TREC (State Exam)

When was TREC Created?

1939

What Does TREC have the authority to do?

Make rules and regulations

How many members are in TREC

9 Members

6 Brokers

3 General Public

How are TREC members appointed?

By the governor or senate

What happens if a License Holder fails to respond to a subpoena

TREC can file a suit with the attorney general

Who writes promulgated contract forms

The broker Lawyer Committee

How many members are on the Broker Lawyer Committee?

13 Members

6 Brokers - appointed by TREC

6 Lawyers - appointed by state bar association

1 public member appointed by the governor

Where is the Real Estate Center?

Texas A&M

How many members are on the Texas A&M advisory Committee?

10 appointed by the governor

6 are brokers licensed for 5 years

3 representing the public

1 ex-official representing TREC

How long does a individual have to file a complaint with TREC?

4 years from the effective date of contract, or the date of the incident

What does TREC have the power to do?

Issue or revoke a Real Estate License

Where are TREC hearings held?

Austin, unless a license holder requests the hearing be held in their county

What happens if a license holder fails to respond to a summons from TREC

TREC will automatically schedule a revocation/suspension hearing

What can you do if you license is revoked by TREC?

You can appeal the decision to the district court

What happens if a person engages in real estate brokerage without having a secured license from TREC?

Guilty of a class A misdemeanor, subject to a fine not more than 4K or imprisonment in the country jail

The broker who profited is liable for 3x's the amount recieved

What is the penalty for violation of the License Act?

$5,000 per day for violation of the license act by any person; licensed or unlicensed

What is the Real Estate Recovery Trust Account

Created by TREC to pay aggrieved persons who suffered a monetary due to acts of a license holder

How much money can an aggrieved person receive from the recovery trust account?

3x's the amount of money lost

What happens if the recovery trust account is less than 1 million?

TREC could make agents pay the renal fee ($10) of their license or whatever necessary to bring the amount to 1,700,000

What happens if the Recovery Trust account exceeds 3.5 Million?

The excess goes into the states general fund

What happens when Recovery Trust Account balance is not below 1 million

TREC simply continues to invest funds

What happens to the licensee when TREC pays an amount out of the Recovery Trust Account

The license of the individual may be revoked or suspended.

The license may never be recovered until the account has been repaid with interest

What is the max payments TREC will pay out of the Recovery Trust?

100,000 per license holder and 50,000 per transaction

Who is required to have a real estate license?

-Attorneys participating in a commission split

-Auctioneers involded in any part of a real estate transaction

-Apartment Locators

-Real estate sales agents/brokers

-anyone doing real estate activity with the Texas Secretary of State

-Property Managers

Errors and Omissions Insurance

Needed if a agent has less than 10% interest in a real estate business, with a minimum annual limit of $1 million per occurrance

If more than 10% of the business is owned then the required amount is $0

Who do all license holders receive commission from?

a Broker

People who do not have to have real estate licenses?

-Texas Licenses attorneys not dealing with commission split. All other attorneys need to be licensed in the state of Texas

-Anyone carrying out a foreclosure sale

-Administrators and executors of wills

-On-site apartment managers

-Sales agent working for a builder

-Cemetery lot sales agents

-A person selling their own property

-Employee leasing or renting property for the owner

When must TREC be notified of an assumed name?

within 30 days of starting or stopping use of that name

Where must an assumed name be filed?

The secretary of state. TREC, and local county clerk

Non-resident Broker

Texas Licensed broker who does not have a home office in Texas.

Cannot represent a buyer or seller in Texas, but can earn referral commision

Foreign Broker

A broker from another state, may collect commission from a Texas broker as long as that Broker does not negotiate in Texas.

Commission can be a gift or cash

TALCB

regulates real estate appraisers and administers the Texas Appraiser Licensing and Certification Act

Members of TALCB

9 Members

4 -Licensed Real Estate Appraisers

4-General Public (appointed by the governor)

And the exec. secretary of the Texas Veterans Land Board

Steps of obtaining a real estate license

-Meet educational requirements

-Submit an application with or without a sponsoring Broker

-Submit the required fees

-Pass state exam

Sales Agent Educational Requirments

180 qualifying course hours

Broker's License Educational Requirements

900 Classroom hours

4 years of an active sales license

3600 points - 300 points per sale

-6 hour broker responsibility course

How many hours must be maintained for first license renewal?

270 hours

The original 180 + 90 additional qualifying hours for renewal.

CE

18 HR Continuing education must be taken every 2 years. If not completed at time of renewal TREC will include a $200 penalty

How does an licensee return to active status after failing to do CE?

Pay a additional $250 penalty, submit the CE, and pay $50 to return back to active; as well as submit a form saying they did not engage in real estate activity during that time

After how many days will a licensee become inactive after not submitting the CE

60 Days

Can you have a Broker and Sales Agent License at the same time?

No; Texas is a one state one license state. However a Broker can act as a sales agent and a Broker

How long does TREC have to deny an application?

There is no time limit; but once they decided to disapprove an application they must notify the applicant within 30 days

How many days does an applicant have to make an appeal?

10 days after the receipt of the notice of denial

Is there a time limit for an applicant to choose a Broker?

No

Is CE required for inactive Status?

No; but renewal fees and SAE requirements are

How can you reactivate your licnese

apply through a broker,r pay 50$ and complete 18 CE if necessary

5 Canons of Professional Ethics?

Fidelity

Integrity

Competency

Consumer Information Notice 1-2 (Notifies the public of the recovery trust account)

Discriminatory practices

Where must the Consumer Information Notice 1-2 be displayed?

