Unit 7 - Overview Flashcards
Learning Objective: Identify the purpose of licensing laws, the activities that require a license, the situations that may not require a license, and the types of license categories.
Explanation: Licensing laws, such as the Texas Real Estate License Act (TRELA), aim to protect the public by ensuring that only qualified individuals can engage in real estate brokerage. A license is required for activities such as buying, selling, leasing, or negotiating real estate transactions for others and for compensation. However, certain individuals, like property owners or attorneys, may be exempt. The law defines categories of licenses, including broker and sales agent licenses.
Learning Objective: Describe the membership and the scope of authority of the Texas Real Estate Commission (TREC) and the Texas Real Estate Broker-Lawyer Committee.
Explanation: TREC is composed of nine members—six real estate brokers and three public members—appointed by the governor. TREC oversees the administration of the Texas Real Estate License Act, including licensing, regulation, and enforcement. The Texas Real Estate Broker-Lawyer Committee is responsible for drafting and revising standardized contract forms for real estate transactions, ensuring they comply with legal requirements.
Learning Objective: Distinguish the general and education requirements for real estate broker and sales agent licensing and the procedures for receiving or renewing an active or inactive license.
Explanation: To become a licensed sales agent in Texas, applicants must be at least 18 years old, complete the required pre-licensing education, pass a state exam, and be sponsored by a licensed broker. Brokers must complete additional education and have several years of experience. Renewing a license requires continuing education and compliance with renewal deadlines. Failure to meet renewal requirements can result in an inactive license, which prohibits practicing real estate.
Learning Objective: Explain the purpose and operation of the real estate recovery trust account.
Explanation: The real estate recovery trust account is designed to reimburse individuals who suffer financial harm due to the illegal actions of a licensed broker or sales agent. If a consumer wins a court judgment against a license holder but is unable to collect, they can apply for compensation from the recovery trust account. Licensees contribute to this fund through fees, and TREC manages the account.
Learning Objective: Identify the reasons for which a license may be suspended or revoked, the manner in which the Commission may investigate a license holder, and the disciplinary actions available to TREC.
Explanation: A real estate license may be suspended or revoked for reasons such as fraud, dishonesty, misrepresentation, or failure to comply with legal or regulatory requirements. TREC investigates complaints against license holders and can take disciplinary actions, including suspending or revoking licenses, issuing fines, or mandating additional education.
Key Term: Texas Real Estate Commission (TREC)
Definition: The regulatory body responsible for overseeing the licensing and regulation of real estate professionals in Texas. TREC enforces the Texas Real Estate License Act (TRELA) and ensures compliance with licensing laws.
Key Term: Texas Real Estate Broker-Lawyer Committee
Definition: A committee composed of real estate brokers and lawyers tasked with drafting and revising standard contract forms used in real estate transactions. The committee ensures that the forms comply with legal requirements and protect both parties.
Key Term: Texas Real Estate Research Center
Definition: A research center based at Texas A&M University that conducts research on all aspects of real estate to provide information and data to real estate professionals, government officials, and the public. It is funded through license fees paid by Texas real estate license holders.
Key Term: ARELLO (Association of Real Estate License Law Officials)
Definition: An international association of real estate regulators that promotes consistent standards for real estate licensing and regulatory practices. ARELLO helps establish uniform policies and education standards across jurisdictions.
Key Term: Broker
Definition: A licensed individual or entity authorized to represent another in real estate transactions for a fee or commission. Brokers may also sponsor and oversee the activities of sales agents.
Key Term: Sales agent
Definition: A licensed individual who performs real estate activities under the supervision of a licensed broker. Sales agents cannot operate independently and must have a broker sponsor.
Key Term: Nonresident broker
Definition: A broker who is licensed in another state but engages in real estate activity in Texas by working with a Texas broker. Nonresident brokers must comply with Texas laws but are not required to maintain a Texas office.
Key Term: Apprentice inspector
Definition: A person who holds an inspector license under the supervision of a professional inspector or real estate inspector and performs real estate inspections. Apprentice inspectors are required to complete specific training and gain experience under supervision.
Key Term: Real estate inspector
Definition: A licensed individual who works under the general supervision of a professional inspector to conduct real estate inspections. This role requires education, licensing, and experience beyond that of an apprentice inspector.
Key Term: Professional inspector
Definition: A fully licensed real estate inspector who is qualified to perform property inspections independently. Professional inspectors can also supervise apprentice inspectors and real estate inspectors.
