Unit 1 - Texas Contract Law
How many members are on the Broker-Lawyer Committee? A) 12 B) 9 C) 13 D) 15
13
The Texas Real Estate Commission has _____ public members.
3
The Texas Real Estate Commission has _____ broker members
6
Unauthorized or Authorized Practice of Law: use promulgated forms
Authorized
The purpose of the Texas Real Estate License Act (TRELA) is to protect Texas real estate license holders. True False
False
Who appoints the TREC commissioners? A) Governor B) Senate C) House of representatives D) Lt. governor
Governor
Disclosure Required or Not Required: Sale by court order
Not Required
What is the main purpose of the Texas Real Estate Commission? A) To draft and revise contracts B) To protect REALTORS® C) To protect the public D) All of these
To protect the public
Mandatory or Voluntary: Notice to Prospective Buyer
Voluntary
Mandatory or Voluntary: Seller's Disclosure of Property Condition
Voluntary
How many commissioners are on the Texas Real Estate Commission? A) 9 B) 12 C) 6 D) 13
9
Under the DTPA, which statement is FALSE? A) A real estate agent can be liable for fraud. B) A real estate agent can be liable for failing to disclose factual information. C) A real estate agent may be sued under the DTPA for giving bad advice related to a real estate transaction. D) A real estate agent can be liable for misrepresentation.
A real estate agent may be sued under the DTPA for giving bad advice related to a real estate transaction.
An agent represents a buyer. Which of the following forms of advice can the agent give to an unrepresented buyer? A) Advice on having the abstract examined by an attorney B) Advice regarding the legal sufficiency of a paragraph of the contract C) Advice on asking for repairs D) Advice on what price to offer
Advice on having the abstract examined by an attorney
The Rules of the Texas Real Estate Commission have the full force of _____.
Law
Mandatory or Voluntary: One to Four Family Residential Contract
Mandatory
Disclosure Required or Not Required: From one co-owner to another
Not Required
Disclosure Required or Not Required: New single-family residence
Not Required
Disclosure Required or Not Required: Sale to or from government agencies
Not Required
What type of contract is a license holder prohibited from completing because doing so would be considered the unauthorized practice of law? A) Prepared by an attorney and required by the property owner B) Prepared by the property owner C) Prepared by a licensed escrow agent D) Prepared by an attorney licensed in Texas and approved by the attorney for the type of transaction for which the form is used
Prepared by a licensed escrow agent
Who appoints the lawyers to the Broker-Lawyer Committee? A) Texas Real Estate Commission B) President of the state bar C) Other real estate lawyers through election D) Governor
President of the state bar
When should a buyer review the written seller's disclosure notice? A) At move in B) Prior to writing an offer C) At closing D) Before viewing a property
Prior to writing an offer
Disclosure Required or Not Required: A $50,000 home on land valued at $500,000
Required
Disclosure Required or Not Required: Licensee's 10-year-old single-family home
Required
Which of the following is a TREC-promulgated contract? A) Residential Condominium Contract B) Lake Property Contract C) Fine Homes and Estates Contract D) Agricultural Property Contract
Residential Condominium Contract
The Texas Real Estate Commission has _____ authority.
Rulemaking
What must a plaintiff prove about a misleading statement in order to get triple damages under the DTPA? A) That the defendant acted with malice B) That the defendant acted indifferently C) That the defendant acted negligently D) That the defendant acted intentionally
That the defendant acted intentionally
Which of the following real estate-related entities has rule-making authority in the state of Texas? A) Attorneys B) All of these C) The commission D) The Real Estate License Act
The commission
A consumer who wishes to file a DTPA lawsuit must do so within A) five years after the deceptive act occurred. B) one year after closing of the transaction. C) two years after the consumer discovered the deceptive act. D) five years after the date of the purchase agreement.
two years after the consumer discovered the deceptive act.
