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Standards of conduct and grounds for discipline is a 9-item Texas state-law area on the Pearson outline for sales agents. It covers professional ethics and conduct, grounds for discipline, unauthorized practice of law, trust accounts, splitting fees, rebates, and advertising. The exam is testing whether a license holder acts with fidelity, integrity, competence, honesty, fair dealing, proper disclosure, broker supervision, and public-protection judgment. TREC rules say a license holder acting as an agent is a fiduciary, must put the principal's interest above the license holder's own interest, must deal honestly and fairly with all parties, must keep the principal informed of significant transaction information, and must convey accurate information to the public. This article is educational exam prep, not legal, disciplinary, brokerage, advertising, trust-account, or professional advice.

9
state-law scored items
2 days
TREC response rule for parties
FIC
fidelity, integrity, competency

Start Here

Texas standards of conduct is where the exam asks:

Would a competent, honest Texas license holder do this?

That sounds simple. It is not always simple in a fact pattern.

A sales agent knows the seller will reject a low offer and decides not to present it. A broker holds earnest money in the wrong account. A license holder advertises a ranking without objective criteria. A sales agent writes a custom legal clause for a buyer. A license holder buys property for themselves and forgets to disclose license status. A license holder receives a referral fee from a settlement service provider without the right disclosure and consent.

Those are standards of conduct questions.

They are not just morality questions. They are license-law questions.

The best way to study this topic is to organize it into three layers:

Character -> conduct -> consequence

Character means honesty, trustworthiness, integrity, fidelity, competence, and fair dealing.

Conduct means what the license holder actually does: disclose, respond, supervise, present information, handle money, advertise, fill forms, receive compensation, and avoid legal advice.

Consequence means the conduct can lead to TREC discipline if it violates TRELA or TREC rules.

That is the entire article in one sentence:

Texas conduct questions test whether the license holder acted honestly, competently, and within the limits of license law.

Table Of Contents

What Pearson Is Testing

Pearson's Texas Sales Agent state-law outline gives Standards of Conduct 9 scored items.

The outline lists:

  • Professional ethics and conduct.
  • Grounds for discipline.
  • Unauthorized practice of law.
  • Trust accounts.
  • Splitting fees.
  • Rebates.
  • Advertising.

That is a wide section.

It is also one of the most practical parts of the state exam because it overlaps with nearly everything else:

  • TREC authority.
  • TRELA.
  • Complaints and investigations.
  • Broker supervision.
  • Trust money.
  • Unlicensed activity.
  • Agency disclosure.
  • IABS.
  • Intermediary practice.
  • TREC forms.
  • Seller disclosure.
  • Advertising names.
  • Compensation.

The exam can test this as a direct rule:

A broker or sales agent must respond to a party within what time?

It can also test it as judgment:

A license holder receives information that would affect the seller's decision but decides not to mention it because the offer is inconvenient.

The second question is harder because it asks you to apply the rule, not repeat it.

The Conduct Map

Use this table as your mental map.

Conduct area Exam question Safe answer habit
Fidelity Who is the client and what duty is owed? Put the principal's interest first
Integrity Did the license holder mislead by words or silence? Avoid misrepresentation by act or omission
Competency Is the license holder qualified for this market, property, or task? Stay within competence and use broker guidance
Honesty and fair dealing Did the license holder deal honestly with all parties? Client loyalty does not permit dishonesty to others
Disclosure Was significant information conveyed at the right time? Disclose known material facts and required relationship information
Discipline Did the conduct violate TRELA or TREC rules? Match the violation to process and consequence
Unauthorized practice of law Is the license holder drafting legal rights or giving legal advice? Use promulgated forms properly and refer legal questions to an attorney
Trust money Was money held for another handled correctly? Broker trust account, no commingling, timely deposit, proper disbursement
Fees and rebates Was compensation paid or received properly? Check license status, broker consent, client consent, and disclosure
Advertising Could the ad mislead the public? Include broker identity and avoid misleading names or claims

If a question feels confusing, identify the conduct area first.

Fidelity

TREC's Canons of Professional Ethics and Conduct state that a license holder acting as an agent for another is a fiduciary.

For exam purposes, fiduciary means more than "be nice."

It means the license holder's primary duty is to represent the client's interests, while still treating other parties fairly.

