Real Estate Flashcards
1
Q
What word do we use instead of price reduction and why?
A
We use price adjustment because the word reduction carries too many emotions for the seller.
2
Q
What are two important reasons to price the sellers house correctly?
A
- The longer the properties on the market the more likely buyers will perceive a defect in the property.
- When an agent for the buyer sees multiple price adjustments on the properties history they will get really aggressive and asking for more concessions which results in the cellar getting less than their anticipated price.
3
Q
How should a seller’s agent suggest to price?
A
Seller’s agent will advise clients to list just below the comparative market analysis suggested value.
4
Q
By pricing sellers home just below the comparative market analysis, What could this create that would benefit the seller?
A
It could create a bidding war or multiple offer situation due to increased buyer traffic early on a listing.
*Could potentially get far more money by listing the home for less than an overpriced house from the start
5
Q
Who is an appraiser?
A
An independent decision maker who cast a professional judgment on the agreed-upon price.
6
Q
How will providing comps and CMA for the appraiser help the seller?
A
It will show you have done your homework and prevent large discrepancies from occurring.
7
Q
What will the lender usually require that the property appraises for?
A
At least the sales price outlined in the contract
8
Q
What does CMA Take into account?
A
Number of homes that are currently on the market in the local area, they are listing prices, and purchase prices of recent sales
9
Q
When realtors prepare opinions of real property value or price such opinions shall include: NAR Standard of 11-1
A
Identification of the subject property
Date prepared
Defined value or price
Limiting conditions including statements of purposes and intended user
Disclosure of weather and when a physical inspection of the properties interior was conducted
Conflicts of interest
Any present or contemplated interest including possibility of representing the seller landlord or buyers tenants
basis for opinion including applicable market data
If the opinion is not an appraisal, a statement to that effect
10
Q
Why would a mortgage company want a BPO?
A
The people in the home have asked to refinance the home and lender does not want to pay for the full appraisal but they do want to have some assurance that the home is valued at or above what the loan will be
The people in the house are about to be foreclosed on and lender wants an inexpensive estimate of value
11
Q
Who potential he receives funds in a sale?
A
The list of potential’s are seller, license holder, broker, title company, surveyor, home inspector, termite inspector, remodeler doing repairs, lender, appraiser, insurance agent, taxing entities, other
12
Q
Key terms -define
Misrepresentation Party Commingle Promulgated forms Approved forms Cloud on the title Puffing
A
Misrepresentation is a false statement made unintentionally
A person involved in a contract for sale, lease, or agency- party
Commingle-an illegal act of a license holder who makes is their own money with the clients or customers
Promulgated forms are forms prepared and authorized by the Texas real estate commission that MUST be used by real estate license holders
Approved forms are forms prepared and authorized by the Texas real estate commission that CAN be used by real estate license holders
Cloud on the title is an encumbrance that keeps the title to the property from transferring easily
Puffing is the exaggeration of opinions about real estate
13
Q
What act was passed in 1939?
A
The Real Estate Dealer’s license Act
Later became Tx Real Estate Licensing Act
14
Q
What was the first note of the legislation requiring sales agents to be licensed called?
A
The Real Estate Dealer’s License Act
15
Q
The enforcement of the site of the real estate dealers license act that was passed in 1939 was initially handled by whom?
A
Texas Secretary of State
16
Q
When was the Tx Real Estate Commission established?
A
1949
17
Q
How often is the NAR Code of Ethic’s reviewers and updated?
A
Annually
18
Q
TRELA is reviewed and update how often?
A
Every two years when Tx legislator meets
19
Q
What licenses holders MUST do?
A
Keep their license up-to-date if it’s an active status
Keep the continuing education up to date
Stay current on off to the Texas real estate commission
The practice will stay under the sponsorship of an active broker
Always disclose agency relationships to customers and other license holders
Provide customers with information about brokerage services form when required
Be fair and honest with all parties, client and customer
Perform fiduciary duties for clients
Disclose if a license holder is involved in the transaction
20
Q
What license Holders SHOULD do?
A
Quote the source of all information you share
Give that info in writing or back up verbal statements in writing
21
Q
What licenses Holders CANNOT do?
A
Commit fraud/misrepresentation
Practice without a license or sponsoring
Fail to inform TREC of convicted felony
Fail to notify TREC of address/email change
Fail to do any of the items under what a license holder must do
22
Q
Through the license act and the minimum level of service, a Texas broker can offer their sellers?
(Under exclusive agreement)
A
a)A broker who represents a party in a real estate transaction or less real estate for sale under exclusive agreement for a party is that the parties agent.
23
Q
Cont sect 1101.557 acting as agent
The sole delivery of an offer to a party does not violate section 1101.652 if:
A
A party’s broker consents to the delivery
A copy of the offer sent to the parties broker and less a governmental agency using a sealed bid process does not allow a copy to be sent
The person delivering the offer does not engage in another activity that directly or indirectly violate section 1101.652
24
Q
Section 1101.558 representation disclosure addresses?
A
Need for license holders to properly disclosed representation when dealing with others
25
What does section 1101.558 say?
License holder representing a party in a proposed real estate transaction must provide either oral or written disclosure of that representation upon first con tact with the party to the transaction for to another license holder representing another party to the transaction
It identifies content and format of written communication required when substantive dialogue relating to proposed transaction regarding real property occurs with a party.
It lists few exceptions to the written notice requirement
26
What does IABS notice stand for?
Information about brokerage services notice
27
Sect 1101.652 grounds for suspension or revocation of license
How?
Enters a plea of guilty or is convicted of felony or criminal offense including fry, and a time for appeal has elapsed or judgment or convection has been affirmed on appeal without regard to an order granting community supervision that suspends the apposition of the sentence
Procures or attempts to procure a license under chapter for the license holder by fraud, misrepresentation, or deceit by making a material miss statement of fact in an application for license
Fails to honor a check issued to the commission after the commission has sent by certified mail a request for payment to the license holders last known business address according to commission records
Fails to provide information requested by commission that relates to a formal or informal complaint to the commission that would indicate a violation of this chapter
Fails to surrender to the owner without just cause, a document or instrument that is represented by the owner and that is in the license holders possession
Fails to notify the commission not later than the 30th day after the date of final conviction or entry of plea of guilty, that the person has been convicted or entered a plea of guilty to a felony or criminal offense including fraud
Disregards our violates chapters
28
What is incompetence?
Attempting to facilitate something in which you’ve never attempted
29
How can you avoid getting into trouble for misrepresentation?
By stating the source of any information you provide
30
As selling agent, who should be responsible for filling out the disclosure form on the property?
The seller’s agent should make sure that the seller feels out the disclosure form
31
What is earnest money?
A deposit that is submitted along with the contract to demonstrate seriousness about the offer
32
When the broker receives earnest money or a security deposit on a rental how should the money be handled?
First, it should be accounted for at all times and passed on to the appropriate party.
Secondly the law does allow brokers to hold the earnest money in an account as long as the brokers money is not in that same account
Brokers send clients checks to the title company for safekeeping
33
What is nolo contendere?
A plea in criminal court in which the defendant accepts the punishment without admitting guilt.
34
TREC acts as and monitors:
Actions of license holders to ensure compliance of Act
Maintains edu standards and records
Collects licensure fees and issues fines
And penalties for violation of TREC rules/License Act
Handles consumer compliments and complaints concerning license holders
35
TREC rules on inactive license
a) The license of a salesperson immediately becomes inactive upon each of the following circumstances:
(1) the death of the salesperson's sponsoring broker;
(2) the expiration, suspension, revocation or inactivation of the license of the sponsoring broker;
(3) if the sponsoring broker is a business entity, the dissolution of the entity or the forfeiture of its charter;
(4) if the sponsoring broker is a business entity, the expiration, suspension, revocation, or inactivation of the license of the designated broker of the entity, or the death of the designated broker;
(5) termination of sponsorship by the salesperson or sponsoring broker;
(6) failure to timely complete continuing education required under the Act and this Chapter; or
(7) receipt by the Commission of an application for inactive status.
36
(b) If the broker intends to terminate the sponsorship, the broker must immediately:
Or
c) If the salesperson intends to terminate the sponsorship, the salesperson must immediately:
1) notify the salesperson in writing; and
(2) terminate the sponsorship:
(A) through the online process approved by the Commission; or
(B) on the appropriate form delivered to the Commission.
37
to reactivate a license on inactive status, the license holder must:
provide the Commission with documentation that the license holder has satisfied all continuing education requirements under the Act and this chapter;
(2) certify, on a form acceptable to the Commission, that the license holder has not engaged in activity requiring a license at any time after the license became inactive;
(3) establish a sponsorship relationship with a broker:
(4) pay the appropriate fee.
38
What’s really the Three levels of inspectors licenses?
Apprentice inspector (entry level)
Real estate inspector (intermediate)
Professional real estate inspector (highest level)
39
What does TALCB stand for and when was it established?
Texas appraiser licensing and certification board
Established as an independent subdivision of TREC in 1991
40
What is an appraiser
A real estate appraiser is An individual Who provides professional and Estimate of the current market value of the property
41
What is Appraisal Management Company (AMC)?
an entity authorized to provide appraisal management services by TALCB. AMCs often act as the intermediary between the lender, borrower, realtor, mortgage broker and the appraiser.
42
NAR Code off Ethics
Has higher standards than TREC laws
43
What is BPO?
