REAL ESTATE EXAM REVIEW
• Commission Duties and Powers
o Texas Real Estate Commission (TREC)
▪ Nine Member – six brokers and three members of the general public
▪ Appointed by the governor to staggered six-year terms
▪ One broker designated by the governor as chairperson
o Duties and Powers
▪ Protect the public
▪ Make and enforce rules and regulations
▪ Establish standards of conduct and ethics for licensees
▪ Administer and enforce license law and levy civil fines
▪ Select an administrator and employees to administer the law
▪ Issue license and probationary licenses and collect money for licenses and renewals
▪ Conduct investigations (within 4 years after the incident) hold hearings, and
issue injunctions
▪ Suspend or revoke a license, and place on probation or reprimand a licenses
▪ Initiate a cease and desist action
▪ Inspect and accredit real estate educational programs
▪ Promulgate Contracts and Addenda
▪ Enforce the Texas Time-Share Act
▪ Order a person regulated by the commission to pay a refund to a consumer as
provided in an agreement resulting form an informal settlement conference or an
enforcement order, instead of or in addition to imposing an administrative
penalty or other sanctions
▪ TREC does NOT mediate disputes between licensees, settle commission
disputes, recommend individual licensees to the public, or send licensees to jail
o Brokers Lawyer Committee
▪ Composition
• 13 Member – 6 brokers appointed by the commission, 6 Lawyers appointed
by the president of the State Bar of Texas, 1 Public Member appointed by
the governor
o 6yr staggered terms
o Terms for 2brokers and 2 lawyers expire every 2yrs
o Public members term expires every 6yrs
, REAL ESTATE EXAM REVIEW
▪ Contract Forms
• Drafts and revises contract forms does NOT PROMULGATE the forms
• Filling out a form is not performing an unauthorized practice of law
o Investigations, Hearings, Appeals, and Penalties
▪ Investigations and Hearings
• The Commission – may initiate investigations on its own or in response to
a signed written complaint
• Priority given to the investigation of a complaint filed by a consumer
• Commission will use a risk-based approach to assign priorities
and investigating complaints
• If The Commission proposes to deny, suspend, or revoke a persons license or
certificate of registration, the licensee is entitled to a hearing conducted
by the State Office of Administrative Hearings
• The Commission has the power to subpoena witnesses and documents
that may file suit through the attorney general
, REAL ESTATE EXAM REVIEW
• A person aggrieved by a decision of the commission has the right to
initiate and appeal to a District Court
• A salesperson whose license is revoked must notify the broker immediately;
a broker whose license is suspended must notify the salespersons and
parties to existing contract and remit the escrow or trust money in
accordance with instructions of the principal
▪ Penalties for Violation of Real Estate License Act
• A person who acts as a licensee is guilty of a CLASS A MISDEMANOR,
punishable by a max of $4,000 fine and/or up to 1yr in jail
• If a person received money wrongfully, a court may charge a penalty of one
to three time the total money received
• TREC – Can issue administrative penalties for violations of the Act or a
rule or order of the Commission, not to exceed $5,000 per day for each
violation
• Felonies or Misdemeanors according to TREC:
o Offense involving fraud or misrepresentation (remember intent)
o Knowing or intentional offenses against real or personal
property belonging to another
o Offenses against public administration
o Offenses involving the sale or disposition of real or personal
property belonging to another without authorization of law
o Offenses involving moral turpitude
o Mechanics lien/Materialmens Liens
▪ Mechanics Lien – specific, involuntary, statutory lien that gives security
to contractors, subcontractors, and others who provide services or
materials
▪ Filed when owner has not fully paid the contractor or when subcontractors have
not been paid by the main contractor
o Texas Mechanics Lien Requirements
▪ Lien rights attach when the first labor and/or material is furnished
▪ Must file an affidavit with the County Clerk within approx. 75 Days of the last of
the month in which the contract was completed, settled, or abandoned
▪ Must have worked under a contract with the owner
