Texas Real Estate Final Exam

If a broker does not have a written agreement to represent the buyer, what recourse does the broker have if another broker "steals" a client?

A buyer can choose the broker with whom the buyer wants to work. TREC does not determine what constitutes "procuring cause" or who is entitled to a commission or other compensation. Like a listing agreement, the buyer representation agreement must be in writing and signed by the buyer to be binding.

I signed a buyer representation agreement, but I want to work with a different Broker. Can I cancel the agreement?

A buyer representation agreement is intended to be a legal and binding contract. You can ask the broker to release you from the buyer representation agreement. However, TREC does not have the authority to require a broker to release you from the agreement. If the broker refuses to release you from your buyer representation agreement, you should seek the advice of a private attorney.

What is the definition of a "commission"?

A commission or fee includes any form of compensation received for engaging in an act for which a license is required, essentially anything of value.

What is the required information that must be provided in advertisements such as signs, email and business cards?

All advertisements must comply with TRELA Rule 535.155 requires each advertisement to include the following items in a readily noticeable location in the advertisement: The name of the license holder or team placing the advertisement; and The broker's name in at least half the size of the largest contact information for any sales agent, associated broker, or team name contained in the advertisement. Notes: A broker's name includes a broker's assumed business name that has been registered with TREC. Requirements for an assumed business name and team name are set out in There is no requirement that a phone number or email address included in an advertisement belong to the broker.

Can a sales agent have a commission check written to the sales agent's own corporation or Limited Liability Company? If so, does that entity have to be licensed as a real estate broker?

All commissions must be paid through the agent's sponsoring broker. Further, a business entity that receives compensation on behalf of a license holder must be licensed as a broker.

Can a license holder offer to give a $50 gift card to an unlicensed person for referring a potential lessee or buyer?

Although a license holder may not pay an unlicensed person valuable consideration for referring a potential lessee or buyer, gifts of merchandise with a retail value of $50 or less are not considered valuable consideration. Therefore, a $50 gift card that is only redeemable for certain merchandise (e.g. a gift card to a restaurant or department store) is not defined as valuable consideration and is permissible. A gift card from a bank (e.g. Visa or American Express), however, which can be converted to cash is not permissible. Any amount of cash or a credit or bonus toward rent owed is also not allowed as a reward for a referral.

What is considered an advertisement?

An advertisement is defined as "any form of communication by or on behalf of a license holder designed to attract the public to use real estate brokerage services and includes, but is not limited to, all publications, brochures, radio or television broadcasts, all electronic media including email, text messages, social media, the Internet, business stationery, business cards, displays, signs and billboards." An advertisement does not include a communication from a license holder to the license holder's current client.

When can an agent say that they "sold" a property in an advertisement?

Any agent who worked with the seller or the buyer in a transaction that resulted in the sale of a property may correctly state in an advertisement that they "sold" the property. If the license holder did not participate in that specific transaction, he cannot state or imply that his actions resulted in the sale of that property. An example of a misleading advertisement of this nature would be if a license holder sent out "Just Sold" postcards with her contact information and a picture of a recently sold property that she did not help to sell. She didn't state that she sold it but an average person reading the card could surely and reasonably imply an erroneous claim of involvement. Another potential example of a misleading advertisement is a license holder who included a list of "Recently Sold Homes" in his advertisement that included many properties where he had no role in the transaction, but he failed to make it clear in the ad which - if any - of those transactions he was involved in. Under Texas law, a license holder may not "create a misleading impression" in their advertisement. A broker must review all ads to ensure this result is avoided.

What is an associated broker?

Associated broker means a broker who associates with and is paid through another broker under a relationship that is intended to be a continuous relationship, including but not limited to, an employment or ongoing independent contractor relationship.

What is the difference between an assumed business name and a team name?

Assumed Business Name (also known as a dba) is another name for the broker's business that can be used by all sponsored sales agents and brokers associated with this broker. Another name that indicates a broker's line of business, e.g. property management or commercial, is also an assumed business name of the broker, even though it may not be available for use by all sponsored agents and associated brokers. Team Name is a name used only by a team or group of one or more sponsored sales agents or brokers associated with this broker. Team names must end in "team" or "group" and cannot contain the words "brokerage", "company", "associates" or other similar terms.

