QUICK ANSWER
For a Texas claim to recover a commission for the sale or purchase of real estate, Section 1101.806(c) requires the promise, agreement, or memorandum to be in writing and signed by the party being charged or that party's authorized signer. For compensation based on a Texas broker or sales-agent act, subsection (b) separately requires the claimant to prove the license status specified by the statute when the act began; it also names a licensed-attorney alternative. A sales agent may accept transaction compensation only from the current or former sponsoring broker allowed by Section 1101.651(b), and Rule 535.3 separately requires the applicable broker's written consent.
EXAM PREP ONLY
This guide explains how this topic appears on the Texas real estate sales agent exam. It is not legal, tax, lending, brokerage, or licensing advice. Verify current rules with TREC, the Texas Real Estate License Act (Occupations Code Chapter 1101), and the Pearson VUE candidate handbook before acting on a real transaction or application.
Pearson's current Texas sales agent outline lists Enforcing Compensation Agreements as row D under Agency and Brokerage. The same rule pattern also connects to Statute of Frauds, splitting fees, rebates, broker-sales agent relationships, brokerage agreements, and commission math.
The exam usually does not ask, "Can the broker sue?" in a vacuum. It gives a fact pattern:
- A seller orally promises to pay a broker.
- A buyer signs a representation agreement but later buys through another broker.
- A sales agent wants to collect directly from a seller.
- A broker was not licensed when the work started.
- A listing expired before a buyer closed.
- A commission amount is missing or disputed.
- A broker says they were the procuring cause but has no signed agreement.
Your job is to decide whether the compensation claim is enforceable, who may enforce it, and which missing fact changes the answer.
Enforcing Compensation Agreements in Texas: Quick Facts
| Exam issue | Short answer |
|---|---|
| Oral sale-or-purchase commission promise | Cannot support the statutory collection action unless a signed writing or memorandum satisfies Section 1101.806(c). |
| Signed listing agreement | Usually the strongest compensation fact because it shows written authority and compensation terms. |
| Signed buyer representation agreement | Can support a broker's compensation claim against the buyer if the agreement creates that obligation. |
| Claimant's status | For a Texas brokerage-act compensation action, Section 1101.806(b) requires the claimant to prove qualifying license status when the act began or fit its licensed-attorney alternative. |
| Unlicensed person | Cannot enforce compensation for acts requiring a real estate license. |
| Sales agent collecting directly from client | Not permitted for transaction compensation; Section 1101.651(b) limits the payment source to the current or qualifying former sponsoring broker. |
| Expired agreement | Look for protection period, extension, closing date, and whether the buyer or seller was covered. |
| Procuring cause | Important in some compensation disputes, but not a substitute for Section 1101.806(c)'s signed writing in a sale-or-purchase commission claim. |
| Fee splitting | Watch for licensed status, broker consent, disclosure, and whether the recipient performed acts requiring a license. |
| Rebate | Texas allows certain rebates when properly disclosed, but the exam may test disclosure and prohibited conduct. |
High-Yield Definition
What does enforcing compensation agreements mean in Texas real estate?
Enforcing a compensation agreement means using an agreement to collect a commission, fee, or other valuable consideration for real estate brokerage services. On the Texas exam, first identify the kind of claim. The signed-writing rule in Section 1101.806(c) expressly addresses a commission for the sale or purchase of real estate; do not automatically extend that subsection to every management, leasing, referral, or broker-to-broker payment. Then check subsection (b), the agreement itself, other contract rules, and the broker-sales agent payment restrictions.
The key phrase is "action to collect compensation." If the person cannot legally maintain that action, the compensation claim fails even if the person worked hard or helped cause the transaction.
The One-Sentence Exam Rule
For the usual exam sale-or-purchase commission claim, look for a signed writing, the status required by Section 1101.806(b) when the act began, and agreement terms showing that the commission became payable.
That sentence is not legal advice. It is the exam pattern.
Why This Topic Matters on the Texas Real Estate Exam
Pearson VUE's current Texas sales agent outline specifically lists "Enforcing Compensation Agreements" under Agency and Brokerage. It also connects to several other tested areas:
| Pearson outline area | Why it connects |
|---|---|
| Contracts | Statute of Frauds, valid vs unenforceable contracts, breach, and performance. |
| Real estate practice | Brokerage agreements, services, fees, compensation, and termination. |
| Standards of conduct | Splitting fees, rebates, trust accounts, and discipline. |
| Agency and brokerage | Broker-sales agent relationships and broker responsibility. |
| Math | Commission and compensation calculations. |
So even if you are preparing for the sales agent exam, do not skip this. A question about compensation may be dressed as a contract question, a licensing question, a broker responsibility question, or a math question.
