Chapter 1: Commission Duties and Powers

Recovery Trust Account Payments

The $10 paid by everyone who applies to get their license for the first time All of the penalties charged by the Real Estate Commission for violating the license act Any fine charged by TREC as a penalty for someone who practiced real estate without a license If the balance goes below $1,000,000, every license holder will also have to pay an additional $10 at their next renewal.

TRELA's List

-Are found guilty or plead no contest to a felony or fraud -Receive their license by some form of deceit -Perform a transaction for themselves or a family member and commit fraud -Send a bad check to TREC and fail to pay -Fail to give requested documents to TREC -Fail to provide documentation requested by TREC about a complaint -Fail to give a requested document to an owner -Fail to use the required forms available -Fail to notify TREC within 30 days of being found guilty of a felony -Disregard the license act's regulations -Act negligently or incompetently -Are dishonest, act in bad faith, or are untrustworthy -Misrepresent or fail to disclose a material fact about a property -Make a false promise -Make a flagrant misrepresentation -Fail to disclose any agency relationship -Fail to let both parties know if they are receiving compensation from both -Fail to return money in a timely manner -Commingle someone else's funds with their own -Pay a fee or share a commission with an unlicensed person -Fail to notify a party about a termination date in a contract -Receive an undisclosed commission -Try to sell a property using a lottery system -Practice real estate deceptively -Act as an undisclosed seller or buyer in a transaction -Guarantee future profits will come from a property -Place a sign on a property without the owner's consent -Offer a property for sale or lease without the owner's consent -Offer a property for something other than the terms the owner set -Induce someone out of a contract or agency with someone else -Steal a client away from another license holder -Place a misleading ad and/or fail to mention status as agent or broker -Insert anything into an invoice that should not be there -Make a threat of legal action

Duties of TREC

1. Issuing and renewing real estate licenses 2. Revoking or suspending licenses 3. Reinstating proceedings against individuals practicing real estate without an appropriate license *Protect consumers from fraudulent conduct of license holders who assist them with real estate transactions and oversee the educational requirements.

Functions of TREC

1. To enforce all real estate-related statutes in the Texas Occupations Code, Chapter 1101 and 1102, also referred to as The Texas Real Estate License Act (TRELA) 2. To adopt and enforce new rules governing the practice of real estate, as needed to administer the law and protect the public

Hearings

According to TRELA, if the Commission proposes to deny, suspend, or revoke a person's license or certificate of registration, the person is entitled to a hearing conducted by the State Office of Administrative Hearings. In this situation, a judge would hear the case and read through the recommendation of the Enforcement Division of TREC. Then they would issue a decision.

TRELA Violations

Both TREC and the local government have the power to reprimand the violators of the License Act (TRELA). Engaging in conduct that is dishonest, fraudulent, or negligent may result in: -Administrative penalties (TREC can levy an administrative penalty up to $5,000 per violation per each day a violation continues.) -Civil fines (License holders can be charged a penalty up to three times the amount of money they received on a transaction.) -Criminal charges (Local government can charge license holders with a misdemeanor for violating TRELA.) If a license holder does receive notice of violation from TREC, they have 20 days to either accept the decision or ask for a hearing.

Appeals

If the license holder is not satisfied with the decision, they can appeal even further. The next stop after the State Office of Administrative Hearings is the district court. If the license holder is still not satisfied after that decision is made, they can go to the Texas Supreme Court or present their case directly in front of the Commissioners. Of course, nothing says the agent has to fight the decision. They could agree with it and accept the punishment for their violation.

Composition of TREC

Nine members, all appointed by the governor, who serve six-year terms. These terms are overlapping, so not all nine terms end on the same date. They have six broker members and three non-licensed members with no financial interest in real estate. The governor designates a member to serve as the Chair of the Commission.

Filing A Complaint

Sec. 1101.202 of TRELA establishes methods by which consumers are provided the name, mailing address, and telephone number of the Commission for the purpose of directing complaints from the public. Such notice is provided in the Consumer Protection Notice TREC No. CN 1-2. This must be prominently displayed in each place of business. This form can be obtained from TREC'S website. The Commission is required to maintain a prompt and efficient system for maintaining a file on each complaint and the requirements of what must be included in each file. The commission will periodically notify the parties as to the complaint status until final disposition, unless the notice would jeopardize an undercover investigation.

Broker Lawyer Committee

Six attorneys appointed by the State Bar Six brokers appointed by the Commission One public member The Committee does not have any rule-making ability and can't force Texas license holders to use the contracts they create. Instead, it creates, edits, and recommends contract forms to TREC, which then decides to either promulgate the recommended forms (i.e., require license holders to use them), make them voluntary (i.e., approve them but not require them), or dismiss them.

Suspension

TRELA contains a long list of specifically prohibited acts that could put an agent or broker's license in danger of _______ or revocation. Most of these behaviors represent a failure on the part of the license holder to perform their duties to clients and customers, while others have to do with a broker or agent not meeting their obligations to TREC. And a few of these prohibited acts even rise to the level of criminal behavior.

Complaint Investigation

The Commission is authorized to file a complaint and conduct an investigation as necessary to enforce the Texas Real Estate License Act. The commission will investigate the actions and records of a license holder if a person submits a signed written complaint related to that license holder. The submitter must provide reasonable cause for the investigation within four years of the date of the incident — hopefully sooner (the statute of limitations is four years).

Recovery Trust Account

The commission maintains a monetary fund to reimburse members of the public who have been financially harmed by the unlawful or unscrupulous practices of its license holders. This reimbursement fund is referred to as the Real Estate Recovery Trust Account or the Recovery Trust Account. Payments made from the Trust Account must be court ordered and are limited to: $50,000 arising out of a single incident, or $100,000 per license holder (unless the debt has been repaid with the accrued interest) Note: In order for a consumer to receive payment from the Recovery Trust Account, the complaint must be filed within two years of the incident.

Education Standards Advisory Committee

To ensure that license holders are well trained and have an understanding of their limitations and responsibilities in their real estate practice, TREC established this. The function of the ESAC is to review and revise curriculum standards, course content, and instructor certification requirements for both Qualifying and Continuing Education (CE) courses. The committee consists of 12 members appointed by TREC as follows: -Seven members who are license holders with at least five years of active real estate experience -Four education members who are real estate instructors or owners of real estate schools, accredited by TREC, that provide qualifying or continuing education -One member who represents the public

Probation

Unethical practices and violations of TRELA are grounds for a suspended or revoked license. In some cases, TREC may place a license holder on probation. There are a few things that could happen during probation: The Commission could require the license holder to make regular reports. They could also instruct the broker or sales agent to avoid the type of real estate practice that caused the initial problem. The license holder may be required to take more education in real estate until the skill of the agent is increased in the area that caused the violation. If a complaint is filed while the license holder is on probation (and they are found to have violated the License Act), the original decision of suspension or revocation will be applied to that person.