Chapter 1

Question 1

TREC was created in

Answer 1

1949

Question 2

TREC was created in 1949 to

Answer 2

administer the provisions of the License Act which was passed
in 1939. The primary purpose of both the License Act and TREC is to protect the public

Question 3

TREC has the authority to

Answer 3

make rules and regulations. TREC can advise with reference to
its rules and the laws that govern license holders.

Question 4

TREC consists of

Answer 4

9 commission members
3 represent the general public 
6 are real estate
brokers. 
-All are appointed by the governor and approved by the Senate. 
=They serve for 6-year
terms.

Question 5

TREC has the power to

Answer 5

subpoena books, records, and witnesses. If a license holder fails
to respond to a subpoena, TREC can file suit with the Attorney General to enforce the
subpoena.

Question 6

The Broker Lawyer Committee writes

Answer 6

the promulgated contract forms.

Question 7

The Broker Lawyer Committee has

Answer 7

13 members
6 are brokers appointed by TREC
6 are lawyers appointed by the President of
the State Bar Association.
1 is a public member appointed by the governor.

Question 8

The Real Estate Center at Texas A&M University has an

Answer 8

Advisory Committee to help

TREC.

Question 9

TREC can initiate an

Answer 9

investigation against a license holder at its own motion

Question 10

An individual has ___ years from the ____ date of _____ or the _____ of the ______ to file a complaint with TREC regarding the license holder involved

Answer 10

4 years from the effective date or contract

or

the date of the incident

Question 11

After four years

Answer 11

TREC

will no longer investigate a complaint. The complaint must be written and signed.

Question 12

A consumer can research a complaint history on a license holder through

Answer 12

TREC

Question 13

Only TREC has the power to

Answer 13

issue or revoke Real Estate Licenses.

Question 14

A hearing for the revocation

or suspension is held at the

Answer 14

State Office of Administrative Hearings (SOAH) unless a
license holder requests the hearing be held in his county. If a license holder, in violation, fails
to respond to a summons from TREC, TREC will automatically schedule the revocation/
suspension hearing

Question 15

If your license is revoked by TREC, you may

Answer 15

appeal the decision to the district court.

Question 16

People engaged in the real estate brokerage business without having secured a license from TREC
are guilty of

Answer 16

a Class A Misdemeanor and subject to a fine of not more than $4,000.00 or imprisonment
in the county jail for not more than one year, or both. Trials for this would be held in the
county court.

Question 17

persons guilty of a violation of the License Act and whoever profited there from are
liable for

Answer 17

additional civil penalties of up to three times the amount of money received

Question 18

TREC may assess an administrative penalty of up to

Answer 18

$5,000 per day for violation of the license act
by any person, either licensed or unlicensed. If TREC assesses a penalty, a license holder has 30 days
to pay the penalty.

Question 19

Real Estate Recovery Trust Account

Answer 19

• This fund was created to pay aggrieved parties who win an uncollectable judgment from an
agent/broker. An aggrieved party may collect treble damages up to $50,000 per lawsuit and
up to $100,000 per license number.
• The account is funded by taking $10 out of every applicant’s or renewing licensee’s fees. In
addition, all fines levied by TREC fund this account which is invested in safe securities like
T-Bills and Notes.
• If the fund ever falls below $1 million, TREC can assess all licensees $10 or a pro rata share
to bring the balance up to $1.7 million. If the balance is above $3.5 million on January 1st,
TREC reduces the value to $3.5 million by flushing the excess into the General Fund of Texas
where the Texas Legislature spends it.
• When any amount is paid out against a licensee, the amount must be paid back with interest
and the license can be suspended/revoked.
• TREC plays no part in resolving conflicts between license holders. This is usually handled at
the Local Board of Realtors level.