How Exam Questions Usually Frame It
| If the question says... | The exam is probably testing... |
|---|---|
| "The seller orally promised..." | Statute of Frauds and signed writing. |
| "The broker was unlicensed when..." | TRELA license requirement for an action to collect compensation. |
| "The sales agent asked the seller to pay..." | Sales agent compensation through sponsoring broker. |
| "The buyer bought through another broker..." | Buyer representation agreement, procuring cause, and agreement terms. |
| "The listing expired before closing..." | Termination, protection period, and whether the agreement still applies. |
| "The referral came from an unlicensed person..." | Referral compensation and activities requiring a license. |
| "The broker rebated part of the commission..." | Disclosure and rebate rules. |
| "The agreement did not state the commission..." | Essential compensation terms and enforceability. |
The Four-Part Exam Test for a Sale or Purchase Commission
A typical Texas claim for a commission on the sale or purchase of real estate turns on four checks: the signed writing required by Section 1101.806(c), the claimant status required by subsection (b) when the brokerage act began, compliance with subsection (d)'s buyer title-advice condition, and agreement terms that actually made compensation payable. Other compensation claims can require a different statutory and contract analysis.
Use this four-part version when a question asks whether a commission for a real estate sale or purchase can be collected.
1. Is there a signed written agreement?
Under Texas Occupations Code Section 1101.806(c), a person may not maintain an action in Texas to recover a commission for the sale or purchase of real estate unless the promise, agreement, or memorandum is in writing and signed by the party against whom the action is brought or that party's authorized signer. Texas Business and Commerce Code Section 26.01 separately applies a writing rule to the underlying agreement for the sale of real estate.
For exam purposes, an oral promise to pay a real estate commission is a red flag.
2. Did the claimant have the status subsection (b) requires?
Section 1101.806(b) separately says a claimant cannot maintain a Texas action to collect compensation for an act as a broker or sales agent unless the claimant alleges and proves that, when the act began, the claimant was a license holder or an attorney licensed in any state. The attorney language is a statutory alternative in this collection provision; it is not a shortcut allowing a person to ignore other licensing, ethics, contract, or fee rules.
So the exam may ask you to reject a compensation claim even if the person found the buyer, negotiated, or "earned" the money in ordinary language.
3. Was the buyer given the required title advice?
Section 1101.806(d) says a license holder who fails to advise a buyer as Section 1101.555 requires may not receive or recover an agreed sale commission. Section 1101.555 requires written advice, when an offer to purchase Texas real estate is signed, that the buyer should either have the abstract examined by an attorney the buyer chooses or be provided with or obtain a title insurance policy.
4. Did the agreement terms actually make compensation payable?
Even with a signed writing and a licensed broker, the facts still matter. Did the agreement cover this property, this client, this transaction, this time period, and this fee? Did the listing expire? Was there a protection period? Was the buyer excluded? Did the broker satisfy the conditions for payment?
Decision Table
| Writing | Claimant status | Other statutory/agreement facts | Likely exam result |
|---|---|---|---|
| Signed agreement | Qualifying status | Terms and buyer advice support payment | Compensation claim may be enforceable, subject to other defenses and law. |
| No signed writing | Qualifying status | Oral sale-or-purchase commission promise only | Statutory collection action fails under Section 1101.806(c). |
| Signed agreement | No qualifying status when the act began | Terms support payment | Claim likely fails under Section 1101.806(b). |
| Signed agreement | Qualifying status | License holder failed to give Section 1101.555 buyer advice | Sale commission is barred by Section 1101.806(d). |
| Signed agreement | Qualifying status | Transaction outside agreement terms | Claim may fail because compensation was not earned under the agreement. |
| Signed agreement with broker | Sales agent asks client for direct payment | Sales agent acted through broker | Sales agent should look to broker compensation rules, not direct client collection. |
Written Agreement and Statute of Frauds
In Texas, Section 1101.806(c) applies its signed-writing rule to a commission for the sale or purchase of real estate. The general statute of frauds, Section 26.01, separately requires the underlying real estate sale agreement to be written and signed by the person to be charged. An oral sale-or-purchase commission promise cannot support the statutory collection action.
A written, signed commission agreement is one of the most important facts in compensation questions.