The exam version:

Represent the client loyally, but do not lie, hide material facts, or mislead other parties.

TREC's fidelity rule also says a license holder should be faithful to the trust placed in the license holder and place no personal interest above the client's interest.

That creates several exam traps.

Trap: personal interest over client interest

A listing agent wants a quick closing because the agent needs commission income. A lower offer is easier and cleaner than a higher offer with more contingencies. The agent quietly discourages the seller from looking at the higher offer.

The issue is not just strategy.

The issue is fidelity.

The agent cannot put personal convenience above the principal's interest.

Trap: client loyalty as permission to be dishonest

A buyer's agent wants to help the buyer get a good deal, so the agent says something false about the seller's property condition.

The issue is not "strong representation."

It is dishonesty.

Fidelity to a client does not authorize unfair or dishonest treatment of others.

Integrity

TREC's integrity rule says a license holder has a special obligation to exercise integrity, including prudence and caution to avoid misrepresentation by acts of commission or omission.

That phrase matters.

Misrepresentation can happen two ways:

Type Meaning
Commission The license holder says or does something misleading
Omission The license holder leaves out something that should have been disclosed

The exam likes omissions because they feel less obvious.

Example:

The license holder knows about a drainage problem but avoids mentioning it because the buyer did not ask the exact right question.

That is not safe exam logic.

When a known fact is material, the question is not whether someone said the perfect magic words. The question is whether the license holder handled the information honestly and properly.

Integrity also connects to:

  • False promises.
  • Exaggerated claims.
  • Selective facts.
  • Fake urgency.
  • Misleading advertising.
  • Concealing license status.
  • Hiding compensation.
  • Omitting facts from applications or renewals.

The safest answer usually tells the truth early, clearly, and within the license holder's role.

Competency

TREC's competency canon says a license holder must be knowledgeable and competent as a real estate brokerage practitioner.

The rule expects the license holder to be informed about:

  • Local market issues and conditions where the license holder provides services.
  • National, state, and local real estate industry issues and developments.
  • Judgment and skill in brokerage activities.
  • The characteristics of the specific type of real estate being brokered.

The exam may test competency in a quiet way.

Example:

A residential agent with no farm-and-ranch experience agrees to advise a buyer on water rights, mineral issues, agricultural exemptions, and access without broker guidance or outside help.

The problem is not that a license holder can never learn a new area.

The problem is pretending to be competent without the needed knowledge, supervision, or professional support.

Competency also connects to broker responsibility. TREC's broker responsibility rule says brokers must maintain written policies and procedures to ensure sponsored sales agents are competent for authorized activities, including geographic market competence, and must provide coaching and assistance when a sales agent performs a type of brokerage activity for the first three times.

Exam translation:

Competence is not optional, and broker supervision matters.

Honesty And Fair Dealing

TREC Rule 535.156 says a license holder must put the principal's interest above the license holder's own interest. It also says the license holder must deal honestly and fairly with all parties, while representing only the principal and owing fidelity to that principal.

This is one of the most important Texas exam rules.

It separates loyalty from dishonesty.

Relationship Duty concept
Client or principal Fidelity, loyalty, significant information, best interest within the law
Other parties Honesty, fairness, accurate information, no misrepresentation

A license holder can advocate for a client.

A license holder cannot lie for a client.

A license holder can negotiate hard.

A license holder cannot hide known material facts that must be disclosed.

A license holder can protect confidential client information.

A license holder cannot invent facts or mislead the public.

The exam will often give you an answer choice that sounds loyal but is actually dishonest.

Do not pick it.

Disclosure Duties

Disclosure is the backbone of this topic.

Texas conduct questions ask what the license holder knew, when the license holder knew it, who needed it, and whether it was disclosed properly.

Significant information to the principal

TREC Rule 535.156 says a license holder has an affirmative duty to keep the principal informed at all times of significant information applicable to the transaction.

That is why offer-presentation questions matter.

If the information would affect the principal's decision, the safe answer usually involves informing the principal unless a specific rule or written instruction changes the duty.

Accurate information to the public

The same rule says a license holder has a duty to convey accurate information to members of the public with whom the license holder deals.

This is why "I only represented the seller" is not a license to mislead the buyer.

