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Information About Brokerage Services

-A link to a completed IABS Notice in a readily noticeable place on the homepage of each business website should be provided. -The font size of the link should be 10-point if spelling out "Texas Real Estate Commission" and 12-point if using "TREC".

In what year was the National Association of REALTORS® Code of Ethics first adopted?

1913

The National Association of REALTORS® Code of Ethics consists of:

A preamble and 17 articles

Which of the following statements accurately describes the basic issues involved in the Jones v. Mayer Co. case?

A real estate company refused to sell a home because of the prospective buyer's race and was found guilty of violating the Civil Rights Acts of 1866

How often must a real estate license be renewed?

A real estate license must be renewed every two years.

According to the Canons of Professional Ethics and Conduct, the IABS notice can be provided to consumers:

According to the Canons of Professional Ethics and Conduct, the IABS notice can be provided to consumers either in person, by mail, or by email.

Which of the following is NOT one of the unethical or illegal activities performed by Ulysses?

Acting as a real estate agent without a license

ADA

Americans with Disabilities Act

Which of the following is an example of misrepresentation?

An agent thinks there are hardwood floors beneath the carpet of a property and implies to the buyer that there are, when in fact, there are not.

What is a protected category according to Texas fair housing laws, but not national ones?

Ancestry

Special Agency

Broker & Client

General Agency

Broker & Sales Agent

What law (chapter) imposes a code of ethics and standard of conduct on members of the Commission?

Chapter 572

Universal Agency

Child & Parent or Executor of will

Which was the first housing discrimination protection act?

Civil Rights act of 1866

HUD

Department of Housing and Urban Development

In an agency relationship, the agent owes the principal the fiduciary duties of loyalty, obedience, accounting, confidentiality, reasonable care, and what else?

Disclosure

If a lender refuses to make Harry a 30-year mortgage just because Harry is 85 years old, they will have violated:

ECOA

ECOA

Equal Credit Opportunity Act

Ulysses did nothing wrong in instructing the mortgage company to take money out of Sam's account.

FALSE

FHA

Fair Housing Act

Protected classes in the Fair Housing Act of 1968 include race, color, religion, national origin, sex, disability, and what other category?

Familial Status

When asked to inquire about the previous owner's death, how should Tom have responded?

He should tell his clients he's legally not allowed to inquire about the death

HMDA

Home Mortgage Disclosure Act

A tenant comes to a property manager asking to put in shower bars to accommodate their disability. When they property manager informs the landlord, the landlord balks, because the tenant is not a wheelchair user. What should the property manager do? Choose the BEST option.

Inform the landlord that not all disabilities are visible, and warn them they could be violating the Fair Housing Act by refusing accomodations

IABS

Information About Brokerage Services

Does misrepresentation require malicious or deceptive intent?

No, the seller, broker, or agent may be liable for misrepresentation even without malicious or deceptive intent.

How long does person who believes that they have been injured by the discriminatory practices of a real estate license holder have to file a complaint with HUD?

One Year

Which of these actions requires a real estate license to legally perform?

Shane helping his friend sell his home for $500.

You are working with a Black buyer, Tom, and you decide to show him homes in a neighborhood with a high Black population. This illegal act is known as:

Steering

DTPA

Texas Deceptive Trade Practices-Consumer Protection Act?

The Texas Real Estate License Act is Chapter 1101 of the:

Texas Occupation Code

What federal act was passed to help eliminate redlining?

The Community Reinvestment Act

Who designates a broker member of the Commission to serve as a presiding officer?

The Governor

Under the ECOA, it is legal for a lender to ask if a borrower is separated.

True

Integrity

employment of prudence and caution to avoid misrepresentation

The preamble of the National Association of Realtors Code of Ethics refers to which rule to use as a guide for making ethical decisions?

the Golden Rule

What is the name of the professional organization that created the Code of Ethics?

the National Association of REALTORS

A license holder is facing three separate complaints. The license holder must pay $45,000 for the first complaint, $62,000 for the second complaint and $21,000 for the third complaint. What is the amount that the Commission will pay on the license holder's behalf?

