QUICK ANSWER
TREC Duties and Powers accounts for 3 scored items on the 40-item Texas sales agent state-law exam. Pearson lists three official rows: General Powers, Handling of Complaints, and Penalties for Violation. Learn who has authority, how a complaint moves, and which consequence fits the facts.
EXAM PREP ONLY
This guide is educational exam preparation, not legal, licensing, disciplinary, or brokerage advice. Texas statutes, TREC rules, procedures, and exam outlines can change. Check current primary sources before acting on a real matter.
What Is Tested
Pearson VUE's Texas Sales Agent State Law outline, effective January 1, 2026, gives Commission Duties and Powers 3 scored items. The state portion has 40 scored items plus 10 unidentified pretest items.
The outline does not publish a separate item count for A, B, or C. Prepare all three.
| Official row | What Pearson lists | Best lesson |
|---|---|---|
| A. General Powers | Composition, duties and powers, real estate advisory committees | This hub |
| B. Handling of Complaints | Investigations, hearings and appeals | TREC complaints and hearings |
| C. Penalties for Violation | Unlicensed activity, disciplinary authority, Recovery Trust Account | Penalties and Recovery Trust Account |
This is a small area with dense vocabulary. Most misses come from assigning the right job to the wrong institution.
Texas Legislature: enacts TRELA
TREC: administers and enforces TRELA, adopts rules, licenses, and disciplines
SOAH: conducts specified contested-case hearings
Commission: renders the final agency decision
Court: handles judicial review and private legal remedies
Pearson VUE: administers the licensing examination
A. General Powers
TREC is the Texas Real Estate Commission. The Legislature created it as a state regulatory agency. TRELA, the Texas Real Estate License Act, is Texas Occupations Code Chapter 1101.
The distinction is simple:
The Legislature enacts the statute. TREC administers it and adopts rules within the authority the statute grants.
TREC does not create statutes. It also cannot enlarge its own jurisdiction by rule. TREC Rule 535.42 expressly says the Commission does not mediate license-holder disputes about working relationships or entitlement to compensation and does not recommend individual license holders to the public.
Commission composition
Texas Occupations Code Section 1101.051 sets the composition:
- Nine members appointed by the governor with the advice and consent of the Texas Senate.
- Six members who have worked in brokerage as licensed brokers as their major occupation for the five years before appointment.
- Three public members.
- Each member must be a qualified voter.
Members serve staggered six-year terms under Section 1101.055. The governor designates a licensed broker member as presiding officer. The Commission elects an assistant presiding officer and secretary.
Do not replace these facts with a tempting variation. The members are not elected by license holders, and the six industry seats are broker seats, not broker-or-sales-agent seats.
Core duties and powers
Section 1101.151 requires TREC to administer Chapters 1101 and 1102. It also authorizes TREC to adopt and enforce necessary rules and establish standards of conduct and ethics.
For exam purposes, group TREC's work into five jobs:
| TREC job | Exam meaning |
|---|---|
| Licensing | Issues and maintains licenses, registrations, and approvals |
| Rulemaking | Adopts administrative rules within statutory authority |
| Education and examination oversight | Approves education standards and determines eligibility, while Pearson administers the exam |
| Enforcement | Investigates possible violations and pursues authorized discipline |
| Consumer protection | Provides complaint information and administers the Recovery Trust Account |
TREC may also issue subpoenas in an investigation or proceeding under Section 1101.157. This is regulatory authority, not a power to decide every civil dispute involving property.
Real estate advisory committees
Section 1101.158 allows TREC to appoint advisory committees. The word advisory matters. These committees study, review, draft, and recommend. They do not replace the Commission.
The four committees most useful for sales agent candidates are:
| Committee | What to remember |
|---|---|
| Texas Real Estate Broker-Lawyer Committee | Drafts and revises standardized contract forms; TREC adopts the forms |
| Education Standards Advisory Committee | Reviews curriculum, course content, and instructor qualifications |
| Broker Responsibility Advisory Committee | Studies broker responsibility and recommends possible rule or legislative changes |
| Texas Real Estate Inspector Committee | Advises on inspector licensing and regulation |
The Broker-Lawyer Committee has a statutory composition of 13 members: six appointed by TREC, six attorneys appointed by the president of the State Bar of Texas, and one public member appointed by the governor. Sections 1101.252 and 1101.254 say it drafts and revises standardized forms with safeguards for the principals.
The exam trap is predictable:
Broker-Lawyer Committee drafts and revises.
TREC adopts by rule.
License holders use the form when the rules require it.
B. Handling of Complaints
A complaint is an allegation, not a finding. Texas law separates intake, investigation, hearing, final agency action, and judicial review.
