Chapter 7 - Subchapter L Flashcards
Sec. 1101.551.
Definitions starts off the subchapter by defining the following terms:
⦁ “Intermediary” means a broker who is employed to negotiate a transaction between the parties to a transaction and for that purpose may act as an agent of the parties.
⦁ “Party” means a prospective buyer, seller, landlord, or tenant or an authorized representative of a buyer, seller, landlord, or tenant, including a trustee, guardian, executor, administrator, receiver, or attorney-in-fact. The term does not include a license holder who represents a party
Sec. 1101.552.
Fixed Office Required, Change of Address, Branch Offices lays out the rules for maintaining a physical office as follows:
⦁ A resident broker must maintain a fixed office in this state. The address of the office will be designated on the broker’s license.
⦁ Within 10 days after the date a broker moves from the address designated on the broker’s license, the broker must submit an application, accompanied by the appropriate fee, for a license that designates the new location of the broker’s office. The commission will issue a license that designates the new location if the new location complies with the requirements of this section.
⦁ A nonresident licensed broker isn’t required to maintain a place of business in this state.
⦁ A license holder must provide the commission with the license holder’s current mailing address and telephone number, and email address if available. A license holder must notify the commission of a change in the license holder’s mailing or email address or telephone number.
Sec. 1101.553.
Display of License states the rules that apply to a residential rental locator.
A residential rental locator must prominently display all of the following items in a place accessible to clients and prospective clients:
⦁ The locator’s license
⦁ A statement that the locator is licensed by the commission
⦁ The name, mailing address, and telephone number of the commission as provided by section 1101.202(a)
Sec. 1101.554.
Copy of Salesperson License says that the commission will deliver or mail a copy of each salesperson license to the broker with whom the salesperson is associated.
Sec. 1101.555.
Notice To Buyer Regarding Abstract or Title Policy states that when an offer to purchase real estate in this state is signed, a license holder must advise each buyer, in writing, that the buyer should either have the abstract covering the real estate that is the subject of the contract examined by an attorney chosen by the buyer or be provided with or obtain a title insurance policy.
Sec. 1101.556.
Disclosure of Certain Information Relating to Occupants covers the disclosure of certain kinds of information. Notwithstanding other law, a license holder isn’t required to inquire about, disclose, or release information relating to whether either of these circumstances is true:
⦁ A previous or current occupant of real property had, may have had, has, or may have AIDS, an HIV-related illness, or an HIV infection as defined by the Centers for Disease Control and Prevention of the United States Public Health Service.
⦁ A death occurred on a property by natural causes, suicide, or accident unrelated to the condition of the property.
Sec. 1101.557.
Acting as Agent, Regulation of Certain Transactions says that a broker who represents a party in a real estate transaction or who lists real estate for sale under an exclusive agreement for a party is that party’s agent.
While acting as an agent, a broker:
⦁ may not instruct another broker to directly or indirectly violate Section 1101.652(b)(22) which says that a licensee may not negotiate a transaction with a party while knowing that party has a written contract granting exclusive agency to another broker.
⦁ must inform the party if the broker receives material information related to a transaction to list, buy, sell, or lease the party’s real estate, including the receipt of an offer by the broker.
⦁ must, at a minimum, answer the party’s questions and present any offer to or from the party.
An example of sole delivery is dropping off an offer at the seller’s home if you’re the buyer’s broker.
Sec. 1101.558.
Representation Disclosure begins by defining “substantive dialogue” as meaning a meeting or written communication that involves a substantive discussion relating to specific real property. The term does not include a meeting that occurs at a property that is held open for any prospective buyer or tenant or a meeting or written communication that occurs after the parties to a real estate transaction have signed a contract to sell, buy, or lease the real property concerned.
A license holder who represents a party in a proposed real estate transaction must disclose, orally or in writing, that representation at the time of the license holder’s first contact with:
⦁ another party to the transaction.
⦁ another license holder who represents another party to the transaction.
“Representation Disclosure” is also known as the TREC Information About Brokerage Services (IABS).
Unless a discussion with a prospective buyer at an open house turns into a larger discussion with specifics about the buyer — for example, the buyer’s qualifications or the buyer’s interest in having the agent show them other homes — representation must be disclosed. It’s always a good idea to disclose using the IABS at the beginning of any meeting, no matter how innocent.
A license holder must provide to a party to a real estate transaction at the time of the first substantive dialogue with the party the written statement prescribed by Sec. 1101.558(d) (see below) unless:
⦁ the proposed transaction is for a residential lease for not more than one year and a sale isn’t being considered.
⦁ the license holder meets with a party who is represented by another license holder.
Sec. 1101.559.
Broker Acting as Intermediary says that a broker may act as an intermediary between parties to a real estate transaction if the broker obtains written consent from each party for the broker to act as an intermediary in the transaction and the written consent of the parties states the source of any expected compensation to the broker.
Note: Acting as an intermediary is different than acting as a dual agent. A dual agent is a broker who represents two parties at the same time in accordance with common law obligations and duties. Acting as a dual agent is illegal in Texas. An intermediary is a broker who negotiates the transaction between the parties, subject to the provisions of Section 1101.559 of The Real Estate License Act.
The intermediary may appoint licensees associated with the intermediary to work with and advise the party to whom they have been appointed, but only with written consent of the parties. On the other hand, in a dual agency situation — in which two salespeople are sponsored by the same broker, but are working with different parties — the broker and the salespeople are considered agents of both parties, unable to act contrary to the interests of either party.
Sec. 1101.560.
Associated License Holder Acting as Intermediary states that a broker who complies with the written consent requirements of Section 1101.559 (which we covered on the previous screen) may appoint:
⦁ a license holder associated with the broker to communicate with and carry out instructions of one party to a real estate transaction.
⦁ another license holder associated with the broker to communicate with and carry out instructions of any other party to the transaction.
A license holder may be appointed under this section only if the written consent of the parties authorizes the broker to make the appointment and the broker provides written notice of the appointment to all parties involved in the real estate transaction.
Sec. 1101.561
Duties of Intermediary Prevail states that the duties of a license holder acting as an intermediary under this subchapter supersede the duties of a license holder established under any other law, including common law. A broker must agree to act as an intermediary under this subchapter if the broker agrees to represent a buyer or tenant and a seller or landlord in a transaction.