$100k

An administrative penalty cannot exceed

$5k

There are also exemptions to the license requirement. These roles do not require a license in order to practice their profession:

-A licensed attorney in Texas -A public official while engaged in official duties -An on-site manager of an apartment complex

Executory Contract

-MLS status shows "pending" rather than "for sale" or "sold" -a contract that is not completely executed or performed

Who TREC Oversees

-Real estate inspectors 🔎 -Easement/right-of-way agents 🛣 -Education providers for real estate & inspection courses 📚 -Developers of timeshares ⛱ -Residential service companies 🏠 -Real estate brokers and sales agents 🕵️

Executed Contracts

-The property's listing status in the MLS is changed from pending to sold. -a contract in which all terms have been fulfilled by all parties

Vendee's Liens

-a document declaring a claim from a buyer that the seller has not transferred title to the buyer -ensure the repayment of what the buyer paid

Rectangular Survey System

-a more refined version of the longitude and latitude system of mapping with a surveyed grid of meridians, baselines, townships, and ranges to describe a piece of land -example: "T1N, R1E"

Encroachment

-an illegal use of another land owner's property -a physical intrusion on someone else's property without direct permission

Concurrent Estates

-community property -joint tenancy

Unliateral Contract

-contests, rewards, and commissions are examples -a contract in which only one of the contracting parties is bound

Bilateral Contracts

-creates reciprocal obligations -an agreement in which both parties give consideration and promise to perform

Freehold Estate

-defeasible fee estate -life estate

Mutual Agreement

-discharge can be for any reason if all parties agree -when all parties mutually agree to cancel the contract

Bail Bond Liens

-enforceable by a court officer or the sheriff if the accused property owner does not appear in court -put up in the form of real estate in lieu of cash when a property owner is accused of a crime

Execution Liens

-gives court officers the right to confiscate and sell the debtor's property to satisfy the debt -can be issued by a court to force payment of monies owed from a judgment when a debtor does not pay

Equitable Estates

-if another party has an easement on your property -commonly created by encumbrances

Legal Description

-included in a deed to the property -required for a contract

Parcel

-individual lots combined to make block -A plat (a.k.a. plat map or recorded plat) is used to identify lot and block references for legal descriptions.

Obedience

-is only required if legal -the principal is the ultimate decision-maker

Vertical Land Description

-most commonly used when air rights and subsurface rights need specific explication -the method for expressing condominium ownership boundaries

Restrictions

-outline what someone may not do on their own personal piece of property -usually created by the developer of a subdivision

Leasehold Estates

-periodic estate -estate for years

Non-performance due to legal issues

-permissible discharge of a contract to avoid the violation of law -a party cannot be compelled to perform an illegal act to meet the terms of the contract

Partial Performance

-the party injured by the other party's failure to fully perform can seek legal restitution or discharge the contract -when at least one party performs only a portion of the agreed-upon contractual duties

Liens

-use subordination agreements to change the priority -evidence an owner's debt and obligation to pay the debt

Lot and Block System

-used when parcels of land are divided up into individual lots -example: Lot B, Block 22 of Rose Creek, Ace County, Texas

Easements

-usually created by an agreement between two parties or out of necessity -the rights of use by another will convey in the transfer of that deed or title

Substantial Performance

-when a party performs the majority of the contract's requirements, but not all -the under-performing party has usually fulfilled enough of the contract's obligations to gain legal enforcement of the contract

Mortgage Liens

-when a person buys a home, the home itself becomes collateral for the loan, so the lender obtains it -specific because they only apply to the property that is secured by the debt and voluntary because owner voluntarily enters into the contract

Judgement Liens

-when decrees given by courts specify the amount of money owed -takes effect only after it has been recorded in the county clerk's office

Within how many days of a move does a broker need to tell the Commission about their change of address?

