Chapter 3: TREC and Licensing Requirements

Key point regarding activities requiring a license

"on behalf of others for compensation"

parties that do NOT need a Texas real estate license

attorneys-in-fact, attorneys-at-law, auctioneer, receivers/trustees in bankruptcy/administrators/executors/guardians, person employed by an owner, resident managers, federal agency or state government officer or employee, owner or owner's employee, partnership or limited liability partnership

two types of Texas real estate licenses

broker's license, salesperson's license

A real estate firm owner

does NOT need to be licensed, but must employ broker to conduct business

Texas Real Estate License Act (TRELA)

establishes Real Estate Recovery Fund for protection of the public against harmful actions by licensees. Fund is maintained and administered by Texas Real Estate Commission

person employed by owner (don't need TX license)

in sale of structures and land on which structures are located, if the structures are erected by the owner in the course of the owner's business

salesperson

individual holding salesperson's license who is employed by or an independent contractor for a broker; authorized to perform real estate services under supervision of broker

auctioneer (don't need TX license)

licensed under CH1802 while conducting the sale of real estate by auction, if the auctioneer does not perform another act of a broker or salesperson

DONT need real estate license in transactions involving

sale, lease, or transfer of a mineral/mining interest in real property OR of a cemetery lot, lease or management of hotel/motel, sale of real property under a power of sale conferred by a deed of trust or other contract lien

Receivers, trustees in bankruptcy, administrators, executioners, or guardians (don't need TX license)

while acting under court order or under the authority of a will or trust instrument

Federal agency or state government officer or employee (don't need TX license)

while conducting their official duties

An owner or the owner's employee (don't need TX license)

who leases the owner's improved or unimproved real estate

Members of commission

9 total 6 - licensed brokers with 5 years experience as major occupation preceding appointment 3 - represent public must be qualified voter

Creation of the Texas Real Estate Commission (TREC)

(Tx Title 7, Subtitle A, Chapter 1101, Subchapter B) to administer and enforce real estate license law. Empowers commission to create rules & regulations necessary for carrying out the provisions of the statues

Qualifications for broker or salesperson license

At least 18 yrs old Be US citizen or lawfully admitted alien Be resident of this state

Commission members serve staggered six-year terms with the terms of three members expiring January 31 of each odd-numbered year.

How long does the term of a commission member last and when does a term expire?

18 years old

How old must a license applicant be to apply for a real estate license?

-Attorneys-at-law providing legal services in the course of their duties as attorneys, licensed in Texas only -An auctioneer licensed under Chapter 1802 while conducting the sale of real estate by auction, if the auctioneer does not perform another act of a broker or salesperson -Receivers, trustees in bankruptcy, administrators, executors, or guardians while acting under court order or under the authority of a will or trust instrument

List three parties that do not need a license to sell real estate. (See screen 10 for other correct answers.)

Nine members - six licensed brokers and 3 members of the public

TREC consists of how many members?

Agency law Contract law Contract forms and addenda Real estate finance

When applying for a salesperson's license, an applicant must have at least two semester hours of each of several core real estate courses covering what topics?

Administer Chapter 1101 and Chapter 1102. Adopt rules and establish standards relating to permissible forms of advertising by a license holder acting as a residential rental locator. Maintain a registry of certificate holders. Design and adopt a seal.

What actions must the commission perform?

At least four years of active experience in Texas as a license holder during the 60 months preceding the date the application is filed

What is the experience requirement for an applicant for a broker's license?

To regularly review and revise curriculum standards, course content requirements and instructor certification requirements for core and continuing education courses

What is the function of the Education Standards Advisory Committee?

When the entity's designated agent is a licensed broker

When may a business entity act as a broker?

If a licensee cannot pay the full amount of the judgment ordered by the court, the party may apply to the court in which the judgment was rendered for an order to pay the balance due from the real estate recovery fund.

When will a court order a payment to an aggrieved party from the Recovery Fund?

A college graduate advertises he will sell properties of other students to raise tuition money for college.

Which of these persons would need a real estate license?

A senior citizen charges an advance fee for referring an individual to her son who owns a leasing office in town

Which of these persons would need a real estate license?

A partnership or limited ability partnership (don't need TX license)

acting as a broker or salesperson through a partner who is a licensed broker

Attorneys-in-fact (don't need TX license)

acting under power of attorney from an owner or lessor to conduct a real estate transaction, provided the attorney in fact receives no fee or other consideration

licensee (in TX)

an individual who holds "any type of license issued by the commission and shall include a broker and sales person

Broker (in Texas)

an individual who performs certain real estate services for another party for compensation

Broker's license

an individual who performs real estate activities while acting for another for a fee, commission, or other consideration, or the expectation of consideration; person ULTIMATELY RESPONSIBLE for company's activities, and of other licensees as well as the business's trust accounts; party who employs other agents to carry out firm's business

Salesperson (in Texas

any licensed person who is associated with a licensed broker and performs certain real estate services

Business entity (entity license)

must designate an officer or manager as agent for both corporations and/or partnerships; may NOT act as a broker unless entity's designated agent is a licensed broker

Resident managers (don't need TX license)

provided they reside on the premises and are engaged in leasing as a part of their employment

Attorneys-at-law (don't need TX license)

providing legal services in the corse of their duties as attorneys, licensed in Texas ONLY