Brokers Professional Opinion
44
Improvement define
Any permanent human-made addition to land
45
Subsurface Right define
Ownership of the minerals, gas, or oil beneath the surface of a piece of real estate
46
Surface Rights
The ownership of the land in a parcel or real estate but limited only to the plane
47
Air Rights define
The right to use the airspace above the surface of land
48
Water Rights define
The right to enjoy the water that borders a property
49
Littoral Rights
Rights that govern lakefront or oceanfront property and usually allow the property owner to use the water bordering their property
50
Riparian Rights
Rights that govern the use of flowing water, such as rivers and streams that pass through or border a property
51
Land refers to
to more than a tract of earth. Land includes not only the natural resources seen on the surface of the land but the minerals below the surface and the air above the surface.
52
Real estate includes
land AND and human-made improvements attached to it.
53
Real Estate is also referred to as
Realty
54
What is an improvement?
permanent human-made addition that is attached to the land. Buildings, fences, decks, and roads are all examples of improvements.
55
Real property refers to
all that PLUS the set of rights associated with real estate ownership.
56
Bundle of rights (interesting history) refers to
The ownership of real property includes a set of legal rights
57
What rights are included in a bundle of rights?
Right of exclusion-The right to tell Aunt Sally that she can’t trespass on your property.
Right of possession-right to occupy/live/breathe on your property, no matter what Aunt Sally has to say about it.
58
Personal property is anything that
someone can move and take with them from place to place, like a vacuum cleaner or a lawnmower.
59
What are for ownership rights associated with real property?
Surface rights🌲
Subsurface rights ⛏
Air rights 🌬
Water rights 🌊
60
What is subsurface rights often referred to?
Mineral rights
61
When talking about air rights what is the sunlight right?
In some cases in the United States, if one has sunlight for a certain number of years they may be able to prevent construction of a taller project that would block light.
62
What are two Types of rights associated with waterfront properties?
Riparian Rights
Littoral Rights
63
What is riparian Rights?
Rights that govern the use of flowing water such as streams or rivers that passes through or borders the property.
64
What is littoral rights?
Right that governs lakefront and ocean front and usually allows property owner to use water bordering the property.
Note* littoral use prohibits property owners to artificially change waters location.
65
What is usually necessary to have water rights of lakefront or ocean front?
Surface ownership of a waterfront property
66
Personal Property is known as anything that can go with you from place to place but also known as what?
Any item that’s not real estate, also known as personalty or chattel
67
What is real estate?
Part of the surface of land to the center of the earth and upward toward space plus improvements made by man or nature.
68
What is real property?
Land from the surface to the center of earth and upward into space, including everything attached by man or nature as well as the bundle of legal rights of the ownership
69
What is fixture?
An object that was once personal property, but which has now been firmly attached to the land in such a way that it becomes part of the real estate
70
What is trade fixture?
Personal property attached to real property that’s owned by Anna needed for a tenant’s business
71
Adaptation define
use and modification of a particular item for a specific use in a property
72
Fructus naturales
Trees, bushes, grass, and uncultivated plants, usually considered to be real property because of their permanence
73
Define Fructus Industriales
Annually-cultivated crops generally considered to be personal property; also known as emblements
74
What is Fructus Industriales also known as?
Emblements
75
How is the way documents are transferred done differently between real property and personal property?
Ownership to a parcel of real estate is transferred by a recordable document such as a deed.
Ownership to personal property (chattel) transfers by a bill of sale.
76
Define Bill of Sale
written agreement used to sell, reassign, or transfer one’s right to or interest in personal property, like furniture or appliances.
77
What is a deed?
written instrument used specifically to transfer real estate, which the owner (sometimes called the grantor) uses to convey ownership in real property to the buyer (or grantee).
78
What is a non-realty Items addendum?
special addendum that must be attached to the sale contracts when Someone purchases personal property such as washing machine or refrigerator.
79
What is severance?
the act of separating some element of the real estate from the land.
80
A fixture is
a chattel bound to real estate and refers to an object that was once personal property, but which has now been firmly attached to the land in such a way that it becomes part of the real estate.
81
What question should agent ask a seller When discussing terms?
“Is there anything attached to the property that you will be taking with you when I sell your home?”
82
What is trade fixture?
personal property that is owned by and needed for a tenant’s business. (For example, shelves that a store owner attaches to the wall when leasing a storefront in a strip mall.
83
What is a accession?
The process of any trade fixture being left behind after the lease and becomes landlords property.
84
When trying to consider if something is a fixture we can consider:
annexation, adaptation, and intention. Abbreviated as AAI.
85
When determining if it is a fixture what is the first consideration?
Annexation which is the way the item is attached to the land.
86
What is adaptation when considering if an item is a fixture?
It refers to the use and modification of particular item for specific use in a property
87
When considering if an item is a fixture what does intention mean?
It means we consider annexation and adaptation. How was an item attached and used or modified for the specific use of the property.
88
When talking about chattel a client might have certain concerns. What are they?
Are crops that are attached to the earth, which can be harvested and sold, personal property or real estate?
What about trees and decorative flora that one could remove — are they chattels or realty?
89
What is a landman?
A professional searching for owners of mineral rights in attempt to obtain the lease on the rights that can be passed on to oil and gas companies
90
What is one way to find out Who owns the mineral rights to the property?
for the seller or the buyer to hire a landman to help with the searching of records.
91
Another way to learn who has the mineral rights would be?
to hire an oil and gas attorney who can research the issue and figure out the ownership situation.
92
Mobile homes are mobile therefore they are considered?
Personal property
93
What qualifies a mobile home to be considered as real property?
It must be connected to utilities and permanently attached to the land that the home owner also owns.
94
What is a condominium?
A single unit in a residential complex, which may or may not share common walls with neighbors, in which the owner owns the unit and a share of the common elements, but not the land
95
What are common elements when referring to condos?
Shared areas in a residential community, such as hallways, elevators, stairwells, pools, and recreational facilities
96
What is cooperative(co-op) housing?
A residential building in which the title is held by a corporation, the residents are stockholders in the corporation, and the residents have a lease
97
What is a planned unit development when referring to housing?(PUD)
A subdivision or development that includes single-family dwellings along with some common elements such as parks, pools, community recreational centers, or golf courses
98
What is a timeshare?
Residence with multiple owners who share the right to possession for a specific period of time with the other owners
99
Fun fact: in 2015 census data bureau, how many people live in owner occupied household? (Single fam)
65%
100
Based on 2015 census data bureau how many rental homes or single-family homes? %
35%
101
A condo offers freedom from what?
exterior maintenance responsibilities
102
Condominium ownership typically provides ownership of what?
unit itself (from floor to ceiling and wall to wall), but not the land that it sits on.
103
According to the 2016 Texas Condominium Mid-Year Sales Report by the Texas Association of REALTORS®, condominium sales increased in what for major metros?
Austin, Houston, Dallas, or San Antonio
104
What is one thing cooperative and condominiums have in common?
They both have to pay assessments
105
What is the major difference between condominium in town house?
the conveyance of the land with the residence by the deed.
Townhomes usually include the unit and the land.
106
Why is it important to let buyer clients know upfront if there is any homeowners association fees?
Because it is a big consideration for buyers and they don’t want to fall in love with the property first then find out they have these monthly expenses.
107
What makes the building qualify as commercial real estate when were furring to multifamily?
Buildings with more than four units
108
Define Ad Valorem Tax
A tax calculated according to the assessed value of real estate
109
Define Homestead Tax Exemption
Reduces the amount of ad valorem taxes assessed on a homestead
110
What does prorate mean?
The dividing of expenses for items like taxes, interest, and rent at the closing between the seller and the buyer
111
First time buyers may have options such as
Withdrawing from their individual retirement account up to $10,000 penalty free and tax deferred for their down payment.
First time buyers may find other programs through their state county or city and their city programs may include low income family programs.
112
What is capital gains taxes?
taxes on the profit a person makes by selling principal home.
113
What are the definitions of capital gains and capital loss?
Capitol gains is referred to the profit received from selling a capital asset
Capital loss is a loss incurred from selling a capital asset
114
Capital assets include all taxpayers tangible property such as
Real estate, investment property, and equipment, but does not include property held for regular sale to consumers
115
What determines Whether a capital gain is taxed as a short-term or long-term gain?
length of time the property is held (the amount of time between the day a property is bought and the day it is sold). This is called the holding period.
116
A broker described by subsection (a)
| may not instruct .....
b)A broker described by subsection (a)
may not instruct
.....another broker to directly or indirectly violate section 1101.652
Must inform the party if broker receives material information related to transaction to list, buy, sell, or lease the parties real estate including the receipt of an offer by the broker and,
At minimum answer the parties questions and present any offer to or from the party
117
for the purpose of this section:
A license holder who has authority to bind a party to a lease or sale under a power of attorney or property management agreement is also a party to the lease or sale
True or false?
True
118
An inquiry to a person described by section 1101.005 about contract terms and forms required by the person’s employer does not violate section 1101.652 if the person
does not have authority to bind the employer to the contract
119
What Act created exclusions from capital gains?
The Taxpayer Relief Act of 1997
120
What is capital gain exclusion eligibility for tax paying homeowner?
taxpayer must have owned and occupied the home as a principal residence for at least two of the five years preceding the sale.
121
What are exceptions to the two year requirement to tax exemptions?
Property acquired in rollover transactions, which are transfers of funds to investments of the same type, used to defer the payment of taxes (i.e., 1031 exchanges)
Property transferred by a spouse
Property owned by a spouse, former spouse, or deceased spouse
Owners who have received care from a nursing home
122
What is the 1031 exchange do?
lets an investor sell a property, reinvest the proceeds in a brand new property, and defer all capital gain taxes.
123
IRC Section 1031 (a)(1) says:
No gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment, if such property is exchanged solely for property of like-kind which is to be held either for productive use in a trade or business or for investment.”
124
Ever since May 6, 1997, sellers of principal residences have been required to provide the government with a written assurance containing the following two items:
A statement that the entire gain made from the sale can be excluded
A statement that the property is the owner’s principal residence
125
The 1997 law allows most people to avoid any taxes from gains on the sale of their primary residences because the exclusion can be used frequently. However,
these benefits do not apply to investment properties.
