Texas Real Estate Study Guide 2026 — Free Cheat Sheet

A 'broker' is a person who, in exchange for or with the expectation of a commission or other valuable consideration, performs for another person acts involving real estate. These acts include selling, exchanging, purchasing, or leasing real estate; offering to do so; negotiating listings/sales/leases; listing real estate; auctioning real estate; dealing in options; aiding in locating/obtaining real estate; procuring prospects or property; controlling acceptance/deposit of rent from a single-family residential unit; providing a written price analysis (BPO) not called an appraisal; or advising an owner on a short sale. A broker also includes a person employed by an owner to sell real estate or one who charges an advance fee to promote sale by listing or referring information.

• ✓Broker status requires acting for ANOTHER person for compensation or expectation of it
• ✓A written analysis of estimated price (BPO) is broker activity only if it is not called an appraisal, is done in the ordinary course of business, and relates to management/acquisition/disposition/encumbrance
• ✓Advising an owner on a short sale is a brokerage activity
• ✓Controlling acceptance or deposit of rent from a single-family residential unit is brokerage

A 'sales agent' is a person sponsored by a licensed broker for the purpose of performing an act described in the broker definition (Subdivision 1). A 'license holder' means a broker or sales agent licensed under Chapter 1101. A sales agent cannot act independently — they must be sponsored by a broker.

• ✓A sales agent must be sponsored by a licensed broker
• ✓'License holder' means a broker OR a sales agent licensed under the chapter
• ✓A sales agent performs the same acts as a broker but only under broker sponsorship

TRELA does not apply to certain persons/transactions: an attorney licensed in Texas; an attorney-in-fact under a power of attorney conducting not more than three transactions annually; a public official in official duties; a licensed auctioneer conducting an auction (if not performing other broker acts); a person acting under court order, will, or written trust; an owner's employee selling structures the owner erects in the owner's business; an on-site apartment manager; an owner or owner's employee leasing the owner's real estate; and certain transactions involving minerals/mining/timber/energy sources, cemetery lots, hotel/motel lease or management, or foreclosure sales. Sales, leases, or transfers by general partners/managers/managing members and their employees of limited partnerships or LLCs are also exempt.

• ✓A Texas-licensed attorney is exempt from TRELA
• ✓An attorney-in-fact may conduct not more than three real estate transactions annually while exempt
• ✓An owner or owner's employee leasing/selling the owner's own property is exempt
• ✓On-site apartment managers and mineral/timber/energy, cemetery lot, and hotel/motel lease transactions are exempt

TREC may adopt rules requiring license holders to use contract forms prepared by the Texas Real Estate Broker-Lawyer Committee and adopted by the commission. However, TREC may NOT prohibit a license holder from using a contract form prepared by the property owner, or prepared by an attorney and required by the property owner. A commission-adopted listing contract form must include a provision informing parties that real estate commissions are negotiable, and a provision explaining availability of Texas coastal natural hazards information where appropriate.

• ✓License holders may be required to use TREC-adopted forms prepared by the Broker-Lawyer Committee
• ✓TREC cannot prohibit use of forms prepared by the owner, or by an attorney and required by the owner
• ✓Listing forms must state that real estate commissions are negotiable

Chapter 1101 of the Texas Occupations Code is officially known as The Real Estate License Act (TRELA). It governs real estate brokers and sales agents in Texas and is administered by the Texas Real Estate Commission (TREC).

• ✓Chapter 1101 may be cited as The Real Estate License Act
• ✓TRELA governs brokers and sales agents in Texas

'Commission' means the Texas Real Estate Commission (TREC). 'Real estate' means any interest in real property, including a leasehold, located in or outside Texas, but does NOT include an interest given as security for an obligation (e.g., a mortgage lien). 'Residential rental locator' means a person who offers for consideration to locate an apartment unit for lease to a prospective tenant (excludes an owner locating a unit in the owner's own complex). A 'business entity' means a domestic or foreign entity qualified to transact business in Texas.

• ✓'Real estate' includes leaseholds but excludes security interests given for an obligation
• ✓A residential rental locator must be licensed but an owner locating a unit in the owner's own complex is excluded
• ✓'Commission' always refers to the Texas Real Estate Commission (TREC)

A person is engaged in real estate brokerage if, with expectation of valuable consideration, they directly or indirectly perform or offer to perform for another any act in the broker definition, as part of or the entirety of a transaction. A person is NOT engaged in brokerage (regardless of licensure) based solely on: (1) constructing, remodeling, or repairing a building; (2) sponsoring/promoting/managing or participating as principal, partner, or financial manager in a real estate investment; or (3) entering into an obligation to pay another secured by an interest in real property.

• ✓Brokerage requires acting for another with expectation of valuable consideration
• ✓Construction/remodeling/repair is not brokerage
• ✓Participating as a principal or partner in a real estate investment is not brokerage

A person may acquire an option or interest in a contract to purchase real property and then sell/assign it (or offer to) WITHOUT a license IF the person: (1) does not use the option/contract to engage in real estate brokerage; AND (2) discloses in writing the nature of the equitable interest to any seller or potential buyer. Failing to disclose the nature of that equitable interest constitutes engaging in real estate brokerage (requiring a license).

• ✓Selling/assigning an option or equitable contract interest without written disclosure of that interest's nature IS brokerage requiring a license
• ✓Written disclosure of the equitable interest to seller and potential buyer is required to remain exempt
• ✓The person may not use the option or contract to engage in brokerage

TREC shall administer Chapters 1101 and 1102, adopt rules and standards for permissible advertising by residential rental locators, maintain a registry of certificate holders, and design/adopt a seal. TREC may adopt and enforce rules necessary to administer the chapters and establish standards of conduct and ethics for license holders to fulfill the chapters' purposes and ensure compliance. TREC's detailed rules are found in 22 Texas Administrative Code (TAC) Chapter 535.

• ✓TREC adopts and enforces rules necessary to administer TRELA (Chapter 1101) and Chapter 1102
• ✓TREC establishes standards of conduct and ethics for license holders
• ✓TREC's administrative rules appear in 22 TAC Chapter 535

TREC may not adopt rules restricting advertising or competitive bidding except to prohibit false, misleading, or deceptive practices. Even when prohibiting deceptive practices, TREC may not adopt a rule that restricts any advertising medium, restricts personal appearance or voice use, relates to ad size/duration, restricts advertising under a registered assumed/trade name, or requires terms like 'broker'/'agent,' a TREC reference, or the license number in the ad. Note TREC rules (22 TAC 535.155) do require certain advertising disclosures consistent with these limits.