License-holder self-interest

TREC Rule 535.144 says a license holder acting on their own behalf, or in certain capacities involving spouse, parent, child, controlled business entity, or trust, must disclose in writing that they are a licensed real estate broker or sales agent before entering into a sale or rental contract. The rule also says the license holder may not use their expertise to the disadvantage of the person they deal with.

Exam translation:

If the license holder is personally on the other side of the deal, disclose license status in writing and do not exploit license expertise.

IABS and consumer notices

TREC Rule 531.20 covers the Information About Brokerage Services notice. It requires the completed IABS at the first substantive communication as required under the statute and explains acceptable delivery methods. It also says a link to the IABS cannot be buried in an email footnote or signature block.

TREC Rule 531.18 covers the Consumer Protection Notice, including display in a broker's place of business and links on business websites.

The exam point is not web-design trivia.

The exam point is:

Texas uses required notices to protect consumers and clarify brokerage relationships.

Grounds For Discipline

Grounds for discipline are the behaviors that can trigger TREC enforcement.

TRELA and TREC rules include many specific grounds. For exam prep, organize them by family:

Discipline family Exam facts
Dishonesty Fraud, misrepresentation, false promise, deceit, material misstatement
Bad faith or untrustworthiness Conduct showing the license holder cannot be trusted with the public
Incompetence or negligence Careless or unqualified brokerage conduct
Failure to disclose Material facts, license status, relationship, compensation, required notices
Trust money problems Commingling, conversion, improper trust-account handling
Improper compensation Fee splitting, undisclosed commission, improper rebate, unlicensed payment
Unauthorized practice of law Drafting legal rights or giving legal advice beyond license authority
Advertising violations Misleading ads, missing broker name, improper team or assumed names
Failure to respond Ignoring parties, other agents, unrepresented parties, or TREC requests
Criminal or application issues Fraud crimes, felonies, false renewal or application information, late reporting

Do not study this as a list of scary words.

Study it as:

What conduct would make TREC question honesty, competence, disclosure, trust money, supervision, or consumer protection?

That approach matches the exam.

Unauthorized Practice Of Law

Unauthorized practice of law is inside the Standards of Conduct outline.

The testable rule is:

A license holder can use appropriate promulgated forms, but should not draft legal rights, give legal opinions, or advise parties on legal consequences.

Typical traps:

  • Writing a custom clause that changes legal rights.
  • Explaining whether a contract is valid or void.
  • Advising a party whether to sue.
  • Interpreting legal effect of title exceptions.
  • Telling a party how probate, divorce, estate, or bankruptcy law applies.
  • Changing a promulgated form in a way that requires legal drafting.

Safe exam answer:

Use the correct form within license authority and refer legal questions to an attorney.

This is not weakness. It is professionalism.

Trust Accounts

Pearson lists trust accounts under Standards of Conduct.

TREC Rule 535.146 says trust money includes a client's money, earnest money, rent, unearned fees, security deposits, or money held on behalf of another. It says trust money accepted by a broker is held in a fiduciary capacity and must be maintained in a designated broker trust account or delivered to an authorized escrow agent according to the agreement of the principals.

Key exam rules:

  • A sales agent does not maintain a trust account.
  • Trust money received by a sales agent must be immediately delivered to the sponsoring broker.
  • Unless the principals agree otherwise in writing, trust money received by the broker must be deposited in a trust account or delivered to an authorized escrow agent not later than the close of business of the second working day after the broker receives it.
  • A broker must not commingle trust money with personal or non-trust money.
  • Placing trust money in a broker's personal or operating account can be evidence of commingling.
  • Paying operating expenses or making improper withdrawals from a trust account can be evidence of commingling.

This is not a minor bookkeeping topic.

Trust money is one of the fastest ways for a conduct question to become a discipline question.

Fee Splitting And Rebates

Pearson lists splitting fees and rebates in the same Standards of Conduct section.

TREC Rule 535.147 says, with exceptions, a broker or sales agent may not share a commission or fee with a person who performs acts requiring a license if that person is not actively licensed as a broker or sales agent.

That means the exam will ask:

Who got paid, what did they do, and were they actively licensed?