126
One of the advantages of homeownership is that the real estate taxes the owner pays and the dollar amount of the interest paid on the mortgage is
Tax deductible
127
In Texas, a homeowner has state constitutional homestead rights on their owner occupied primary residence. Which is the right....
That’s automatic and protects homeowners from claims by creditors being made against their homes, preventing any eviction by these creditors.
128
These facts pertain to what?
The person might be forced by the court to sell other assets and property, but not the home they live in.
protection does not apply to unpaid taxes or to specific liens, like mortgage debt where the property is the collateral.
Homestead Protection
129
what's assessed value?
Assessed value is the value placed on a property by a governmental unit for use in levying annual real estate taxes.
130
What is exemption?
exemption removes a percentage or an absolute dollar amount from the assessed taxable value of the property.
131
Examples of properties commonly exempted include the following:
Hospitals
School property
Property owned by religious organizations
Property owned by non-profit organizations
Property owned by municipalities, cities, and counties
132
There is a homestead tax exemption (not to be confused with the homestead right mentioned previously) which will:
reduce the amount of ad valorem taxes paid on the homestead.
133
An owner can only claim one homestead. The homestead exemption cannot be filed until the buyer has been in the home past
January 1st
134
Texas law requires school districts to offer a $25,000 tax exemption
Residential homesteads
135
Who is required to offer a $3,000 exemption if the county collects farm-to-market road taxes or flood control taxes?
Counties
136
State and local governments also may reduce general real estate taxes for:
Senior citizens
Land used for agricultural purposes
Certain industries
Other possible reductions include those for homesteads and for persons with disabilities.
137
For homeowners aged 65 or older, the appraised value of the property established by the county is
frozen, meaning the value will not go up any more on the home. (However, the tax rate might.)
138
If someone owns acreage in a rural area, it is possible that the taxes could be
lowered with an agricultural exemption, due to any farming or ranching that takes place on the property.
139
There is also a program for an agricultural tax exemption for
wildlife conservation.
140
Texas law requires school districts to offer a $10,000 exemption for people who are
over the age of 65 or those who have a disability.
141
advantage for Texas seniors is that when they file their senior exemptions, their school taxes are
Frozen
142
the spouses of veterans who were killed in action are
totally exempt from property taxes in Texas.
143
agents must be careful to quote the dollar amount that does not include
any exemptions, not the amount the current occupants of the home are paying.
144
Federal income tax is assessed according to an individual’s
Net income
145
Common deductions for homeowners include:
Real estate taxes levied on primary residences
Interest on mortgage payments for primary residences
Other costs associated with a mortgage, such as prepayment penalties, fees, and discount points
146
Homeowners may NOT deduct the following expenses from their primary residence from taxable income:
The principal portion of a mortgage payment
Depreciation expenses
Insurance premiums
Escrow payments
Utility expenses
147
At closing, the taxes for the property will be
Prorated
148
Buyers also have the option to pay their property taxes (and homeowners insurance)
up-front in a lump sum, or in installments through an escrow account.
149
Most homeowners’ insurance policies include coverage of
the dwelling and outbuildings, personal property damage or loss, liability for injury and medical bills for others who are hurt on the property if the homeowner is found legally liable, and loss of use.
150
Loss of use provides for the expenses of
place to live if the home is rendered uninhabitable from damage covered under the insurance policy.
151
most homeowners insurance policies will cover
loss or damage caused by fire or smoke, lightning, windstorms, hail, aircraft, vehicles, vandalism, theft, and explosions
152
Most homeowners insurance policies will NOT cover
loss or damage from flooding, earthquakes, termites, freezing pipes, wear and tear, or lack of maintenance.
153
only a licensed insurance professional should
discuss insurance coverage and homeowners policies with your clients.
154
If an insurance question comes up, refer clients
To an insurance agent
155
Most title companies DO NOT take care of cancelling
the insurance for the seller.
156
The seller will need to cancel homeowners insurance after closing and any refund from the insurance company will come directly to the seller.
This is typically called
The return premium
157
What is amortization?
The process of paying off the debt or mortgage in regular installments Based on a fixed payment schedule
158
Define Arrears
Payment for an item or service after it is received
159
Define CLUE reports
Stands for comprehensive loss underwriting exchange, a database used by insurance agencies that contains information on any claims made in the past five years by property owners on specific properties
160
Define PITI
Stands for principal, interest, taxes, and insurance, which are the components of the most mortgage payments
161
Define proration
The allocation and distribution of an annual expense across smaller chunks of time
162
This type of insurance protects the lender in case the borrower defaults.
PMI
| Private mortgage insurance
163
The seller’s old loan company (assuming the house was not paid off in full) will want to collect interest through the day of closing. Interest paid in monthly payments is always paid in arrears, which means
it is paid after it's received/issued.
164
When talking about arrears, if a property closes on February 11th, the seller will owe interest for
11 days and that will be charged to him on the Closing Disclosure form at closing.
165
The buyer's new loan company will expect to collect interest
From the day is closing
166
As buyer, when talking arrears, If we assume our February 11th closing date, the first monthly payment will probably be
April 1st
167
When discussing arrears, If we assume our February 11th closing date, the first monthly payment will probably be April 1st. That payment will account for March's interest. Interest for February 11th through February 28th will probably be collected from the buyer
At closing
168
What subsidized flood insurance and requires land management and flood control programs.
National Flood Insurance Act of 1968
169
The cost of flood insurance is based on
detailed flood insurance rate map
170
The cost of flood insurance is based on a detailed flood insurance rate map issued by
Federal Insurance Administration
| FIA
171
Insurance companies keep a database containing information on any claims made in the past five years by
owners on specific properties.
172
insurance companies use this database to determine the
insurability of the client and the specific property.
173
The insurance report from the database is referred to as a
CLUE (Comprehensive Loss Underwriting Exchange) report.
174
The CLUE report provides
dates of claims,
insurance company or companies involved,
the type of policy,
whether loss was related to a named catastrophe (hurricane, etc.),
location of the loss (on or off the property),
the amount paid,
cause of the loss.
175
Define Agency
Relationship between a client and a broker
176
Express Agency is:
Agency created by a clear, specific agreement
177
Implied Agency is:
Created when an agent is given permission to act on behalf a client through conduct or communication, but the permission is not established orally or in writing. Does not have to be an action, but can be a statement that leads the principal to believe that the license holder is their agent.
178
What is Agency by Ratification?
Created when a license holder acts on behalf of but without prior authorization of a principal and that principal accepts the license holder's action after the fact
179
Define Intermediary Broker
A broker who negotiates a contract between two parties that are both being represented by that broker
180
Define Appointed License Holder
A sales agent license holder who was designated to work with a client during an intermediary transaction
181
Special Agency is:
The relationship between a broker and a principal wherein the broker has restricted authority to act on behalf of the principal to achieve one specific objective
182
The general public participates in real estate transactions under four types of roles:
Principal
Client
Customer
Third party
183
An agency relationship is created when
an individual authorizes another party to represent them and act in their best interest.
184
When talking about general public roles, A principal has two meanings:
A major party who is a part of a real estate transaction (buyer, seller, landlord, tenant).
An individual who authorizes an agent to represent their interests as a client in a real estate transaction.
185
A client is an individual who has signed
an agency agreement with you or your broker to represent them in a real estate transaction.
186
A customer is
a person on the other side of the transaction with whom the license holder does not have an agency relationship.
187
A third party is
ANY person involved in a real estate transaction with you who is not your client.
188
Any customer as well all real estate professionals in a transaction (inspector, title officer, loan officer) is a:
Third party
189
An agent representing a seller is oftentimes known as
Listing agent
190
an agent representing the buyer is known as
Buyers agent
191
There are three different types of agency relationships:
Special Agency (broker-client)
General Agency (sales agent-broker)
Universal Agency (child-parent as executor of will)
192
In a special agency relationship, the client grants their agent the authority to act on their behalf for specific actions. Specific actions such as…
Listing their home on the MLS
Representing their interests as a buyer at an open house
193
Because special agency is created at the broker level, this means that not only does the broker owe the client (principal) fiduciary duties, but ALL
of that broker's sponsored agents also owe that client fiduciary duties.
194
Broker Natalie sponsors 15 sales agents. One of her agents, Audrey, gets a seller to sign a listing agreement. Who owes that seller fiduciary duties?
because agency is created at the broker level, broker Natalie and ALL of her 15 sponsored sales agents owe the seller fiduciary duties.
195
Whereas special agency is limited, general agency:
Gives agents more power
Holds the principal (broker) responsible for actions performed by their agent
196
general agency relationships are?
Principal: The broker is the principal of the agent.
Agent: The sales agent is the agent of the broker.
197
Universal agency gives agents the power to
act on behalf of their principal and make decisions on behalf of the principal.
198
Under universal agency, an agent is given
the general power of attorney — this means the agent has the actual power to sign legal documents on behalf of their principal.
199
Express agency is created by a
written or oral agreement between the principal and the agent.
200
Implied agency means there is
nothing in writing
201
ratification is
“after the fact.”
202
agency by ratification occurs when a broker or sales agent has done:
something on behalf of, but without prior authorization of, a principal.
203
What are four steps to use to determine if agency by ratification has taken place:
The license holder must have done something on behalf of, but without the prior authorization of, a principal.
The principal learned of the act after the fact
The principal had capacity to contract at the time of the action
The principal accepts the action of the license holder after the fact
204
There is another type of agency that license holders need to know about, and that i
is gratuitous agency.
205
gratuitous agency means
means that the real estate agent worked for free and received no commission.
