Texas Private Investigator Portion of License Exam Questions With Correct Answers

What is the primary purpose of TRELA and TREC? - Answer Protect the public of the State of Texas What is TRELA? - Answer TRELA is the law that governs all real estate license holders and sets the powers for TREC. What is the composition of TREC? - Answer 9 members, 6 brokers and 3 members of the public How are members of TREC selected? - Answer They are appointed by the governor with the advice and consent of the state senate (with staggered 6 year terms) One broker is designated to be the chairperson. What are the duties and powers of TREC? - Answer -Make and enforce rules and regulations -Establish standards of conduct and ethics for license holders -Administer and enforce license law and levy civil fines -Select an administrator and employees to administer the law -Issue active and probationary licenses and collect money for licenses and renewals -Conduct investigations, hold hearings, and issue injunctions. -Suspend or revoke a license and place on probation or reprimand a license holder -Initiate a cease and desist action -Inspect and accredit real estate education programs -Promulgate contracts and addenda -Enforce the Texas Timeshare Act What can TREC not do? - Answer -Mediate or settle commission or other disputes between license holders or brokerage firms -Recommend individual license holders to the public -Send license holders to jail What are the functions of the Broker-Lawyer committee? - Answer -Drafts, revises, and recommends contract forms intended for use by license holders -They do not publish, promulgate or approve the forms. -Only TREC may promulgate or approve real estate contract forms What is the composition of the Broker-Lawyer Committee? - Answer -13 members, 6 brokers appointed by the commission, 6 lawyers appointed by the president of the state bar, and one public member appointed by the governor -They serve staggered 6 year terms (2 brokers and 2 lawyers expire every two years, public members expire every 6 years) What are the functions of the Education Standards Advisory Committee? - Answer The committee reviews and revises education curriculum standards, course content requirements, and instructor certification requirements for all Texas real estate core, Sales Agent Apprentice Education, and Mandatory Continuing Education courses. What is the composition of the ESAC? - Answer 12 members, 7 active license holders with 5 years experience, 4 education members who are TREC approved real estate instructors, and one public member How are investigations handled through TREC? - Answer 1. The commission may initiate investigations on its own or in response to a signed written complaint. 2. The commission will give priority to the investigation of a complaint filled by a consumer or from an enforcement case resulting from the consumer complaint. 3. The commission uses a risk based approach to assign priorities and investigate complaints. 4. It pursues those with the highest impact to the public first. How are hearings and appeals handled? - Answer 1. If, after the investigation, the commission determines it is appropriate to deny, suspend, or revoke a persons license or certificate, the license holder is entitled to a hearing conducted by the State Office of Administrative Hearings. 2. TREC has the power to subpoena witnesses and documents from the hearing and may file suit through the attorney general. 3. Failure to obey a court order may be punished by the court as contempt. 4. Appeals of the TREC decision may be made to a district court. What are the penalties for a violation that the commissioners may impose? - Answer -revoke a license -cancel a license -suspend a license What must a broker whose license is suspended do? - Answer -Notify all the firms sales agents and parties to existing contracts -Remit the escrow or trust money in accordance with instructions of the contract principals What must a sales agent whose license is suspended do? - Answer Notify the broker How much are the administrative penalties issued by TREC? - Answer -The penalties may not exceed $5,000 per day for each violation -Each day a violation continues, it may be considered a separate violation for purposes of imposing a penalty. What are the punishments for a person who acts as a real estate license holder without an active real estate license? - Answer -Class A misdemeanor -Max $4,000 fine and up to one year in jail or both -Also punishable by court which may charge a penalty o one to three times the total money received What are other requirements that TREC may impose if they revoke, cancel or suspend a license? - Answer -Report regularly to the commission on matter that are the basis of the probation -Limit practice to an are prescribed by the commission -Continue to renew professional education until the license holder attains a degree of skill satisfactory to the commission in the area that is the basis of the probation. Who maintains the Recovery trust account and what is its purpose? - Answer -The account is maintained by TREC and must total $1mil minimum -The purpose of the account is to reimburse consumers who suffer damages caused by real estate license holders, cert holders, or their employees. What must each brokerage firm display? - Answer Consumer protection notice in a prominent location in each location, notifying the public of the availability of the recovery fund. How is the license fees funded? - Answer -At the time of application the applicant pays $10 into the trust account -If the amount drops below 1 mil, each license holder is assessed $10 at the time of renewal to bring the trust account back up to 1.7 mil What are the maximum payouts from the recovery act? - Answer -Applicants must apply within two years of offense -50,000 per transaction regardless of the #of claimants -100,000 total per license holder regardless of the number of claims What are the remedies against license holders if funds are used? - Answer -The commission may revoke a license if the commission makes a payment from the recovery trust account to satisfy all or part of a judgment against the license holder -TREC may issue a probationary license instead of revoking -Renewal of a license or a certificate will be held until repayment of the full amount plus interest. What is the three prong test to determine if a real estate license is required? - Answer -activity or dealing in real property -compensation -for others A real estate license is required for which activities? - Answer LLBEANS -list -lease -buy -exchange -auction -negotiate -sell What are the requirements to be a realtor? - Answer -18 yrs old -US citizen -Texas resident -Work under a sponsored Broker -complete 180 hrs of education (certs) -submit application (fingerprints, pass exam) What are the requirements to be a broker? - Answer -minimum four years of active experience as a Texas license holder in the 5 years preceding the application date -900 classroom hours (270 core, 30 broker course, and the remaining real estate courses/college credits) -must pass brokers license exam