TREC Rule 535.147 also allows a license holder to rebate or pay a portion of a fee or commission to a party in the transaction when the sales agent has the written consent of the sponsoring broker and the party represented by the license holder. It also says the payment may not be made in a way that misleads a broker, lender, title company, or government agency about the transaction or the buyer's financial resources or obligations.

TREC Rule 535.148 covers undisclosed commissions or rebates. A license holder may not receive a commission, rebate, or fee from someone other than the person represented without disclosing the intent to the client and obtaining the client's consent.

Exam translation:

Compensation questions are about license status, broker consent, client consent, disclosure, and whether the payment misleads someone.

Do not answer fee questions from vibes.

Answer them from structure.

Advertising

Pearson lists advertising as part of Standards of Conduct.

TREC advertising rules are heavily tested because they are practical and easy to turn into fact patterns.

Core ideas:

  • An advertisement must include the license holder or team name placing the ad.
  • It must include the broker's name in a readily noticeable way.
  • A sales agent's ad cannot imply that the sales agent is responsible for operating the brokerage.
  • Team names cannot imply independent brokerage services away from the sponsoring broker.
  • A license holder cannot mislead the public about license status, property status, service-provider compensation, rankings, or involvement in a transaction.

Advertising is really a truthfulness topic.

The question is:

Could a member of the public be misled about who is responsible, who is licensed, what is being offered, or what compensation exists?

If yes, be careful.

Failure To Respond

TREC Rule 535.157 says a broker or sales agent must respond to the principal, another broker or sales agent representing another party, or an unrepresented party to a transaction within two calendar days.

That is a clean exam fact.

TREC's complaint-processing rule also gives 14 days as the reasonable time to respond to Commission staff requests for information in a complaint context.

Keep these separate:

Situation Exam timing idea
Responding to principal, other agent, or unrepresented party Two calendar days
Responding to TREC staff request in complaint processing Reasonable time, defined in the rule as 14 days from receipt

Do not blend them.

Two days is a transaction communication rule.

Fourteen days is the complaint-response context in the TREC rule.

Decision Tree

When a Standards of Conduct question feels messy, use this:

1. Who is the license holder representing?
2. Is the person a client, customer, principal, other license holder, or member of the public?
3. What did the license holder know?
4. What did the license holder say, omit, write, advertise, receive, pay, draft, or hold?
5. Was money, a document, an ad, a legal clause, or a material fact involved?
6. Did the conduct require broker consent, client consent, written disclosure, or attorney involvement?
7. Does the answer protect the client without misleading anyone else?
8. Does the answer keep the license holder inside TREC rules and TRELA?

If you are stuck between two answers, choose the one that is more precise about:

  • Authority.
  • Timing.
  • Disclosure.
  • Broker supervision.
  • License status.
  • Consumer protection.

Mini Scenarios

Case 1: The withheld offer

A listing agent receives a low backup offer after the seller has accepted another contract. The seller did not give written instructions to stop submitting offers after acceptance. The agent assumes the seller will not care and does not tell the seller.

The tempting answer:

The agent can decide what the seller wants.

The better answer:

The agent should keep the principal informed of significant transaction information unless a specific rule or written instruction changes the duty.

This is fidelity and disclosure.

Case 2: The farm-and-ranch listing

A residential agent takes a rural listing involving minerals, water, access, septic, agricultural valuation, and easements. The agent has no experience in that type of property and does not involve the broker or qualified help.

The tempting answer:

A license lets the agent handle any property alone.

The better answer:

Competency matters. The license holder should work within competence, get broker guidance, and use qualified professionals when needed.

This is competency and broker responsibility.

Case 3: The personal purchase

A license holder buys a property for themselves and does not disclose in writing that they are a licensed broker or sales agent before entering the contract.

The tempting answer:

Disclosure is not needed because the license holder is not acting as someone else's agent.

The better answer:

TREC rules require written disclosure of license status when a license holder acts on their own behalf in a covered transaction.

This is self-interest disclosure.

Case 4: The custom legal clause

A buyer asks the sales agent to write a clause that changes default remedies if the seller defaults.

The tempting answer:

The agent should draft whatever helps the buyer.

The better answer:

The agent should avoid drafting legal rights and recommend attorney help for legal language.

This is unauthorized practice of law.

Case 5: The side referral fee

A title company offers a license holder a fee for sending buyers to that title company. The license holder does not disclose the fee to the client.

