Is the brokerage responsible for my rentals?

Question

I'm a newly licensed agent in Tennessee, working solely in new construction.

My builder/principal broker is concerned with being liable/responsible for the 2 rental properties that I own, live in, and manage myself. In no way do I intend to sign a management agreement with the brokerage or involve the brokerage in any way.

I'm having a hard time getting information from the state. Does anyone have any insight into this? Is there a release of liability form that I need to sign?

Any insight it appreciated. Thanks in advance.

Steve Chaisson · Answer

Your broker has liability for your actions as an agent.  You have responsibilities for that are delineated in the NAR Code of Ethics.  Your broker absolutely can regulate your conduct with respect to rental properties you own within the terms of your agency agreement.

Your licensure creates a higher standard of duty to the public, and if someone is injured at one of your properties due to your negligence any competent attorney is going to bring your broker into the lawsuit.

You need to carry a separate E&O policy for property management if you hold a license.  RICE has property management coverage for agents.  Get the additional coverage and hopefully your broker will be satisfied.  I would not dismiss his/her argument as unfounded.

Curt Davis · Answer

@Jenna Stonecipher

If you own and manage your own property then your brokerage is not involved or liable.

I am also an agent and I own 20 homes and my broker has never said anything.

Not sure who your broker is but they dont sound too familiar with rentals.

Good luck

Jenna Stonecipher · Answer

That's the thing. The brokerage really exists only to facilitate the purchase of the homes we build. They aren't familiar at all.

I thought the same thing and I appreciate you validating it. I can't find anything relevant in the TREC code though. Any idea on how I can go about finding documentation to support this? My word isn't enough :P