time.

Registration Web Link:


9. LOW Mortgage Rates

Last week, Average interest on 30-year fixed mortgages fell to 3.84 percent, the lowest level since long-term mortgages began in the 1950s, according to Freddie Mac!

To see current mortgage rates, go to:

To see THDA rates and programs, go to:

10. To Ask a Hot Line Question…

To ask a TAR Legal and Ethics Hot Line question, CLICK HERE.