Texas Occupations Code Section 1101.806(c) says a person may not maintain an action to recover a commission for a real estate sale or purchase unless the promise, agreement, or memorandum is in writing and signed by the party being charged or an authorized signer. Texas courts applying this requirement have generally looked for a writing that promises a definite commission (or refers to a written commission schedule), names the broker to be paid, and identifies the land with reasonable certainty. Texas Business and Commerce Code Section 26.01 separately applies to the underlying agreement for the sale of real estate.
What "Signed by the Party to Be Charged" Means
The party to be charged is the person against whom enforcement is sought.
If the broker is trying to enforce a commission against the seller, the exam looks for a writing signed by the seller or authorized agent. If the broker is trying to enforce a buyer representation fee against the buyer, the exam looks for a writing signed by the buyer or authorized agent.
| Compensation claim against... | Look for signature by... |
|---|---|
| Seller | Seller or authorized agent |
| Buyer | Buyer or authorized agent |
| Broker | Broker or authorized representative |
What the Writing Should Do
The writing should identify the parties, connect to the property or services, and include compensation terms clearly enough to show what was promised.
The exam will not usually require a courtroom-level analysis. It will likely test an obvious missing piece:
| Missing fact | Why it matters |
|---|---|
| No writing | Statute of Frauds problem. |
| No signature | Statute of Frauds problem. |
| No compensation term | Hard to show what was promised. |
| Wrong property | Agreement may not cover the transaction. |
| Expired term | Agreement may have ended before compensation was earned. |
| Signed by the wrong person | May not bind the party being charged. |
Oral Promise Trap
Oral promises create tempting exam answers because they sound fair.
Example: "The seller promised the broker at the kitchen table, 'If you find me a buyer, I will pay you 3 percent.' The broker found the buyer. The seller refused to pay."
The fact that the broker found the buyer is not enough. For exam purposes, the missing signed writing is the problem.
License Status and TRELA Section 1101.806
Under Texas Occupations Code Section 1101.806(b), a person cannot maintain a Texas action to collect compensation for an act as a broker or sales agent unless the person alleges and proves that the person was a license holder when the act began or was an attorney licensed in any state. For the ordinary broker exam fact pattern, getting a real estate license after the brokerage act began does not satisfy the first alternative.
Texas Occupations Code Section 1101.806 is the compensation action rule tied to the Real Estate License Act.
For exam purposes, the plain-English version is:
| Requirement | Exam meaning |
|---|---|
| Person seeks compensation for a brokerage act | The person is trying to collect for conduct that required a license. |
| Claimant must fit subsection (b) when the act began | The usual answer is a license holder; the text also names an attorney licensed in any state. |
| Claimant must allege and prove that status | The collection action requires more than merely asserting that compensation was earned. |
Why "When the Act Began" Matters
The exam may say a person found a buyer before getting licensed, then became licensed before closing. That is still a problem if the person is trying to collect compensation for brokerage activity that began while unlicensed.
| Timeline | Likely exam result |
|---|---|
| Licensed broker signs listing, markets property, closes sale | License requirement satisfied if other facts support payment. |
| Unlicensed person finds buyer, later gets licensed, then asks for commission | Compensation claim likely fails for the unlicensed brokerage activity. |
| Active sales agent acts through sponsoring broker | Compensation flows through broker rules. |
| Inactive license holder procures buyer | Inactive status creates a license problem. |
| Attorney licensed in any state is the claimant | Section 1101.806(b) names this alternative, but the agreement and every other applicable legal or ethics rule still matter. |
Unlicensed Activity and Compensation
The exam often pairs enforceability with unlicensed activity. If a person needed a real estate license for the act and did not have one, that person usually cannot enforce payment for that act.
This is true even if:
- The buyer liked the person.
- The seller promised to pay.
- The deal closed.
- The person later became licensed.
- The person claims the fee is a "consulting fee" or "finder fee."
Labels do not control. The act controls.
Broker vs Sales Agent Compensation Rights
A Texas sales agent may not accept transaction compensation from the client or title company. Texas Occupations Code Section 1101.651(b) limits the source to the broker currently sponsoring the agent or the broker who sponsored the agent when the compensation was earned. TREC Rule 535.3 adds a separate written-consent requirement for receiving or paying a commission or other valuable consideration.
This is where many candidates pick the wrong answer.
A Texas sales agent acts for a sponsoring broker. The client relationship and brokerage agreement usually belong to the broker, not the individual sales agent.