• ✓TREC may restrict advertising only to prohibit false, misleading, or deceptive practices
• ✓TREC cannot restrict the advertising medium, ad size/duration, or use of a registered trade name
• ✓Advertising rules must still be reviewed under TREC's 22 TAC Chapter 535 provisions

TREC or its staff may file a complaint and investigate to enforce Chapter 1101, 1102, or related rules. TREC must investigate a license holder's actions/records when a person submits a signed, written complaint and the evidence provides reasonable cause. TREC cannot investigate a complaint submitted after the fourth anniversary of the incident. An investigation cannot be started based on an anonymous complaint. TREC must give written notice to a license holder under investigation unless it deliberately decides against notice.

• ✓TREC must investigate when there is a signed, written complaint plus reasonable cause
• ✓No investigation may be conducted on a complaint submitted more than 4 years after the incident
• ✓No investigation or action may be initiated based on an anonymous complaint
• ✓Undercover/covert investigations require express commission authorization

The Broker-Lawyer Committee has 13 members: six appointed by TREC, six State Bar of Texas members appointed by the state bar president, and one public member appointed by the governor. Members serve staggered six-year terms (two commission and two bar appointees expire every two years; the public member every six years). The committee's key duty is to draft and revise standardized contract forms that expedite transactions, minimize controversy, and contain safeguards adequate to protect the principals.

• ✓Committee consists of 13 members: 6 TREC, 6 State Bar, 1 public member
• ✓Members serve staggered six-year terms
• ✓Committee drafts and revises standardized contract forms with safeguards to protect principals

TREC must adopt rules prescribing a notice with the commission's name, mailing address, and telephone number so consumers know how to direct complaints. License holders regulated under Chapter 1101 or 1102 must provide this notice to consumers and service recipients. When a complaint is filed, TREC must give both the complainant and the license holder an explanation of available remedies and information about other appropriate state/local agencies.

• ✓TREC by rule prescribes a complaint notice containing its name, mailing address, and telephone number
• ✓License holders must provide the complaint notice to consumers and service recipients
• ✓TREC must give complainant and license holder an explanation of remedies and info on other agencies where a complaint may be filed

TREC maintains a system to promptly act on complaints and keeps a file on each complaint. The file must contain party information, subject matter, a summary of investigation results, and the disposition. TREC must make its complaint procedures publicly available and periodically notify parties of the complaint status until final disposition, unless doing so would jeopardize an authorized undercover investigation.

• ✓Each complaint file must include parties, subject matter, summary of results, and disposition
• ✓TREC must periodically notify parties of complaint status until final disposition
• ✓Status notice may be withheld if it would jeopardize an authorized undercover investigation

TREC must give priority to complaints filed by consumers and resulting enforcement cases. Complaints are assigned priority and investigated using a risk-based approach considering degree and immediacy of potential harm, severity of allegations, number of license holders involved, prior complaint history, and number of potential violations. If an allegation or complaint is inappropriate or without merit, TREC must dismiss it with no further action; staff may be delegated dismissal authority.

• ✓Consumer complaints and resulting enforcement cases receive priority
• ✓Risk-based prioritization factors include degree/immediacy of harm, severity, number of license holders, complaint history, and number of potential violations
• ✓Inappropriate or meritless complaints must be dismissed; staff may be delegated dismissal duty

Information or material (including an investigation file) prepared or compiled by TREC in connection with a complaint, investigation, or audit is confidential and not subject to disclosure under the Public Information Act (Gov. Code Ch. 552) or by discovery/subpoena. Exceptions allow disclosure to the respondent, an audit subject, service providers/experts/witnesses/investigators, other licensing jurisdictions, law enforcement, and SOAH. TREC must protect a complainant's identity by excluding identifying information from the complaint notice sent to a respondent. Upon dismissal or final resolution, the materials (including completed audit reports and final orders) become subject to disclosure.

• ✓Investigation files are confidential and not subject to Public Information Act disclosure, discovery, or subpoena
• ✓Disclosure is permitted to specified parties (respondent, law enforcement, SOAH, other jurisdictions, etc.)
• ✓TREC must protect the complainant's identity in the notice sent to the respondent
• ✓After dismissal or final resolution, materials become subject to disclosure under Gov. Code Ch. 321 or 552

TREC may by rule set standards for approving qualifying education programs/courses in real estate and inspection (excluding public high schools and accredited colleges/universities) and set minimum instructor education/experience requirements. TREC must set an examination passage-rate benchmark for each license category, based on the average first-attempt pass rate; a program must meet or exceed the benchmark to renew approval, but may be renewed on a probationary basis if it can meet the benchmark within a reasonable time. TREC may deny approval if the applicant owned/controlled a program whose approval was revoked, or is in violation of a commission order.

• ✓TREC sets standards and minimum instructor requirements for approved education programs
• ✓Public high schools and accredited colleges/universities are excluded from the approval requirement
• ✓An exam passage-rate benchmark (based on first-attempt average) must be met to renew program approval
• ✓Approval may be denied if applicant previously controlled a revoked program or violated a commission order

TREC generally may not charge more than one approval fee when a program is offered in multiple formats (in person, online, correspondence), unless it has adopted a rule policy allowing separate per-format fees. An educational institution (excluding accredited colleges/universities) must maintain a $20,000 corporate surety bond or acceptable security, payable to TREC, for the benefit of parties damaged by the institution's failure to fulfill its obligations.

• ✓TREC may charge only one approval fee for a program offered in multiple formats absent a multi-format fee rule
• ✓Educational institutions must maintain a $20,000 corporate surety bond payable to TREC
• ✓The bond benefits parties harmed by the institution's failure to fulfill obligations

If an applicant satisfies the requirements, TREC may approve a continuing education provider or CE course of study for a two-year period. TREC may set minimum instructor education/experience requirements, and applicants must ensure course instructors meet them. TREC may deny renewal of a CE approval if the applicant is in violation of a commission order. TREC must adopt rules on collecting and publishing examination passage-rate data for graduates of approved programs.