The tempting answer:

The payment is fine if the title company is happy.

The better answer:

Undisclosed compensation or referral arrangements can violate TREC rules and settlement-service rules. Consent and disclosure matter.

This is compensation, disclosure, and conduct.

Case 6: The operating account

A broker receives security deposits and places them in the brokerage operating account, then uses the same account to pay office rent.

The tempting answer:

It is fine if the broker tracks the amount in a spreadsheet.

The better answer:

Trust money must be handled as trust money. Commingling and improper use are serious conduct issues.

This is trust-account discipline.

Case 7: The misleading team name

A sponsored sales agent advertises under a team name that uses words suggesting an independent brokerage and does not make the broker's name clearly noticeable.

The tempting answer:

Branding is personal preference.

The better answer:

Texas advertising rules are conduct rules. The ad cannot mislead the public about brokerage responsibility.

This is advertising and broker supervision.

Common Traps

Trap Why candidates miss it Better answer
Client loyalty means anything goes Loyalty feels powerful Loyalty does not permit dishonesty
No damage means no issue Candidates wait for loss Conduct can violate rules before final dollar loss
Silence is safer Omission feels less risky Omission can be misrepresentation
Competency is optional A license feels broad The license holder must be competent for the work
Sales agent acts alone Agent is the named person in the fact pattern Sponsoring broker structure still matters
Trust money is bookkeeping Money handling feels administrative Trust-money violations are serious discipline facts
Rebates are always banned Candidates overcorrect Rebates can be allowed with proper consent and disclosure
Advertising is marketing only Branding feels creative Ads are regulated conduct
Legal advice helps the client Client asks directly Legal advice should go to an attorney
Complaint equals discipline Accusation feels final Discipline requires process and evidence

The safer answer is usually not the most aggressive answer.

It is the answer that protects the client, tells the truth, follows the broker structure, and avoids making the license holder a lawyer.

How To Study This Topic

Use a four-pass method.

Pass 1: Memorize FIC

Write:

Fidelity. Integrity. Competency.

Then add:

Honesty and fair dealing to all parties.

That gives you the ethics core.

Pass 2: Attach the seven Pearson subtopics

Write the outline from memory:

Ethics, discipline, UPL, trust accounts, fee splitting, rebates, advertising.

If you can write that, you know the section.

Pass 3: Drill money, forms, and advertising

These are the easiest to turn into exam questions:

  • Earnest money.
  • Security deposits.
  • Operating account versus trust account.
  • Custom contract clauses.
  • Referral fees.
  • Rebates.
  • Broker name in ads.
  • Team names.
  • License-holder self-interest.

Pass 4: Explain the wrong answer

When you miss one, finish this sentence:

The wrong answer sounded right because...

Maybe it sounded loyal. Maybe it sounded efficient. Maybe it sounded like a real-world shortcut. Maybe it sounded more helpful to the client.

That sentence shows you the trap.

TEXAS CONDUCT DRILL

Practice the ethics and discipline traps before test day.

The Texas real estate exam prep app helps you drill standards of conduct, grounds for discipline, trust money, fee splitting, rebates, advertising, unauthorized practice of law, and disclosure scenarios with original Texas state-law explanations. 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.

Practice Texas conduct questions

Practice Questions

These are original Texas-style practice questions. They are not copied from the Texas real estate exam.

Question 1

A license holder represents a seller. The license holder receives information that would affect the seller's decision whether to accept an offer. What should the license holder do?

A. Keep the information quiet if the license holder thinks the seller will reject the offer.
B. Keep the principal informed of significant information applicable to the transaction.
C. Tell only the buyer.
D. Wait until closing.

Answer: B

TREC Rule 535.156 requires the license holder to keep the principal informed of significant transaction information.

Question 2

A buyer asks a sales agent to write a custom legal clause changing the seller's remedies if the seller defaults. What is the best response?

A. Draft the clause if the buyer insists.
B. Use appropriate forms within license authority and recommend attorney help for legal language.
C. Ask the title company to secretly write it.
D. Tell the buyer legal clauses are never allowed in contracts.

Answer: B

The exam distinction is between proper form use and unauthorized practice of law.

