General Practice Flashcards

Which of the following statements is true with regard to the "Seller's Disclosure Of Property Condition" approved and published by the Texas Real Estate Commission?

Answer: The form is approved by the Texas Real Estate Commission for voluntary use to make it easier for sellers to make the disclosures called for by section 5.008 of the Texas Property Code.

The "Seller's Disclosure of Property Condition" form is approved by the Texas Real Estate Commission (TREC) as a standardized tool. Its use is voluntary, but it helps sellers comply with their legal obligation under Section 5.008 of the Texas Property Code to disclose known material defects about the property. This form simplifies the disclosure process for sellers and provides clarity for buyers.

No Federal Fair Housing laws are violated if a landlord refuses to rent to

Answer: Students.

The Federal Fair Housing Act prohibits discrimination based on specific protected classes: race, color, religion, sex, national origin, familial status, and disability. "Students" are not included as a protected class under this federal law. Therefore, a landlord can legally refuse to rent to students without violating federal fair housing regulations, although some state or local ordinances might offer additional protections.

Which of the following is the Texas Real Estate Commission NOT empowered to do?

Answer: Make a payment from the Recovery Fund to pay the legal fees of a salesperson that was found to be innocent.

The Texas Real Estate Recovery Trust Account (Recovery Fund) is designed to reimburse members of the public who suffer actual damages due to the unlawful acts of a licensee. TREC is empowered to make payments to aggrieved consumers from this fund. However, the fund's purpose is consumer protection, and TREC is explicitly not authorized to use it to pay the legal fees of a licensee, even if they are found innocent.

Which one of the following is authorized by statute to promulgate forms for mandatory use by real estate brokers and sales persons?

Answer: Texas Real Estate Commission.

The Texas Real Estate Commission (TREC) is the only entity authorized by statute to promulgate (create and mandate the use of) contract forms for real estate licensees in Texas. This authority ensures standardization, clarity, and legal compliance in real estate transactions. While the Broker-Lawyer Committee drafts these forms, TREC officially promulgates them for mandatory use.

Which of the following is NOT registered, licensed, certified or regulated by the Texas Real Estate Commission?

Answer: Appraisers.

While the Texas Real Estate Commission (TREC) regulates many real estate-related professions, including brokers, salespersons, and residential rental locators, it does not regulate appraisers. Real estate appraisers in Texas are regulated by a separate state agency, the Texas Appraiser Licensing and Certification Board (TALCB). This distinction ensures specialized oversight for each profession.

The Texas Real Estate Commission is not empowered to

Answer: Increase license fees when more money is needed to run the agency.

The Texas Real Estate Commission (TREC) has broad powers to regulate the real estate industry, including adopting rules and establishing standards of conduct. However, TREC is not empowered to unilaterally increase license fees simply because more money is needed to run the agency. License fees are typically set by statute and require legislative action to change, limiting TREC's financial autonomy in this regard.

The obligation of protecting any deposits entrusted to an agent is an example of the fiduciary duty of

Answer: Accounting

The fiduciary duty of accounting requires an agent to properly handle and account for all money, property, and documents entrusted to them by their client. Protecting deposits, such as earnest money, and ensuring they are held in the correct accounts and disbursed appropriately, is a direct example of fulfilling this crucial duty. This prevents commingling and safeguards client funds.

A prospect for the lease of a commercial property feels the need for adversarial representation and hires a broker to negotiate the lease on his behalf. The contract entered into between the prospect and the broker is called

Answer: A buyer broker agreement.

A buyer broker agreement is a contract that establishes an agency relationship where a broker represents the interests of a prospective buyer or, in this case, a lessee. Even for a commercial property lease, the agreement formalizes the broker's role in providing adversarial representation and negotiating on behalf of their client, similar to how a buyer's agent represents a home purchaser.

Parties can be compelled to take dispute to mediation prior to being able to initiate litigation by

Answer: A judge.

While parties can voluntarily agree to mediation, only a judge has the legal authority to compel parties to participate in mediation prior to initiating or continuing litigation. This judicial power is often exercised to encourage dispute resolution outside of court, aiming to save time and resources for all involved parties. Neither the Texas Real Estate Commission nor a broker possesses this authority.

If a seller insist that you not disclose a "latent defect" in the property, what should you do

Answer: Withdraw or do not take the listing

Real estate licensees have a legal and ethical obligation to disclose known material facts and latent defects about a property to prospective buyers. If a seller insists on concealing a latent defect, the agent cannot ethically or legally comply with such a request. The only appropriate action is to withdraw from the listing or refuse to take it, as participating would involve misrepresentation and potential legal liability.