Who registers an assumed business name, team, or alternate name?

Assumed Business Name: Broker Team Name: Broker Alternate Name: Individual License Holder Remember -- all these types of names must be registered with TREC before use in advertising.

If a buyer wishes to have a hydrostatic test performed on a home, what is required for a seller to consent to such a test?

Both TREC forms 20-14 and 30-12, The One to Four Family Residential Contract (Resale) and Residential Condominium Contract (Resale), state, "Any hydrostatic testing must be separately authorized by Seller in writing." Therefore, there must be a separately signed document of authorization by the seller for a hydrostatic test. Thus, for example, any authorization language in the special provisions of the standard Resale contract is not separate consent by a seller.

What is proof of legal authority to use an assumed business name in Texas?

Generally, in Texas, filing an assumed business name is required to put the public on notice that you are doing business under a name other than your legal name. For most business entities, the assumed business name is filed with the Secretary of State. For a general partnership or individual broker, the assumed business name is filed with the county clerk in the county or counties where you do business.

My license is expired or on inactive status with TREC. Can I receive money for referrals?

Generally, no. Your license must be on active status at the time you make the referral. If you made the referral while you were active, however, you may collect that fee while you are expired or on inactive status. In addition, if you are a licensed sales agent, the referral fee must be paid through your sponsoring broker.

What happens if a license holder is convicted of a crime?

If a license holder is convicted of a felony or a criminal offense involving fraud it is a violationof the License Act. This section gives the Commission authority to suspend or revoke a license holder that has entered a plea of guilty or nolo contendere or has been convicted of a felony or any criminal offense that involves fraud (including misdemeanors). The Commission does not have the authority to revoke or suspend a license holder that has been only charged or accused of committing a felony or criminal offense that involves fraud. A license holder is required to notify the Commission not later than the 30th day after the final conviction or the entry of a plea of guilty or nolo contendere. Failing to timely notify may result in more severe or further disciplinary action. All license holders' criminal backgrounds are rechecked upon renewal, however, this does not excuse a license holder from notifying the Commission not later than the 30th day after the final conviction.

I was trying to buy a house and the earnest money was deposited in the broker's escrow or trust account. The transaction has fallen through and now the broker won't return the earnest money.

If the broker used a Commission promulgated form, it contains provisions permitting the broker to require the buyer and seller to agree on who gets the earnest money and to sign a release before the money is disbursed. See Rule 535.146(d) for proper procedures for handling earnest money disputes where the broker is holding the money in a trust or escrow account.

My wife and I signed an offer to buy a house over the weekend. Now we have changed our minds and don't want to buy the house after all. Can we get out of the deal?

If the seller has accepted your offer, you may have a binding contract. There is no automatic three-day or 72 hour cooling off period for you to change your mind like in some other consumer contract situations. Any rights that you have to terminate the contract will be contained in the contract. For example, you may have paid a fee to obtain an "option" period in the contract. You should consult with a private attorney for advice regarding termination of your contract.

Can a broker pay all or a portion of a commission or fee to an unlicensed person?

In general, no. However, a license holder may rebate all or a portion of the fee or commission to the party being represented in the transaction, or, with consent of the party being represented, the license holder can also pay all or a portion to a party the license holder does not represent in the transaction.

Can a broker share a commission or other compensation with an attorney when the attorney is a principal in the transaction?

It is not a violation of TRELA or the Rules for a license holder to rebate a portion of their compensation to a party in the transaction. If the rebate is to a party the license holder does not represent, the license holder must obtain the consent of the party the license holder represents. This must be done before making the payment.

Can listing agreements be extended?

Listing agreements are private contracts between a real estate broker and a seller. The terms of the contract and/or desires of the parties would determine whether the listing agreement can be extended. You should contact a private attorney if you have any questions about extending a listing agreement.

Is a broker required to act as an escrow agent or hold the money of others?

No, not unless the broker agrees to do so.

Is a broker required to have a trust or escrow account?

