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TX Examp Prep

Chapter 1: Commission Duties and Powers

QuestionAnswer
TRELA created in 1939
TREC created in 1949 to administer the provisions of the License Act
TREC members 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 staggered terms.
TREC penalties Civ = treble damages Crim = $4,000 fine, Class A misdemeanor Admin - $5,000
The Broker Lawyer Committee 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.
The Real Estate Center at Texas A&M University has an Advisory Committee to help TREC.
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
TREC can initiate an investigation against a license holder at its own motion
An individual has ___ 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. 4 years
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 REC will automatically schedule the revocation/ suspension hearing.
If your license is revoked by TREC, you may appeal the decision to the district court.
If a license is revoked by TREC, The individual must wait at least 2 years before trying to obtain a new license.
TREC is there to protect consumers, therefore TREC plays no part in resolving conflicts between license holders. These types of conflicts are usually handled through the local Board of REALTORS©, by mediation, or in court.
Criminal Penalties - 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 criminal penalties of a fine of not more than $4000.00 or imprisonment in the county jail for not ore than one year, or both. Trials for this would be held in the county court.
Civil Penalties – 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.
Administrative Penalties – TREC may assess an administrative penalty of up to $5000 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 • 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.
Consumer Protection Notice (Form ID: CN 1-4) notifies the public about the existence of the Recovery Trust Account. The notice applies to both real estate license holders and inspectors.
Created by: deidresj
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