• ✓Approved CE providers and courses are authorized for a two-year period
• ✓CE course instructors must meet TREC's minimum education and experience requirements
• ✓TREC must adopt rules for collecting and publishing exam passage-rate data for approved programs

A person may not act as or represent themselves as a broker or sales agent, or act as a residential rental locator, unless they hold a license under Chapter 1101. Business entities must be licensed to act as brokers. Applicants may not act until the license is actually issued. A sales agent may not engage in real estate brokerage unless sponsored by a licensed broker and acting for that broker.

• ✓A person may not act as a broker, sales agent, or residential rental locator without a license
• ✓A business entity may not act as a broker without a license
• ✓An applicant may not act as broker/sales agent until the license evidencing authority is received
• ✓A sales agent may not engage in brokerage unless sponsored by a licensed broker and acting for that broker

Applicants for a license or renewal of an unexpired license must submit a complete, legible set of fingerprints to obtain criminal history record information from DPS and the FBI. The commission must refuse to issue or renew a license on active status for anyone who does not comply. The commission conducts a criminal history check on each applicant using submitted and agency information.

• ✓Applicants for license or renewal must submit fingerprints for a DPS/FBI criminal history check
• ✓The commission must refuse to issue or renew an active license if the applicant does not comply
• ✓Renewal of an unexpired license also requires compliance with the criminal history check (Sec. 1101.4521)

To be eligible for a license, a person must, at time of application, be at least 18 years old and be a U.S. citizen or lawfully admitted alien; satisfy the commission as to honesty, trustworthiness, and integrity; demonstrate competence via examination under Subchapter I; and complete the required courses of study including qualifying real estate courses.

• ✓Applicant must be at least 18 and a U.S. citizen or lawfully admitted alien
• ✓Applicant must satisfy the commission as to honesty, trustworthiness, and integrity
• ✓Applicant must pass the required examination and complete required qualifying courses

A broker applicant must show at least four years of active experience as a license holder during the 60 months preceding the application, complete the qualifying real estate/related course hours required by rule (not to exceed 60 semester hours), and attend the broker responsibility course. These requirements do not apply to an applicant already licensed as a broker in another state with comparable requirements.

• ✓Broker applicants need at least 4 years of active experience in the 60 months before applying
• ✓Broker applicants must complete required qualifying courses (up to 60 semester hours) and the broker responsibility course
• ✓Requirements are waived for brokers licensed in another comparable state

A sales agent applicant must provide evidence of completing at least 12 semester hours (or equivalent classroom hours) of qualifying real estate courses required by commission rule. Education is waived if the applicant was licensed as a broker or sales agent in Texas within the six months preceding the application.

• ✓Sales agent applicants must complete at least 12 semester hours of qualifying real estate courses
• ✓Education requirements are waived if licensed in Texas as a broker/sales agent within the prior 6 months

When a sales agent's relationship with a sponsoring broker terminates, the terminating party must immediately notify the other party and the commission in writing, and the commission places the license on inactive status. A broker may return the agent to active status before license expiration by filing a request and fee assuming sponsorship. Returning to active status requires proof of continuing education from the prior two years (unless subject to first-renewal education under 1101.454).

• ✓The terminating party must immediately notify both the other party and the commission in writing
• ✓The commission places the sales agent license on inactive status upon receiving notice
• ✓A broker may reactivate the agent by filing a request assuming sponsorship with the fee before expiration

Competency is established by an examination prepared or contracted for by the commission, offered at times/places it determines. The exam must be broad enough to determine competence to protect the public, and the sales agent exam must be less exacting than the broker exam. The commission provides study materials. An applicant must satisfy the exam requirement within one year after filing the license application.

• ✓Competency is established by an examination prepared or contracted by the commission
• ✓The sales agent exam must be less exacting than the broker exam
• ✓An applicant must pass the exam within one year of filing the application

The commission may issue or renew a license for a 24-month period. A license expired 90 days or less may be renewed by paying 1-1/2 times the renewal fee; expired more than 90 days but less than six months requires two times the fee. If a license has been expired for six months or longer, it cannot be renewed and the person must obtain a new license by meeting original licensing requirements.

• ✓Licenses may be issued/renewed for up to 24 months
• ✓Expired 90 days or less: renew at 1-1/2 times the fee; 91 days to under 6 months: 2 times the fee
• ✓Expired 6 months or longer: cannot renew — must apply as a new applicant

An applicant for the first renewal of a sales agent license must show completion of at least 18 semester hours (or equivalent classroom hours) of qualifying real estate courses, including the hours required by Sec. 1101.455(e). The commission may not waive this renewal requirement.

• ✓First sales agent renewal requires at least 18 semester hours of qualifying real estate courses
• ✓The commission may not waive the first-renewal education requirement

License holders not subject to first-renewal education must complete continuing education (at least 15 classroom hours, set by rule) during the current license term. At least eight hours must cover required legal topics (commission rules, fair housing, Property Code/landlord-tenant, agency law, antitrust, DTPA (Subch. E, Ch. 17 Bus. & Comm. Code), disclosures, promulgated contract forms, unauthorized practice of law, case studies, FHA/VA regulations, tax laws, and ethics). Qualifying courses and State Bar-approved CLE courses are automatically approved for the remaining hours. A legislator licensed under the chapter needs only three hours on the legal topics.

• ✓CE must be at least 15 classroom hours during the current license term
• ✓At least 8 CE hours must cover specified legal topics including agency, fair housing, disclosures, and ethics
• ✓The commission may not increase required classroom hours by more than 3 over a license term

Each applicant for a broker or sales agent license must apply on a commission-prescribed form and disclose any guilty/nolo contendere plea to a felony or felony conviction (once appeal time has elapsed or conviction affirmed). Disclosure is required even if community supervision suspended imposition of the sentence. Applicants must provide current mailing address, telephone number, and business e-mail (if available), and notify the commission of changes while the application is pending.

• ✓Application must be on a form prescribed by the commission
• ✓Applicant must disclose felony pleas or convictions
• ✓Felony disclosure required even if community supervision was granted
• ✓Applicant must provide current contact info and update changes while application pending

To be eligible for a broker license, a business entity must designate a managing officer as its broker and, if the designated broker owns less than 10% of the entity, provide proof of errors and omissions insurance with a minimum annual limit of $1 million per occurrence. The entity may not act as a broker unless its designated broker is a licensed individual broker in active status and good standing. Good standing may consider disciplinary history and amounts owed to the commission.

