Tennessee has enacted a law which bars a real estate licensee from “giv[ing] or pay[ing] rebates, cash gifts or cash prizes in conjunction with any real estate transaction.” The law also gave the state’s real estate commission the power to regulate this practice by licensees.
The new law followed a repeal of a similar rebate ban by the state real estate commission on May 3, 2007. Following the repeal and while the legislature deliberated over the proposed law, the U.S. Department of Justice sent a letter to legislators arguing that the legislation “overrides the commission’s decision and eliminates the pro-consumer benefits of the commission’s efforts”. Nevertheless, the legislature determined that the rebate ban had long been in place in the state and so the legislature decided to reinstate the rebate ban, which was then signed into law by the governor.
The text of the new law reads:
Section 1. Tennessee Code Annotated, Section 62-13-302, is amended by designating the existing language as subsection (a) and by adding a new subsection thereto, as follows:
(b) a real estate licensee shall not give or pay cash rebates, cash gifts or cash prizes in conjunction with any real estate transaction. As part of the Tennessee real estate commission’s general rulemaking authority, the commission may regulate the practices of real estate licensees in regard to gifts, prizes or rebates that are not otherwise prohibited by law.
Section 2. This act shall take effect upon becoming a law, the public welfare requiring it.
For you folks in Tennessee, how is this law affecting you on a daily basis as you provide real estate services? Should more states adopt similar provisions?
Some think the practice of rebates substitutes cash for professionalism? What do you think?
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