Keep the two controls separate. Section 1101.651(b) controls who may pay the sales agent: the current sponsoring broker or the broker who sponsored the agent when the agent earned the compensation. Rule 535.3 controls consent: the applicable broker must consent in writing to receipt, and the current sponsoring broker must consent in writing before the sales agent pays a commission or other valuable consideration. Written broker consent does not turn a client into a permitted payment source under the statute.
Broker vs Sales Agent Table
| Person | Compensation source on the exam |
|---|---|
| Broker | Written agreement with client or other broker, subject to law and agreement terms. |
| Sponsored sales agent | Current sponsoring broker, or the broker who sponsored the agent when the compensation was earned, subject to the broker agreement and written-consent rule. |
| Former sponsored sales agent | May be paid by the broker who sponsored the agent when the compensation was earned; this does not create a direct client-payment path. |
| Unlicensed assistant | Cannot receive compensation for acts requiring a license. |
| Referring unlicensed person | Referral compensation is restricted and can trigger license requirements. |
Sales Agent Direct-Payment Trap
If a seller says, "I will just write the sales agent a check," the exam should make you pause.
The question is not whether the sales agent worked hard. Ask both who is paying under Section 1101.651(b) and whether the written consent required by Rule 535.3 exists.
| Fact pattern | Better exam answer |
|---|---|
| Seller pays sales agent directly, even with broker consent | Not proper; the seller is not a permitted compensation source under Section 1101.651(b). |
| Title company pays sales agent directly, even with broker consent | Not proper; the title company is not the current or qualifying former sponsoring broker. |
| Broker pays sponsored sales agent according to office agreement | Usually proper if otherwise compliant. |
| Former broker pays agent for compensation earned while sponsored there | Possible under TREC Rule 535.3 if tied to when the agent became entitled to compensation. |
Listing, Buyer Rep, and Property Management Agreements
Most enforceable compensation claims start with a brokerage agreement.
Listing Agreements
A listing agreement is a contract between a broker and a seller or landlord. It authorizes the broker to provide services and sets compensation terms.
| Listing type | Compensation issue |
|---|---|
| Exclusive right to sell | Broker may earn compensation if the property sells during the listing term, even if the seller finds the buyer, depending on the agreement terms. |
| Exclusive agency | Broker is exclusive agent, but seller may retain a right to sell without paying commission if seller finds buyer, depending on the agreement. |
| Open listing | Broker usually must be the procuring cause to earn compensation. |
| Net listing | Exam often treats this as a conflict of interest risk because broker compensation is tied to amount above the seller's net. |
Buyer Representation Agreements
A buyer representation agreement can create the buyer's obligation to compensate the broker if the buyer buys property covered by the agreement.
Exam questions may ask:
- Did the buyer sign the agreement?
- Did the agreement cover the property type and location?
- Did the buyer buy during the representation period?
- Did a protection period apply?
- Was compensation payable by the buyer, seller, listing broker, or another source?
Do not assume the buyer owes compensation just because the broker helped. Read the agreement facts.
Property Management Agreements
Property management agreements can include leasing fees, management fees, renewal fees, maintenance coordination fees, and other compensation terms. A written agreement is essential evidence of authority and fee terms, but Section 1101.806(c)'s specific sale-or-purchase commission language should not be cited as though it automatically governs every management or lease fee.
The enforceability questions are similar:
| Question | Why it matters |
|---|---|
| Is there a written agreement? | Shows authorization and fee terms. |
| Is the broker licensed? | Property management services can require a license. |
| Does the agreement cover this property? | The fee must connect to the covered property. |
| Was the fee earned under the agreement? | Management fees and leasing fees may be triggered by different events. |
| Were trust money rules followed? | Compensation may overlap with rent and trust account handling. |
Procuring Cause vs Enforceable Agreement
Procuring cause means the broker's efforts produced the buyer or transaction, and it can matter in open-listing or broker-to-broker disputes. For a sale-or-purchase commission claim against a client, it does not replace Section 1101.806's signed-writing and claimant-status requirements or the agreement terms.
Procuring cause means the broker's efforts were the cause that produced the buyer or transaction. It can matter in open listing or broker-to-broker disputes.
But on Texas exam questions, do not let "procuring cause" distract you from writing, signature, license status, and agreement terms.
