Champions State Test Chapter 1-6 with all Correct &
100% Verified Answers |Actual Complete Update |
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TREC General Powers, Composition, Duties, and Powers: Real Estate Advisory Committees
✔Correct Answer--TREC was created in 1949 to administer the provisions of the License Act
which was passed in 1939. The primary purpose of both the License Act and TREC is to protect
the public.
-TREC has the authority to make rules and regulations. TREC can advise with reference to its
rules and the laws that govern license holders.
-TREC consists of 9 commission members, 3 represent the general public and 6 are real estate
brokers. All are appointed by the governor and approved by the Senate. They serve for 6-year
terms.
-TREC has the power to subpoena books, records, and witnesses. If a license holder fails to
respond to a subpoena, TREC can file suit with the Attorney General to enforce the subpoena
Broker-Lawyer Committee ✔Correct Answer-Writes the promulgated contract forms.
-This committee has 13 members. 6 are brokers appointed by TREC. 6 are lawyers appointed by
the President of the State Bar Association. 1 is a public member appointed by the governor.
TREC Handling of Complaints: Investigations, Hearings and Appeals ✔Correct Answer--TREC
can initiate an investigation against a license holder at its own motion.
-An individual has four years from the effective date of a contract or the date of the incident to
file a complaint with TREC regarding the license holder involved. After four years, TREC will no
longer investigate a complaint. The complaint must be written and signed.
-A consumer can research a complaint history on a license holder through TREC.
-Only TREC has the power to issue or revoke Real Estate Licenses. A hearing for the revocation
or suspension is held at the State Office of Administrative Hearings (SOAH) unless a license
holder requests the hearing be held in his county. If a license holder, in violation, fails to
respond to a summons from TREC, TREC will automatically schedule the revocation/ suspension
hearing.
-If your license is revoked by TREC, you may appeal the decision to the district court.
TREC Penalties for Violation: Unlicensed Activity: Authority for Disciplinary Actions; Recovery
Trust Account ✔Correct Answer--People engaged in the real estate brokerage business
without having secured a license from TREC are guilty of a Class A Misdemeanor and subject to
a fine of not more than $4,000.00 or imprisonment in the county jail for not more than one
year, or both. Trials for this would be held in the county court.
-In addition, persons guilty of a violation of the License Act and whoever profited there from are
liable for additional civil penalties of up to three times the amount of money received.
, -TREC may assess an administrative penalty of up to $5,000 per day for violation of the license
act by any person, either licensed or unlicensed. If TREC assesses a penalty, a license holder has
30 days to pay the penalty.
Real Estate Recovery Trust Account ✔Correct Answer--This fund was created to pay aggrieved
parties who win an uncollectable judgment from an agent/broker. An aggrieved party may
collect treble damages up to $50,000 per lawsuit and up to $100,000 per license number.
-The account is funded by taking $10 out of every applicant's or renewing licensee's fees. In
addition, all fines levied by TREC fund this account which is invested in safe securities like T-Bills
and Notes.
-If the fund ever falls below $1 million, TREC can assess all licensees $10 or a pro rata share to
bring the balance up to $1.7 million. If the balance is above $3.5 million on January 1st, TREC
reduces the value to $3.5 million by flushing the excess into the General Fund of Texas where
the Texas Legislature spends it.
-When any amount is paid out against a licensee, the amount must be paid back with interest
and the license can be suspended/revoked.
-TREC plays no part in resolving conflicts between license holders. This is usually handled at the
Local Board of Realtors level.
Persons/Activities Requiring a License ✔Correct Answer--Attorneys must have a real estate
license to participate in a commission split.
-Auctioneers involved in any part of a real estate transaction.
-Apartment locators.
-Real Estate sales agents.
Business entities that receive compensation on behalf of a license holder (example: a sales
agent who incorporates and wants commissions paid to his/her corporation) must be licensed
as a broker.
The designated officer of a licensed real estate corporation, or the designated manager of a
licensed Real Estate Limited Liability Company. The designated one is a broker. If a designated
agent has a less than 10% interest in a real estate business entity, he must provide proof that
the entity has E&O insurance with a minimum annual limit of $1 million per occurrence. If the
designated agent owns 10% or more of the business, then the required amount of E&O
insurance is $0.
A third party (person or entity) who controls the acceptance or collection of rent from a single
family residence (like a property manager).
Any business entity that engages in real estate brokerage and is required to be registered to do
business in Texas with the Secretary of State must be licensed as a broker.
Persons/Activities Exempt from licensing ✔Correct Answer--Texas licensed attorneys can
handle a real estate transaction for a client for a fee as long as they do not participate in broker
to broker commission splits.
-Any attorney licensed in a state other than Texas will need to be licensed in Texas (as an
attorney) to handle a real estate transaction for a client for a fee in Texas.