Which of the following is TRUE? A) The Broker-Lawyer Committee develops forms and recommends their adoption, but it is the TREC that promulgates the forms for mandatory use. B) The Texas Real Estate Commission drafts and revises contract forms for use by real estate license holders. C) The Broker-Lawyer Committee promulgates forms for mandatory use by license holders. D) The Broker-Lawyer Committee has rule-making authority, but the Texas Real Estate Commission does not.
The Broker-Lawyer Committee develops forms and recommends their adoption, but it is the TREC that promulgates the forms for mandatory use.
A new home builder wants to use her own contract. What are the agent's legal options? A) The agent can't use this contract because TREC has promulgated a contact for use for this type of transaction. B) The agent can use the contract but must modify it to meet TREC standards. C) The agent can use the contract because it is an exception. D) The agent must withdraw from representing this client.
The agent can use the contract because it is an exception.
Broker-Lawyer Committee contract draft order
1. Committee drafts new contract 2. Commission proposes the draft contract for notice and comment 3. Commission takes comments from public on draft contracts 4. Commission sends comments and contracts to Committee for review 5. Commission adopts contracts 6. License holders must use the new contract
According to the Texas Real Estate License Act, which of the following requires that a license holder be a practicing attorney? A) Advising a person regarding the validity of title to real property B) Filling in a TREC-promulgated contract C) Advising a client to reject an offer D) Determining the offering price for a seller
Advising a person regarding the validity of title to real property
Unauthorized or Authorized Practice of Law: add factual statements
Authorized
Unauthorized or Authorized Practice of Law: fill in contract blanks
Authorized
Which of the following committees is responsible for drafting and revising contract forms? A) Broker-Lawyer Committee B) TREC Contract Committee C) Standards of Conduct Committee D) Committee on Promulgation of Contracts
Broker-Lawyer Committee
A buyer wanted to move in early before closing. Which TREC-promulgated addendum should be used? A) Addendum for Maximum 90-Day Residential Lease B) Buyer's Temporary Residential Lease C) Lease Prior to Closing Addendum D) Addendum for Buyer's Move-in Pre-Closing
Buyer's Temporary Residential Lease
Which of the following concerns led to the Texas Real Estate License Act prohibiting license holders from practicing law? A) License holders giving counsel regarding the validity of an instrument that addresses real property rights B) Contracts for the sale of a business that do not include a real property interest C) Individuals using contracts that are not promulgated by TREC D) All of these
License holders giving counsel regarding the validity of an instrument that addresses real property rights
Mandatory or Voluntary: Farm and Ranch Contract
Mandatory
Mandatory or Voluntary: Loan Assumption Addendum
Mandatory
TREC promulgates two forms for mandatory use by license holders. True False
False
The Broker-Lawyer Committee promulgates forms for mandatory use by license holders. True False
False
The Texas Property Code requires sellers of most residential property to disclose to the buyer the property's condition through the use of TREC Form OP-H, Seller's Disclosure of Property Condition. True False
False
The rules of the Texas Real Estate Commission are only enforced by brokers in their offices. True False
False
Which of the following is an exception to using a TREC-promulgated contract form? A) Transactions in which a United States government agency requires a different form to be used B) None of these C) Transactions in which the property will only be held for less than three years D) Transactions which are under $50,000 total sales price
Transactions in which a United States government agency requires a different form to be used
What is the primary difference between a lawsuit brought under the Deceptive Trade Practices Act (DTPA) and any other type of civil action? A) Costs are not awardable under the DTPA. B) Damages are limited to actual damages only under the DTPA. C) Attorneys fees are not awardable under the DTPA. D) Treble damages are available under the DTPA.
Treble damages are available under the DTPA.