No, not unless the broker agrees to hold money belonging to others or to act as an escrow agent.

Can TREC obtain reimbursement of commissions paid by buyers and sellers to brokers and sales agents for compensation in real estate transactions?

No, unless a refund is ordered by TREC in conjunction with an agreement resulting from an informal settlement conference or an administrative order. However, the amount ordered may not exceed the amount the consumer actually paid to the license holder for the services subject to TREC regulation and may not require payment of other damages or estimate harm. In addition, TREC has no jurisdiction or authority to enforce collection of such amounts.

When a contract falls through, can part of the earnest money be held to pay the commission fee for the other real estate license holder?

No, unless the parties agree in writing otherwise.

Is a license holder required to put their license number on a sign or other advertising?

No.

Can a listing broker share a portion of the listing broker's commission with an attorney who represented the buyer in a real estate transaction?

No. A broker is prohibited from sharing fees with or otherwise compensating the attorney acting as a buyer's agent unless the attorney holds an active real estate license.

As a broker, am I the only person who can sign a check written on my trust account?

No. A broker may authorize another license holder to withdraw or transfer money from a trust account. The broker, however, remains responsible and accountable for the trust account and for the proper handling of trust money received by the broker.

Does TREC have a promulgated buyer representation agreement?

No. A buyer representation agreement is a private contract between a real estate broker and a buyer and is not promulgated or regulated by TREC. You should consult with a private attorney. The Texas Association of Realtors (TAR) provides certain forms to its members. If you are a member, TAR may have a form that fits your needs.

I'm changing sponsoring brokers. Can I take the buyers I represent with me to the new broker if the buyers signed buyer representation agreements?

No. A buyer representation agreement is a private contract between the buyer and the real estate broker, not the sales agent. As such, the buyer would still be represented by the sales agent's previous broker. The buyer may, however, seek to be released from the buyer representation agreement.

Can a real estate license be revoked because a license holder files for bankruptcy?

No. A license holder's bankruptcy does not affect a pending complaint or limit disciplinary action by TREC. If the underlying conduct violates TRELA, disciplinary action can be taken against the license holder for the underlying conduct. Further, a judgment that involves conduct that violates TRELA may be eligible for payment from the Real Estate Recovery Trust Account even if the debt was discharged in bankruptcy.

I am the listing broker. An attorney has presented an offer from a buyer that the attorney represents and wants me to share my commission. Can I do this?

No. A licensed broker is prohibited from sharing compensation with anyone who acts in the capacity of a broker but is not licensed as a broker. In cases such as this, the listing broker still needs to present the offer to the seller. The listing broker should inform the seller that the broker is prohibited from sharing compensation with the attorney. Assuming the attorney is licensed in Texas, the seller and buyer may work something out between themselves regarding any compensation to be paid to the Texas attorney. The listing broker can agree to reduce the commission if requested by the seller without violating the prohibition on splitting.

Does TREC have a promulgated listing agreement form?

No. A listing agreement is a private contract between a real estate broker and a property owner and is not promulgated by TREC. The Texas Association of Realtors (TAR) provides certain forms to its members. If you are a member, you may find a listing agreement form that meets your needs through TAR. Otherwise, you should consult with a private attorney.

Can an associated broker use his or her own assumed business name in advertising?

No. A name used in advertising by an associated broker that is not the associated broker's licensed name must be registered as a team name by the broker he or she is associated with and meet all the requirements for a team name.

Can a sales agent receive or pay a commission to a party in a real estate transaction?

No. A sales agent may not accept compensation for a real estate transaction from anyone other than the broker the sales agent was associated with at the time the commission was earned and may not pay a commission to a person except through the sales agent's sponsoring broker.

I have completed several courses for my law degree. Can any of these courses be used towards the required qualifying courses to obtain a sales agent license?

No. All sales agent applicants must complete the required education.

Does Deferred Action for Childhood Arrivals (DACA) status qualify as a lawfully admitted alien?

No. An individual with DACA status does not meet our licensing requirements as a lawfully admitted alien. The US Citizenship and Immigration Services (USCIS) Department website specifically states that deferred prosecution does not provide lawful status to a DACA recipient. Receiving a social security number and card does not provide lawful status to a DACA recipient, it merely provides proof of the work authorization granted by USCIS. To be considered a lawfully admitted alien, you must have a green card or Permanent Resident card.