Question 3

A broker places earnest money into the brokerage operating account and pays office expenses from that account. What issue is most likely being tested?

A. Trust-money commingling or improper use.
B. Homestead exemption.
C. National math.
D. License exam scheduling.

Answer: A

TREC trust-money rules prohibit commingling trust money with personal or non-trust money.

Question 4

A sales agent receives trust money from a buyer. What should happen?

A. The sales agent should hold it in the agent's personal account.
B. The sales agent should immediately deliver it to the sponsoring broker.
C. The sales agent should use it to pay advertising costs.
D. The sales agent should keep it until commission is due.

Answer: B

TREC Rule 535.146 says a sales agent shall not maintain a trust account and trust money received by a sales agent must be immediately delivered to the sponsoring broker.

Question 5

A license holder is buying property for themselves. What should they remember?

A. License status never matters when buying for yourself.
B. Written disclosure of license status is required before entering the covered contract.
C. The seller must discover the license status independently.
D. Disclosure is required only after closing.

Answer: B

TREC Rule 535.144 requires written disclosure when a license holder acts on their own behalf in a covered transaction.

Question 6

A sales agent tells a buyer a fact about a property that the agent did not verify and that turns out to be inaccurate. What conduct principle is involved?

A. Duty to convey accurate information to the public.
B. Right to make any statement if representing the seller.
C. Automatic buyer representation.
D. Property tax proration.

Answer: A

TREC Rule 535.156 says a license holder has a duty to convey accurate information to members of the public with whom the license holder deals.

Question 7

A broker or sales agent must respond to the principal, another broker or sales agent representing another party, or an unrepresented party within what time?

A. Two calendar days.
B. Ten business days.
C. Thirty days.
D. Only after closing.

Answer: A

TREC Rule 535.157 gives the two-calendar-day response rule.

Question 8

A license holder wants to share a commission with an unlicensed person who performed acts requiring a license. What is the main issue?

A. Improper fee splitting with an unlicensed person.
B. Seller financing.
C. Homestead protection.
D. Quiet title.

Answer: A

TREC Rule 535.147 restricts sharing commissions or fees with a person who performs licensed acts without active license status.

Question 9

A license holder receives a fee from a service provider in a transaction involving the license holder's client but does not disclose it to the client or get consent. What issue is likely being tested?

A. Undisclosed commission, rebate, or fee.
B. Constructive notice.
C. Mineral rights.
D. Deed delivery.

Answer: A

TREC Rule 535.148 addresses receiving undisclosed commissions, rebates, or fees.

Question 10

A sponsored sales agent's advertisement makes it look like the sales agent operates the brokerage independently from the broker. What is the issue?

A. Misleading advertising and broker-identification rules.
B. Recording statute priority.
C. Proration method.
D. Leasehold estate.

Answer: A

Texas advertising rules prohibit ads that mislead the public or imply a sales agent is responsible for operating the brokerage.

Question 11

Which conduct family includes fraud, false promises, misrepresentation, and material omissions?

A. Dishonesty and integrity problems.
B. Area calculation.
C. Deed restriction.
D. Loan amortization.

Answer: A

Misrepresentation can happen by what a license holder says, does, or omits.

Question 12

Which answer best describes the Standards of Conduct section as a whole?

A. It tests whether license holders act honestly, competently, within their role, and within TREC rules.
B. It tests only memorization of one form title.
C. It applies only to brokers, never sales agents.
D. It has nothing to do with discipline.

Answer: A

The section covers ethics, discipline, unauthorized practice of law, trust accounts, fee splitting, rebates, and advertising.

Final Checklist

Before you leave this topic, make sure you can explain each line.

Checklist item Can you explain it?
Standards of Conduct is 9 scored state-law items Yes or no
TREC canons include fidelity, integrity, and competency Yes or no
A license holder owes fidelity to the principal but honesty to all parties Yes or no
Misrepresentation can happen by statement or omission Yes or no
Competence includes local market and property-type competence Yes or no
A license holder buying for themselves must disclose license status in writing Yes or no
Unauthorized practice of law means not drafting legal rights or giving legal opinions Yes or no
Trust money is handled by the broker, not a sales agent trust account Yes or no
Commingling trust money with operating money is a serious issue Yes or no
Fee splitting depends on license status and broker structure Yes or no
Rebates require consent and cannot mislead transaction parties Yes or no
Advertising cannot mislead the public or hide broker responsibility Yes or no

If any line feels fuzzy, this is a good topic for mixed practice. Standards questions rarely stay in one neat bucket.