How an outside complaint starts
Under Section 1101.204(b), TREC must investigate a license holder when:
- A person submits a signed, written complaint.
- The complaint and supporting evidence provide reasonable cause for an investigation.
Section 1101.204(f) bars an investigation based on an anonymous complaint. Section 1101.204(c) bars an investigation connected to a complaint submitted later than the fourth anniversary of the incident.
That wording is more accurate than saying every incident "four years old" is automatically outside the rule. Read the date in the stem.
TREC is not limited to outside complaints. Section 1101.204(a) allows the Commission or its staff to file a complaint and investigate as needed to enforce Chapters 1101 and 1102 or their rules.
The complaint path
TREC Rule 535.142 supplies the operational sequence:
| Step | Current rule |
|---|---|
| Receipt | Signed, written complaint received |
| Acknowledgment | Case number and written acknowledgment within 7 days |
| Initial evaluation | Written evaluation to complainant within 30 days |
| Notice | A jurisdictional complaint and attachments go to the respondent |
| Response | Requested information is due within a reasonable time, defined as 14 days, unless extended for good cause |
| Investigation | Staff may request records, use written responses, or assign a field investigator |
| Resolution | Dismissal, advisory letter, agreed order, or contested hearing |
A complainant cannot withdraw a filed complaint without TREC's consent. The agency may continue because the issue is regulatory, not merely a private disagreement.
Hearings, final orders, and appeals
If formal discipline is disputed, a contested case can go to the State Office of Administrative Hearings. Under Sections 1101.657 and 1101.705, a SOAH administrative law judge conducts the hearing and issues findings, conclusions, and a proposal for decision.
The administrative law judge does not impose TREC's final discipline. TREC Rule 533.7 says the Commission renders the final decision and is responsible for disciplinary action and administrative penalties.
Section 1101.658 provides for appeal to district court. Current procedural rules can affect rehearing and appeal rights, so real cases require the current rule text and legal advice. For the exam, keep this order:
Complaint or agency initiation
Investigation
Proposed enforcement outcome
SOAH hearing if contested
Proposal for decision
Commission final order
Judicial review
C. Penalties for Violation
Do not treat every consequence as a "fine." Texas law provides several paths, and the correct answer depends on the actor and conduct.
Administrative and license discipline
Section 1101.656 authorizes TREC to suspend or revoke a license, place a person with a suspended license on probation, or reprimand a license holder for violating TRELA or a Commission rule.
Sections 1101.701 and 1101.702 authorize administrative penalties. The statutory ceiling is $5,000 for each violation, and each day a violation continues or occurs may count as a separate violation. Rule 535.191 assigns current ranges based on the violated provision:
- $100 to $1,500 per violation per day.
- $500 to $3,000 per violation per day.
- $1,000 to $5,000 per violation per day.
The schedule does not force TREC to use only money. TREC may impose another authorized disciplinary action in addition to or instead of a monetary penalty.
Unlicensed activity
Unlicensed brokerage can lead to more than one consequence:
- TREC may investigate under Rule 535.181.
- TREC may impose an administrative penalty.
- TREC may issue a cease-and-desist order under Section 1101.759.
- TREC may seek injunctive relief under Sections 1101.751 and 1101.752.
- Acting as a broker or sales agent without the required license is a Class A misdemeanor under Section 1101.758.
- A person who received compensation while acting without the required license may face civil liability under Sections 1101.753 and 1101.754.
- Section 1101.806 generally blocks an action to collect brokerage compensation unless the person proves the required license status when the act began, subject to its attorney exception.
The exam may test only one of these consequences. Choose the one the stem asks for.
Recovery Trust Account
The Real Estate Recovery Trust Account is not a broker trust account and not automatic complaint compensation.
Sections 1101.601 through 1101.614 create a limited path for an aggrieved person who suffers actual damages from qualifying licensed conduct. The claimant generally needs a final civil judgment and must satisfy the statutory collection and court-application requirements.
Current payment limits under Section 1101.610 are:
- Up to $125,000 for claims arising from one transaction.
- Up to $250,000 for judgments against one license or certificate holder until the account is repaid.
A TREC complaint is not required before applying for recovery-account payment. The two processes serve different purposes:
| Process | Main purpose |
|---|---|
| TREC complaint | Investigate and discipline regulated conduct |
| Consumer refund order | Return up to what the consumer paid for a regulated service; no other damages |
| Recovery Trust Account claim | Seek payment on a qualifying civil judgment under statutory conditions and caps |
If TREC pays from the account and the license holder does not repay the full amount before the 31st day after TREC gives notice, Section 1101.655 requires revocation. TREC may probate that order. The person is not eligible for a license or certificate until the amount and legal interest are repaid.
