1. B
The primary purpose of the Texas Real Estate License Act (TRELA) is to protect the public by regulating real estate practitioners and ensuring they meet minimum standards of competency and ethical conduct. While licensing does generate revenue, public protection is the fundamental objective of real estate regulation in Texas.

2. B
The Texas Real Estate Commission (TREC) is the state agency with authority to adopt rules and regulations governing real estate licensees in Texas. TREC administers and enforces the Texas Real Estate License Act (TRELA) and has the power to license, regulate, and discipline real estate professionals in the state.

3. B
The Texas Real Estate Commission consists of 9 members: 6 licensed real estate brokers with at least 10 years of experience and 3 public members who are not licensed and have no financial interest in real estate. Members are appointed by the Governor and confirmed by the Senate for six-year staggered terms.

4. C
Texas requires a minimum of 180 classroom hours of approved real estate education to qualify for a salesperson license. This includes specific required courses: Principles of Real Estate I (30 hours), Principles of Real Estate II (30 hours), Law of Agency (30 hours), Law of Contracts (30 hours), Promulgated Contract Forms (30 hours), and Real Estate Finance (30 hours).

5. C
A sponsoring broker must notify TREC within 30 days if a salesperson or broker associate terminates their association with the brokerage. This notification requirement ensures TREC maintains accurate records of license holder sponsorship status and helps track when licenses become inactive.

6. B
Texas real estate licenses are valid for 2 years from the date of issuance or most recent renewal. License holders must complete continuing education requirements and pay renewal fees before the expiration date. Licenses that expire become inactive and cannot be reactivated without completing additional requirements.

7. C
A property manager who collects rent for a fee for multiple property owners must hold a real estate license under TRELA. The key factors are: managing property for others (not owned by the manager), receiving compensation, and doing so for multiple owners. Exceptions exist for on-site managers of single properties, attorneys in the course of practice, and owners managing their own property.

8. B
The minimum age requirement to obtain a Texas real estate salesperson license is 18 years old. Additionally, applicants must be a U.S. citizen or lawfully admitted alien, be honest and trustworthy, complete the required education, and pass the state licensing examination.

9. B
The maximum payment from the Texas Real Estate Recovery Trust Account for claims arising from a single transaction is $50,000. This fund exists to compensate aggrieved persons who suffer actual damages caused by license holder misconduct when they cannot collect a court judgment from the license holder.

10. B
The “Information About Brokerage Services” form is required when a license holder is acting as an intermediary or in any representation capacity. This form explains the different types of brokerage services available in Texas (seller’s agent, buyer’s agent, intermediary) and must be provided at the first substantive dialogue about a specific property.

11. C
The “Information About Brokerage Services” form must be provided at the time of the first substantive dialogue with a party about a specific property. A substantive dialogue is communication that goes beyond general conversation and involves specific properties, prices, terms, or conditions of a potential transaction.

12. C
In Texas, when a broker represents both the buyer and seller in the same transaction with written consent from both parties, this creates an intermediary relationship. Texas does not permit traditional dual agency. As an intermediary, the broker must treat all parties fairly and honestly but does not advocate for either party unless appointed to do so.

13. B
Texas requires 18 hours of continuing education for license renewal during each two-year period, including at least 6 hours of Legal Update courses (3 hours of Legal Update I and 3 hours of Legal Update II). The remaining hours may be elective courses from TREC-approved providers covering real estate topics.

14. C
A Texas real estate salesperson may only receive compensation from their sponsoring broker. It is illegal for a salesperson to accept compensation directly from buyers, sellers, or other brokers. All commissions must flow through the sponsoring broker, who then pays the salesperson according to their agreement.

15. C
The statute of limitations for filing a complaint with TREC is 4 years from the date of the alleged violation or from the date the violation was discovered or should have been discovered through reasonable diligence. This provides adequate time for aggrieved parties to file complaints while ensuring cases are brought within a reasonable timeframe.

16. C
While refusing to show property may be poor customer service, it is not grounds for suspension or revocation unless it involves discrimination or violation of a fiduciary duty. Dishonest dealings, failure to disclose material facts, and discrimination based on protected classes are all serious violations that can result in disciplinary action.

17. B
TREC rules require brokers to maintain copies of all transaction documents for a minimum of 4 years. This retention period applies from the date of closing, or if the property did not sell, from the date the listing or other agreement terminated. Records must be readily available for inspection by TREC.