• ✓A business entity broker must designate a managing officer as its broker
• ✓E&O insurance of at least $1 million per occurrence is required if the designated broker owns less than 10% of the entity
• ✓The designated broker must be a licensed individual broker in active status and good standing

The commission must issue an appropriate license to a qualifying applicant and may issue an inactive sales agent license to one who meets all requirements but is not yet sponsored. A license remains in effect if the holder complies with the chapter and pays renewal fees. On denial, the commission must immediately give written notice, and the applicant is entitled to a hearing under Sec. 1101.657.

• ✓The commission may issue an inactive sales agent license; the person may not act until sponsored by a broker who notifies the commission
• ✓On denial, the commission must give immediate written notice and the applicant may request a hearing

A broker may go inactive if not acting as a broker, not sponsoring a sales agent, and submitting written application before expiration (or within 6 months after expiration on a prescribed form). A broker applying for inactive status must terminate sponsorship of each sales agent by written notice before the 30th day preceding the application. Inactive brokers may not perform regulated activities but must pay renewal fees; returning to active status requires application, fee, and proof of continuing education.

• ✓A broker may be placed inactive only if not acting as a broker and not sponsoring a sales agent
• ✓An inactive broker must pay renewal fees but may not perform regulated activities
• ✓Returning to active status requires proof of continuing education from the prior two years

The commission must waive the exam for a broker or sales agent applicant who was previously licensed in Texas as a broker or sales agent, if the application is filed before the second anniversary of the equivalent license's expiration date.

• ✓Exam is waived for previously Texas-licensed applicants
• ✓The application must be filed within 2 years of the equivalent license's expiration

The commission or testing service must notify each examinee of results within 10 days of the exam (or of the reason for delay before the 10th day). A person who fails may request a written analysis of their performance; results are confidential. A failing applicant may reapply with the proper fee, but after failing three consecutive times may not reapply without completing additional prescribed education.

• ✓Examinees must be notified of results within 10 days
• ✓Exam results are confidential
• ✓After three consecutive failures, an applicant must complete additional education before reexamination

Renewal applicants must disclose felony pleas or convictions (even if community supervision granted) and comply with criminal history record check requirements. To renew, a business entity must designate a managing officer as broker and, if the designated broker owns less than 10%, maintain $1 million E&O insurance; it may not act as a broker unless the designated broker is licensed, in active status, and in good standing.

• ✓Renewal applicants must disclose felony pleas/convictions and complete the criminal history check
• ✓Business entity renewal requires a designated managing officer broker and $1 million E&O if the broker owns under 10%

During the term of a current license, a broker responsibility course approved by TREC must be attended by any broker licensed under Chapter 1101 and any sales agent who supervises another license holder. TREC prescribes the course title, content, and duration by rule, and the course may not exceed six classroom hours. These hours count toward the continuing education (CE) hours required under Section 1101.455(f). This requirement does not apply to a broker exempt from CE under Section 1101.456.

• ✓Brokers and sales agents who supervise another license holder must take the broker responsibility course during the current license term
• ✓The broker responsibility course may not exceed six classroom hours
• ✓Broker responsibility hours may be used to satisfy required CE hours under 1101.455(f)
• ✓Does not apply to a broker exempt from CE under Section 1101.456

TREC may deny renewal of a license under Chapter 1101 if the applicant is in violation of a commission order. A denial of a license renewal receives the same procedural protections that apply to the denial of an original license under Section 1101.364 (including hearing/appeal rights).

• ✓TREC may deny license renewal if the applicant is in violation of a commission order
• ✓Renewal denial is subject to the same provisions as denial of a license under Section 1101.364

A person may not act as an easement or right-of-way agent unless the person either holds a license issued under Chapter 1101 or holds a certificate of registration issued under this subchapter. This is the certificate-of-registration alternative to full licensure for easement/right-of-way work.

• ✓A person may not act as an easement or right-of-way agent without a license OR a certificate of registration
• ✓Either a Chapter 1101 license or a certificate of registration satisfies the requirement

To receive a certificate of registration or renewal, an individual applicant must, at the time of application, be at least 18 years of age and be a U.S. citizen or lawfully admitted alien, and must successfully complete the required courses of study (qualifying or continuing education) prescribed by this subchapter. A business entity applicant must designate as its agent one of its managing officers who is registered under this subchapter.

• ✓Applicant must be at least 18 years of age at time of application
• ✓Applicant must be a U.S. citizen or lawfully admitted alien
• ✓Applicant must complete required qualifying or continuing education courses
• ✓A business entity must designate a registered managing officer as its agent

An applicant for an original or renewal certificate of registration as an easement or right-of-way agent must comply with the criminal history record check requirements of Section 1101.3521.

• ✓Both original and renewal certificate applicants must undergo a criminal history record check
• ✓The check must comply with Section 1101.3521 requirements

TREC by rule approves the coursework an applicant must complete for issuance or renewal of a certificate of registration. An applicant for an original certificate must submit evidence of completing at least 16 classroom hours of TREC-approved coursework covering: the law of eminent domain (including property owners' rights), appropriate standards of professionalism in contacting and negotiating with property owners, and ethical considerations in performing right-of-way acquisition services.

• ✓Original certificate applicants must complete at least 16 classroom hours of approved coursework
• ✓Coursework must cover eminent domain law, professionalism in owner negotiations, and ethics in right-of-way acquisition
• ✓TREC approves the required coursework by rule

Subchapter L defines key terms. An 'intermediary' is a broker employed to negotiate a transaction between the parties and who may act as an agent of the parties for that purpose. A 'party' is a prospective buyer, seller, landlord, or tenant, or an authorized representative such as a trustee, guardian, executor, administrator, receiver, or attorney-in-fact. Importantly, the term 'party' does NOT include a license holder who represents a party.

• ✓An intermediary is a broker employed to negotiate a transaction between parties and may act as agent of the parties
• ✓A 'party' includes authorized representatives (trustee, guardian, executor, administrator, receiver, attorney-in-fact) but excludes a license holder who represents a party

When an offer to purchase Texas real estate is signed, a license holder must advise each buyer in writing that the buyer should either (1) have the abstract covering the real estate examined by an attorney chosen by the buyer, or (2) be provided with or obtain a title insurance policy. This is a mandatory written disclosure at the time an offer is signed.