License holders do it sometimes to help a friend or relative. You're the one giving the gratuity!
206
In non-agency, the broker or the sales agent would have
a contract with someone (either a seller, buyer, tenant, or landlord) and would only give services that do not require fiduciary duties.
207
The Sherman Antitrust Act is a law that was passed in
1890
208
The Sherman Antitrust Act prohibits
trusts, contracts, combinations, or conspiracies “in the restraint of trade or commerce.”
209
Texas, we have the Texas Fair Enterprise & Antitrust Act of 1983, a law that
investigates and prosecutes things like price-fixing, bid-rigging, monopolies, cartels, group boycotts, and anti-competitive mergers and acquisitions.
210
If a meeting should take place between two license holders, brokers or sales agents, and one person said to the other, “Let’s stop showing that agent's listings and let’s not let him show ours,” that would be a violating what law?
The Sherman Antitrust Act because it outlaws the practice of boycotting a competitor
211
If two or more agents/brokerages talk about how they don't like the prices of a place that does their advertising and decide not to use them anymore, that is a
group boycott and a per se antitrust violation.
212
What is an example of the allocation of customers or markets.
You stay on the north side and I’ll stay on the south side,” or, “You take the listings over one million dollars and I’ll take the ones below that amount.”
213
the broker could announce that the company will not take any listings with a commission rate lower than 3%, which isn't actually considered price fixing as much as
setting a price floor.
214
Disclosures come in two formats:
those made by consumers and
those made by the license holders.
215
Seller disclosure means:
seller typically informs the buyer about any negative conditions concerning the property and its improvements
216
License holders must disclose
their agency relationships at first meeting
217
Agents must also disclose their agency relationships to
Other agents
218
Agents must also disclose their agency relationships to other agents. For example,
a license holder might contact a listing agent for more information on a listing. The caller has to disclose whether they are working as a buyer’s agent or a subagent.
219
This one is extremely important. If you as an agent notice something that should be disclosed on the Seller's Disclosure Notice but isn't,
it's your job to advise the sellers they need to disclose the condition. If they refuse, you should stop working with them.
220
The Law of Agency establishes a
fiduciary relationship
221
(b-1) At the time of a license holder's first substantive communication with a party relating to a proposed transaction regarding specific real property, the license holder shall provide to the party
written notice in at least a 10-point font
222
(b-1) At the time of a license holder's first substantive communication with a party relating to a proposed transaction regarding specific real property, the license holder shall provide to the party written notice in at least a 10-point font that:
(1) describes the ways in which a broker can represent a party to a real estate transaction, including as an intermediary;
(2) describes the basic duties and obligations a broker has to a party to a real estate transaction that the broker represents; and
(3) provides the name, license number, and contact information for the license holder and the license holder's supervisor and broker, if applicable.
223
A license holder is not required to provide the notice required by Subsection (b-1) if:
the proposed transaction is for a residential lease for less than one year and a sale is not being considered;
(2) the license holder meets with a party who the license holder knows is represented by another license holder; or
(3) the communication occurs at a property that is held open for any prospective buyer or tenant and the communication concerns that property.
224
Brokers can act as an intermediary, representing both parties to a real estate transaction. This is okay as long as:
The broker gets written consent from each party.
(2) That written consent clearly says who's paying for any compensation the broker will earn.
(3) The intermediary treats all parties fairly.
225
A written listing agreement and a written buyer/tenant representation agreement that authorize the broker to act as an intermediary counts as written consent. The agreement needs to specify in bold or underlined print
the actions that are prohibited by law.
226
A broker who complies with the written consent requirements of Section 1101.559 may appoint:
(1) a license holder associated with the broker to communicate with and carry out instructions of one party to a real estate transaction; and
(2) another license holder associated with the broker to communicate with and carry out instructions of any other party to the transaction.
227
) A license holder may be appointed under this section (sec. 1101.560) only if:
(1) the written consent of the parties under Section 1101.559 authorizes the broker to make the appointment; and
(2) the broker provides written notice of the appointment to all parties involved in the real estate transaction.
(c) A license holder appointed under this section may provide opinions and advice during negotiations to the party to whom the license holder is appointed.
228
6 fiduciary duties throughout this course is with the acronym OLD CAR: meaning?
```
Obedience
Loyalty
Disclosure
Confidentiality
Accounting
Reasonable Care
```
229
Define Subagent
A license holder from one office who represents the seller through cooperation with the listing broker of another company
230
Define Material Fact
Any fact that is significant or essential to the transaction
231
What exactly is a "subagent"? TRELA §110.002 (8) gives the following definition:
Subagent" means a license holder who:
represents a principal through cooperation with and the consent of a broker representing the principal and
(B) is not sponsored or associated with the principal's broker.
232
Commissions are totally
Negotiable
233
The broker can continue working in the transaction but it would be considered
intermediary without appointments.
234
May a broker who works by themself and has no agents practice an intermediary relationship?
The answer is yes, but only as an intermediary without appointments.
235
In order for a brokerage to be able to represent both the buyer and seller in a real estate transaction, the brokerage needs to have
the permission of BOTH PARTIES.
236
What's "floor duty"?
It's a system by which each sales agent volunteers to be given a period of time in the office where they are the first person to answer the phone or grab the first person who walks in the door in an attempt to turn that person into a client.
237
Remember: The agent works FOR
the principal and works WITH (but not for) the third party.
238
Texas Real Estate License Act identifies particular pieces of information that are not properly considered material facts. Under this law, a license holder is not required to inquire about, disclose, or release information relating to whether:
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; or a death occurred on a property by natural causes, suicide, or accident unrelated to the condition of the property. (Sec. 1101.556)"
239
substantive communication is
communication that involves a substantive discussion relating to specific real property.
240
Broker Arnold was advertising his brokerage services in the newspaper while his license was inactive. Broker Arnold has held his license for five years and is working on making it active again. Is Broker Arnold violating any TREC rules by continuing to advertise his brokerage services during the inactive period?
Yes
According to Section 1101.351(b) of the Real Estate License Act:
No individual may sell, lease, advertise, or exchange real estate services without an active license. If the license holder is a salesperson, then he or she may only sell, lease, advertise, or exchange real estate while acting under his or her sponsoring broker. If that sponsoring broker’s license status is "inactive,” then all agents must stop providing real estate services until the broker renews his license.
241
For those renewing license for the first time, the current education requirement is
three thirty-hour courses in SAE (Sales Agent Apprentice Education) plus two four-hour courses called Legal Update I and Legal Update II.
242
For license holders, After the first renewal at the end of the second year, the education requirement is
18 hours of continuing education. Four of those hours must be Legal Update I and another four hours of Legal Update II. The rest of the hours can be any continuing education course.
243
if the license holder is a broker who is responsible for sales agents, or if a sales agent is responsible for a team or an office manager, then a portion of the 18 hours must be a six-hour course called
Broker Responsibility.
244
§535.93 Late Renewal Applications
a) Subject to the requirements of this section and §1101.451(e) of the Act, a license holder may late renew a license after the expiration date of that license if:
(1) the license has been expired for less than six months;
(2) the license holder files the application to renew on a form approved by the Commission for that purpose;
(3) completes all required continuing education for renewal of the license; and[...]
4) the license holder submits the required fees under §535.101
245
Concerning late renewals, the license holder submits the required fees under §535.101, including:
(A) application fees for late renewal;
(B) a continuing education deferral fee if continuing education for the previous active license period was not completed by the expiration date of the previous active license period; and
(C) a continuing education late reporting fee if continuing education for the previous active license period was not completed by the 60th day after the expiration date of the previous active license period.
246
To renew a salesperson license on active status after the expiration date of the license without any lapse in active licensure, a license holder must submit a Salesperson Sponsorship Form certifying that the license holder:
(1) was continuously sponsored by a Texas licensed broker from the date after the previous license expired to the date the renewal of that license will be issued; and
(2) will continue to be sponsored from the date immediately after the date the renewal of that license will be issued.
(d) The same broker may be the sponsor to the salesperson for both periods under subsection (c) of this section.
247
If the license holder is unable to certify that the license holder was sponsored for the periods under subsection (c) of this section, the Commission will renew the salesperson license on
inactive status for the period(s) in which the license holder was not sponsored.
248
A license renewed under this section is effective the day
following the expiration of the previous license.
249
Working in real estate is a unique career for three reasons:
1) Real estate agents work with their competitors at other offices to share inventory and negotiate transactions to a closing.
2) Agents have fiduciary duties to their clients. Attorneys and medical doctors have a similar emphasis on fiduciary duties, but this commitment to always putting the client's interests first is rare in many other industries.
3) The most amazing (and cute) robot teacher exists to teach you the important concepts.
250
What is Fraud?
A misstatement made intentionally to deceive
251
The Texas Deceptive Trade Practices Act (DTPA) was enacted in
1973
252
The Texas Deceptive Trade Practices Act (DTPA) purpose is
to protect consumers against false, misleading, and deceptive business practices, unconscionable actions, and breaches of warranty.
253
In 1995, the legislature amended the DTPA by adding an exemption for providing a professional service. Courts have not
applied the exemption to real estate license holders
254
In reference to DTPA, In 2011, the 82nd Texas Legislature added
real estate brokerage as a specific exemption to the DTPA.
255
unless a license holder has committed an unconscionable act, misrepresentation of a material fact, or a failure to disclose with the intention of inducing a consumer into a transaction, the license holder can no longer
be held liable under DTPA.
256
DTPA defines an unconscionable action as
one that "takes advantage of the lack of knowledge, ability, experience, or capacity of a person to a grossly unfair degree."
257
To sue for fraud, all of the following need to apply to the situation:
A material representation was made to the plaintiff by the defendant.
The representation was false.