When Procuring Cause Helps
| Scenario | Why procuring cause may matter |
|---|---|
| Open listing with multiple brokers | The broker who produced the ready, willing, and able buyer may be the one entitled to compensation. |
| Broker-to-broker dispute | The question may ask who earned the offered compensation under the facts. |
| Protection period dispute | The broker may need to show the buyer was produced during the listing relationship. |
When Procuring Cause Does Not Fix the Problem
| Problem | Why procuring cause is not enough |
|---|---|
| No signed writing for a sale-or-purchase commission | Section 1101.806(c) problem remains. |
| Unlicensed person | TRELA compensation action problem remains. |
| Sales agent tries to collect from client | Broker compensation structure remains. |
| Agreement expired with no protection | Terms may not support payment. |
| Fee recipient is unlicensed | Fee splitting or referral rules may block payment. |
Good Exam Shortcut
Procuring cause is a fact about who caused the sale. Enforceability is a legal question about whether the claimant can collect.
Both can matter, but enforceability comes first.
Fee Splitting, Rebates, and Referral Compensation
Compensation enforcement questions often bump into standards of conduct.
Splitting Fees
The sales agent outline lists splitting fees under standards of conduct. The broad pattern is:
- A sales agent may accept transaction compensation only from the current or qualifying former sponsoring broker.
- A license holder generally should not pay compensation to a person for acts requiring a license unless the recipient is properly licensed or an exception applies.
- Rule 535.3 separately requires the applicable broker's written consent when a sales agent pays or receives commission or other valuable consideration.
Rebates
Texas permits certain rebates, but they must be handled properly. Exam questions may test whether the rebate was disclosed, whether it is prohibited by another law or lender rule, or whether it is being used in a misleading way.
For exam purposes, do not assume "rebate" automatically means illegal. Ask whether it is disclosed and otherwise lawful.
Referral Compensation
TREC Rule 535.20 says referring a prospective buyer, seller, landlord, or tenant to another person in connection with a proposed real estate transaction is an act requiring a license if done with expectation of valuable consideration.
That is why "finder's fee" language can be a trap. If the person expects money or value for producing a real estate prospect, the referral is licensed activity. Rule 535.20 does not treat merchandise worth $50 or less as valuable consideration for this purpose; TREC explains that a merchant gift card redeemable only for merchandise may fit, while cash, a general-purpose cash-equivalent card, rent credit, discounts, and merchandise over $50 do not.
| Payment label | Exam question |
|---|---|
| Finder fee | Did the person perform a referral requiring a license? |
| Marketing fee | Was it really compensation for procuring a prospect? |
| Referral bonus | Was valuable consideration expected? |
| Gift card | Was it merchandise over the threshold or otherwise tied to a prohibited referral? |
| Rebate | Was it disclosed and otherwise lawful? |
Scenario Examples
These are original learning examples for study. They are not copied exam questions and are not official Pearson VUE questions.
Scenario 1: Oral Seller Promise
A seller tells a broker, "Bring me a buyer and I will pay you 3 percent." The broker produces a buyer and the seller refuses to pay. There is no signed agreement.
Best answer: The statutory action fails without the signed writing Section 1101.806(c) requires for a sale commission.
Scenario 2: Licensed After the Lead
An unlicensed person finds a buyer for a ranch, then obtains a license before closing and asks for a commission.
Best answer: The claim likely fails. Under the TRELA compensation action rule, the person generally must have been licensed when the brokerage activity began.
Scenario 3: Sales Agent Asks Seller for Payment
A sponsored sales agent closes a transaction and asks the seller to write the commission check directly to the sales agent because the broker is slow to process payments.
Best answer: Not proper. Section 1101.651(b) does not permit the seller to be the source of the sales agent's transaction compensation. Payment must come from the current or qualifying former sponsoring broker, and Rule 535.3 separately requires the applicable broker's written consent.
Scenario 4: Signed Listing, Expired Before Buyer Appears
A broker has a signed listing agreement that expires May 31. A new buyer first contacts the seller on June 15. The agreement has no protection period.
Best answer: The broker may have trouble enforcing compensation because the agreement expired before the buyer appeared and no protection period is stated in the facts.
Scenario 5: Signed Listing With Protection Period
A broker shows the property to a buyer during the listing term and gives the seller written notice of that buyer as required by the listing agreement. The seller waits until after expiration and sells to that buyer during the protection period.
Best answer: The broker may have an enforceable claim if the agreement's protection-period requirements were satisfied.
Scenario 6: Buyer Rep Agreement
A buyer signs a buyer representation agreement promising to pay the broker if the buyer purchases residential property in Travis County during the term. The buyer purchases a covered property during the term through another broker.
