As your statewide association, Tennessee REALTORS® is committed to working hand-in-hand with state legislators and the state government to protect the rights of property owners and strengthen the real estate industry.
In a current example of that commitment, we are working closely with Rep. Mark Pody, R-Lebanon, concerning a bill he introduced in the General Assembly. If passed into law, the bill (HB891) would exempt certain transactions by limited liability companies (LLCs) from the Tennessee Real Estate Broker License Act of 1973.
After becoming aware of the bill, our governmental affairs team, guided by the legal and advocacy efforts of Farrar & Bates, engaged Rep. Pody in conversation, seeking to ensure that the interests of REALTORS® are considered in the deliberative process. As a result, Rep. Pody agreed to place the bill essentially “on hold” to allow time to make certain it receives careful examination from those most affected.
Rep. Pody tells The Digest, “I want to thank the REALTORS® for being willing to look at this issue and work together throughout the coming summer to see if we can find something beneficial to all parties and best for all Tennesseans.”
Rep. Pody emphasizes that our REALTOR® leaders “have been very professional in bringing up issues that we need to look at, in a very respectful way. Russ Farrar and his team have been fantastic. They don’t just want to try to kill a bill, but to come up with a solution. Whenever any bill is introduced, it’s always important for the people most affected to haveconversations with legislators. This helps us to work together, rather than as adversaries, to look at potential pitfalls, to overcome them, to make sure all parties are well represented.”
He also explains the impetus behind the bill: “Because of the ownership structure in which some businesses operate (LLCs), for tax reasons, they are stuck because of how the code is worded. We are trying to resolve this issue that makes it more difficult for some business owners to liquidate their property.”
In more technical terms, the Broker Act requires anyone carrying out a real estate transaction “to be licensed as a broker, affiliate broker, or time-share salesperson, as appropriate.” There are six specific exceptions to the licensure requirement and a general exemption for vacation lodging services. This bill would add one more: “a limited liability company acting through an officer duly authorized to engage in a real estate transaction, where the transaction occurs as an incident to the management, lease, sale, or other disposition of real estate owned by the company…”
Whatever the eventual outcome, the voices of REALTORS® will be heard and included in the process—and they already have. “We are in really good shape, with a great working relationship, to work toward a solution that protects Tennessee businesses, that protects real estate professionals, and that protects consumers buying real estate,” Rep. Pody says. “I am confident that we’ll accomplish that as we work together.”