Can an individual sales agent use an assumed business name in advertising?

No. Any name used by an individual sales agent, other than the name on the license or a registered alternate name, is considered a team name under TREC rules and must meet the team name requirements.

I loaned Broker Smith $10,000 to build his real estate office and now he won't repay me. Can you help?

No. Failure to repay a loan constitutes a breach of your private agreement with the license holder and is not a violation of TRELA or the Rules. In addition, since it is not a violation of the License Act, any judgment obtained would not be eligible for payment from the Real Estate Recovery Trust Account.

Do I need to go to Texas to be fingerprinted?

No. If you reside outside the service area of MorphoTrust you may request a Hard Card to get fingerprinted. A TREC-specific Hard Card must be obtained from TREC because it contains coding required by the DPS and FBI. MorphoTrust has details on how a Texas Non-resident can complete the fingerprinting process using a Hard Card.

Can a name used in advertising be both an assumed business name and a team name?

No. It will be one or the other. See question regarding the difference between the types of names to figure out which one is appropriate for your situation.

I am changing sponsoring brokers. Do I get to take my listings with me?

No. Listing agreements are private contracts between the property owner and the real estate broker, not the sales agent.

My agent moved to another broker's office and I want them to continue to handle my listing. Can I switch my listing to the new broker's office?

No. Listing agreements are private contracts between the property owner and the real estate broker, not the sales agent. You can ask the original broker to release you from the agreement or contact a private attorney to advise you if you can terminate the listing agreement in some other fashion. TREC does not have the authority to require a broker to release you from a listing agreement.

Can a license holder offer to enter an unlicensed person in a drawing to win a cruise for referring a potential lessee or buyer?

No. Since the cruise would have a value greater than $50, it is defined as valuable consideration. Although entering a name into a drawing may not have a cost associated with it, whoever won the drawing would be receiving valuable consideration. In addition, a "referral" drawing may be considered a contest defined as an illegal lottery under Sections 47.01(7) & 47.03(5) of the Texas Penal Code.

Does TREC require the use of a "contract" for inspections which would outline the responsibilities of the parties to the contract or have a form inspectors can use?

No. TREC does not require a pre-inspection or employment contract to be signed by the parties to the inspection. Inspectors are free to use or not use a contract. You may want to have a private attorney create a contract for you, or you may check with some of the inspector trade associations to see if they provide templates of pre-inspection contracts.

I am a sales agent. Can TREC review my advertising and advise me whether my advertising complies with TREC Rules?

No. TREC does not review a sales agent's advertising. TREC will only discuss advertising questions with a broker directly. Your sponsoring broker should review your advertising because your sponsoring broker is responsible for ensuring that your advertising complies with TREC's advertising rules, and both you and your sponsoring broker can be disciplined if your advertising violates TREC rules. Your broker must maintain, on a current basis, written policies and procedures to ensure that each sponsored sales agent complies with the Commission's advertising rules.

I am a sales agent and am not sure how to fill out the listing agreement form. Can you help me?

No. TREC is unable to advise you on how to fill out a private contract form. You should direct your questions to your sponsoring broker. If your sponsoring broker is unable to help you with your questions about a Texas Association of Realtors (TAR) listing agreement form, you can direct your questions to TAR.

Can a sales agent have an escrow account?

No. TREC prohibits a sales agent from having an escrow account. The sales agent must turn all money received over to the sales agent's sponsoring broker.

Does Texas have reciprocity with any other state?

No. Texas does not have reciprocity with any state. To become licensed, you must satisfy all current Texas licensing requirements.

Is it permitted to submit an invoice to an apartment complex falsely claiming that the locator has procured a tenant for the apartment complex?

No. The Commission can issue an order revoking the license of a locator found to have engaged in this practice.

Can a license holder offer or pay cash to an unlicensed person for referring a potential lessee or buyer?