The defendant knew the statement was false or made the statement not knowing whether the statement was true.
The statement was made with the intention the other person should act on it.
The other person relied on that representation and acted on it.
The other person was damaged in some way by the statement.
258
It makes sense, then, that real estate license holders are more commonly accused of
misrepresentation rather than fraud.
259
Overall, the DTPA lists 31 specific violations (commonly referred to as the laundry list). Of these 31 violations, the following are applicable to the real estate industry:
Representing goods as new or original if they are in fact reconditioned or used
Representing goods as meeting a certain standard, quality, or grade or as if they are of a particular style when, in fact, they do not fit these descriptions
Misrepresenting facts concerning the goods, services, or business of another in order to discredit that entity
Misrepresenting facts concerning the reasons for a reduction in price of goods or services
Representing an agreement as containing rights, remedies, or obligations that it does not contain
Concealing or misrepresenting the need for replacement or repair services
Misrepresenting the authority of the representative to negotiate the transaction
Claiming that replacement or repair services have been performed when, in fact, they have not
Failure to disclose any information at the time of the transaction that may have affected the outcome of the transaction
260
A lien is
a type of security interest granted over a property to secure the payment of a debt or performance of some other obligation
261
Damages under the DTPA refers to:
Economic damages (compensatory damages for pecuniary loss, including costs of repair and replacement)
Non-economic damages (exemplary damages or damages for physical pain and mental anguish, loss of consortium, disfigurement, physical impairment, or loss of companionship and society)
262
When talking DTPA, Economic damages can include the following:
Costs of repair
Loss of use during repairs or due to damage
Diminution in value
Out-of-pocket expenses
263
A common form of non-economic damages awarded in DTPA lawsuits are those resulting from
mental anguish.
264
The courts often decide that not only are plaintiffs owed recovery for their economic losses, but also recovery
of their time and energy spent dealing with the misconduct of the agent or broker.
265
In order for the Texas Real Estate Commission to revoke or suspend an agent’s license, that license holder’s violations of the DTPA must be coupled with
violations of provisions set forth in the Texas Real Estate Licensing Act.
266
If a court finds that the conduct of the seller or the agent was committed "knowingly," a court may award not more than
three times the amount of economic damages plus add damages for mental anguish.
267
If a court finds the conduct of the seller or the agent was committed "intentionally," a court may also award not more than
three times the amount of damages for mental anguish AND economic damages.
268
Under the DTPA, knowingly means
actual awareness at the time of the act
269
Under the DTPA, "intentionally" means
actual awareness of the falsity, deception, or unfairness of the act or practice, or the condition, defect, or failure constituting a breach of warranty giving rise to the consumer's claim, coupled with the specific intent that the consumer act in detrimental reliance on the falsity or deception or in detrimental ignorance of the unfairness.
270
Some of the infractions for which TREC may revoke or suspend an agent’s license – that is, violations of license law which are also violations of the DTPA – are the following:
Material misrepresentation or failure to disclose any known or latent property defects
Deceptive practices in the marketing, selling, or offering of real property False promises made to the consumer through advertising or directly through the agent
Failure to disclose which party is compensating the agent, or that more than one party is liable for compensation without the written consent of all parties involved
Request or acceptance of an undisclosed compensation, a.k.a. accepting money from a client because they want you to do something illegal
Acting as agent and undisclosed principal in a transaction
271
most brokers carry errors and omissions insurance that covers
the entire office to avoid lawsuits whenever possible.
272
The agent is to operate under a warranty of authority
guarantee that an agent gives (explicitly or implicitly) to a third party that establishes that the agent has the authority to bind a principal – i.e., that the agent has the authority to make contracts, agreements, and enter into similar arrangements on the principal’s behalf.
273
In the event that a prospective buyer chooses not to have a property inspected, the license holder should secure
a signed written statement from the prospective buyer stating that they made this choice despite the license holder’s recommendation that the property be inspected.
274
If repairs are required by the buyer after the inspection report is received, this information needs to be passed on to the listing agent and/or the seller. The owner should also be aware of
Paragraph 7F of the One to Four Residential Contract, stating that repairs should be performed by qualified and licensed (if applicable) workers.
275
Paragraph 7F of the One to Four Residential Contract states that
repairs should be performed by qualified and licensed (if applicable) workers.
276
an inspector might not have expertise in these two areas:
One is pools and
| the other is foundation problems
277
Broker Quinn and her client had a contract accepted for purchase of a single family home. In order to expedite the inspection process, Broker Quinn strongly recommended an inspector she has worked with in the past, and assured her client that the inspector would provide a thorough and comprehensive home inspection. Broker Quinn also stated that the inspection would include a wood-boring pest inspection.
Is this risky behavior for Broker Quinn?
Yes, Quinn made a risky move. A broker should think hard before steering her client in the direction of any particular service provider since she cannot truly guarantee the quality or effectiveness of the service.
TREC’s Canons of Professional Ethics require license holders to conduct themselves with integrity and competence, as well as to make their clients’ interests their foremost concern.
278
It's very important for an agent to abstain from
giving legal advice if they aren't licensed to do so.
279
What is a smart way of documenting your disclosures:
At the end of each day, send an email reminding the customer or client what documents you gave to them that day as well as restating in the email anything you disclosed verbally, such as who you are representing. Save that email. It is your proof that you did what you did.
280
State law requires the seller to disclose what they know about the condition of the property, and this requirement cannot be replaced with
an "as is" clause
281
As-is" language on an MLS listing typically signals to the buyer's agent that even though all known defects are (hopefully) being disclosed, or will be discovered upon an inspection, the seller intends
to sell the home in its current condition, without making any repairs.
282
give the buyer a list of topics to think about and ask questions about. An example of this type of form is the
Texas Association of REALTORS® General Information and Notice to a Buyer (TAR 1506).
283
Civil Rights Act of 1866:
The first law that began to promise equal rights for all citizens regardless of race or color
284
Fair Housing Act:
A federal law that prohibits discrimination in housing based upon race, color, religion, or national origin and was amended to include sex, disability, and familial status, a.k.a. the Fair Housing Act of 1968
285
Disability
A physical or mental impairment that limits at least one major activity in someone’s life
286
Steering is
An illegal act of channeling buyers or tenants to certain areas, either to keep the area demographically the same or to change the demography of the area
287
Americans with Disabilities Act:
federal law enacted to remove barriers for individuals with disabilities
288
Equal Opportunity in Housing:
The concept that everyone will have equal access to housing with no discriminatory actions taking place
289
The Civil Rights Act of 1866 was essentially the first law to introduce a
protected class (in this case, race) and prevent housing discrimination based on this class.
290
in 1962, President John F. Kennedy issued
Executive Order 11063
291
Executive Order 11063 prohibited:
prohibited discrimination in the selling or leasing of property owned or funded by the federal government, including those properties relying upon Veterans Administration (VA) and Federal Housing Administration (FHA) loans. Because only a few transactions were done with federal involvement in those days, the law had few results.
292
The Fair Housing Act is a federal act designed to
protect buyers and renters from seller or landlord discrimination.
293
the Fair Housing Act says that it is unlawful to
refuse to sell, rent to, or negotiate with any person because of that person's inclusion in a protected class.
294
The Fair Housing Act introduced some pretty meaningful federal regulations and enforcements. Here's what the act outlaws:
Refusal to sell or rent a dwelling to any person because of race, color, religion, sex, disability, familial status, or national origin
Discrimination based on race, color, religion, sex, disability, familial status, or national origin in the terms, conditions, or privileges of sale or rental of a dwelling
Advertising the sale or rental of a dwelling indicating preference, limitation, or discrimination based on race, color, religion, sex, disability, familial status, or national origin
Coercing, threatening, intimidating, or interfering with a person's enjoyment or exercise of housing rights based on discriminatory reasons or retaliating against a person or organization that aids or encourages the exercise or enjoyment of fair housing rights
295
there are two groups that a real estate license holder has the legal right to turn down in certain situations:
People too young to enter a legal contract
| People who don't have the means to obtain a home loan
296
If a child is living with a person who has parental or legal custody designated in writing, then that household is also protected against
familial status discrimination.
297
To maintain a protected familial status,
children must be under 18 years old.
298
tenants are protected against familial status discrimination if they are expecting a
child to become part of their home. This means landlords cannot discriminate against tenants if they are pregnant or in the process of adopting a child.
299
if an agent advertised a home as "perfect for a young couple," they have effectively stated that a family shouldn't have this home. This is an example of what violation?
Fair Housing Act Violation
300
Agents should always seek to be inclusive rather than
exclusive in their promotion of properties.
301
The real estate agent may steering based on:
assumptions about the client's race, religion, familial status, or membership in any of the protected classes.
302
a license holder could be in violation of the Fair Housing Act would be if they failed to make a reasonable accommodation for a person with a
Disability
303
Physical or mental impairments can include: (when discussing disability)
```
Hearing
Mobility
Visual impairments
Chronic alcoholism
Chronic mental illness
AIDS
AIDS Related Complex
Intellectual disabilities
```
304
When referring to disabilities, major life activities affected include:
```
Walking
Talking
Hearing
Seeing
Breathing
Learning
Performing manual tasks
Caring for oneself
```
305
someone who is currently using illegal drugs is not
protected under the Fair Housing Act.
306
When referring to Fair Housing Act, A few legal cases have decided that a recovering drug addict or alcoholic
is protected. And, of course, as mentioned earlier in this course, someone with AIDS or HIV is protected under this law.
307
Landlord Responsibility: Landlords must allow tenants to
make reasonable modifications so that people with disabilities can enjoy their properties.
308
Tenant Responsibility: Landlords may require tenants (accessibility)
to pay for modifications and may require tenants to return the property to its unmodified condition at the end of the lease.