10

After receiving a notice of violation, how many days does a license holder have to request a hearing?

20 days

After how many days will the Commission notify an applicant of their moral determination?

30

1 township

36 sections

Township lines intersect with range lines to create townships, which are how many square miles?

36 square miles

1 acre

43,560 square feet

How many square feet are there in an acre?

43.560

1 mile

5,280 feet

Township lines run west and east, parallel to the baseline. How many miles apart from each other are they?

6 miles

How many lawyers are on the Broker-Lawyer Committee?

6 six

1 section

640 acres = 1 square mile

Plat

A drawing of a development used in the lot and block method

Is "123 Buyer Lane, San Antonio, TX 78216" an adequate legal description? Why or why not?

A street address is not an adequate legal description; it is considered an informal reference. For purposes of legal documents, the exact size and location of a property requires precise measurements and descriptions.

An abbreviated history of a property, including info on any transfers, grants, wills, conveyances, liens, and encumbrances is called what?

Abstract of title

What is the difference between actual and punitive damages?

Actual damages are designed to compensate the claimant; punitive damages are designed to punish the defendant

What right does an easement grant?

An easement gives a party the right to use the property owned by another party.

What must you have if you wish to sell, buy, lease, or transfer an easement or right-of-way?

Certificates are necessary to perform transactions with easements or right-of-ways. Be sure to review the revocation rules to make sure you keep yours!

Which of the following phrases would be considered discriminatory if used in an advertisement?

Christian Neighborhood

Who is responsible for informing employees of their conduct expectations and responsibilities?

Commissioners

CRA

Community Reinvestment Act

What two documents were sent to TREC by Deb for her claim?

Deb sent the Writ of Execution and Abstract of Judgement along with all other necessary paperwork to TREC.

A person who possesses a broker's license and is responsible for not only their own actions, but the actions of every license holder in their real estate office is called a:

Designated Agent

Sally and Fred are two single people buying a home together. The lender is threatening to deny them a loan because he does not like their lifestyle. If the lender does that, it will be a violation of the:

ECOA

When a person passes the Texas exam for real estate, they:

Have met the competency requirement under TRELA

What is one instance in which the commission allows license holders to use alternatives to the required, or promulgated, forms?

If the alternative form is prepared by the property owner themselves

Lot

Individual parcel of land measured and defined by the metes and bounds system

Which legal description will likely include the phrase "point of beginning"?

Metes and bounds

Shane learned that a seller has already signed a listing agreement with another agent in town. Wanting to represent the seller, Shane attempted to convince the seller to terminate their current agency agreement and sign a representation agreement with him instead. Is this legal? Why or why not?

No, it is against TREC rules to try and convince someone to terminate an agreement with another license holder

Was Tom right in discouraging his clients from taking the closing documents to an attorney?

No, you should never discourage clients from seeking the advice from an attorney

What is the term for when a defendant in a criminal court does not admit they are guilty but still accepts punishment for a crime?

Nolo contendere

When a property is talked about in a meeting or via written communication, that is called:

Substantive dialogue

Promulgated contracts are prepared by

TREC

Where did Deb file the paperwork for her claim?

TREC

If an agent closes a sale unaware of hidden water damage to the roof, the agent would be most likely covered by errors & omissions insurance if a lawsuit were to be filed.

TRUE

TCEQ

Texas Commission on Environmental Quality

TRELA is a law passed by the Texas Legislature to govern:

Texas Real Estate

Who enforces the Texas Real Estate License Act?

Texas Real Estate Commission

Chapter 1101 of the Texas Occupations Code is the _____________________.

The Real Estate License Act

How does the Real Estate License Act require brokers to provide consumers with information for the purpose of filing complaints?

The broker must display Consumer Protection Notice TREC No. CN 1-2 in each place of business

What happens when the association of a salesperson and a sponsoring broker is terminated?

The broker returns the sales agent's license to the commission

Who pays for mortgage title insurance?

The buyer

How can a potential student find the pass rates of real estate education providers?