No. The person who made the referral and received cash would be considered an unlicensed person engaged in the business of real estate brokerage and could be subject to administrative penalties and criminal charges. The license holder who offers to or actually pays cash to an unlicensed person for a referral is subject to disciplinary action. However, a license holder may compensate an unlicensed person from a foreign country or state that does not require a license to engage in real estate brokerage activities, if the person otherwise complies with the law of the foreign country and practices there as a real estate broker.

I'm buying a house. Do I have to have pay for an option period to be able to buy the house?

No. The termination option is a negotiable contract term. However, if you pay the seller an agreed option fee, you have the unrestricted right to terminate the contract for any reason if you give written notice to the seller during the option period. A buyer can use the option period to perform an inspection of the property and negotiate an amendment to the contract for any necessary repairs as a result of the inspection.

Can an associated broker refer to himself or herself as a "broker" in an advertisement?

No. This could "tend to mislead" the public that the associated broker is in charge of the brokerage operation. The public needs to know the broker with whom they will have a legal agreement (remember listing agreements, etc. are taken in the name of the broker, not the sales agent or the associated broker). The associated broker could use "associated broker", "broker associate" or "associate broker", since that distinguishes his or her role.

I am a broker licensed in another state and would like to apply in Texas. Can I apply online?

No. To apply as an out of state broker, you must submit the paper Application for Broker License by an Individual along with requested documents and the applicable fee.

Does TREC have an improved commercial earnest money contract form?

No. You must use a form drafted by an attorney or a form supplied by either the buyer or seller. If you are a member of The Texas Association of Realtors (TAR), you may use a form prepared by TAR attorneys.

If a real estate broker has an escrow account, can the broker keep any interest that is earned on the money on deposit?

Not unless the person depositing the money has signed an agreement authorizing the broker to keep the interest. Otherwise, the interest must be treated in the same manner as the deposited money. The broker is responsible for accounting for the interest and disbursing it to the person whose money is held by the broker. Accounting is more simple if the broker puts all escrow money into a non-interest bearing account

Can a license holder hold a gift giveaway of any prize regardless of its value as long as entry into the giveaway is not limited to only those that refer a prospect for a real estate transaction?

Nothing in TRELA or the Rules would prohibit this. However, the license holder should verify that the giveaway is not considered an illegal lottery under Sections 47.01(7) & 47.03(5) of the Texas Penal Code.

How are days counted in a TREC contract?

Starting with the effective (final execution) date of the contract, the first day of the period starts the next day. Each day is counted as calendar day.

Does TREC consider a license holder's URL or domain name or email address to be advertising?

TREC does not consider URLs or email addresses to be advertisements in and of themselves. However, an advertisement that contains a URL or email address of a sales agent that includes a title that implies responsibility for a brokerage violates TREC. Further, TREC will consider all advertisements in their entirety and if an email address or URL] makes the advertisement misleading or deceptive, it violates the law.

We tried to buy a house but our loan application was not approved. Our $500 earnest money had been deposited with a title company and they said they wouldn't return it without a release signed by the seller, which the seller won't sign. Help!

The Commission does not have jurisdiction over title companies. While a license holder is encouraged to assist the parties in the exchange of the necessary earnest money release and need to sign the release as appropriate, there is nothing in TRELA or the Rules to determine who is entitled to the earnest money. You will need to consult a private attorney.

I am a seller and I signed a contract with a buyer. Before the earnest money was deposited, the buyer backed out. Am I entitled to the earnest money?

The Commission does not have jurisdiction to decide which party is entitled to the earnest money. However, a real estate license holder's failure to deposit earnest money in accordance with the terms of the contract could form the basis of a complaint. Please note that TREC cannot order a license holder to pay money damages. You will need to consult a private attorney about monetary damages or other civil remedies.

When a broker holds earnest money or any money from property management activities in a trust account, how often is a broker required to account for that money?

The broker must provide a monthly accounting of trust money if there has been any activity in the account.

When a broker holds money from property management activities in a trust account, how often is a broker required to account for that money?

The broker must provide a monthly accounting of trust money if there has been any activity in the account.

How long does an agent have to deposit the earnest money once a binding contract has been negotiated?