Best answer: The first broker may have a compensation claim if the agreement terms support payment. Look for writing, signature, covered property, term, and compensation language.
Scenario 7: Unlicensed Finder Fee
An unlicensed assistant gives a broker a buyer lead and expects $1,000 if the buyer closes.
Best answer: That is a referral compensation problem. Referring a prospect for expected valuable consideration generally requires a license.
Scenario 8: Rebate Not Disclosed
A broker promises a buyer a rebate at closing but does not disclose it to the parties or closing side when disclosure is required.
Best answer: The issue is not just whether rebates can exist. The exam is likely testing disclosure and standards of conduct.
Scenario 9: Commission Math Is Clear, Enforceability Is Not
A question gives a 3 percent commission on a $400,000 sale, but the broker has no signed compensation agreement.
Best answer: Do not stop at the math. The calculated amount would be $12,000, but enforceability still depends on the signed writing and license facts.
Practice Questions
These are original practice questions written to teach the rule. They are not copied from the Texas exam.
Question 1
A seller orally tells a broker, "Find me a buyer and I will pay you 3 percent." The broker produces a buyer, but there is no signed agreement. Can the broker recover the commission?
A. Yes, because the broker produced the buyer. B. No, because Section 1101.806(c) requires a sale commission promise, agreement, or memorandum signed by the party to be charged or that party's authorized signer. C. Yes, because an oral promise is binding once performed. D. Only if the buyer closes within 30 days.
Answer: B. Section 1101.806(c) bars the collection action without the required signed writing or memorandum.
Question 2
An unlicensed person finds a buyer for a ranch, then gets licensed before closing and asks for a commission. What is the likely result?
A. The claim succeeds because the person was licensed at closing. B. The claim succeeds because the buyer closed. C. The claim likely fails because the person was not licensed when the brokerage activity began. D. The claim succeeds if labeled a consulting fee.
Answer: C. Under Section 1101.806, the person generally must have been licensed when the activity began.
Question 3
A sponsored sales agent closes a deal and asks the seller to write the commission check directly to the agent because the broker is slow to pay. Is this proper?
A. Yes, the agent earned it. B. Yes, if the seller agrees in writing. C. No. Section 1101.651(b) limits the payment source to the current or qualifying former sponsoring broker, and Rule 535.3 separately requires written consent. D. No, but only if the broker objects.
Answer: C. Written broker consent does not make a seller a permitted payment source. The current or qualifying former sponsoring broker must pay the sales agent.
Question 4
A signed listing expires May 31 with no protection period stated. A new buyer first contacts the seller June 15 and later closes. Can the listing broker likely collect?
A. Yes, the listing always covers later buyers. B. No, the agreement expired before the buyer appeared and no protection period applies. C. Yes, because the broker held the listing earlier. D. Yes, if the broker was the procuring cause of any sale.
Answer: B. Without a protection period or other continuing obligation, the expired agreement likely does not support payment.
Question 5
An unlicensed assistant gives a broker a buyer lead and expects $1,000 if the buyer closes. What does this raise?
A. Nothing, because the assistant is not a broker. B. A referral compensation problem, because referring a prospect for expected valuable consideration generally requires a license under Rule 535.20. C. A fee-splitting exception that always applies. D. A procuring-cause claim by the assistant.
Answer: B. A referral made with expectation of valuable consideration is an act requiring a license.
