TREC Ethics and Professional Conduct Flashcards

What is 'steering' as prohibited by Texas fair housing laws?

Answer: Directing buyers toward or away from neighborhoods based on protected class characteristics

Steering is the illegal practice of guiding buyers toward or away from specific neighborhoods based on race, religion, national origin, or other protected class characteristics.

A licensee who represents both the buyer and seller in the same transaction without proper disclosure is guilty of:

Answer: Undisclosed dual agency, which is illegal in Texas

Representing both parties without written disclosure and consent constitutes undisclosed dual agency, which violates TREC rules and the license act.

Under TREC rules, how long must a broker retain transaction records?

Answer: 3 years

Texas brokers are required to retain all transaction records, including contracts and closing documents, for a minimum of four years — commonly tested as 'at least 3 years' for specific document types.

If a client instructs a licensee to discriminate in a real estate transaction, the licensee should:

Answer: Refuse to comply and may terminate the relationship

A licensee must refuse to follow discriminatory instructions regardless of who gives them, as compliance would violate federal and state fair housing laws.

What is 'blockbusting' in real estate?

Answer: Inducing homeowners to sell by suggesting that protected-class persons are moving into the area

Blockbusting is the illegal practice of inducing panic selling by implying that the entry of minority groups into a neighborhood will cause property values to decline.

A Texas licensee's failure to disclose a known latent defect to a buyer may result in:

Answer: Disciplinary action by TREC and potential civil liability

Failing to disclose known material defects can result in TREC disciplinary action, including suspension or revocation, as well as civil lawsuits.