• ✓When an offer to purchase is signed, the license holder must advise each buyer IN WRITING
• ✓The advice must state the buyer should have the abstract examined by an attorney OR obtain a title insurance policy

Notwithstanding other law, a license holder is NOT required to inquire about, disclose, or release information about whether a previous or current occupant had, has, or may have AIDS, an HIV-related illness, or HIV infection (as defined by the CDC), or whether a death occurred on the property by natural causes, suicide, or accident unrelated to the property's condition.

• ✓A license holder need not disclose whether an occupant had/has AIDS, HIV-related illness, or HIV infection
• ✓A license holder need not disclose a death on the property by natural causes, suicide, or accident unrelated to the property's condition

A broker who represents a party or lists real estate under an exclusive agreement is that party's agent. Such a broker may not instruct another broker to violate Section 1101.652(b)(22), must inform the party of material information (including receipt of an offer), and must at minimum answer the party's questions and present any offer to or from the party. A license holder with authority to bind a party under a power of attorney or property management agreement is also a party to the lease or sale.

• ✓A broker representing a party or listing under an exclusive agreement is that party's agent
• ✓The broker must inform the party of material information, including receipt of any offer
• ✓The broker must at minimum answer the party's questions and present any offer to or from the party
• ✓A license holder with power of attorney or property management authority to bind a party is also a party

A license holder who represents a party must disclose that representation—orally or in writing—at first contact with another party or with another license holder representing another party. Additionally, at the first substantive communication about specific real property, the license holder must provide written notice (at least 10-point font) describing: how a broker can represent a party (including as intermediary), the basic duties to a represented party, the basic obligations to a party the broker does not represent, and the name, license number, and contact info for the license holder and their supervisor/broker. TREC prescribes the notice text (the 'Information About Brokerage Services' form).

• ✓Representation must be disclosed orally or in writing at first contact with another party or their license holder
• ✓Written notice (min. 10-point font) must be given at first substantive communication about specific real property
• ✓The written notice must describe brokerage representation options, duties, obligations, and provide license holder contact info
• ✓TREC prescribes the text of the notice by rule

A broker may act as intermediary between parties if the broker obtains written consent from each party and the written consent states the source of any expected compensation. A written listing/buyer-representation agreement authorizing intermediary status is sufficient consent if it specifies in conspicuous bold or underlined print the conduct prohibited under Section 1101.651(d). An intermediary must act fairly and impartially. Appointing associated license holders under 1101.560 is considered a fair and impartial act.

• ✓A broker may act as intermediary only with written consent from each party stating the source of expected compensation
• ✓A written listing or buyer agreement can establish consent if it specifies prohibited conduct in conspicuous bold/underlined print
• ✓An intermediary must act fairly and impartially

A broker who complies with the written consent requirements of 1101.559 may appoint one associated license holder to communicate with and carry out instructions of one party, and another associated license holder for the other party. Appointments are allowed only if the parties' written consent authorizes them AND the broker provides written notice of the appointment to all parties. An appointed license holder may provide opinions and advice during negotiations to the party to whom they are appointed.

• ✓A broker may appoint separate associated license holders to each party only with prior written consent authorizing appointments
• ✓The broker must give written notice of the appointment to all parties
• ✓An appointed license holder may give opinions and advice to the party to whom they are appointed

The duties of a license holder acting as intermediary under this subchapter supersede duties under any other law, including common law. A broker MUST agree to act as an intermediary if the broker agrees to represent in one transaction both a buyer/tenant AND a seller/landlord.

• ✓Intermediary duties under this subchapter supersede all other law, including common law
• ✓A broker must act as intermediary if representing both a buyer/tenant and a seller/landlord in the same transaction

A license holder who performs any act of real estate brokerage for a prospective buyer of residential real property must enter into a written agreement with the buyer BEFORE showing any residential real property, or—if none will be shown—before presenting an offer to purchase on the buyer's behalf. 'Residential real property' means a single-family house; a duplex, triplex, or quadraplex; or a unit in a multiunit residential structure where individual unit title transfers under a condominium or cooperative system.

• ✓A written buyer agreement is required before showing any residential real property to a prospective buyer
• ✓If no property will be shown, the written agreement is required before presenting a purchase offer on the buyer's behalf
• ✓Residential real property includes single-family homes, 2-4 unit dwellings, and condo/co-op units

A resident broker must maintain a fixed office in Texas, with the office address designated on the broker's license. If a broker moves from the designated address, the broker must submit an application (with fee) for a license designating the new office location no later than the 10th day after moving. A nonresident licensed broker is NOT required to maintain a place of business in Texas.

• ✓A resident broker must maintain a fixed office in Texas with the address on the broker's license
• ✓A broker who moves must apply for a license with the new address within 10 days of moving
• ✓A nonresident licensed broker is not required to maintain a place of business in Texas

A license holder must provide TREC with current mailing address, business address, business telephone number, and business e-mail address, and if the holder is an associated broker, the name of the broker with whom they are associated. Any change in this information must be reported to the commission. An 'associated broker' is a broker who associates with and is paid through another broker under a relationship intended to be continuous, including as employee or ongoing independent contractor.

• ✓License holders must keep current mailing address, business address, phone, and e-mail on file with TREC
• ✓License holders must notify the commission of any change to the required information
• ✓An associated broker is a broker paid through and associated with another broker in a continuous relationship

A license holder need NOT provide the written representation notice (under Subsection (b-1)) if: (1) the proposed transaction is a residential lease for less than one year and a sale is not being considered; (2) the license holder meets with a party the holder knows is represented by another license holder; or (3) the communication occurs at property held open (open house) for any prospective buyer or tenant and concerns that property.

• ✓No written notice required for a residential lease under one year with no sale considered
• ✓No written notice required when meeting a party known to be represented by another license holder
• ✓No written notice required at an open house when communication concerns that open property

A broker may show property for sale or lease without representing a party if the broker: has not agreed to represent the party, is not otherwise acting as the party's agent, does not provide opinions or advice about the property or transactions generally, and performs no other act of real estate brokerage for the party. Before showing, the broker must disclose representation (per 1101.558(b)) if representing the owner, or provide the written notice (per 1101.558(b-1)) if not representing the owner. The broker may still confirm size, price, and terms of the property.