18. A
To upgrade to a broker license, a salesperson must complete 90 hours of additional broker-level education (including specific required courses) and have at least 2 years of active experience as a licensed salesperson during the 36 months preceding the broker license application. The applicant must also pass the broker examination.

19. B
License holders may pay compensation to unlicensed assistants for performing clerical and administrative duties that do not require a license, such as answering phones, filing, scheduling appointments, or preparing marketing materials. However, unlicensed persons cannot receive commissions, referral fees, or finder’s fees for activities requiring a license.

20. B
TREC rules require that all advertisements by license holders include the sponsoring broker’s name as it appears on the broker’s license, or the broker’s assumed business name as registered with TREC. This ensures the public can identify the responsible broker and provides accountability in advertising.

21. B
The Texas Real Estate Recovery Trust Account exists to reimburse aggrieved persons who suffer actual monetary damages caused by acts of license holders that violate TRELA, when those persons obtain a court judgment they cannot collect. The fund provides a safety net for consumers harmed by license holder misconduct.

22. C
A broker who receives earnest money must deposit it in an escrow or trust account maintained at a banking institution in Texas. Earnest money cannot be deposited in the broker’s personal or business operating accounts. The funds must remain separate and identifiable until the transaction closes or the earnest money is otherwise properly disbursed.

23. D
A broker must deposit earnest money by the close of business on the first business day after the contract is executed by all parties, unless the parties agree otherwise in writing. The contract execution date is when the final party signs the contract, creating a binding agreement. Some contracts specify that earnest money is due at a different time.

24. B
License holders must disclose to all parties if they are related to or have any business relationship with any party to the transaction. This includes family relationships, business partnerships, or financial interests that could create a conflict of interest. Material relationships must be disclosed to ensure transparency and informed decision-making.

25. A
When a salesperson changes sponsoring brokers, their license becomes inactive until they become associated with a new sponsoring broker. The salesperson cannot perform any acts requiring a license while inactive. Once sponsored by a new broker, TREC will activate the license upon receiving proper notification and payment of any required fees.

26. A
Under Texas law, a seller’s disclosure notice is typically required for residential properties with 1-4 dwelling units. A single-family home being sold by an owner would require this disclosure. Exemptions include new construction never occupied, foreclosure sales, sales to co-owners or spouses, and certain other specific circumstances outlined in the Texas Property Code.

27. B
A Texas real estate license holder who is convicted of a felony must notify TREC in writing within 30 days of the conviction. This includes felonies in any jurisdiction. Failure to report a felony conviction is itself a violation of TREC rules and can result in additional disciplinary action including license suspension or revocation.

28. A
Commingling refers to the prohibited practice of mixing personal or business funds with client funds (such as earnest money or other trust funds) in an escrow or trust account. Even temporarily depositing personal funds to cover bank fees in a trust account constitutes illegal commingling and can result in disciplinary action.

29. B
The Texas Deceptive Trade Practices-Consumer Protection Act (DTPA) is designed to protect consumers against false, misleading, and deceptive business practices, unconscionable actions, and breaches of warranty. Real estate transactions are covered under the DTPA, and license holders can be held liable for violations, including treble damages in some cases.

30. B
All assumed business names (DBAs) used by Texas real estate brokers must be registered with TREC. The broker must file the assumed name with TREC and may only advertise under names registered with the Commission. This requirement ensures proper identification of the responsible broker and protects the public.

31. D
A buyer’s agent owes the client the duty of confidentiality, meaning they must keep confidential any information the client asks to remain confidential, unless the client permits disclosure or disclosure is required by law. Agents must also disclose material facts about property, obey lawful instructions only, and work in the client’s best interests.

32. C
The maximum amount the Texas Real Estate Recovery Trust Account will pay for all claims against a single license holder is $100,000, regardless of the number of claimants or transactions. Once this aggregate limit is reached for claims against one license holder, no additional payments can be made from the fund for claims against that license holder.

33. C
The required courses for initial Texas salesperson license qualification are: Principles of Real Estate I (30 hours), Principles of Real Estate II (30 hours), Law of Agency (30 hours), Law of Contracts (30 hours), Promulgated Contract Forms (30 hours), and Real Estate Finance (30 hours), totaling 180 hours of education from TREC-approved providers.