Texas Real Estate Exam

TREC may authorize a commission employee to file a signed written complaint against a licensee and to conduct an investigation if:

(1) A judgment against the licensee has been paid from a recovery fund established under the Act.
(2) The licensee is convicted of a criminal offense that may constitute grounds for the suspension or
revocation of the licensee's license.
(3) The licensee

Investigations:

TREC may, after receiving a written complaint with proper evidence, investigate the actions and
records of a broker or salesperson.

The complaint must be

submitted within four years after the date
of the incident.

If the person filing the complaint wishes to have the right to have a judgment paid from the recovery fund,

the complaint must be filed within two years, or to be actionable under D.T.P.A. the statute of limitations is two years.

Subpoena Power Investigations:

TREC has the power to subpoena

TREC may compel by subpoena
the attendance of

witnesses for examination under oath and the production for inspection and copying of books, accounts, records, papers, correspondence, documents and other evidence relevant to an investigation.

If a licensee fails to comply with a subpoena,

TREC can file suit through the attorney general to enforce the subpoena

Subpoena Power Hearings:

If the commission proposes to suspend or revoke a license, the person is entitled to a hearing before the commissioner. If that ruling is adverse to the license, they can appeal to a district court within 30 days.

Unlicensed Activity:

A person acting as a real estate broker or salesperson without first obtaining a license commits an offense which is a Class A misdemeanor. The penalty for each violation shall be set in an amount not to exceed $4,000 and other penalties provided by law.

Authority for disciplinary actions

When in the judgment of the Commission a person has engaged in an act or practice which constitutes a violation of the Act, the county attorney, district attorney, or the attorney general may maintain an action in the name of the State of Texas in the dis

penalties

A violation of the Act by any person (licensed or unlicensed) is a Class A misdemeanor. It is punishable by up to a $4,000 fine or imprisonment for a term not to exceed one year or both. In case a person received money, or the equivalent thereof, as a fee

Recovery fund created by TREC to

pay aggrieved persons who suffer a monetary loss due to illegal acts of licensees. The fund is set up to protect the public.

The Fund is administered by

TREC. If at the end of the calendar year the fund is below $1,000,000,the commission is authorized to assess each real estate licensee on certification of their license during the following calendar year, a fee not to exceed $10.00 or a prorated share of

Payments for claims arising out of the same transaction shall be limited

in the aggregate to
$50,000, regardless of the number of claimants and payments for claims based on judgments against
any one licensed real estate agent may not exceed in the aggregate $100,000 until the fund has
been repaid with interest at the current r

Property, real property, and real estate

all have the same meaning when used in the license act

The terms broker and salesperson are used to describe

those activities for which licensure is required.
The Act makes no distinction as to the type of activity that each is permitted to practice. The reason
for the separate classification is to place the responsibility for the salesperson's actions on the br

Real Estate License Required:

(1). Appraising non-federally related transactions. Licensees are allowed to give opinions of market
value to assist the seller in establishing list price. Only licensed appraisers may give appraisals.
(2). Auctioneer selling real property. The auctioneer

Exemptions: The following are exempt from the License Act:

a. Attorneys in the state of Texas (Must be licensed to have agents or collect any type of commission).
They may charge for the practice of law but to practice real estate they must have a license. Any
Attorney from another state must be a licensed broker

Easement or Right-of-Way: A person may not sell, buy, lease, or transfer an easement or right-ofway for another for compensation, or with the intent or in the expectation or on the promise of receiving or collecting compensation, for use in connection wit

(1) Licensed as a real estate broker or real estate salesperson under this Act.
(2) Exempt from this Act for the purpose of selling, buying, leasing, or transferring an easement or
right-of-way.
(3) Registered with the commission under the subchapter rega

To be eligible for, or to renew a license, a corporation must

designate one of the officers to act for it. The designated person must be a licensed real estate broker as shown in the records of the commission.