• ✓A broker may show property without representation only if not agreeing to represent, not acting as agent, and giving no opinions/advice
• ✓Before showing, the broker must make the appropriate representation disclosure or provide the written notice
• ✓The broker may confirm size, price, and terms even when not representing the party

TREC maintains a Real Estate Recovery Trust Account to reimburse aggrieved persons who suffer actual damages caused by wrongful acts of license holders, certificate holders, or their unlicensed employees/agents. The person who committed the act must have held the license or certificate at the time the act was committed. A claim against a business entity license holder is also treated as a claim against that entity's designated broker.

• ✓The account reimburses aggrieved persons for actual damages caused by license holders, certificate holders, or their unlicensed employees/agents (Sec. 1101.601)
• ✓The wrongdoer must have held the license/certificate at the time the act was committed
• ✓A claim against a business entity license holder is also a claim against its designated broker (Sec. 1101.6011)

An aggrieved person is entitled to reimbursement from the trust account only when a covered person engages in conduct requiring a license or certificate and that conduct is described in specific statutory grounds—Sec. 1101.652(a-1)(1) or (b) for license holders, or Sec. 1101.653(1)-(4) for certificate holders. This ties recovery to statutorily prohibited/dishonest conduct, not mere contract disputes.

• ✓Recovery requires conduct that itself requires a license/certificate under Chapter 1101
• ✓For license holders, the act must fall under Sec. 1101.652(a-1)(1) or (b); for certificate holders, under Sec. 1101.653(1)-(4)
• ✓Reimbursement is limited to 'actual damages' (not punitive damages, interest limits apply separately)

An action for a judgment that may result in payment from the trust account must be brought no later than the second anniversary of the date the cause of action accrues (a 2-year limitations period). If seeking an agreed judgment, the aggrieved person and the license/certificate holder must notify the commission in writing before entry and deliver copies of pleadings and the proposed judgment. TREC then has 30 days to notify the parties if it intends to relitigate the issues.

• ✓An action must be brought within 2 years (second anniversary) of the cause of action accruing (Sec. 1101.605(a))
• ✓For an agreed judgment, both parties must notify TREC in writing and deliver pleadings before entry (Sec. 1101.605(b))
• ✓TREC has until the 30th day after receiving documents to state its intent to relitigate

After obtaining a court judgment for a covered act, the aggrieved person must have final judgment entered, execution returned nulla bona, and a judgment lien perfected before filing a verified claim in the court that entered the judgment. After 20 days' written notice to the commission and judgment debtor, the person may apply for a payment order. A hearing must be scheduled within one year of filing the application or recovery is waived. Where multiple jointly-and-severally-liable defendants exist, the claimant must first obtain judgment and pursue collection against all defendants.

• ✓Claimant must exhaust remedies: final judgment, execution returned nulla bona, and perfected judgment lien before filing (Sec. 1101.606(a))
• ✓Must give 20 days' written notice to commission and judgment debtor before applying (Sec. 1101.606(b))
• ✓Recovery is waived if a hearing is not scheduled within one year of filing the application
• ✓With multiple jointly/severally liable defendants, claimant must pursue all defendants first (Sec. 1101.606(c-1))

At the payment hearing the aggrieved person must show: the judgment is based on facts allowing recovery under the subchapter; the person is NOT the judgment debtor's spouse (or spouse's representative), NOT a license/certificate holder seeking a commission in the same transaction, and NOT related to the debtor within the first degree of consanguinity; that the debtor lacks sufficient attachable assets; the amount realizable from the debtor's assets; and the balance remaining due after applying those assets.

• ✓The judgment must rest on facts allowing recovery under the subchapter (Sec. 1101.607(1))
• ✓Ineligible claimants include the debtor's spouse, a license holder seeking a commission in the transaction, and relatives within the first degree of consanguinity (Sec. 1101.607(2))
• ✓Claimant must show the debtor lacks sufficient attachable assets and prove the remaining balance due

Payments from the trust account—including attorney's fees, interest, and court costs—arising out of a single transaction may not exceed $125,000 total, regardless of the number of claimants. Payments based on judgments against a single license/certificate holder may not exceed $250,000 total until that holder reimburses the account for all amounts paid. If total claims exceed the limits, the court proportionately reduces each claim. A business entity and its designated broker count as a single license holder for these limits.

• ✓Maximum $125,000 per single transaction, including fees, interest, and costs, regardless of number of claimants (Sec. 1101.610(a))
• ✓Maximum $250,000 aggregate against a single license/certificate holder until the holder repays the account (Sec. 1101.610(b))
• ✓Excess claims are reduced proportionately by the court (Sec. 1101.610(c))
• ✓A business entity and its designated broker are treated as one license holder for the limits (Sec. 1101.610(e))

The account is funded primarily through administrative penalties collected under Subchapter O, which the commission must deposit to the account's credit. TREC by rule may also collect fees or assessments from applicants for original licenses/certificates or from license/certificate holders at renewal to keep sufficient funds available for anticipated claims. Investment interest is also credited to the account.

• ✓Administrative penalties collected under Subchapter O are deposited to the trust account (Sec. 1101.603(c))
• ✓TREC may by rule collect fees/assessments from applicants or at renewal to keep the account funded (Sec. 1101.603(f))
• ✓Interest earned on account investments is deposited back into the account (Sec. 1101.604(c))

Section 1101.651 restricts who may be paid or pay compensation. A licensed broker may not pay a commission to or otherwise compensate a person (directly or indirectly) for performing an act of a broker unless the person is a license holder, or is a real estate broker licensed in another state who conducts no negotiations in Texas. A sales agent may only accept compensation from the sponsoring broker (or the broker who sponsored them when the compensation was earned), and may only pay a commission through their current sponsoring broker.

• ✓A broker may only compensate a license holder or an out-of-state broker who conducts no Texas negotiations
• ✓A sales agent may accept compensation only from their sponsoring broker (current or the one sponsoring when earned)
• ✓A sales agent may pay a commission to a person only through their current sponsoring broker

A broker and any broker or sales agent appointed under Section 1101.560 acting as an intermediary under Subchapter L may not: disclose that the seller/landlord will accept less than the asking price (unless instructed in a separate writing), disclose that the buyer/tenant will pay more than the written offer (unless instructed in a separate writing), disclose confidential information or information a party instructed in writing not to disclose (with narrow exceptions), treat a party dishonestly, or violate the chapter. Exceptions to the confidentiality rule: separate written instruction by the party, disclosure required by the chapter or court order, or information materially relating to the condition of the property.