A father conveys ownership of his residence to his son but reserves for himself a life estate in the residence. The interest the son owns during the father's lifetime is

Answer: A remainder.

When a father conveys ownership to his son but reserves a life estate for himself, the father holds a life tenancy, meaning he can live on or use the property for his lifetime. The son, in this scenario, holds a "remainder" interest. This means the son will receive full ownership (fee simple absolute) of the property upon the termination of the father's life estate, typically upon the father's death.

A licensee should make no changes to the promulgated contracts except a change which is:

Answer: Desired by the principals.

Licensees are generally prohibited from making unauthorized changes to promulgated forms. The only permissible changes are those specifically desired by the principals (the buyer and seller) to reflect their agreement. Any modifications must be made in a clear and conspicuous manner, often by adding an addendum or striking through and initialing changes, ensuring the principals' intent is accurately documented.

A Real Estate salesperson may receive compensation from

Answer: Only the employing broker.

In Texas, a real estate salesperson can only receive compensation for real estate activities from their employing broker. This rule is a fundamental aspect of the agency relationship and ensures that the broker maintains supervision and responsibility for the salesperson's actions. Receiving compensation directly from a client or another party is a violation of license law.

What is the continuing education requirement for brokers to renew their license

Answer: 15 hrs every 2 years

For many years, the Texas Real Estate Commission (TREC) required brokers to complete 15 hours of continuing education every two years to renew their licenses. This requirement ensured that licensees stayed current with industry standards and legal changes. While the specific number of hours has since been updated to 18 hours, this option reflects a historical continuing education standard for Texas real estate brokers.

A married couple is selling its homestead, owned as community property. For the deed conveying the property to be valid, who must sign it?

Answer: Both husband and wife.

In Texas, a homestead, even if owned as community property, requires the signatures of both spouses for a valid conveyance. This protection is enshrined in Texas homestead laws, which aim to prevent one spouse from unilaterally selling or encumbering the family home. Both husband and wife must sign the deed to ensure the property's transfer is legally binding and to protect the family's interest.

When does the seller agree or disagree to allow sub-agency

Answer: Listing agreement

The question of whether to allow sub-agency is typically addressed and agreed upon in the listing agreement between the seller and their listing broker. The listing agreement outlines the terms of the agency relationship, including how the property will be marketed and whether the seller authorizes other brokers (subagents) to represent them in the sale. This ensures the seller's consent to the agency structure.

Your seller says that he doesn't want to accept any offers from buyers who are represented by a buyer's agent. What should you do when a buyer's agent brings an offer on the listing on behalf of his/her client?

Answer: Present it to the seller.

A listing agent has a fiduciary duty to their seller client to present all offers, regardless of the source or the seller's stated preferences, unless the seller has explicitly instructed otherwise in writing. Even if the seller expresses a general dislike for buyer's agents, a verbal preference does not override the agent's obligation to present a legitimate offer for consideration. Failure to present an offer can lead to disciplinary action.

The Real Estate Center at Texas A&M University is funded by

Answer: $20 from brokers and $17.50 from sales persons, each time a license is issued or renewed.

The Real Estate Center at Texas A&M University, which conducts valuable research and provides education for the real estate industry, is funded by specific fees collected during the licensing process. Each time a real estate license is issued or renewed, a portion of the fee—$20 from brokers and $17.50 from salespersons—is allocated to support the Center's operations, ensuring its continued contribution to the industry.

Each active real estate broker licensed by the Texas Real Estate Commission shall display in a prominent location in their place of business a

Answer: Consumer Information Form 1-1

The Texas Real Estate Commission (TREC) requires all active real estate brokers to prominently display the Consumer Information Form 1-1 in their place of business. This form provides consumers with important information about filing complaints against licensees and the TREC Recovery Trust Account, ensuring transparency and consumer protection by making this information easily accessible to the public.

A novation is BEST defined as:

Answer: Substitution of a new contract for an existing agreement with the intent of extinguishing the old contract.

Novation is a legal term referring to the substitution of a new contract for an existing one, with the express intent of extinguishing the obligations of the old contract. This typically involves replacing one of the original parties with a new party, or substituting a new obligation for an old one, with the consent of all parties involved. It effectively releases the original party from their prior obligations.