309
Steering can be based on many factors:
predominant religion in an area, racial and ethnic demographics, or perceptions of areas being "family friendly" or not.
310
disparate impact...
means that an action taken by a license holder could be adversely affecting a protected class.
311
Many brokers will have a response for their sales agents to recite, such as:
"It is the policy of our company not to answer questions of that nature. If you have further questions or concerns on this topic, you are free to
do some research on your own."
312
The Americans with Disabilities Act (ADA) prohibits discrimination against people with disabilities in
employment, transportation, public accommodation, communications, and governmental activities.
313
we don't all speak the same language (life would be pretty boring if we did!), so some local real estate associations in Texas have a list of REALTORS® who
speak various languages
314
The Texas Association of REALTORS® has all their forms translated into Spanish, including the lease agreement. The tenant is still required to
sign the English version, but at least the property manager has the Spanish forms to assist in helping the potential tenant understand what it is they are signing.
315
When it comes to promoting fair housing, you should pay special attention to the words used in real estate advertising because
Some of the descriptive words commonly used in ads can be read and interpreted to be discriminatory against people.
316
According to HUD, there are certain terms and phrases that should
be avoided altogether in advertising
317
When referring to fair housing, Some of these phrases to be avoided include:
```
🚫 "Exclusive neighborhood" or "family neighborhood"
🚫 "Bachelor pad"
🚫 "Man cave"
🚫 "No kids allowed"
Also possibly,
🚫 "Desirable neighborhood"
🚫 "Mother-in-law suite"
🚫 "Master bedroom" or "master suite"
```
318
find neutral, inclusive terms to use in property descriptions and ads. This shows that you have no preference for any certain group of people based on a protected class.
So what kind of words CAN be used in advertisements?
```
"Great view"
"Walk-in closets"
"Jogging trails"
"Bus stop"
"Non-smoking"
"Two bedroom"
"Bicycles allowed"
"Wheelchair ramp"
```
319
The Fair Housing Act does not cover
non-dwelling buildings.
320
A person is to be considered in the business of selling or renting if: (business investor)
That person has within the preceding 12 months participated as principal in three or more transactions involving the sale or rental of any dwelling or any interest therein.
That person has within the preceding 12 months participated as agent, other than in the sale of their own personal residence in providing sales or rental facilities or sales or rental services in two or more transactions involving the sale or rental of any dwelling or any interest therein.
That person is the owner of any dwelling that is designed for or intended for occupancy by or occupied by five or more families.
321
Religious Laws
The law allows a religious group to
sell or rent to people only of their same beliefs.
There are some subdivisions in Texas in which this occurs.
322
Housing for older persons is also exempt from the familial status requirements of the Fair Housing Act if one or more of the following three conditions apply:
The housing is occupied only by persons who are 62 years of age or older.
80% of the housing units have at least one occupant who is 55 years old or older.
The housing is provided under any state or federal program that the Secretary of Housing and Urban Development determines is designed and operated to provide assistance to the elderly.
323
fair housing court cases and regulations.
| On May 1, 2017, in the case of
Bank of America v. Miami
324
According to a 2017 report from the National Fair Housing Alliance, “Fair Housing Trends Report: The Case for Fair Housing”, more than 4 million instances of
housing discrimination occur every year in the rental market alone.
325
The report also shared that there were 28,181 complaints of housing discrimination in (year)
2016
326
55% of 28,181 complaints in 2016 were based on disability, while race-based discrimination accounted for
20%of claims
327
Texas Department of Housing and Community Affairs:
A department that administers assigned programs on Texas housing, invests resources strategically, and develops high quality affordable housing which allows Texas communities to thrive
328
Reasonable Accommodation:
A change in rules, policies, or practices that may be necessary to afford a person with a disability an equal opportunity to use or enjoy a dwelling
329
Texas fair housing laws include the same protected classes as the federal laws we went over in the last chapter, but TRELA does include the addition
of ancestry as a protected class.
330
Texas fair housing laws include the same protected classes as the federal laws we went over in the last chapter, but TRELA does include the addition of ancestry as a protected class. And some Texas cities have additional protected classes, such as
sexual orientation.
331
Landlords cannot forbid assistance animals even if
they have a no pet policy.
332
A 2014 amendment to the REALTOR® Code of Ethics added
sexual orientation and gender identity as protected classes.
333
To help protect and expand affordable housing, there's the Texas Department of Housing and Community Affairs. Here are its three major functions:
Develop affordable housing
Regulate properties qualifying as affordable
Set and enforce standards on property maintenance for affordable housing
334
Landlord-Tenant Law in TDHCA Properties
Owners of TDHCA monitored rental properties must:
Keep properties suitable for occupancy and in good repair consistent with Uniform Physical Condition Standards ("UPCS") published by HUD.
Estimate utility costs at the property, annually review them, and make them available for inspection.
Provide residents with a certain number of property amenities and/or services.
Operate the property in accordance with its Land Use Restriction Agreement ("LURA"), whether or not owners or managers change.
Offer written leases with specific terms (usually six months for the HTC program and one year for HOME and other federal programs).
Provide tenants with written notice in the event of lease termination or non-renewal.
Provide reasonable accommodations for tenant's disability at the Owner's expense (except in some HTC properties awarded before 2001).
335
Landlord-Tenant Law in TDHCA Properties (cont.)
Owners of TDHCA monitored rental properties are prohibited from:
Locking out or seizing property of tenants who have not paid rent (except by judicial process or as expressly allowed under Texas Government Code Section 2306.6738).
Charging rents in excess of program-specific rent limits that are published each year.
Using certain lease provisions that restrict tenant rights to court and appeals processes or decisions, excuse owners from responsibility, or require tenants to pay court fees if a proceeding is won against the owner.
Denying households for rental housing on the sole basis of the household's participation in the Section 8, HOME TBRA, or other federal rental assistance program.
Evicting tenants for other than good cause under the lease, including retaliation for renters making discrimination complaints or assisting others in exercising their fair housing rights or rights to request reasonable accommodations.
Requiring households participating in the Section 8, HOME TBRA, or other federal rental assistance program to demonstrate a monthly income of more than 2.5 times the household's share of the monthly rent (households with less than $50 of monthly income are not required to demonstrate more than an annual income of $2,500).
336
Other than owners who are qualified to receive an exemption under HOPA, no owner is allowed to discriminate based on familial status. These protections cover all families in which one or more children under 18 live with:
A parent
A person who has legal custody of the child or children
The designee of the parent or legal custodian with the parent or custodian's written permission
Pregnant women
Anyone securing legal custody of a child under 18
337
TDHCA has proposed minimum occupancy standards in its draft Tenant Selection Rule based on the guidance offered in
HUD's Keating Memo
338
TDHCA recommends that occupancy standards should allow at least two persons per
bedroom in the absence of local code or ordinance stating otherwise.
339
Examples of steering could include:
Families with children are not allowed to live on the top floor of the development
Being told that you should live in one building rather than another because you will be closer to other tenants of the same race or national origin
Students and families with children are assigned to units on one side of a complex while single and older persons are assigned to units on another side
Being discouraged from renting an available upstairs unit based on your status as a person with a disability
340
Service animals are not
required to be certified.
341
residents with a disability who have a service animal are not required
to pay a pet deposit or other associated pet fees and service animals are not subject to type, breed, weight, and size restrictions established by the property's tenant selection and eligibility criteria.
342
Eviction
TDHCA does not determine if
an owner has good cause or if a resident has violated their lease terms.
343
Tenants who have received a copy of an eviction or non-renewal notice may contact one of th
Legal Aid offices listed on the "How To File a Complaint" page or access other legal help at TXLawHelp.org.
344
Protected Classes:
Groups that are illegal to discriminate against, as defined by the Fair Housing Act
345
Housing and Community Development Act:
A 1988 amendment to the Fair Housing Act that added familial status and disability to the list of protected classes
346
Familial Status:
Protected class that applies to any family with at least one person under 18 years of age with at least one parent or legal guardian
347
Blockbusting:
The illegal practice of causing owners to sell their homes by creating fear that minorities are moving into the area; also known as panic peddling
348
it is NOT illegal to refuse housing to prospective tenants or to evict current tenants who have a physical or mental impairment that poses a
direct threat to other tenants.
349
It would not be illegal, for example, to refuse to rent an apartment to an unmedicated schizophrenic with a history of
violence against others, even though the person has a documented mental impairment.
350
Felons are not
in a protected class.
351
The criteria that a property manager would use to decide who will or will not become a tenant not only has to be exact, it also has to be
available for others to view. If anyone is turned down for a lease and they ask for the criteria, it must be given to them.
352
Some of the most common causes of denial of tenants are:
insufficient income, poor credit screening, and criminal history.
353
To ensure that fair housing lawsuits regarding this issue remain reasonable, Congress passed the
Quality Housing and Work Responsibility Act of 1998.
354
Quality Housing and Work Responsibility Act of 1998. This act required HUD to
set reasonable limitations on the number of occupants allowed in a dwelling. HUD concluded that a “two occupants per bedroom” rule — taking other factors into consideration — constitutes a good basic model.
355
In 1991, HUD’s then-General Counsel Frank Keating issued a memo that provided a guideline: "…the Department believes that an occupancy policy of two persons in a bedroom, as a general rule, is reasonable under the Fair Housing Act… However, the reasonableness of any occupancy policy is rebuttable…" and nothing "implies that the department will determine compliance with the Fair Housing Act based solely on the number of people permitted in each bedroom." This became known as
the Keating Memo.
356
Real estate agents and brokerages may be tested to make sure they don't participate in any kind of discrimination. Here's how it works: HUD has
testers who regularly visit offices to see how potential clients are treated.