Common Mistakes
| Mistake | Better exam thinking |
|---|---|
| Treating hard work as enough to collect commission | Work does not replace a signed compensation agreement. |
| Forgetting subsection (b) status | In the ordinary exam pattern, the claimant must be a license holder when the brokerage act begins; the text also names a licensed-attorney alternative. |
| Letting "procuring cause" override Section 1101.806(c) | Procuring cause does not fix a missing signed writing for a sale-or-purchase commission claim. |
| Letting a sales agent collect from the client | Transaction compensation must come from the current or qualifying former sponsoring broker. |
| Assuming all rebates are illegal | Texas permits certain rebates if handled properly. |
| Ignoring agreement dates | Listing periods, buyer rep terms, and protection periods matter. |
| Ignoring who signed | The writing must bind the party being charged. |
| Treating "finder fee" as harmless | Referral compensation can require a license. |
| Confusing earned with enforceable | A broker may have done work, but enforcement still needs legal requirements. |
Study Plan
| Step | What to review | What you should be able to answer |
|---|---|---|
| 1 | Texas Occupations Code Section 1101.806(c) and Business and Commerce Code Section 26.01 | Why does a sale-or-purchase commission claim need the statutory signed writing, and why is the underlying sale agreement a separate writing question? |
| 2 | Texas Occupations Code Section 1101.806(b) and (d) | Which claimant status is required, and how can failure to give the Section 1101.555 buyer advice bar a sale commission? |
| 3 | TREC Rule 535.3 | How does sales agent compensation run through broker control? |
| 4 | TREC Rule 535.20 | When does a referral require a license? |
| 5 | Brokerage agreements | Which agreement type creates the compensation obligation? |
| 6 | Listing agreement types | How do exclusive right to sell, exclusive agency, and open listings differ? |
| 7 | Pearson content outline | Where do compensation rules appear across contracts, practice, math, and standards of conduct? |
What To Do Next
| If you miss questions about... | Drill this rule pattern |
|---|---|
| Oral sale-or-purchase commission promises | Section 1101.806(c) requires the signed writing. |
| Unlicensed finders | License needed when brokerage activity begins. |
| Sales agent payment | Sponsoring broker controls compensation. |
| Expired agreements | Term, protection period, and covered party matter. |
| Fee splitting | Broker consent, license status, and disclosure matter. |
| Rebates | Do not assume illegal, check disclosure and law. |
| Math questions | Calculate only after checking whether the compensation claim is legally supported. |
COMPENSATION AGREEMENT PRACTICE
Practice the rule pattern before the math distracts you.
The Texas real estate exam prep app is built for Texas sales agent candidates: original Texas-focused practice questions, national and state review, math drills, scenario practice, flashcards, and weak-area feedback. Use it to practice compensation agreement scenarios involving signed writings, license status, fee splitting, rebates, buyer representation, listing terms, and commission math. Native Texas exam prep. Original questions. No copied exam questions. Not affiliated with TREC or Pearson VUE. Not a 180-hour pre-license course or a pass guarantee.
What To Pair With This
| Pair this article with | Why it helps |
|---|---|
| Texas Real Estate Exam | Places compensation enforcement inside the broader Texas exam outline. |
| Texas Real Estate Fee Splitting, Rebates, and Compensation | Closest companion for standards of conduct and payment rules. |
| Broker-Sales Agent Relationships and Supervision | Helps explain why sales agent compensation runs through broker control. |
| Texas Real Estate License Activities and Exemptions | Helps spot when an unlicensed person cannot collect. |
| Texas Real Estate Commission Calculations | Good follow-up for the math side once enforceability is clear. |
| Texas Real Estate Advertising Rules | Useful when compensation offers appear in ads or public promises. |
| Free Texas Real Estate Practice Test | Quick way to test whether compensation and contract rules are sticking. |
FAQ
When is a Texas real estate compensation agreement enforceable?
For the usual sale-or-purchase commission claim, look for the signed writing required by Section 1101.806(c), the claimant status required by subsection (b), the buyer advice required by subsection (d), and facts showing the commission became payable under the agreement. Other kinds of compensation may require a different statutory and contract analysis.
Does a real estate commission agreement have to be in writing in Texas?
For a commission on the sale or purchase of real estate, yes. Section 1101.806(c) requires the promise, agreement, or memorandum to be in writing and signed by the party being charged or that party's authorized signer before the collection action may be maintained. The subsection does not use that wording for every possible management, lease, referral, or interbroker compensation claim.
Can a broker enforce an oral promise to pay a commission?
Not for the usual sale commission claim. Even if the broker found the buyer, Section 1101.806(c) bars the action without the required signed writing or memorandum.
Can an unlicensed person collect a real estate commission in Texas?
Generally no if the compensation is for an act requiring a real estate license. Section 1101.806(b) requires the claimant to prove the status specified by the subsection when the act began; it also contains a licensed-attorney alternative that should not be expanded beyond the text.
Does getting licensed before closing fix unlicensed activity?
Usually no for exam purposes. If the person began the brokerage activity while unlicensed, later licensure does not cure the original problem for a compensation claim.
Can a Texas sales agent enforce a commission agreement directly against a seller?
No for transaction compensation. Section 1101.651(b) allows a sales agent to accept it only from the current sponsoring broker or the broker who sponsored the agent when it was earned. Rule 535.3 separately requires written consent from the applicable broker. Broker consent alone cannot make a seller an allowed payment source.
What is procuring cause?