The earnest money must be deposited by the close of business of the second working day after execution of the contract by the principals, unless a different time is agreed upon in writing by the principals to the transaction.

Must the earnest money check be deposited to create a binding contract?

The formation of a real estate contract requires "consideration" for the contract to be binding. In general, the buyer's promise to buy and seller's promise to sell is consideration. Although the TREC contract forms include a provision for the deposit of earnest money, if the buyer fails to deposit the earnest money the buyer is considered in default of the contract, and the other party may then exercise the remedies under paragraph 15 of the contract. However, TREC is unable to make a determination as to whether your contract is binding. You should discuss the validity of your contract with a private attorney. Once a binding agreement has been created, a license holder handling the check must deposit the earnest money in a timely fashion in accordance with the contract terms. In addition, a license holder's failure to deposit the earnest money within a reasonable time is a violation of TRELA.

If a sales agent's last name is contained in the broker's licensed or assumed business name, how can the sales agent let the consumer know the agent is not the broker?

To avoid an advertisement that implies the sales agent is responsible for the operation of the brokerage in this situation, the sales agent should make sure that the ad clearly indicates that the sales agent is not the broker. One simple way to accomplish this is to put "sales agent" next to the agent's name. Using "REALTOR" or "agent" is insufficient to distinguish the license status of sales agent.

We are selling our house and the buyer never paid the option fee. What happens now?

Typically, the buyer's agent collects the option fee upon final acceptance of the terms of the contract and delivers the option fee check to the seller's agent. Paragraph 23 in the 1-4 Family Residential Contract provides "If no dollar amount is stated as the Option Fee or if the Buyer fails to pay the Option Fee to Seller within the time prescribed, this paragraph will not be a part of this contract and Buyer shall not have the unrestricted right to terminate this contract." Under the terms of the 1-4 Family Residential Contract, the buyer (or buyer's agent) has three days to deliver the option fee. If the fee is not paid and the parties need help interpreting this provision, they will need to consult with a private attorney.

A residential service company is paying me a fee to advertise for it. Do I have to disclose that fee to my client and use a TREC form?

Yes and yes. You must also provide the client with the TREC Disclosure of Relationship with Residential Service Company form

A residential service company is paying me a fee to advertise for it. Do I have to disclose that fee to my client and use a TREC form?

Yes and yes. You must also provide the client with the TREC Disclosure of Relationship with Residential Service Company form.

Does the designated broker own 10% or more of a licensed business entity if the designated broker owns 10% or more of another business entity that owns 100% of the licensed business entity?

Yes because the designated broker own 10% or more of the licensed business entity through the broker's ownership of the other entity.

May a license holder who is a rental locator advertise that they will pay a prospective tenant a portion of their fee received from an apartment complex if the tenant uses the locator's services?

Yes, as long as the ad complies with Rule 535.155 (effective May 15, 2018), which requires the consent of the party the license holder represents in a transaction. When a rental locator represents an apartment complex, the locator needs the consent of the apartment complex. When the rental locator represents a tenant and not an apartment complex, as demonstrated by a written representation agreement or other evidence of representation, the locator is not required to obtain the consent of the apartment complex because the complex is not his client. Regardless of representation, however, it is misleading advertising to advertise a rebate for an apartment complex that the locator knows has a "no rebate" policy.

I only represent buyers. Can I advertise that I will rebate a part of my compensation to the buyer?

Yes, as long as the advertisement complies with Rule regarding any restrictions that might apply. However, a rebate to a buyer from a license holder may be subject to restrictions by the buyer's lender. You should contact your broker or private attorney to find out how you should notify and obtain the consent of the buyer's lender to address any impact the rebate may have on the determination regarding the buyer's creditworthiness.

I only represent buyers. Can I advertise that I will rebate a part of my compensation to the buyer?

Yes, as long as the advertisement complies with any restrictions that might apply. However, a rebate to a buyer from a license holder may be subject to restrictions by the buyer's lender. You should contact your broker or private attorney to find out how you should notify and obtain the consent of the buyer's lender to address any impact the rebate may have on the determination regarding the buyer's creditworthiness.

Can an individual broker use an assumed business name in advertising?