Non-Resident Broker: The Act permits Texas-licensed brokers to

cooperate with and share earned commission with persons licensed as brokers in other states (foreign brokers), but all negotiations within Texas must be handled by Texas licensees. A broker or salesman from another state who wants to obtain a license in T

A person may not act as a professional inspector for a buyer or seller of real property unless

the person gets a professional inspector license

A person may not act as a real estate inspector unless

unless they receive a real estate inspector license and is monitored by a professional inspector

A person may not act as an apprentice inspector unless

they receive a license and is under direct supervision by a real estate inspector or professional inspector

As of September 1, 2007 all home inspectors are required to

have liability insurance for a minimum of $100,000 per occurrence

In 1991, the Texas Appraiser Licensing and Certification Act were passed to require all five
classifications of appraiser be licensed. The classifications are:

1. Certified General Real Estate Appraiser
2. Certified Residential Real Estate Appraiser
3. State Licensed Real Estate Appraiser
4. Provisional Licensed Real Estate Appraiser
5. Appraiser Trainee.

General Requirements (age, moral character, residency, sponsor, etc.) for obtaining a license:

a. Be 18 years or older.
b. Complete all educational requirements.
c. Be a U.S. citizen or a legally admitted alien.
d. Pass the state exam.
e. Be a legal resident of Texas at the time of application (no time specification for length or residency).
f. Sat

Salesperson education

180 core hours of real estate courses with no less than 60 hours of Principles, 30 hours of Law of Agency, 30 hours of Law of Contracts, 30 hours of electives.

broker education

900 core hours of real estate courses (60 semester hours) and a minimum of four years active experience as a license holder during the preceding five-year period before the date the application is filed. Required to complete a 30 hour course titled "Build

An applicant for a broker's license must provide a document showing that they have accrued a
minimum of

3600 experience points. Applicants will NOT have to provide supporting documents initially to back up the points: rather, the applicant and applicant's broker will sign the point sheet and TREC will have the authority to request any supporting documentati

Both salesman and brokers have

1 year to successfully pass the exam. After 1 year they must reapply with new fees.

Place of Business:

a. Each resident broker shall maintain a fixed office within this state. The address of the office shall
be designated on the broker's license.
b. If a broker maintains more than one place of business within this state, he/she shall apply for, pay
the req

When the association of a salesperson with his/her sponsoring
broker is terminated,

the broker shall immediately return the salesperson license to the commission
after notifying the salesperson in writing of the termination

A broker or salesperson that wants to be inactive

must apply for inactivity before their license expires

Licensees may only late renew within

6 months of the expiration of their license

After 6 months

the person may obtain a new license by submitting to re-examination and meeting the requirements and procedures for obtaining an original license

If the designated broker owns less than 10% of the business-entity

they are required to maintain E&O insurance of at least $1,000,000.

Unlicensed Assistants and Unlicensed Office Managers:
Allowable activities:

1) May sit at on open house as a hostess, attendant or custodian but may not point out features of the
property but may distribute flyers or brochures about property
2) Set appointments to show a listing and may "drive" the purchaser to property
3) Place

FIDELITY***

A real estate broker of salesperson, while acting as an agent for another, is a fiduciary. Special obligations are imposed when such fiduciary relationships are created.

The primary duty of the agent is to

represent the interests of the client and the agent's position should be clear to all parties in a transaction. The agent, in performing duties to the client, shall treat
other parties fairly.

The agent must be

faithful and observant to trust placed in the agent, and be scrupulous and meticulous in performing the agent's functions.

The agent must

The agent must place no personal interest above that of the agent's client

A salesperson has an obligation to show integrity in

the discharge of their responsibilities, including employment of prudence and caution so as to avoid misrepresentation by acts of commission or omission.

It is the obligation of a real estate agent to be knowledgeable as a real estate brokerage
practitioner. The agent should: (3)

a. Be informed on market conditions affecting the business and pledged to continue education in the
intricacies involved in marketing real estate for others.
b. Be informed on national, state, and local issues and developments in the real estate industry.

Reasons for suspension or revocation

1. Commingling of money.
2. Offering real property for sale or lease without the consent or knowledge of the owner.
3. Failing to specify in a contract a definite termination date that is not subject to prior notice.
4. Acting in the dual capacity of a br