A prominent place in the brokers office

Who must a license holder disclose that they are representing?

A spouse, parent, or child

When can you place a for sell sign

after obtaining WRITTEN permission of the owner

Conversion

Spending commingled funds

How long must you wait to apply for a new license once your license is revoked?

2 Years

How long must a written record of all funds be held by a Brokerage?

4 years

Can a Broker pay commission to another Broker?

Yes

When must money be deposited into a trust account by a Broker?

By close of business of the second business day after the effective date of the contract

Can commission be paid to an unlicensed person?

No

Can i licensee give a referral gift to unlicensed individuals?

Yes up to 50$ (NOT CASH) to an unlicensed individual. Gift cards that cant be converted to cash are acceptable. NO COMMISION

Can a licensee rebate a portion of the commission to a client within a transaction?

Yes

What must all ads contain

The Broker or Company name

How do you post IABS and Consumer Notice

Post a link to a completely filled out TREC IABS form labeled Texas Real Estate Commission Information About Brokerage Service on your business website at least 10pt font (readily noticeable)

Or post a link to the Consumer Protection Notice labeled "Texas Real Estate Commission Consumer Protection Notice" 10 pt font (readily noticeable)

Alternate ways to post IABS and Consumer Notice

Post and image of the completed IABS or Consumer Protection form, and label the image TREC Real Estate Commission Information About Brokerage Service or Consumer protection notice. Post on FB, Twitter etc.

When must a TREC IABS form be provided to consumers

At the time of your first substantive communication by personal delivery mail or email.

First substantive dialogue

What must be inlcluded on a Broker Website

The broker or company name on every page

Substantive Dialogue

Face-to-face meeting where substantive discussion of real estate takes place, or mailing with a substantial amount of information about a particular property.

Exceptions to where IABS disclosure is not needed?

Open houses, meeting with a party represented by another agent, when its a residential lease not more than one year, or if no sale is being considered.

What bill requires IABS disclosure?

Senate Bill 489

Senate Bill 489 - Disclosure

Requires a license holder to disclose representation at first contact with another party. Oral or written is allowed

What takes precedence; Statutory Intermediary or Common law dual agency

Statutory Intermediary

How can a broker represent the buyer and seller?

As intermediary, with WRITTEN permission for both parties

Intermediary without appointments

A broker who works alone or who only sponsors 1 license holder

Can a Broker give advice/opinions to either party?

No, they may only disclose facts about the property

Appointed Associate under an Intermediary?

May give advice or opinions to ONE party

Can a license holder advertise another brokers listing?

Yes, with written permission of that Broker

When must a broker respond to sponsors sales agents or clients representing other parties in real estate transactions?

Within 3 Calendar Days

When must a Broker deliver mail and other correspondence from TREC to sponsored sales agents?

Within 10 Calendar Days

TREC RSC-2 Form

Must be used when a Broker Refers clients to a residential service company

What happens if a Broker wishes to terminate sponsorship?

He must notify the sales agent in writing and return the agents license certification to the commission immediately

How can a sales license holder terminate their association with a sponsoring broker?

in Writting

When can a license holder engage in business after changing to a new broker?

When their fees and sponsorship forms have been mailed to TREC;

Same is true when re-activating an inactive license

How can a broker obtain more than one place of Business

They must have a branch office license for each additional office at a cost of $50 per office

An unlicensed assistant may?

Place for sale signs on property

Place advertisements as directed by the license holder

Train and motivate license holders

Manage an Office

Set appointments for a license holder to show a listing

Perform all clerical activities

TREC Promulgated Forms

Most residental properties; including Farm and Ranch

TREC doesnt have forms for commercial transactions, or sale of co-ops or mobile homes

Who writes the promulgated contract forms?

Broker Lawyer Committes

Who promulgates the Contract forms?

TREC

"Time is of the Essence" Location?

Termination/option paragraph, Third Party Financing Addendum, Addendum of sale of other property, back up addendum, short sale addendum

Temporary Lease Addendums

Used when the lease is for 90 days or less

How does a backup offer become effective?

The previous contract must be terminated and the backup buyer must pay any option fee, and deposit any earnest money with an escrow agent.

How must an option fee be paid?

Independently of any other consideration

Can the option fee and the earnest money deposit be combined into one check?

No

Who is the last party to sign a contract?

The party accepting the final change

Who is responsible for filling in the effective date?

The Broker

Contingency Clause?

If it is not met the buyer is entitled to a refund of his earnest money

How do offers need to be presented on a property?

There is no required order of presentation

When can the buyer terminate a contract?

When required repairs exceed 5% of the price

MUD

Municipal Utility District - provides floor control or drainage, water and sewers to residents of the district; this information must be disclosed to the buyer

What happens if MUD indebtedness is not disclosed to the buyer prior to closing.

The buyer can back out of the contract. The seller must deliver and the buyer must sign the MUD disclosure

How much time does a buyer have to address title concerns with the seller?

The negotiated number of days in the contract.

Addendum for Coastal Area Property

A notice that tells buyers that owners may gain or lose portions of the land due to actions of the water.

Addendum for property located seaward of the gulf intracoastal waterway

must be used to disclose that structures must not be erected seaward of the vegetation line.

What happens if structures are erected seaward of the vegetation line?

The structure would be subject to a lawsuit by the state of Texas Removal