MY UNIT ONE: TEXAS CONTRACT LAW
T/F: A license holder is liable for statements made by sellers in the Seller's Disclosure Notice if the license holder knows that the statements are false.
TRUE
T/F: The doctrine of mutual mistake cannot be used to reform a deed.
TRUE
Broker-Lawyer Committee Contract Adoption Process:
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
A lawsuit regarding the property that has been dismissed does not need to be disclosed in the Seller's Disclosure Notice.
TRUE
Which of the following is a TREC-promulgated form?
The answer is Addendum for Sale of Other Property by Buyer. The Addendum for Sale of Other Property by Buyer is a TREC-promulgated addendum; the other choices are either TREC approved forms or TAR forms.
Which of the following is NOT a TREC-promulgated addendum?
The answer is Addendum for Seller's Right to Terminate. The Addendum for Seller's Right to Terminate is not a TREC-promulgated addendum.
Which of the following committees is responsible for drafting and revising contract forms?
The answer is Broker-Lawyer Committee. The Broker-Lawyer Committee drafts and revises contract forms for use by real estate license holders. The purpose is to expedite real estate transactions and reduce controversies while protecting the interests of the parties involved.
The Rules of the Texas Real Estate Commission have the full force of________.
LAW
The Texas Real Estate Commission has ______ broker members.
SIX
The Texas Real Estate Commission is a _________agency.
STATE
The Texas Real Estate Commission has __________public members.
THREE
T/F: "None of the above are available to be conveyed" means that the sellers had no minerals to convey.
TRUE
Unauthorized Practice of Law
Create new contract Create contingency Create addendum
A consumer who wishes to file a DTPA lawsuit must do so within
The answer is two years after the consumer discovered the deceptive act. After this time, the consumer will no longer be able to file suit under the DTPA.
Authorized Act
Fill in contract blanks Use promulgated forms Add business details Add factual statements
T/F: Previous flooding need not be disclosed in the Seller's Disclosure Notice.
FALSE
SELLER'S DISCLOSURE REQUIREMENTS: Disclosure Required:
- A $50,000 home on land valued at $500,000 - Licensee's 10-year-old single-family home
SELLER'S DISCLOSURE REQUIREMENTS: Disclosure NOT Required:
- From on co-owner to another - New single-family residence - Sale to or from government agencies - Sale by court order
TEXAS REAL ESTATE COMMISSION (TREC) FORMS: Mandatory Use:
- One to Four Family Residential - Contract - Loan Assumption Addendum - Farm and Ranch Contract
TEXAS REAL ESTATE COMMISSION (TREC) FORMS: Voluntary Use:
- Seller's Disclosure of Property Condition - Notice to Prospective Buyer - Non-Realty Item Addendum
T/F: "None of the above are available to be conveyed" means that the sellers were keeping the minerals.
FALSE
T/F: A license holder is always liable for statements made by sellers in the Seller's Disclosure Notice.
FALSE
T/F: A real estate agent is authorized to draft language in a contract that materially affects the legal rights of the parties.
FALSE
T/F: A statement in the TAR Seller's Disclosure Notice that states that the brokers have relied on the notice as true and correct is an affirmative representation by the brokers of the condition of the property.
FALSE
T/F: The doctrine of mutual mistake cannot be used to void a contract.
FALSE
The Texas Real Estate Commission has ____________ authority.
RULEMAKING
How many members are on the Broker-Lawyer Committee?
The answer is 13. The committee is composed of six Real Estate Commission appointees (who are licensed real estate brokers); six lawyers, appointed by the president of the State Bar of Texas; and one public member, appointed by the governor. They serve staggered six-year terms.
Under the DTPA, which statement is FALSE?
The answer is a real estate agent may be sued under the DTPA for giving bad advice related to a real estate transaction. A real estate agent may not be sued under the DTPA for giving bad advice related to a real estate transaction, but the agent can be liable for fraud, misrepresentation, or failing to disclose factual information.
What type of contract is a license holder prohibited from completing because doing so would be considered the unauthorized practice of law?
The answer is prepared by a licensed escrow agent. The License Act states that it is not the unauthorized practice of law for a license holder to complete a contract adopted by the commission for the type of transaction for which the form is used; prepared by an attorney licensed in this state and approved by the attorney for the type of transaction for which the form is used; or prepared by the property owner or by an attorney and required by the property owner.
A seller's disclosure notice is NOT required in the sale of real property
The answer is pursuant to a court order. The notice is not required for transactions pursuant to a court order or foreclosure sale.
Which of the following is TRUE?
The answer is the Broker-Lawyer Committee develops forms and recommends their adoption, but it is the TREC that promulgates the forms for mandatory use. The Broker-Lawyer Committee drafts and revises contract forms for use by real estate license holders. This Broker-Lawyer Committee does not promulgate, or publish, forms for mandatory use by license holders.
A buyer wants the seller to leave several items of personal property. The agent uses a Bill of Sale for this transaction. Which of the following is TRUE regarding the agent's actions?
The answer is the agent may use the form. Although TREC has approved a Non-Realty Items Addendum, it is an optional form. License holders are not required to use optional forms.
What effect do the rules made by the commission have on license holders?
The answer is the rules have full force and effect of law. The commission has rule-making authority, and the rules of the commission have the full force and effect of law.
Which of the following is TRUE?
The answer is the rules of the Texas Real Estate Commission have the full force and effect of law. The commission has rule-making authority, and the rules of the 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?
The answer is the seller could use any form as long as it is in writing. Sellers of residential property comprising not more than one dwelling unit located in Texas are to give to the purchaser of the property a written notice of the property's condition as prescribed by the Property Code. The TREC seller's disclosure is an optional form, not a promulgated form. The disclosure is required of the seller, but the Property Code does not dictate which form the seller needs to use.