Procuring cause means the broker's efforts produced the buyer or transaction. It can matter in open listings and some broker-to-broker disputes. For a sale-or-purchase commission claim against a client, it does not replace Section 1101.806's signed-writing and claimant-status requirements.
What if a listing agreement expired before closing?
Read the agreement facts. The broker may still have a claim if a protection period applies and its requirements were satisfied. Without a protection period or other continuing obligation, the broker may have trouble collecting after expiration.
Can rebates be paid in Texas real estate transactions?
Texas permits certain rebates when properly disclosed and otherwise lawful. The exam may test whether the rebate was disclosed, whether it violated another rule, or whether the license holder used it deceptively. Do not assume every rebate is illegal.
Can a broker pay a referral fee to an unlicensed person?
Be careful. TREC Rule 535.20 treats referral of a prospective buyer, seller, landlord, or tenant for expected valuable consideration as an act requiring a license. Its limited exception is merchandise worth $50 or less; TREC distinguishes a restricted merchant gift card from cash, a general-purpose cash-equivalent card, rent credit, discounts, and higher-value merchandise.
What should I practice for enforcing compensation agreements in Texas?
Practice signed writing questions, oral commission promises, unlicensed finder scenarios, sales agent direct-payment traps, listing expiration, protection periods, buyer representation agreements, referral compensation, rebates, and commission math. The Texas real estate exam prep app includes original Texas-focused scenarios for these rule patterns. Native Texas exam prep. Original questions. No copied exam questions. Not affiliated with TREC or Pearson VUE. Not a 180-hour pre-license course or a pass guarantee.
Are the examples in this article official Pearson VUE exam questions?
No. The examples in this article are original learning examples for study. They are not copied exam questions and are not official Pearson VUE questions.
Primary-source verification (2026-08-12): This article was checked against current Texas Occupations Code Sections 1101.555, 1101.651, and 1101.806; Texas Business and Commerce Code Section 26.01; TREC Rules 535.3 and 535.20 plus TREC's referral FAQ; Pearson VUE's May 2026 candidate handbook; and Pearson outline #094401, revision 01/2026. The review preserves Section 1101.806's exact subsection boundaries instead of extending the sale-or-purchase commission writing rule to every type of brokerage fee.
Sources and Methodology
This article uses official sources first and turns compensation-enforcement rules into exam decision patterns.
The method:
- Start with Pearson VUE's Texas broker state outline, which explicitly lists enforcing compensation agreements.
- Cross-check the sales agent outline for related topics: Statute of Frauds, splitting fees, rebates, broker-sales agent relationships, and commission math.
- Use Section 1101.806(c) for the signed-writing rule limited to a sale-or-purchase commission, and Business and Commerce Code Section 26.01 for the separate writing rule on the underlying sale agreement.
- Use Section 1101.806(b) for claimant status and subsection (d), together with Section 1101.555, for the buyer title-advice condition.
- Use Section 1101.651(b) for permitted sales-agent payment sources and Rule 535.3 for the separate written-consent requirement.
- Use TREC Rule 535.20 for referral compensation and finder-fee style questions.
- Convert those rules into plain-English tables and original exam-style scenarios.
EARNED IS NOT THE SAME AS ENFORCEABLE
Drill the writing, license, and broker-control checks before the math
Signed writing or oral promise. Licensed when the work began or not. Sales agent paid through the broker or direct from the client. Run a free Texas practice set to train the enforceability checks behind every commission question, then drill the full state-law bank in the app. Native Texas exam prep. Original questions. No copied exam questions. Not affiliated with TREC or Pearson VUE. Not a 180-hour pre-license course or a pass guarantee.
Official Source Links
- Texas Occupations Code Section 1101.806: Liability for Payment of Compensation or Commission
- Texas Occupations Code Chapter 1101: Real Estate Brokers and Sales Agents
- Texas Occupations Code Section 1101.555: Buyer Advice About Abstract or Title Policy
- Texas Occupations Code Section 1101.651: Certain Practices Prohibited
- Texas Business and Commerce Code Section 26.01: Promise or Agreement Must Be in Writing
- TREC: TREC Rules, 22 TAC Section 535.3 (Salesperson Compensation)
- TREC: TREC Rules, 22 TAC Section 535.20 (Referrals from Unlicensed Persons)
- TREC: Rules and Laws
- Pearson VUE: Texas Real Estate
- Pearson VUE: Texas Real Estate Candidate Handbook PDF
- Pearson VUE: Texas Real Estate Content Outlines PDF