Yes, as long as the broker has the legal authority to use that name in the State of Texas and it is registered with TREC before it is used in advertisements.

Can a license holder donate a portion of his commission to a church if one of the church members refers a client to the license holder?

Yes, as long as the church member who made the referral receives nothing that may be defined as valuable consideration from the church or the license holder.

Does TREC consider a logo that contains the broker's full name sufficient for the broker name requirement?

Yes, as long as the size of the broker's name itself (not the whole logo) is at least ½ the size of the largest contact information.

Is a locator permitted to rebate a portion of the locator's fee to the tenant?

Yes, as with all license holders, this can only be done with the prior consent of the person the locator represents. [Rule 535.147(d)] In addition, if advertising a rebate to the tenant of a portion of the license holder's commission, the ad must disclose that the rebate is subject to consent of the party the license holder represents. [Rule 535.155(d)]

Is a "residential service contract" the same as a "home warranty"?

Yes, both terms refer to the same product.

Can a rental locator rebate a portion of the rental locator's fee received from the apartment complex to a prospective tenant if the tenant uses the locator's services?

Yes, but a locator will be required to first obtain the consent of the apartment complex if the locator does not represent the tenant.

Can I advertise a service provider such as an inspector, moving company, or repair contractor on my website?

Yes, but if you offer, recommend, or promote the use of a service provider and expect to receive compensation from the service provider when a party uses the service, the ad must disclose that you may receive the compensation. You may advertise an inspector's services, however, an inspector may not pay a fee or other valuable consideration for (1) a referral, (2) inclusion on a list of inspectors or preferred providers, or a similar arrangement; or (3) inclusion on a list of inspections contingent on other financial agreements. Also, acceptance of a fee from a service provider may violate the Federal Real Estate Settlement Procedures Act (RESPA), which prohibits certain referral fees and kickbacks.

If I represent the seller, can I advertise that I will rebate part of my compensation to the buyer?

Yes, but the ad must disclose that payment of the rebate is subject to the consent of the seller and if the rebate is contingent upon certain restrictions, such as the use of a particular service provider, the ad must contain a disclosure that payment of the rebate is subject to restrictions. A sales agent must also have their sponsoring broker's authorization to offer a rebate.

Does TREC require a trust or escrow record to be maintained for a specific period of time?

Yes, for four years from the date a trust or escrow document is received or created by the broker.

Can the team name used by an associated broker be the same as the assumed name used by the associated broker when he or she is not associating with another broker?

Yes, if the assumed business name of the associated broker meets the requirements for a team name since a team name must be used when the associated broker is associating with another broker. Keep in mind that the associated broker registers the assumed business name that is used when they are not associating with another broker and the broker that they are associating with registers the team name being used when associating with that broker. Note on Exclusive Name Use: TREC does not, and is not, required to vet names submitted for registration as an assumed name or team name for exclusivity. A brokerage should decide whether it makes good sense from a liability exposure standpoint to allow an associated broker (or a sales agent who owns a business entity) to use the same name for a team name under the brokerage that they have registered as an assumed name under their own licensed business entity.

Can an unlicensed person own a real estate company and receive all or a portion of a commission paid to a licensed broker?

Yes, within certain limitations. The unlicensed person may share in the income earned by a real estate brokerage if the person engages in no acts for which a license is required.

Do partnerships need to be licensed if real estate brokerage activity is performed under the partnership name?

Yes. All business entities engaged in real estate brokerage activity, including partnerships, need to be licensed. Further to receive or maintain a license, a business entity must designate an individual holding an active Texas real estate broker license, in good standing, who is an officer, manager, or general partner of the entity to act for it.

Are signs permitted which display the word "broker" or "agent?"

Yes. Although this is not mandatory, it may still be placed on a sign.

Does a trust account have to have a special name?

Yes. If a broker maintains a trust account, it must be clearly identified as a trust account.

Does TREC consider a sign on a building to be an advertisement?

Yes. If a sales agent's name or team name is on a building sign, the broker's name must also be present (in at least half the size). A broker's name alone is okay.

Does TREC consider promotional items and sponsorships to be advertising?