• ✓Cannot disclose seller/landlord will accept less than asking price unless separately instructed in writing
• ✓Cannot disclose buyer/tenant will pay more than the written offer unless separately instructed in writing
• ✓Cannot disclose confidential info except when separately instructed in writing, required by chapter/court order, or the info materially relates to property condition
• ✓May not treat any party to the transaction dishonestly

Section 1101.652(a) lists general grounds including: pleading guilty/nolo or being convicted of a felony or fraud-related offense (after appeal time elapses), procuring a license by fraud or material misstatement, failing to honor a payment to the commission within a reasonable time, failing to timely provide requested complaint information, failing to surrender documents to owners without just cause, failing to consider market conditions, failing to notify the commission within 30 days of a fraud/felony conviction or plea, and disregarding or violating the chapter or Chapter 1102. Subsection (a-1) adds: misrepresentation/dishonesty/fraud in transactions in the license holder's own name (or spouse/first-degree relative), refusing to produce records for inspection, and failing to use a required TREC contract form.

• ✓Felony or fraud conviction/plea is a ground for discipline once appeal time elapses
• ✓Must notify the commission within 30 days of a final conviction or plea to a felony or fraud offense
• ✓Failing to use a TREC-required contract form under 1101.155 is a ground for discipline
• ✓Misrepresentation/fraud in transactions in the holder's own name, spouse's, or first-degree relative's name is a ground for discipline

Section 1101.652(b) provides an extensive list of disciplinary grounds when engaged in real estate brokerage, including: acting negligently/incompetently; dishonesty, bad faith, or untrustworthiness; material misrepresentation of a significant/latent defect known to the holder; failing to disclose a known defect to a buyer; false promises; a continued and flagrant course of misrepresentation; failing to make clear whom the holder represents; accepting compensation from more than one party without full knowledge and consent of all; failing to timely account for/remit money belonging to another; commingling; improper commission splitting; and failing to specify a definite termination date in a contract.

• ✓Failing to disclose a known significant or latent structural defect to a potential buyer is a ground for discipline
• ✓Receiving compensation from more than one party requires full knowledge and consent of all parties
• ✓Commingling client money with the holder's own money is prohibited
• ✓A listing/agency contract (other than property management) must specify a definite termination date not subject to prior notice

Section 1101.652(b) continues with grounds including: undisclosed commissions/rebates/profits on principal expenditures; selling property by lottery or deceptive practice; acting as broker and undisclosed principal; guaranteeing future resale profits; placing signs or offering property without owner consent or on unauthorized terms; inducing contract breaches to substitute a new contract; interfering with exclusive agency; misleading advertising (including failing to include the broker's name); inaccurate statements of account; unwarranted threats of legal proceedings; unlicensed assistant violations; aiding circumvention of the chapter; failing to provide copies of signed documents; failing to advise buyers in writing to have the abstract examined or obtain title insurance; escrow deposit and disbursement violations; and discrimination.

• ✓Must include the broker's name in advertisements and cannot publish misleading advertising
• ✓Cannot place a sign or offer property for sale/lease without the owner's written consent or on unauthorized terms
• ✓Must advise a buyer in writing before closing to have the abstract examined by an attorney or obtain a title insurance policy
• ✓Cannot accept undisclosed commissions, rebates, or direct profit on expenditures made for a principal

Under Section 1101.652(b)(30)-(31), a license holder must deposit escrow/trust funds within a reasonable time either in trust with a Texas-authorized title company or in a custodial, trust, or escrow account maintained for that purpose in a Texas-authorized banking institution. It is a violation to disburse money from such an account before the completion or termination of the real estate transaction.

• ✓Escrow/trust funds must be deposited within a reasonable time with a title company or in a proper custodial/trust/escrow account at a Texas-authorized bank
• ✓Money in an escrow/trust account cannot be disbursed before the transaction is completed or terminated

Section 1101.652(b)(32) prohibits discriminating against an owner, potential buyer, landlord, or potential tenant on the basis of race, color, religion, sex, disability, familial status, national origin, or ancestry. This includes steering — directing a prospective buyer or tenant interested in equivalent properties to a different area based on those protected characteristics.

• ✓Discrimination based on race, color, religion, sex, disability, familial status, national origin, or ancestry is a ground for discipline
• ✓Steering (directing buyers/tenants to different areas based on protected class) is expressly prohibited

Section 1101.652(b)(34), effective January 1, 2026, makes it a disciplinary ground to fail to enter into a written agreement with a prospective buyer as required by Section 1101.563. This reflects the new mandate that buyer representation be documented in writing.

• ✓A license holder must enter into a written agreement with a prospective buyer as required by Section 1101.563
• ✓Failing to do so (effective Jan. 1, 2026) is a ground for suspension or revocation

Section 1101.654 requires the commission to suspend or revoke the license or certificate of a non-attorney holder who, for consideration, drafts an instrument (other than a TREC form under 1101.155) that transfers or affects an interest in real property, or advises a person on the validity/legal sufficiency of an instrument or title. However, completing a commission-adopted contract form (or an attorney-prepared/owner-required form) incidental to acting as a broker is NOT unauthorized practice of law.

• ✓A non-attorney holder may not draft instruments affecting real property interests or advise on legal sufficiency/title validity
• ✓Completing a TREC-adopted contract form incidental to brokerage is not unauthorized practice of law
• ✓Forms prepared/approved by a Texas attorney or prepared by/required by the property owner are also permitted

Section 1101.655 requires the commission to revoke a license, approval, or registration if a payment is made from the Real Estate Recovery Trust Account on the holder's behalf and the holder fails to repay the full amount (plus interest at the legal rate) before the 31st day after the commission provides notice. A person is not eligible for a new license until repayment in full is made. If payment was made on behalf of a business entity or its designated broker, the commission proceeds against both.

• ✓The commission must revoke if a recovery trust account payment is not fully repaid within 30 days (before the 31st day) after notice
• ✓No new license/certificate is issued until full repayment plus legal-rate interest is made
• ✓When paid for a business entity, action proceeds against both the entity and its designated broker

TREC may impose an administrative penalty on any person who violates Chapter 1101 or a rule/order adopted under it. The commission must combine administrative penalty and disciplinary proceedings into a single enforcement procedure, and may combine a penalty proceeding with another disciplinary action such as license suspension or revocation.