They are posted publicly online by TREC

How do the time requirements for online continuing education classes compare to in-person continuing education classes?

They are the same

Range lines run parallel to the meridian, running north to south.

True

The TCEQ is tasked with regulating which of these things?

Water Rights

Municipal Utility Liens

When a property owner refuses to pay bills for municipal utilities

Can a license holder renew their expired license if it has been expired for 5 months?

Yes, but they must pay an additional fee equivalent to twice the amount of the renewal fee

Block

a collection of lots (parcels)

Who is eligible to request that the Real Estate Commission pay out of the trust account to a defendant who has lost a case?

a defendant's previous employer

Committing a real estate act without a license is what kind of crime?

a misdeamor

About how long can you have an expired license but still be eligible to reactivate your license without retaking the state exam?

about 2 years

Subpoena authority exists to:

allow the commission to bring witnesses to court

Nolo contendere means that a person was accused of something and was a defendant in a trial:

and will accept the decision of the court without pleading guilty to the charge

Metes and bounds

are a written legal land description identifying a piece of real estate's exact dimensions and location in reference to a fixed and permanent monument.

When does the information about intermediary brokerage contained in the IABS need to be given to a consumer?

at the first face-to-face meeting where substantive dialogue about a specific property occurs

Which party must remain neutral during a transaction?

broker acting as intermediary

What is it called when an agent illegally mixes their money with client money?

commingling

In order to get their license, a TREC real estate license applicant MUST:

demonstrate competence by passing the licensing exam

As a license holder, what could help protect you against mistakes you might make in real estate transactions?

errors and omissions insurance

TREC requires applicants to pay renewal fees every how many years to maintain an inactive license?

every two years

Where does the money in the recovery fund come from?

fees and fines paid by license holders

What is one way an applicant can satisfy the related post-secondary education required for a broker's license?

getting a college degree

How do you pay a penalty while still ensuring that your payment does not go through until the appeal is over?

give a supersedeas bond

Once all hearings and appeals have been completed, a broker or sales agent will have to start paying what on any owed funds?

interest

What are nolo contendere pleas sometimes referred to as?

no contest pleas

How long from the TREC filing date does an applicant have to take the state exam?

one year

Metes

refers to the distance measurements used in the description

The National Association of REALTORS® Code of Ethics:

requires a higher standard than the law requires

In order for an individual to be eligible for a real estate license, they MUST:

satisfy the commission as to their integrity

Agent Sam owes Agent Layla a referral fee. How must he get it to her?

send it to Layla's sponsoring broker

All listing contracts in Texas must include two pieces of information: the special rules concerning anyone who lives on a coast and what else?

that all commissions are negotiable

If the buyer asks if the seller has AIDS or HIV, the agent's response should be:

to give notification that the question might be violation of the Fair Housing Act

When can a salesperson start practicing real estate?

when their physical license is received by their sponsoring broker

The Broker-Lawyer Committee

-Members: 13 (6 brokers appointed by TREC, 6 lawyers appointed by the president of the Texas Bar, 1 public member appointed by the governor.) -Membership Term Length: 6 years -Committee Purpose: Draft and revise contract forms for the approval and adoption by TREC.

Texas Real Estate Commission (TREC)

-Members: 9 (All appointed by the governor and confirmed by at least 2/3 of Texas Senate.) -Membership Term Length: 6 years -Committee Purpose: Enforce the Texas Real Estate License Act

Discriminatory Practices

-closely resemble the Fair Housing Laws -The protected classes include race, color, religion, sex, national origin, ancestry, familial status, or disability. -prohibit license holders from answering questions that would lead to disclosures about the protected classes

Which of these tenants is protected by the Fair Housing Act?

A seeing-impaired woman who uses a service dog in a pet-free building

Why is it important to stay on top of your license renewal and expiration dates?

After a license has expired there is an extra fee for renewal

How often will you be formally evaluated in the workplace?