Yes. If a sales agent's name or team name is on them, the broker's name must also be present (in at least half the size). A broker's name alone is okay.

I am a 25% stockholder in a corporation that holds title to a number of investment properties. I typically negotiate the resale of the properties for the corporation. Must I disclose my licensed status?

Yes. If you participate in a transaction and hold more than a 10% interest in the corporation or other business entity, you are subject to the disclosure requirements. Additionally, you may not use your expertise to the disadvantage of others with whom you deal. [Rule 535.144(b)]

Can a license holder rebate a portion of his commission to a seller? What about a buyer?

Yes. It is not a violation of TRELA or the Rules for a license holder to rebate a portion of the license holder's commission to a party to a real estate transaction. If the rebate is to a party the license holder does not represent, the license holder must obtain the consent of the party represented by the license holder before making the payment.

If a broker has an exclusive listing with a seller, may another broker solicit a listing from the same seller that would begin after the other listing expired?

Yes. Rule 535.153 states that §1101.652(b)(22) of TRELA does not prohibit a license holder from soliciting a listing from the owner while the owner's property is subject to an exclusive listing with another broker, provided the listing does not commence until after the current listing expires.

Can a broker use the words "team" or "group" in the broker's licensed name or assumed business name?

Yes. TREC Rules do not prohibit a broker from using the word "team" or "group" anywhere in a broker's licensed or assumed business name.

Are there any restrictions on the placement of a license holder's signs?

Yes. TREC may suspend or revoke a license if the license holder places a sign on a property offering it for lease or rental without the written permission of the owner or the owner's authorized agent. Also, although TREC does not regulate where a license holder places a sign, a license holder is responsible for compliance with any rules, restrictions, or regulations covering placement of a sign in their local area. Placement of signs in violation of city ordinance could be considered an act of negligence or incompetence that authorizes disciplinary action against the license holder as well as subject the license holder and possibly even their principal to enforcement actions by the appropriate authorities. Typically, sign ordinances prohibit placing a sign on a utility pole, traffic signal box, or in a road median.

Does a lease for a term of longer than one year and a contract for the sale of real estate need to be in writing to be enforceable?

Yes. The Statute of Frauds, as defined by Chapter 26 of the Business and Commerce Code, requires that certain agreements be reduced to writing to be enforceable. However, you should consult with a private attorney for advice on this matter.

My real estate application was filed with a name that is different than the name on my government issued ID. Will this prevent me from taking the exam?

Yes. The name on your government issued photo ID must match the name on your real estate license application. If the names do not match, please submit a name change request. Include your name as it appears on the application, a copy of your government-issued photo ID, and your telephone number to TREC.

Can a license holder rebate a portion of the license holder's commission to a church or other non-profit organization of the license holder's choosing or one of the principals' choosing?

Yes. This is a donation and not a rebate.

I have a license in another state. Can I be exempt from taking the National portion of the exam?

You can be exempt from taking the National portion of the exam if you hold an active license in a state that participates in the National exam accreditation with ARELLO. Submit a license history from the state in which you are licensed when you file your application so we can determine if you are exempt.

I am a sales agent, Sally White. I am sponsored by a broker but want to use an assumed name for my advertisements. Can I use "Sally's Spectacular Properties" or "White Real Estate" for my business name on my advertising?

You cannot use either company name because each implies that Sally, a sales agent, is in charge. An advertisement cannot in any way imply that a sales agent is the person responsible for the operation of a real estate brokerage. A sales agent may use her name with the term "Team" or "Group," so long as the advertisement also includes the broker's name, and so long as the broker has registered the team or group name with the Commission.

I listed my property for sale with a broker and the broker has done nothing about selling the house. Can I break my contract and list with someone else?

Your listing contract with the broker is a private legal contract. TREC is unable to advise you on private contractual matters. If you feel that the broker has not fulfilled the broker's part of the agreement, i. e. advertising, holding open houses, etc., then you may have grounds to terminate the contract but you would need to contact a private attorney for help in making that determination. You could also ask the broker to agree to cancel or release the listing. If the broker agrees, then the contract can be mutually rescinded.