Unit 7: Texas Real Estate License Act Flashcards
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.
The purposes of the license law are to protect the public from dishonest or incompetent brokers or sales agents, prescribe certain minimum standards and qualifications for licensing brokers and sales agents, maintain high standards in the real estate profession, and protect licensed brokers and sales agents from unfair or improper competition.
(a) A person is engaged in real estate brokerage if the person, with the 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), as a part of a transaction or as an entire transaction.
(b) A person is not engaged in real estate brokerage, regardless of whether the person is licensed under this chapter, based solely on engaging in the following activities:
(1) constructing, remodeling, or repairing a home or other building;
(2) sponsoring, promoting, or managing, or otherwise participating as a principal, partner, or financial manager of, an investment in real estate; or
(3) entering into an obligation to pay another person that is secured by an interest in real property.
Describe the membership and the scope of authority of the Texas Real Estate Commission (TREC) and the Texas Real Estate Broker-Lawyer Committee.
The Texas Real Estate Commission consists of nine members appointed by the governor with the advice and consent of the senate as follows:
(1) six members who have been engaged in the brokerage business as licensed brokers as their major occupation for the five years preceding appointment; and
(2) three members who represent the public.
The Texas Real Estate Broker-Lawyer Committee consists of 13 members appointed as follows:
(1) six members appointed by the commission;
(2) six members of the State Bar of Texas appointed by the president of the state bar; and
(3) one public member appointed by the governor.
In addition to other delegated powers and duties, the committee shall draft and revise contract forms that are capable of being standardized to expedite real estate transactions and minimize controversy.
Explain the purpose and operation of the real estate recovery trust account.
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.
(b) The license or certificate holder must have held the license or certificate at the time the act was committed.
apprentice inspector
A person who is in training under the direct supervision of a professional inspector or a real estate inspector to become qualified to perform real estate inspections.
ARELLO
The Association of Real Estate License Law Officials; promotes uniform policies and standards in the
field of license law administration and enforcement across the United States.
broker
Any person or corporation who sells (or offers to sell), buys (or offers to buy), or negotiates the purchase, sale, or exchange of real estate or who leases (or offers to lease) or rents (or offers to rent) any real estate or the improvements thereon for others and for compensation or valuable consideration. A real estate broker may not conduct business without a real estate broker’s license.
intermediary
A broker who is employed to negotiate a transaction between both parties and who for that purpose may be an agent of both parties to the transaction, acting fairly so as not to favor one party over the other.
mandatory continuing education (MCE)
A requirement for most brokers and all sales agents to complete 15 classroom hours of education once every two years in order to renew a real estate license; becomes effective after the completion of sales agent annual education (SAE) requirements are met.
nonresident broker
A resident broker of another state also licensed in Texas but not a Texas resident.
party
A prospective buyer, seller, landlord, or tenant, or the person’s authorized representative (excluding a real estate license holder).
professional inspector
A person who accepts employment for the purpose of performing a real-property inspection for a buyer or a seller.
qualifying real estate course
A real estate course included in the statute or approved by the Texas Real Estate Commission as fulfilling part of the core requirements for licensure. Permitted by statute or Rule: Principles of Real Estate, Real Estate Appraisal, Real Estate Law, Real Estate Finance, Real Estate Marketing, Real Estate Mathematics, Real Estate Brokerage, Property Management, Real Estate Investments, Law of Agency, Law of Contracts, Promulgated Contract Forms, and Residential Inspection for Real Estate Agents.
real estate inspector
A person who, under the indirect supervision of a professional inspector, accepts employment for the purpose of performing a real-property inspection for a buyer or seller.
real estate recovery trust account
A fund established from real estate license revenues to cover claims of aggrieved parties who have suffered monetary damage through the illegal actions of a real estate or property inspection license holder.
residential rental locator
A person, other than the owner of the property or an onsite manager, who offers, for consideration, to locate a unit in an apartment complex for lease to a prospective tenant.