100% Verified Answers |Actual Complete Update |
Already Graded A+
TREC General Powers, Composition, Duties, and Powers: Real Estate Advisory Committees
✔Correct Answer--TREC was created in 1949 to administer the provisions of the License Act
which was passed in 1939. The primary purpose of both the License Act and TREC is to protect
the public.
-TREC has the authority to make rules and regulations. TREC can advise with reference to its
rules and the laws that govern license holders.
-TREC consists of 9 commission members, 3 represent the general public and 6 are real estate
brokers. All are appointed by the governor and approved by the Senate. They serve for 6-year
terms.
-TREC has the power to subpoena books, records, and witnesses. If a license holder fails to
respond to a subpoena, TREC can file suit with the Attorney General to enforce the subpoena
Broker-Lawyer Committee ✔Correct Answer-Writes the promulgated contract forms.
-This committee has 13 members. 6 are brokers appointed by TREC. 6 are lawyers appointed by
the President of the State Bar Association. 1 is a public member appointed by the governor.
TREC Handling of Complaints: Investigations, Hearings and Appeals ✔Correct Answer--TREC
can initiate an investigation against a license holder at its own motion.
-An individual has four years from the effective date of a contract or the date of the incident to
file a complaint with TREC regarding the license holder involved. After four years, TREC will no
longer investigate a complaint. The complaint must be written and signed.
-A consumer can research a complaint history on a license holder through TREC.
-Only TREC has the power to issue or revoke Real Estate Licenses. A hearing for the revocation
or suspension is held at the State Office of Administrative Hearings (SOAH) unless a license
holder requests the hearing be held in his county. If a license holder, in violation, fails to
respond to a summons from TREC, TREC will automatically schedule the revocation/ suspension
hearing.
-If your license is revoked by TREC, you may appeal the decision to the district court.
TREC Penalties for Violation: Unlicensed Activity: Authority for Disciplinary Actions; Recovery
Trust Account ✔Correct Answer--People engaged in the real estate brokerage business
without having secured a license from TREC are guilty of a Class A Misdemeanor and subject to
a fine of not more than $4,000.00 or imprisonment in the county jail for not more than one
year, or both. Trials for this would be held in the county court.
-In addition, persons guilty of a violation of the License Act and whoever profited there from are
liable for additional civil penalties of up to three times the amount of money received.
, -TREC may assess an administrative penalty of up to $5,000 per day for violation of the license
act by any person, either licensed or unlicensed. If TREC assesses a penalty, a license holder has
30 days to pay the penalty.
Real Estate Recovery Trust Account ✔Correct Answer--This fund was created to pay aggrieved
parties who win an uncollectable judgment from an agent/broker. An aggrieved party may
collect treble damages up to $50,000 per lawsuit and up to $100,000 per license number.
-The account is funded by taking $10 out of every applicant's or renewing licensee's fees. In
addition, all fines levied by TREC fund this account which is invested in safe securities like T-Bills
and Notes.
-If the fund ever falls below $1 million, TREC can assess all licensees $10 or a pro rata share to
bring the balance up to $1.7 million. If the balance is above $3.5 million on January 1st, TREC
reduces the value to $3.5 million by flushing the excess into the General Fund of Texas where
the Texas Legislature spends it.
-When any amount is paid out against a licensee, the amount must be paid back with interest
and the license can be suspended/revoked.
-TREC plays no part in resolving conflicts between license holders. This is usually handled at the
Local Board of Realtors level.
Persons/Activities Requiring a License ✔Correct Answer--Attorneys must have a real estate
license to participate in a commission split.
-Auctioneers involved in any part of a real estate transaction.
-Apartment locators.
-Real Estate sales agents.
Business entities that receive compensation on behalf of a license holder (example: a sales
agent who incorporates and wants commissions paid to his/her corporation) must be licensed
as a broker.
The designated officer of a licensed real estate corporation, or the designated manager of a
licensed Real Estate Limited Liability Company. The designated one is a broker. If a designated
agent has a less than 10% interest in a real estate business entity, he must provide proof that
the entity has E&O insurance with a minimum annual limit of $1 million per occurrence. If the
designated agent owns 10% or more of the business, then the required amount of E&O
insurance is $0.
A third party (person or entity) who controls the acceptance or collection of rent from a single
family residence (like a property manager).
Any business entity that engages in real estate brokerage and is required to be registered to do
business in Texas with the Secretary of State must be licensed as a broker.
Persons/Activities Exempt from licensing ✔Correct Answer--Texas licensed attorneys can
handle a real estate transaction for a client for a fee as long as they do not participate in broker
to broker commission splits.
-Any attorney licensed in a state other than Texas will need to be licensed in Texas (as an
attorney) to handle a real estate transaction for a client for a fee in Texas.