Annually

If a license holder does not disclose a defect in a property to a customer or client because the broker or sales agent did not know about the defect, the license holder is still liable.

FALSE

What direction do longitude lines, or meridians, run?

North to South, Perpendicular to the equator

Tract

The totality of the property represented on a plat

How many tries does an applicant have to pass the state licensing exam?

Three

Who is at fault for not filing the closing paperwork in a timely manner?

Ulysses (Agent)

Bounds

on the other hand, are the descriptions of the boundaries that enclose a parcel of real estate.

What is one promulgated form that TAR has and TREC does not?

the Intermediary Relationship Notice form

What is the recovery fund used for?

to pay damages to a person from the public who wins a court case against a license holder

At what age does a child living with his or her parents no longer qualify for familial status protection under the Fair Housing Act?

18, they are no longer considered a child by the Fair Housing Act and do not receive the act's protections.

Which statement is NOT true regarding death on a property?

Agents are able to disclose deaths at their discretion

Using the general terms of agency law, which party is represented by another party?

Principal

The introduction to the National Association of REALTORS® Code of Ethics is called the:

The preamble.

Since Ulysses said he would take care of closing, did he technically do anything wrong with Sam's money?

Yes, agents should never hold onto money that does not belong to them.

What is a main function of the Texas Real Estate Commission?

adopt and enforce rules for governing real estate practitioners

If a salesperson has no interest in opening their own brokerage, why might they still want to get a broker's license?

for marketing purposes

What should a license holder do when reporting facts in an advertisement?

quote the source of the information

Equal Credit Opportunity Act

-illegal to discourage anyone from applying for credit -illegal to offer anyone credit on terms that are less favorable than terms offered to someone with similar qualifications

Why do most brokerages fall within the scope of the ADA, and therefore must be extra careful about accessibility?

Because of their location or because they have 15 or more employees

What does the integrity portion of the Canons of Professional Ethics charge license holders with avoiding?

Misrepresentation

What is the definition of misrepresentation?

Misrepresentation is an unintentional mistake, written or spoken.

What is the difference between the NAR Code of Ethics and the Canons of Professional Ethics and Conduct?

The NAR Code of Ethics is enforced by NAR; the Canons of Professional Ethics and Conduct are enforced by TREC

If the Code of Ethics and the law conflict, which takes precedence?

The law

What is the best definition of blockbusting?

The practice of encouraging people to sell their homes due to beliefs about how the entry of a protected class will affect an area's property values

The protected class of disability is defined as anyone who has:

a physical or mental impairment that affects the performance of one or more major life activities

Competency

-It is the obligation of a real estate agent to be knowledgeable as a real estate brokerage practitioner. -The agent should be informed on market conditions affecting the real estate business. -The agent should exercise judgment and skill in the performance of the work.

Which of the following is NOT true regarding a license holder's obligation to disclose a property defect:

-Only if the Buyer asks -A license holder is required to disclose a property defect if the seller has disclosed the defect at all.

Fair Housing Act

-a federal law that prohibits discrimination in housing based upon race, color, religion, or national origin and was amended to include sex, disability, and familial status -does not apply to housing developments that are designed for senior citizen living

Home Mortgage Disclosure Act

-allows HUD to spot problematic lending patterns and helps support lawsuits or other disciplinary measures -requires lenders to disclose specific lending information for HUD to map lending patterns

Integrity

-employment of prudence and caution -Don't advise on matters outside the scope of your real estate license. -avoid misrepresentation -Don't exaggerate, misrepresent, or conceal any important facts relating to a property or transaction.

