unit 7

Question 1

if the commission revokes a license after making a payment from the real estate recovery trust account to satisfy all or part of a judgment against a license holder, the license holder is not eligible to receive a new license

Answer 1

until the amount paid from the real estate recovery trust account on the license holder’s account has been fully repaid, with interest, by the license holder

Question 2

it is permissible for a real estate agent to

Answer 2

fail to specify a definite termination date in a contract to perform property management services

Question 3

aside from a criminal background check, what other check may the commission make-even before someone applies for a license?

Answer 3

moral character, to make sure the prospective license holder has satisfied any outstanding conflicts with the law

Question 4

the responsibility for ensuring that a sales agent license is timely renewed belongs to

Answer 4

the sales agent

Question 5

what happens if more than $3.5 million is in the trust fund at the end of the year?

Answer 5

the excess money is transferred to the general fund of the state

Question 6

how many members are appointed to the Texas Real Estate Commission (TREC)?

Answer 6

nine members: six real estate professionals and three public members

Question 7

a person is not eligible for appointment as a public member of the commission if that person owns more then how much of an interest in an entity regulate by or receiving funds from the commission?

Answer 7

10%

Question 8

A person acting as a real estate broker, real estate sales agent, or a right-of-way agent without a license or registration is guilty of a Class A misdemeanor that is punishable by a fine of

Answer 8

not more than $4,000.

Question 9

Obtaining a license through the use of fraud is just cause for

Answer 9

a broker’s license to be revoked or suspended.

Question 10

May a sales agent receive a “finder’s fee” directly from a lender in exchange for sending potential mortgage business to the bank?

Answer 10

No, receiving referral fees from lender is illegal, plus sales agents may only be compensated through their sponsoring broker.

Question 11

To be eligible for a license, an applicant must be a resident of Texas

Answer 11

at the time of filing the application.

Question 12

If the Commission proposes to deny, suspend, or revoke a person’s license or certificate of registration, the person is entitled to a hearing conducted by

Answer 12

the State Office of Administrative Hearings.

Question 13

Which isNOTa condition for a broker’s maintaining an action to collect a commission or other compensation for an act as a broker or sales agent?

Answer 13

The agreement to pay had a definite termination date and stipulated the listing price and an acceptable date for closing and transfer of possession.

Question 14

Which is an aggrieved personNOTrequired to show at a Texas Real Estate Commission (TREC) hearing on an application for payment from the real estate recovery trust account?

Answer 14

That the judgment debtor (license holder) filed for bankruptcy before the hearing

Question 15

The Commission will pay no more than what amount from the real estate recovery trust account for claims against any one license holder until the fund has been repaid in full by the license holder?

Answer 15

$100,000

Question 16

Does a person appointed by the governor to the Texas Real Estate Commission have to be trained before joining the governmental body?

Answer 16

Yes, appointees must understand license law and regulation of the industry, must understand open meetings law, and must be acquainted with TREC audits.

Question 17

Who is barred from collecting from the trust fund?

Answer 17

The spouse of a license holder
The child of a license holder
License holders deprived of a commission

Question 18

Aaron wants to work in the real estate industry but does not have a license. Which career choice is available to him, with compensation, before he obtains a real estate sales agent license?

Answer 18

Working for a builder to sell properties the builder constructed

Question 19

Are real estate brokers and agents obligated to advise consumers that the trust fund is available to offset losses caused by malfeasance by a license holder?

Answer 19

Yes, real estate brokers are obligated to post notices to consumers that the fund is available.

Question 20

Applicants for a real estate license must be how many years of age, at a minimum?

Answer 20

18

Question 21

If a person violates the License Act, the Commission may assess an administrative penalty in an amountNOTto exceed

Answer 21

$5,000 per day for each violation.

Question 22

25. It is permissible for a real estate agent to

Answer 22

disclose to a buyer that the seller will accept a price less than the asking price if the agent represents the buyer.

Question 23

If a sales agent associated with or acting for a broker makes a material misrepresentation to a potential buyer concerning a significant defect known to the license holder, the broker is liable to which parties?

Answer 23

The Commission, the public, and the buyer

Question 24

Under which circumstances would a broker’s license be required?

Answer 24

Selling, exchanging, purchasing, or leasing real estate for another person for compensation

Question 25

In which situation would a broker’s license be required?

Answer 25

A person handles short sales for other persons for compensation.

Question 26

Which notice or disclosure isNOTrequired by the Texas Real Estate Commission (TREC)?

Answer 26

A written notice to a purchaser that a death occurred on a property by natural causes, suicide, or accident unrelated to the condition of the property

Question 27

A complaint against a license holder was filed with the Texas Real Estate Commission (TREC). After a hearing, the Commission determined that the license holder had violated the Real Estate License Act. Which isNOTa disciplinary action available to TREC?

Answer 27

Requiring a license holder to pay a consumer triple damages

Question 28

Members of the Texas Real Estate Broker-Lawyer Committee hold office for staggered terms of how many years?

Answer 28

Six

Question 29

An aggrieved person may only be reimbursed from the real estate recovery trust account if the reimbursement is ordered by

Answer 29

the court that entered the judgment.

Question 30

The Commission mayNOTprohibit a license holder from using for the sale, exchange, option, or lease of an interest in real property a contract form that is prepared by an attorney and required by the property owner or prepared

Answer 30

by the property owner.

Question 31

Which isNOTa violation for which the Texas Real Estate Commission (TREC) may suspend or revoke a license or take other disciplinary action?

Answer 31

Failing to advise a buyer or a seller regarding the validity of title to real estate

Question 32

The amount for each fee collected by the Texas Real Estate Commission is stipulated in

Answer 32

the rules of the Texas Real Estate Commission.

Question 33

Brokers are required to maintain, and to place all money received from clients in, which of the following?

Answer 33

Escrow or trust account

Question 34

A member may be removed from the Commission if absent for more than how many of the regularly scheduled meetings?

Answer 34

One-half

Question 35

An agent received a cash deposit for a client’s property. The agent placed the deposit in his personal checking account and then wrote a check to his trust account. For this action, the agent was found guilty of

Answer 35

commingling.

Question 36

To receive a real estate license in Texas, potential sales agents must complete course work on contract law. Which of the following are included in the course?

Answer 36

Offer and acceptance of a contract, remedies for breach of contract, and the unauthorized practice of law

Question 37

Paid executives for real estate trade associations—such as the Texas Association of REALTORS®—are not permitted to serve on the Real Estate Commission. Who else isNOTallowed to be a commissioner?

Answer 37

A person whose spouse is an officer, employee, or executive of a real estate trade association
Managers or consultants to businesses or organizations that have business before the Commission
A person who is registered as a lobbyist who may have occasion to represent special interest before the Commission

Question 38

If the Texas Real Estate Commission (TREC) determines that the facts revealed in the investigation of a complaint against a license holder do not warrant disciplinary action but, if not corrected, could lead to further complaints and ultimately to potential disciplinary action, what may TREC do?

Answer 38

Issue an advisory letter

Question 39

42. Which listing-related activity would a real estate agent legally be permitted to perform?

Answer 39

Depositing earnest money in a title company rather than holding it in a trust account maintained by the broker for that purpose

Question 40

The Texas Real Estate Commission’s powers and duties include allEXCEPT

Answer 40

setting commission or compensation rates for sales transactions in Texas.

Question 41

Does a person appointed by the governor to the Texas Real Estate Commission have to be trained before joining the governmental body?

Answer 41

Yes, appointees must understand license law and regulation of the industry, must understand open meetings law, and must be acquainted with TREC audits.