It is a violation of TRELA for license holders to draft sales contracts for use by their principals in real estate sales transactions. True False
True
License holders do not have to use TREC-promulgated forms in transactions in which an agency of the United States government requires a different form to be used. True False
True
License holders who complete sales contracts adopted by the Texas Real Estate Commission are not participating in the unauthorized practice of law. True False
True
Tony and Paul are co-owners of a house. When Tony sells his interest in the house to Paul, Tony is not required to provide a disclosure of property condition to Paul. True False
True
Unauthorized or Authorized Practice of Law: create addendum
Unauthorized
Unauthorized or Authorized Practice of Law: create contingency
Unauthorized
Unauthorized or Authorized Practice of Law: create new contract
Unauthorized
Unauthorized or Authorized Practice of Law: add business details
Authorized
A license holder selling her house on her own behalf is required to use TREC-promulgated forms in the transaction. True False
False
Which statement is TRUE, as it relates to the DTPA? A) Errors and omissions insurance does cover fraud or intentional violations of the DTPA. B) The DTPA allows for civil penalties of up to $5,000 per violation. C) The DTPA does not allow for civil penalties. D) The DTPA allows for penalties of up to $500,000 for deceptive acts or practices that target the elderly.
Errors and omissions insurance does cover fraud or intentional violations of the DTPA.
A property sells for $25,000, and the dwelling built thereon is only valued at $1,000. What does Section 5.008 of the Texas Property Code say about this situation? A) It is silent in regards to the value of a dwelling in relation to value of the property. B) It does not require the seller to provide a written notice of the property's condition. C) It requires the seller to provide a written notice of the property's condition. D) It requires the seller to provide a written notice of the property's condition only if requested by the buyer.
It does not require the seller to provide a written notice of the property's condition.
The Texas Real Estate Commission is a _____ agency
State
For which of the following actions may the Texas Real Estate Commission NOT suspend a license holder? A) All of these are violations and are subject to suspension. B) The license holder explains to the principals the meaning of the factual statements or business details contained in the contracts. C) The license holder drafts an instrument (other than a form promulgated by TREC) that transfers an interest in real property. D) The license holder used a TREC-promulgated purchase agreement that was specifically designed to work for a different type of transaction.
The license holder explains to the principals the meaning of the factual statements or business details contained in the contracts.
Which of the following is TRUE? A) The Texas Real Estate Commission can sentence a violator to no more than two years in jail. B) The Texas Real Estate Commission meets only during the Texas legislative session. C) When the Texas Real Estate Commission receives a formal complaint, the Commission will suspend a license holder until a full investigation is completed. D) The rules of the Texas Real Estate Commission have the full force and effect of law.
The rules of the Texas Real Estate Commission have the full force and effect of law.
A seller of residential property in Texas must give to the buyer of the property notice of the property's condition. Which of the following is TRUE? A) TREC Form OP-H, Seller's Disclosure of Property Condition must be completed and signed by the seller. B) The seller could use any form as long as it is in writing. C) The disclosure may be oral. D) The TREC requires the buyer to sign the OP-H form.
The seller could use any form as long as it is in writing.
What is the possible result for an owner not providing a seller's disclosure notice when required by the Texas Property Code (TPC), according to the standard purchase agreement promulgated by the Texas Real Estate Commission (TREC)? A) The seller would commit fraud. B) The TREC does not address TPC regulations. C) The seller would commit misrepresentation. D) The seller would be in violation of failing to disclose, and the buyer could terminate the contract.
The seller would be in violation of failing to disclose, and the buyer could terminate the contract.
A seller wants to close using a contract for deed. Which of the following is MOST correct? A) The listing agent would be in violation for attempting this type of transaction because contract for deeds are not legal by federal statute. B) The listing agent, with her broker's permission, could use a TREC-promulgated purchase agreement to handle this type of transaction. C) The listing agent must use the TREC-promulgated Contract for Deed Contract. D) This type of contract must be drafted by an attorney.
This type of contract must be drafted by an attorney.
Mandatory or Voluntary: Non-Realty Items Addendum
Voluntary
The TREC Seller's Disclosure of Property Condition form is A) a promulgated addendum. B) a promulgated amendment. C) an approved optional/voluntary use form. D) a promulgated consumer disclosure.
an approved optional/voluntary use form.
Real estate brokers who are members of the Broker-Lawyer Committee become members by being A) elected in a public election. B) appointed by the governor. C) appointed by the Texas Real Estate Commission. D) appointed by the president of the State Bar of Texas.
appointed by the Texas Real Estate Commission.