• ✓TREC may impose an administrative penalty for violating Chapter 1101 or a TREC rule/order
• ✓Administrative penalty proceedings may be combined with suspension or revocation proceedings
• ✓Enforcement is handled as a single combined procedure

An administrative penalty may not exceed $5,000 per violation, and each day a violation continues may be treated as a separate violation. The executive director sets the amount considering seriousness, history of prior violations, deterrence, correction efforts, and other factors justice requires. TREC must adopt a penalty schedule by rule and may suspend or revoke a license instead of or in addition to a penalty.

• ✓Maximum administrative penalty is $5,000 per violation
• ✓Each day a violation continues may be a separate violation
• ✓Factors: seriousness, prior violations, deterrence, correction efforts, and justice
• ✓TREC may suspend/revoke instead of or in addition to a penalty

A licensed broker is liable to TREC, the public, and the broker's clients for any conduct engaged in under this chapter by the broker or by a sales agent associated with or acting for the broker. This liability extends to the acts of sponsored sales agents and is not diminished by the misrepresentation liability provisions.

• ✓A broker is liable for conduct by the broker and by sales agents acting for the broker
• ✓Broker liability runs to TREC, the public, and the broker's clients
• ✓Misrepresentation liability rules do not diminish a broker's responsibility for sales agents

A party is not liable for a misrepresentation or concealment of a material fact made by a license holder unless the party knew of the falsity and failed to disclose it. Likewise, a license holder is not liable for a party's misrepresentation/concealment unless the license holder knew of the falsity and failed to disclose it. This section prevails over any other law, including common law.

• ✓A party is not liable for a license holder's misrepresentation unless the party knew and failed to disclose
• ✓A license holder is not liable for a party's misrepresentation unless the license holder knew and failed to disclose
• ✓This section prevails over other law, including common law

A person may not sue to collect compensation for acting as a broker or sales agent in Texas unless they allege and prove they were a license holder when the act began (or an attorney licensed in any state). An action to recover a real estate commission requires a written, signed agreement or memorandum. A license holder who fails to advise a buyer under Section 1101.555 may not recover the commission.

• ✓A person must have been a license holder (or a licensed attorney) to sue for commission
• ✓A commission-recovery action requires a written agreement signed by the party charged
• ✓Failing to advise a buyer per Sec. 1101.555 forfeits the commission

Chapter 1102 defines three levels of inspector licenses in a hierarchy. An apprentice inspector trains under direct supervision of a professional or real estate inspector. A real estate inspector works under indirect supervision of a professional inspector. A professional inspector represents to the public that they are trained and qualified to perform real estate inspections and accepts employment for buyers or sellers. A 'real estate inspection' is a written or oral opinion as to the condition of improvements to real property, including structural items, electrical items, mechanical systems, plumbing systems, or equipment.

• ✓Three license types: apprentice inspector, real estate inspector, professional inspector
• ✓Apprentice works under direct supervision; real estate inspector works under indirect supervision of a professional inspector
• ✓A real estate inspection is a written or oral opinion on the condition of improvements to real property
• ✓'Inspector' means any person who holds a license under Chapter 1102

A person may not act as an apprentice inspector unless they hold an apprentice license AND are under direct supervision of a real estate or professional inspector. A person may not act as a real estate inspector unless they hold that license AND are under indirect supervision of a professional inspector. A person may not act as a professional inspector unless they hold a professional inspector license.

• ✓Apprentice inspectors must be under direct supervision
• ✓Real estate inspectors must be under indirect supervision of a professional inspector
• ✓Professional inspectors need no supervision to practice

An inspector may not perform an inspection negligently or incompetently. An inspector may not accept an assignment where the fee is contingent on reporting a predetermined condition or specific findings the inspector knows to be untrue, and may not act dishonestly, fraudulently, or with deceit or misrepresentation. An inspector may not act in the dual capacity of inspector and undisclosed principal or broker/salesperson, and may not perform or agree to perform repairs or maintenance in connection with an inspection under an earnest money contract, lease, or exchange.

• ✓Inspections may not be performed negligently or incompetently
• ✓Fees may not be contingent on reporting a predetermined condition or false findings
• ✓An inspector may not act as both inspector and undisclosed principal or broker/salesperson
• ✓An inspector may not perform repairs/maintenance in connection with an inspection under a contract, lease, or exchange

• A. The buyer will pay zero property taxes to the city for the duration of the TIRZ because all city tax revenue is diverted to the zone fund.
• B. The buyer pays full property taxes at the normal rate; the incremental tax revenue above the base-year value is allocated to the TIRZ fund rather than the general taxing unit fund, but the buyer's total tax liability is unchanged. ✓ Answer
• C. TIRZ designation entitles the buyer to a permanent 10% reduction in the assessed value of the property.
• D. The buyer is exempt from county taxes but must pay double the school district rate to compensate for city revenue diverted to the TIRZ.

• A. The deferred taxes continue to accrue interest at 5 percent per year, no delinquency penalties are added, and the taxes remain a lien on the homestead until she no longer owns and occupies it. ✓ Answer
• B. The deferred taxes are permanently cancelled, and the taxing units may not collect them from the owner or her estate at any time.
• C. The deferral stops collection only of school district taxes; county and city taxes must still be paid on time to avoid foreclosure.
• D. The deferred taxes accrue the standard delinquent-tax penalty of up to 12 percent plus 1 percent interest per month, the same as any other delinquent account.

• A. 175 days ✓ Answer
• B. 90 days
• C. 365 days
• D. 30 days

• A. It has no practical effect because Texas property taxes are always discharged at closing.
• B. It provides constructive notice that the property is subject to pending tax foreclosure litigation, and the buyer takes title subject to that lawsuit. ✓ Answer
• C. It merely indicates the seller owes back taxes, which the title company will pay from escrow with no risk to the buyer.
• D. It triggers an automatic TREC disclosure requirement that pauses the transaction for 10 days.

• A. Three years. ✓ Answer
• B. Five years.
• C. Seven years.
• D. Ten years.

• A. The Texas Comptroller of Public Accounts, under the Texas franchise tax rules applicable to individuals.
• B. The Texas Real Estate Commission, which reports gains to the state revenue department.
• C. The federal government through the Internal Revenue Service, because Texas imposes no state income or capital gains tax. ✓ Answer
• D. The county appraisal district, which adjusts the property's tax basis and collects a gain assessment.