T. Standards of Conduct Flashcards
James is a real estate licensee in Texas. A complaint has been filed through the Texas Workforce Commission Civil Rights Division (TWCCRD) against James for a fair housing violation. Which of the following is true?
A. James could be fined, but will definitely keep his license.
B. The TWCCRD could revoke James’ reall estate license.
C. James could be sanctioned by both the
TWCCRD and the Real Estate Commission.
D. The TWCCRD cannot impose monetary penalties for fair housing violations.
C. James could be sanctioned by both the
TWCCRD and the Real Estate Commission.
Fair housing violations are no joking matter.
Eliolators can expect to pay dearly land not just in terms of monetary fines). As the correct answer (option C) states, James could be sanctioned by both the TWCCRD and TREC. And sanctioned doesn’t mean a slap on the wrist, or even “just” a fine.
There’s a good chance James could lose his real estate license (but unlike answer option A, the TWCCRD wouldn’t take it away-that’s a job for TREC). And even if James “just” faces some fines, since both TWCCRD and the Real Estate Commission have the authority to impose those fines, he could face multiple fines, and “hefty” isn’t just the name of a trash bag.
What is the purpose of TREC’s Consumer Protection Notice?
A. Tells consumers how to submit a complaint against a license holder
B. Gives notice to license holders that they can be sued by consumers
C. Educates consumers about the services that brokerages provide
D. Educates license holders about how they can protect themselves from unwanted civil lawsuits.
A. Tells consumers how to submit a complaint against a license holder
As you noticed here, paying attention to the wording of both questions and contracts/forms is otten the key to finding the correct answer. In this case, we’re talking about the Consumer Protection Notice, which means it’s designed to protect the consumer. Automatically, we can rule out options B and D, which both refer to informing the license holder. Option C does talk about educating consumers, but it says they’re being educated about brokerage services (and the document that does that is the Information About Brokerage Services form).
As you know, it’s the Consumer Protection Notice that tells consumers how they can submit a complaint to TREC against a license holder. It also alerts consumers that two recovery funds are available to satisty a civil court judgment against a license holder.
Nathan is a sales agent. He convinced one of his clients to purchase in a specific area of town, guaranteeing that it would be the next hot spot in the city and that he was sure to make a profit when his client sold. Six months atter closing on the home, his client lost his job and needed to sell. The area had taken a turn, and the client’s home was now worth less than what he paid for it. Nathan should have never promised his client a profit. Which of the following is true?
A. Nathan committed a prohibited action and could have his license suspended or revoked by TREC.
B. Nathan cannot be held liable for what he guaranteed, because he cannot predict the market.
C. Nathan’s client should have never listened to him, and should have known Nathan wasn’t serious when he made his guarantee.
D. Making a guarantee is a subjective statement, and therefore, the client is responsible for his decision if he takes an action based on a guarantee.
A. Nathan committed a prohibited action and could have his license suspended or revoked by TREC.
Nathan, on the other hand, just stepped right over the line into Things Licensees Must Never Do. Chief among those things is making a guarantee like this. Why? Because Nathan is a licensed real estate agent, which means his clients have every reason to believe he is an expert in all things real estate. Therefore, there’s a darn good chance they’re going to take what he says to the bank. As you can see, the three answer options that remove the blame from Nathan are incorrect. Guaranteeing, authorizing, or permitting a person to guarantee that future profits will result from a resale of real property is a prohibited action under TRELA, and can result in TREC suspending or revoking a license holder’s license or taking other disciplinary actions.
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Texas licensee James is working with his clients, the Murphys, who are purchasing a new home. After he has explained to them the ins and outs of the sales contract, they still have additional questions and ask if they should consult with an attorney. What else should James do at this point?
A. Recommend they seek legal counsel on their own.
B. Tell them that it’s really not necessary to seek legal counsel, because the sales contract is very straightforward and to the point.
C. Suggest that he provide the legal counsel for them, because he loves providing exceptional customer service.
D. Begin to offer this legal advice to his clients, because after all, he’s been a broker for 18 years, and probably knows real estate contracts better than a lawyer.
A. Recommend they seek legal counsel on their own.
considering that all but one of these choices could result in a licensee losing their license. James has only one option if he wants to hold onto his hard-earned license: He should recommend that his clients seek legal counsel on their own. (He may not provide or pay for a lawyer on his clients’ behalf.) When you come across questions that ask when a licensee can practice law, the answer is always simple: Never.
When the parties couldn’t mutually decide how to disburse the earnest money after a contract terminated, buyer Kevin sent the escrow agent a written request to return the earnest money to him. What should the escrow agent do next?
A. Return the earnest money to Kevin
B. Review the reason the contract was terminated and decide if Kevin should get his money back
C. Send a copy of Kevin’s request to the seller
D. Inform Kevin that his request will be processed within three business days
C. Send a copy of Kevin’s request to the seller
The escrow agent holds the money that two different people want. Does that agent just hand the money over to the first person who sends a written request for it? Of course not. That wouldn’t be fair to the other party. The escrow agent is a neutral party, and not someone who’s been given permission by the parties to decide who gets their money. That means the escrow agent’s job is simply to disburse that money according to both parties’ wishes. The law requires that when a contract terminates, if the parties can’t come to terms about who should receive the earnest money, and one party requests that the earnest money be given to them, the escrow agent must inform the other party that the request has been made. This means that answer option C is correct.
Once the other party has been notified of the request, that party then has 15 days to formally object to the request in writing.)
You’re a sales agent in Texas, and you just received your part of the commission on a recent sales transaction. With whom can you legally share your commission?
A. Both licensed and unlicensed business entities that were part of the transaction
B. Unlicensed persons directly associated with the transaction
C. Attorneys who are TREC-licensed real estate professionals
D. Your unlicensed assistant who helped with the paperwork for the transaction
C. Attorneys who are TREC-licensed real estate professionals
A Texas licensee cannot share a commission with an unlicensed business entity or with an attorney who is not a TREC-licensed real estate professional.
Francis, an associate broker in Texas, promised his brother, Fred, who is unlicensed and not an attorney or trustee, that he would pay him a portion of his commission when he closed on the Maple Street transaction. Under what circumstances would this be legal?
A. If it were paid after the fact by Francis
B. It it were paid through Francis’ broker
C. If Fred were a party to the transaction, and this rebate was paid by Francis’s broker
D. If it were a referral fee
C. If Fred were a party to the transaction, and this rebate was paid by Francis’s broker
We’ve definitely drummed it into your head that licensees are prohibited from paying unlicensed parties for doing real estate work. However, there is one exception to this rule. The only time a licensee can pay a rebate land yes, it must be paid through their broker, but answer option B is only partially correct) is if the person receiving the rebate is a principal (buyer, seller, landlord, or tenant) to the real estate transaction.
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Which of the following is NOT considered an advertisement in Texas?
A. An email from broker Samantha to her clients, the Weidmans, with whom she signed an exclusive listing agreement a month ago
B. Broker Michaela’s Instagram postings
C. Broker Sarah’s business card
D. Social media posts by broker Ella
A. An email from broker Samantha to her clients, the Weidmans, with whom she signed an exclusive listing agreement a month ago
While numerous communications tall under & he umbrella of “advertisements,” communications sent to one’s current client don’t belong to that group.
As you know, answer option A is correct, because broker Samantha’s communicating with a current client. Keep in mind that as of 2018, directional designs that also contain only the broker’s name or logo are also not considered advertisements.