• Commission Duties and Powers
o Texas Real Estate Commission (TREC)
▪ Nine Member – six brokers and three members of the general public
▪ Appointed by the governor to staggered six-year terms
▪ One broker designated by the governor as chairperson
o Duties and Powers
▪ Protect the public
▪ Make and enforce rules and regulations
▪ Establish standards of conduct and ethics for licensees
▪ Administer and enforce license law and levy civil fines
▪ Select an administrator and employees to administer the law
▪ Issue license and probationary licenses and collect money for licenses and renewals
▪ Conduct investigations (within 4 years after the incident) hold hearings, and
issue injunctions
▪ Suspend or revoke a license, and place on probation or reprimand a licenses
▪ Initiate a cease and desist action
▪ Inspect and accredit real estate educational programs
▪ Promulgate Contracts and Addenda
▪ Enforce the Texas Time-Share Act
▪ Order a person regulated by the commission to pay a refund to a consumer as
provided in an agreement resulting form an informal settlement conference or an
enforcement order, instead of or in addition to imposing an administrative
penalty or other sanctions
▪ TREC does NOT mediate disputes between licensees, settle commission
disputes, recommend individual licensees to the public, or send licensees to jail
o Brokers Lawyer Committee
▪ Composition
• 13 Member – 6 brokers appointed by the commission, 6 Lawyers appointed
by the president of the State Bar of Texas, 1 Public Member appointed by
the governor
o 6yr staggered terms
o Terms for 2brokers and 2 lawyers expire every 2yrs
o Public members term expires every 6yrs
, REAL ESTATE EXAM REVIEW
▪ Contract Forms
• Drafts and revises contract forms does NOT PROMULGATE the forms
• Filling out a form is not performing an unauthorized practice of law
o Investigations, Hearings, Appeals, and Penalties
▪ Investigations and Hearings
• The Commission – may initiate investigations on its own or in response to
a signed written complaint
• Priority given to the investigation of a complaint filed by a consumer
• Commission will use a risk-based approach to assign priorities
and investigating complaints
• If The Commission proposes to deny, suspend, or revoke a persons license or
certificate of registration, the licensee is entitled to a hearing conducted
by the State Office of Administrative Hearings
• The Commission has the power to subpoena witnesses and documents
that may file suit through the attorney general
, REAL ESTATE EXAM REVIEW
• A person aggrieved by a decision of the commission has the right to
initiate and appeal to a District Court
• A salesperson whose license is revoked must notify the broker immediately;
a broker whose license is suspended must notify the salespersons and
parties to existing contract and remit the escrow or trust money in
accordance with instructions of the principal
▪ Penalties for Violation of Real Estate License Act
• A person who acts as a licensee is guilty of a CLASS A MISDEMANOR,
punishable by a max of $4,000 fine and/or up to 1yr in jail
• If a person received money wrongfully, a court may charge a penalty of one
to three time the total money received
• TREC – Can issue administrative penalties for violations of the Act or a
rule or order of the Commission, not to exceed $5,000 per day for each
violation
• Felonies or Misdemeanors according to TREC:
o Offense involving fraud or misrepresentation (remember intent)
o Knowing or intentional offenses against real or personal
property belonging to another
o Offenses against public administration
o Offenses involving the sale or disposition of real or personal
property belonging to another without authorization of law
o Offenses involving moral turpitude
o Mechanics lien/Materialmens Liens
▪ Mechanics Lien – specific, involuntary, statutory lien that gives security
to contractors, subcontractors, and others who provide services or
materials
▪ Filed when owner has not fully paid the contractor or when subcontractors have
not been paid by the main contractor
o Texas Mechanics Lien Requirements
▪ Lien rights attach when the first labor and/or material is furnished
▪ Must file an affidavit with the County Clerk within approx. 75 Days of the last of
the month in which the contract was completed, settled, or abandoned
▪ Must have worked under a contract with the owner