A person or persons who belong to a certain protected class will enter an office, playing the role of speculative clients with a defined set of parameters.
357
The best way to avoid accusations of discrimination is to
treat everyone who enters your real estate office exactly the same.
358
Blockbusting came to be a few decades ago, as more minorities began moving into predominantly white neighborhoods. The homeowners in those neighborhoods were fearful that their new neighbors would result in their homes losing value. So, these people sold their homes and moved farther out into the country. This was known as
White flight
359
Unlike the federal Fair Housing Act, there are no exceptions to the
Civil Rights Act of 1866. This means that you may never turn away a qualified tenant or purchaser because of race or color. Nor can you publish an advertisement that discriminates against someone on this basis.
360
Any person who believes that they have been injured by the discriminatory practices of a real estate license holder, or who believes that they are being or will be injured, may file a complaint with HUD. They have
1 year from the beginning or end of the incident to file a complaint
361
Fair Housing Complaints (cont.)
Complaints must be in writing and must contain the specific information that HUD requires, such as:
Date of the incident
Location where it happened
Name(s) of the party or parties involved
Any other pertinent details
362
HUD Actions in a Complaint
In the situation of a complaint, HUD will consider the following items:
Testing studies on the company completed by HUD using the testers, a.k.a. HUD's "secret shoppers"
Which properties were shown to the buyer or tenant? Which properties were the agent and client looking at?
Is an equal opportunity poster displayed in the office? Are they following the most basic aspects of the law?
363
Sometimes, when discriminatory action requires an immediate solution, HUD will attempt to establish a temporary solution to the complaint, while it works on completing a
Full investigation
364
A fair housing complaint that requires immediate action meets the following conditions:
Irreparable harm will more than likely result without immediate action.
Substantial, compelling evidence exists that indicates a violation of the fair housing laws.
365
Sometimes complaints may be the result of a simple misunderstanding, or an investigation may reveal issues that require additional clarification. If HUD believes this is the case, then it can hold an informal meeting to help resolve the issue. In the federal Fair Housing Act, this type of informal conference is referred to as
conciliation
366
Conciliation is an attempt to
resolve the issues raised by a complaint or an investigation through informal negotiations between the aggrieved person, the respondent, and the HUD Secretary.
367
If an administrative hearing takes place and concludes that there has been a violation of fair housing law, then the person or group who violated the law can be ordered to:
Compensate the complainant for actual damages, including humiliation, pain, and suffering.
Provide injunctive or other equitable relief, for example, making the housing available to the complainant.
Pay the Federal Government a civil penalty. The maximum penalties are $10,000 for a first violation and $50,000 for a subsequent violation within seven years.
Pay reasonable attorney's fees and costs.
368
In any civil action, the burden of proof is on the person making the complaint. In order to have a legal basis for a case, a complainant must show that:
They are a member of a protected class.
They applied for and were qualified to rent or purchase the property but were rejected.
The property remained available after the rejection – i.e., the property was rented or sold to someone else after it was denied to the qualified person making the complaint.
369
Equal Credit Opportunity Act (ECOA):
Law prohibiting credit discrimination on the basis of race, color, religion, national origin, sex, marital status, age, or use of public assistance
370
the Equal Credit Opportunity Act makes it illegal to:
Refuse borrowers credit if they qualify for it
Discourage anyone from applying for credit
Offer anyone credit on terms that are less favorable (example: higher interest rate) than terms offered to someone with similar qualifications
Close their account
371
it is illegal for lenders to discriminate on the basis of:
Race or color
Religion
National origin
Sex
Marital status
Age (as long as they are old enough to enter into a contract)
Receipt of income from any public assistance program
Exercising in good faith their rights under the Consumer Credit Protection Act
372
under ECOA, lenders may not deny a loan to an individual merely because that person is
divorced, widowed, or unmarried.
373
The lender may not ask about the receipt of alimony or child support unless the borrower intends to
use that money to qualify for the loan, but may ask if a borrower must pay alimony or child support.
374
A lender may not ask if an applicant is divorced or widowed, but may ask if a borrower is
married, unmarried, or separated.
375
A lender may not ask about a borrower’s spouse unless that person will be
involved in the contract.
376
A lender asks a loan applicant how much child support she, the applicant, is receiving, although she has stated that she doesn’t intend to use the money to qualify for the loan.
Is this legal?
No!
377
A lender asks about the credit of a loan applicant’s husband, who is a party to the loan application.
Is this legal?
Yes It's legal!
378
Jim is 92 years old. (He doesn't look a day over 90!) He is applying for a 30-year mortgage. Jim has good income, almost no debt, and his credit is excellent. (Do yo thang, Jim!) The lender forces Jim to purchase life insurance to cover the loan.
Is this legal?
No The lender cannot ask Jim to purchase life insurance unless they ask ALL of their borrowers to purchase life insurance. Otherwise, that would be age discrimination, and age is a protected class for lenders under the rules of ECOA.
379
Community Reinvestment Act:
Helps commercial banks and savings associations meet the needs of borrowers in all segments of their communities, including low- and moderate-income neighborhoods
380
Redlining:
The illegal act of a lender denying mortgages in certain areas of town
381
Home Mortgage Disclosure:
Federal act that requires lenders to disclose specific lending information, which HUD then uses to map lending patterns
382
the Community Reinvestment Act aims at
reversing the abandonment and decay of residential property.
383
the community reinvestment Act requires lenders to assist their local communities by
participating in community development projects.
384
But to help prevent discrimination in lending, in 1975, Congress passed
the Home Mortgage Disclosure Act.
| This act requires lenders to disclose specific lending information, which HUD then uses to map lending patterns.
385
In addition to HUD’s efforts to promote fairness in lending, the Office of Thrift Supervision (a bureau of the U.S. Treasury) also passed
a regulation that bans redlining as part of the Community Reinvestment Act.
386
Compliance with HUD’s Fair Housing Accessibility Guidelines is
Not mandatory
It is, however, a way to help ensure the equitable treatment of all potential clients and customers. Compliance can also provide evidence of non-discrimination in the event of a lawsuit.
387
The Accessibility Guidelines only apply to covered multifamily dwellings, which are defined by the Fair Housing Act as “buildings consisting of four or more dwelling units if such buildings have one or more elevators, and ground floor dwelling units in other buildings consisting of four or more units."
The guidelines ask landlords to ensure that:
Public use and common use portions of the dwellings are readily accessible to and usable by persons with disabilities
All doors within such dwellings that are designed to allow passage into and within the premises are sufficiently wide to allow passage by persons in wheelchairs
All premises within such dwellings include the following features of adaptive design:
An accessible route into and through the dwelling
Light switches, electrical outlets, thermostats, and other environmental controls in accessible locations
Reinforcements in bathroom walls to allow later installation of grab bars
Usable kitchens and bathrooms that can be navigated by an individual in a wheelchair
388
It's important to note that the Fair Housing Act governs
residential real estate and not commercial real estate.
389
1975, Congress passed the Home Mortgage Disclosure Act. This act requires lenders to disclose
specific lending information, which HUD then uses to map lending patterns.
390
Federal fair housing laws are enforced by the Secretary of the Department of
Housing and Urban Development.
391
Texas Department of Housing and Community Affairs. Here are its three major functions:
Develop affordable housing
Regulate properties qualifying as affordable
Set and enforce standards on property maintenance for affordable housing
392
REALTOR®:
A registered trademark designed for the sole use of identifying the members of a local board who are affiliated with the National Association of REALTORS®
393
Code of Ethics:
A document created by the National Association of REALTORS® that their members pledge to abide by
394
REALTORS® are different from other real estate practitioners because the Code of Ethics and Standards of Practice of the National Association of REALTORS®* requires a higher
standard than the law requires.
395
There are two groups who are less likely to become REALTORS®:
License holders who work in a rural area where the board does not exist or is too far away 🌵
License holders who practice commercial real estate. They have their own methods of sharing listings with each other. However, the local board is available to them and some do join it.
396
When someone wants to file a complaint because they believe a REALTOR® did something against the NAR Code of Ethics, that complaint does not go to
Not TREC. Because it is dealt with by the local board and the Texas Association of REALTORS®. It is also possible to file a complaint with TREC AND the local board over Code of Ethics violations AND also file a lawsuit.
397
There have even been a few instances in which courts have used the NAR Code of Ethics as their guide to deciding the outcome for an accused party, even when the accused
was not a member of NAR.
398
if the Code of Ethics and the law conflict, the law
takes precedence.
399
The Code of Ethics consists of a Preamble (an introduction) and 17 Articles. These articles cover three main categories of duties:
The first nine Articles are Duties to Clients and Customers
Articles 10 through 14 are Duties to the Public
Articles 15, 16, 17 are Duties to REALTORS®
400
The NAR Code of Ethics was adopted in
1913 to establish a widely held code for conducting business in a proper fashion.
401
What three qualities best define a Realtor®? According to the the Code of Ethics' Preamble:
The term Realtor® has come to connote competency, fairness, and high integrity.
402
How to display competency:
Perform your duties as a real estate professional with expertise.
403
How to display fairness:
Be fair and considerate in your dealings with others at all times.
404
How to display integrity:
Always behave ethically in a manner consistent with the NAR Code of Ethics, as well as any laws and Rules of the Commission (TREC).
405
Some license holders would consider it always in the best interest of the client to work with any other license holder. What is the license holder to do?
The most likely way you will convince a client to allow cooperation is by explaining that the more exposure their property has in the market, the better chance there is of meeting or exceeding the contemplated price.
406
Farming means that the REALTORS® were trying to send out
seeds” in hopes of receiving a “harvest” of listings.
407
when a REALTOR® writes ad copy, they are supposed to
put the word REALTOR® in the ad somewhere.