Americans with Disabilities Act

-establishes requirements for telecommunications relay services -prohibits discrimination against people with disabilities in employment, transportation, public accommodation, communications, and governmental activities

Disclosure

-if it will help the client, the agent should share it -including sharing of material facts about a property

Community Reinvestment Act

-requires lenders to assist their local communities by participating in community development projects -enables all parts of a community to have access to credit

Reasonable Care

-standard is based on what most agents would do -assumes agent expertise will be used in handling client's concerns

Competency

-stay informed on market conditions affecting the real estate business -complete the continuing education -exercise judgment and skill in the performance of the work -limit your activities to only the services that you're fully qualified to provide

Loyalty

-the buyer's agent should get the lowest price possible, even if it means less commission -the principal's best interests come before the agent's interests

Which parties need to be told if an agent is representing anyone?

A license holder must disclose orally or in writing to others of their representation of a party to a real estate transaction at the first contact.

Why should real estate agents refrain from giving legal advice to clients?

Agents aren't licensed to give legal advice and if they do, they could be held liable

What is the BEST way to avoid giving misinformation (and consequently, violating the Texas Deceptive Trade Practices-Consumer Protection Act)?

Cite a source for any information you give a client about a property

What form does the Canons of Professional Ethics and Conduct say must be on display in a readily noticeable location in each of the real estate brokers places of business?

Consumer Protection Notice 1-2`

A person who is employed to rent and by the owner needs a real estate license

FALSE

Families Crave Resorts Not Small Damp Ramps

Familial Status Colors Religion National Origin Sex Disability Race

Canons of Professional Ethics and Conduct

Fidelity Integrity Competency Consumer Information Discriminatory Practices Information About Brokerage Services

Fraud vs. Misrepresentation

Fraud is intentional; misrepresentation is not. Fraud generally includes both affirmative misrepresentations and affirmative concealment, and the person making the misrepresentation is aware of the true facts.

Discriminatory Practices

No real estate license holder shall inquire about an owner of real property which indicates any preference, limitation, or discrimination based on a person's inclusion in a protected class.

An elderly couple is going to rent their vacant basement for extra income. The couple does not want a family with children. The couple asks their granddaughter, who is a real estate agent, to help them with finding tenants. Is this legal? Why or why not?

No, the couple is not allowed to discriminate against families with children if they are helped by their granddaughter because she is a license holder

Carla has clients looking for a rental property who only speak Spanish. What should she do to accommodate them?

Non-English speakers should be treated the same as English-speakers, and should therefore be shown the same properties, regardless of language. However, there are official translated lease forms that could help them understand the contract they're signing.

OLD CAR

Obedience (if legal) Loyalty (100%) Disclosure (full) Confidentiality (forever) Accounting (forever) Reasonable care

What is one important difference between REALTORS and other practitioners?

REALTORS are held to a higher standard than the law by the NAR Code of Ethics

Fair Housing Act Protected classes

Race Color Religion National origin Sex Disability Familial status

Which one of the following actions is most likely to be a violation of the Texas Deceptive Trade Practices-Consumer Protection Act?

The Deceptive Trade Practices Act prohibits the license holder from knowingly and/or intentionally deceiving the consumer in the selling or leasing of any real property. Providing a list of professionals to choose from does not violate the law. Continue

Information About Brokerage Services

The Notice could be delivered by the broker or sales agent, first class mail or overnight common carrier delivery service, in the body of or as an attachment of an email. Brokers and agents need to provide this notice to consumers.

What is the name given to the duties owed by agents to their clients?

The duties owed by agents to their clients are known as fiduciary duties.

According to the Canons of Professional Ethics, the primary duty of a real estate agent is to represent:

The interests of their client

Landlords are required to allow tenants to make modifications to their property in order to accommodate their disability. Who's responsible for paying for these modifications?

The tenant

What categories of people are barred from serving on the Commission?

Trade association employees and lobbyists are barred from membership

What is one of the major tenets in the NAR Code of Ethics?

Treat all parties fairly and honestly, not just those you represent

Was it a violation for Tom to agree to inquire about the previous owner's death?

Yes, Tom's inquiry was in violation of Fair Housing Laws

Which of the following people would need a real estate license?

a person selling their neighbor's home for a free

What two important classifications were added to the list of protected classes under the 1988 Housing and Community Development Act amendment?

familial status and disability


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