Numbers Worth Knowing
| Number | Meaning | Authority |
|---|---|---|
| 3 | Scored Commission Duties and Powers items | Pearson outline |
| 9 | TREC commissioners | Section 1101.051 |
| 6 + 3 | Broker members plus public members | Section 1101.051 |
| 6 years | Commission member term | Section 1101.055 |
| 13 | Broker-Lawyer Committee members | Section 1101.252 |
| 4 years | Complaint submitted later than the fourth anniversary cannot be investigated | Section 1101.204(c) |
| 14 days | Rule-defined reasonable response time for requested complaint information | Rule 535.142 |
| $5,000 | Maximum administrative penalty per violation | Section 1101.702 |
| $125,000 | Recovery cap for one transaction | Section 1101.610 |
| $250,000 | Recovery cap tied to one license or certificate holder | Section 1101.610 |
Pearson does not promise a question on any one number. Learn the numbers that separate otherwise similar answers.
Common Exam Traps
| Tempting answer | Why it fails |
|---|---|
| TREC writes TRELA | The Legislature enacts the statute; TREC adopts rules |
| TREC has six brokers or sales agents | Section 1101.051 requires six broker members |
| An advisory committee adopts forms | The Broker-Lawyer Committee drafts; TREC adopts |
| TREC needs a consumer complaint to investigate | TREC or its staff may initiate a complaint |
| A complaint proves a violation | It starts review and possible investigation |
| SOAH makes TREC's final decision | SOAH produces the hearing record and proposal; TREC renders the final agency decision |
| A complaint pays the consumer | Administrative penalties go to the agency; recovery requires a separate statutory path |
| Recovery payment merely suspends the license | Nonpayment after statutory notice requires revocation, which may be probated |
| TREC can order any damages a consumer requests | A refund order and a Recovery Trust Account claim have statutory limits |
A 20-Minute Study Plan
Spend seven minutes on General Powers. Write the 9-member composition, the Legislature-versus-TREC distinction, and the Broker-Lawyer Committee chain from memory.
Spend seven minutes on complaints. Rebuild the sequence from signed complaint to judicial review. Mark the three timing facts: later than the fourth anniversary, 7-day acknowledgment, and 14-day response rule.
Spend six minutes on penalties. Separate administrative penalty, license discipline, unlicensed-activity enforcement, consumer refund, and Recovery Trust Account payment.
Then take the TREC Duties and Powers practice questions. Do not stop at the correct letter. Explain why each wrong answer gives the wrong institution, timing, or remedy.
Frequently Asked Questions
How many TREC Duties and Powers questions are on the Texas real estate exam?
Pearson's current sales agent outline assigns 3 scored Texas state-law items to Commission Duties and Powers. It does not publish an A, B, and C item split.
What are the three official TREC Duties and Powers subtopics?
They are General Powers, Handling of Complaints, and Penalties for Violation. Pearson further lists composition, advisory committees, investigations, hearings, appeals, unlicensed activity, disciplinary authority, and the Recovery Trust Account.
Who writes TRELA?
The Texas Legislature enacts TRELA. TREC administers and enforces it and adopts rules within the authority the statute grants.
Can TREC investigate without a consumer complaint?
Yes. Section 1101.204(a) allows the Commission or Commission staff to file a complaint and investigate as necessary to enforce the statutes and rules within its authority.
Does a TREC complaint automatically pay the consumer?
No. A complaint concerns regulatory investigation and possible discipline. Recovery Trust Account payment requires a separate statutory claim based on a qualifying judgment and other conditions.
Who makes the final decision after a SOAH hearing?
The SOAH administrative law judge issues findings, conclusions, and a proposal for decision. The Commission renders the final agency decision and imposes any authorized discipline or administrative penalty.
Primary-source verification (2026-07-29): This guide was checked against Pearson VUE Texas Real Estate Content Outlines #094401, revision 01/2026; Texas Occupations Code Chapter 1101 as rendered May 14, 2026; current TREC Rules Chapters 533 and 535; and current TREC pages for the Commission, complaints, and the Real Estate Recovery Trust Account. Pearson does not publish a row-level item allocation or a cognitive split for the Texas state-law portion.
Official Sources
- Pearson VUE Texas Real Estate Content Outlines
- Texas Occupations Code Chapter 1101
- Current TREC Rules
- TREC: About the Commission
- TREC: How to File a Complaint
- TREC: Information Regarding Recovery Fund
TEXAS STATE-LAW PRACTICE
Know who acts, when they act, and what they can order
Practice original TREC authority, complaint, penalty, and Recovery Trust Account questions with explanations built around the official outline. Pass Texas is not affiliated with TREC or Pearson VUE and does not reproduce live exam questions.