408
Canons of Professional Ethics and Conduct:
The Texas Real Estate Commission’s code of ethics for real estate license holders; contained in Chapter 531 of the Texas Administrative Code
409
Integrity:
Firm adherence to a code of especially moral or artistic values; incorruptibility.
410
In order to demonstrate competency, a license holder might ask themselves the following:
What are my strengths and deficiencies?
Do I attend classes to improve my services to my clients or customers? How often?
Which resources are available to help me maintain my competence?
Do I keep abreast of market conditions in the area in which I practice? How?
Am I aware of trends in real estate practices?
How do I usually find out about these trends?
Do I read TREC and trade publications? Which ones? How do they help me maintain my competence?
Can I identify local, state and national issues that are currently under development or consideration?
411
The Consumer Protection Notice lets consumers know that TREC
regulates brokers and agents, and that there are options for anyone who wants to check the license status of a real estate professional or file a complaint.
412
You'll note that you have two font sizes you can use with your IABS Notice links online:
10-point if you spell out "Texas Real Estate Commission"
| 12-point if you use the abbreviated name "TREC"
413
That's the last of the six Canons of Professional Ethics and Conduct as contained in Chapter 531 of the Texas Administrative Code. Let's review:
```
Fidelity
Integrity
Competency
Consumer Information
Discriminatory Practices
Information About Brokerage Services
```
414
TREC regulates all of the following individuals:
Real estate inspectors 🔎
Easement/right-of-way agents 🛣
Education providers for real estate & inspection courses 📚
Developers of timeshares ⛱
Residential service companies 🏠
Real estate brokers and sales agents 🕵️
415
Who exactly needs a real estate license?
Anyone who helps another party (such as a client) complete a real estate activity (such as buying, selling, leasing, or listing to sell) for a fee ($$$) must have a real estate license.
416
For purposes of this chapter, "qualifying real estate courses" include:
(1) agency law
(2) contract law
(3) principles of real estate
(4) property management
(5) real estate appraisal
(6) real estate brokerage
(7) real estate finance
(8) real estate investment
(9) real estate law
(10) real estate marketing
(11) real estate mathematics
417
Sec. 1101.004 depicts what constitutes as engaging in real estate brokerage. If a license holder, with expectation of receiving valuable consideration, directly or indirectly performs or offers, attempts, or agrees to perform for another person any act described by Section 1101.002(1), they are
engaging in real estate brokerage.
418
Sec. 1101.005. APPLICABILITY OF CHAPTER.
| This chapter does not apply to:
(1) an attorney licensed in this state;
(2) an attorney-in-fact authorized under a power of attorney to conduct not more than three real estate transactions annually;
(3) a public official while engaged in official duties;
(4) 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;
(5) a person conducting a real estate transaction under a court order or the authority of a will or written trust instrument;
(6) a person employed by an owner in the 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;
(7) an on-site manager of an apartment complex;
(8) an owner or the owner's employee who leases the owner's improved or unimproved real estate; or
(9) a transaction involving:
(A) the sale, lease, or transfer of a mineral or mining interest in real property;
(B) the sale, lease, or transfer of a cemetery lot;
(C) the lease or management of a hotel or motel; or
(D) the sale of real property under a power of sale conferred by a deed of trust or other contract lien.
419
Sec. 1101-006 provides that the commission is subject to the Sunset Act (Chapter 325 of the Government Code). The Sunset Act is a common state law, which, in Texas, requires the Sunset Commission to evaluate all state
agencies every 12 years with respect to their efficiency and the need for their continued services.
420
Sec. 1101.052. PUBLIC MEMBER ELIGIBILITY. (TREC member)
| A person is not eligible for appointment as a public member of the commission if the person or the person's spouse:
(1) is registered, certified, or licensed by an occupational regulatory agency in the real estate industry;
(2) is employed by or participates in the management of a business entity or other organization regulated by the commission or receiving funds from the commission;
(3) owns or controls, directly or indirectly, more than a 10 percent interest in a business entity or other organization regulated by the commission or receiving funds from the commission; or
(4) uses or receives a substantial amount of tangible goods, services, or funds from the commission, other than compensation or reimbursement authorized by law for commission membership, attendance, or expenses.
421
Sec. 1101.053. MEMBERSHIP AND EMPLOYEE RESTRICTIONS.
| (a) In this section, "Texas trade association" means
a cooperative and voluntarily joined statewide association of business or professional competitors in this state designed to assist its members and its industry or profession in dealing with mutual business or professional problems and in promoting their common interest.
422
Commission members serve staggered
six-year terms, with the terms of three members expiring January 31 of each odd-numbered year.
423
The training program must provide the person with information regarding: (concerning commission membership)
(1) this chapter and other laws regulated by the commission;
(2) the programs, functions, rules, and budget of the commission;
(3) the results of the most recent formal audit of the commission;
(4) the requirements of laws relating to open meetings, public information, administrative procedure, and conflicts of interest; and
(5) any applicable ethics policies adopted by the commission or the Texas Ethics Commission.
424
A member of the commission is entitled to quasi-judicial immunity from suit for an action that:
(1) is taken as a member of the commission; and
| (2) is in compliance with the law.
425
Real Estate Center:
Located at Texas A&M University to provide the results of research and education to license holders
426
For every renewal of a broker/salesperson license, or certificate registrant, a fee is collected in addition to
the application or registration fee. This money goes towards the Texas Real Estate Research Center.
427
Sec. 1101.152 TREC
The commission may not prohibit a license holder from using for the sale, exchange, option, or lease of an interest in real property a contract form that is:
(1) prepared by the property owner; or
| (2) prepared by an attorney and required by the property owner.
428
A listing contract form adopted by the commission that relates to the contractual obligations between a seller of real estate and a license holder acting as an agent for the seller must include:
(1) a provision informing the parties to the contract that real estate commissions are negotiable; and
(2) a provision explaining the availability of Texas coastal natural hazards information important to coastal residents, if that information is appropriate.
429
the state legislature has stated that there are two things that have to be included in all listing contracts:
The first one is a line indicating that all commissions are negotiable.
The second one is to inform sellers about the special rules concerning anyone who lives along the coast.
430
The commission may not adopt a rule restricting advertising or competitive bidding by a person regulated by the commission except to prohibit
a false, misleading, or deceptive practice by the person.
431
The commission may not include in rules to prohibit false, misleading, or deceptive practices by a person regulated by the commission a rule that:
1) restricts the use of any advertising medium;
(2) restricts the person's personal appearance or use of the person's voice in an advertisement;
3) relates to the size or duration of an advertisement used by the person; or
(4) restricts the person's advertisement under a trade name that is authorized by a law of this state and registered with the commission.
432
By TREC, advisory committee is made up of
real estate license holders and instructors is created to assist with the development of identifying a situation that needs to be addressed.
433
TREC's main purpose is to enforce
the Texas Real Estate License Act (TRELA)
434
remember these two dates. 1939 and 1949
TRELA was passed in 1939.
| TREC was created in 1949.
435
TRELA is a law passed by
the Texas Legislature to govern Texas real estate.
436
TREC is a government agency created by
the Texas Legislature to enforce TRELA.
437
Texas Real Estate Broker-Lawyer Committee:
A committee that creates and corrects contract forms to be used by Texas real estate license holders
438
The Broker-Lawyer Committee consists of 13 members.
| Break down:
Six members are brokers appointed by the Commission
Six members are lawyers appointed by the President of the State Bar Association
One member is a member of the public appointed by the governor
439
The Broker-Lawyer Committee committee serves a staggered:
six-year term with two commission appointees and two Texas State Bar appointees expiring every two years. The governor-appointed public member term expires every six years.
440
The primary duties of the Broker-Lawyer Committee are to
draft and revise contract forms for the approval and adoption by TREC.
441
The TAR Intermediary Relationship Notice form is used by REALTORS® to
inform sellers and buyers that there is an intermediary relationship.
442
you are not to practice real estate until
the license physically arrives at the broker’s office.
443
A person residing outside of Texas may apply for a license under this section if the person:
1. is licensed as a foreign broker; or
2. was licensed as a Texas real estate sales person or broker no more than two years before filing of the application.
3. The commission may waive education and experience requirements if the applicant satisfies the conditions established by §535.56 or §535.55 of this title.
444
There is not a requirement that a real estate office carry errors and omissions insurance as sole proprietor unless
the owners create a business entity
* Once creating a LLC or an S Corporation, however, it would be necessary.
445
If a license has been expired for more than 90 days but less than six months, the person may renew the license by paying to the commission a fee equal to
two times the required renewal fee.
446
If a person's license has been expired for six months or longer, the person may not
Renew license
447
right of way is a type of
easement used for passing through another's land.
448
Abstract of Title:
An abbreviated history of a property, including info on any transfers, grants, wills, conveyances, liens, and encumbrances
449
All the license holder has to do to meet the requirements of this section is to tell the buyer that they should have an abstract of title and to
obtain a title insurance policy.
450
For the title company to provide a policy, they have to create an
Abstract of Title
451
exclusive single agency.
Some offices create a policy of only representing one party in a transaction
452
Real Estate Recovery Trust Account
A fund managed by the Texas Real Estate Commission to provide payment to a party who has been damaged through the violation of The Real Estate License Act by a license holder
453
The commission shall maintain a real estate recovery trust account to reimburse aggrieved persons who suffer actual damages caused by an act described by Section 1101.602 committed by:
(1) a license holder;
(2) a certificate holder; or
(3) a person who does not hold a license or certificate and who is an employee or agent of a license or certificate holder.
454
A backup contract is
contract put in place in case the original sales contract (typically the One to Four Family Residential Contract) is terminated
455
The law and the TREC Rules do not always use the word “commission” in situations like this. Instead, they might say
receiving valuable consideration