How This Connects To Other Texas Topics

Standards of conduct connects to:

This is one of the launch-worthy state-law articles because it supports many other posts. It is not a single isolated rule. It is the conduct lens for the whole Texas state exam.

Frequently Asked Questions

Is Standards of Conduct on the Texas real estate exam?

Yes. Pearson's Texas Sales Agent state-law outline gives Standards of Conduct 9 scored items. It includes professional ethics and conduct, grounds for discipline, unauthorized practice of law, trust accounts, splitting fees, rebates, and advertising.

What are the main TREC ethics canons for Texas license holders?

For exam prep, remember fidelity, integrity, and competency. Fidelity means the license holder acting as an agent is a fiduciary. Integrity means avoiding misrepresentation by statement or omission. Competency means being knowledgeable and skilled for the brokerage activity being performed.

Does loyalty to a client allow a Texas license holder to mislead another party?

No. A license holder represents the principal and owes fidelity to the principal, but must still deal honestly and fairly with all parties and convey accurate information to the public.

What are common grounds for discipline?

Common exam families include fraud, misrepresentation, false promise, material omission, negligence, incompetence, failure to disclose, trust-money mishandling, improper compensation, unauthorized practice of law, misleading advertising, and failure to comply with TREC rules or requests.

What is the two-day response rule?

TREC Rule 535.157 says a broker or sales agent must respond to the principal, a broker or sales agent representing another party, or an unrepresented party to a real estate transaction within two calendar days.

Can a Texas sales agent maintain a trust account?

No. TREC's trust-money rule says a sales agent shall not maintain a trust account. Trust money received by a sales agent must be immediately delivered to the sponsoring broker.

Can a license holder receive an undisclosed fee or rebate from a service provider?

No. TREC rules require disclosure and consent when a license holder receives certain commissions, rebates, or fees from someone other than the person represented. Settlement-service referral fees are especially sensitive.

Is advertising part of Standards of Conduct?

Yes. Pearson lists advertising under Standards of Conduct. Texas advertising rules test broker name, team name, assumed name, sales-agent identity, property status, service-provider compensation, rankings, and whether an ad misleads the public.

Do I need to memorize every statute number?

Usually no. It is more useful to know the conduct families and the exam triggers. You should recognize the role of TRELA, TREC rules, fiduciary duty, honesty, competence, trust money, compensation, and advertising.

Can the Texas app help me study Standards of Conduct?

Yes. The Texas real estate exam prep app can help you practice standards of conduct, grounds for discipline, trust accounts, fee splitting, rebates, advertising, unauthorized practice of law, and disclosure questions with original Texas-focused explanations. 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.

Primary-source verification (2026-06-16): This article was checked against the Pearson VUE Texas Real Estate Content Outlines effective January 1, 2026 for the Texas Sales Agent state-law outline, TREC Chapter 531 Canons of Professional Ethics and Conduct, TREC Chapter 535 general provisions and broker responsibility rules, TREC trust-money, fee-splitting, rebate, advertising, and complaint-processing rules, and Texas Occupations Code Chapter 1101 source materials. Regulated facts can change. Reverify current requirements with TREC, Pearson VUE, Texas statutes, your sponsoring broker, or qualified counsel before making licensing, advertising, trust-account, compensation, disciplinary, or transaction decisions.

Sources And Methodology

This article is written for Texas real estate sales agent exam candidates. It uses official Texas and Pearson VUE source material first, then translates the topic into plain-English exam prep, original examples, and original practice questions. It does not use copied exam questions and does not claim to reproduce the live exam.

Use it for study purposes only. For real-world discipline, advertising, trust accounts, broker supervision, compensation, legal advice, license status, complaint, hearing, appeal, or transaction questions, verify the current official source and consult the right qualified professional.

This post is exam preparation content for the Texas Real Estate Sales Agent exam. It is not legal, tax, financial, lending, appraisal, brokerage, insurance, title, closing, disciplinary, trust-account, advertising, administrative-hearing, or professional advice.

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