Commission Duties and Powers accounts for 3 scored questions on the Texas State Law exam. These 15 free practice questions cover TREC's authority, complaints, hearings, discipline and the Recovery Trust Account. Take the quiz without signing up, or read each answer with its explanation and source. Learn who can act, which process applies and where the Commission's authority ends.
15 questions on trec duties & powers, scored, each with a full explanation after you answer. Every question is also written out below if you would rather study at your own pace.
15 questions
~11 min
Texas State Law practice only
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Study mode · Texas rules
Work through the questions at your own pace.
Choose an answer mentally, then open its explanation. Each question has a source and a point to watch. These are original practice questions, not Pearson VUE exam items or a prediction of your result.
1
Who enacts the Act?
A study outline separates the Texas Real Estate License Act from the TREC Rules. Which statement correctly identifies the lawmaker and the regulator?
A.TREC enacts the Act; the Legislature decides individual disciplinary cases.
B.The Broker-Lawyer Committee enacts the Act; TREC publishes it.
C.The Legislature enacts the Act; TREC administers it and adopts authorized rules.
D.TREC and SOAH jointly enact the Act through contested-case decisions.
Check answer and explanation
Correct answer: C. The Legislature enacts the Act; TREC administers it and adopts authorized rules.
The Texas Legislature enacts the Texas Real Estate License Act, in Occupations Code Chapter 1101. Section 1101.151 gives TREC authority to administer Chapters 1101 and 1102 and adopt and enforce necessary rules. A rule must stay within delegated authority; it is not an amendment to the Act.
Watch for this: Keep legislation, rulemaking and enforcement separate. A regulator does not acquire legislative power by publishing a rule.
A consumer submits a timely, signed, written complaint about a license holder. The complaint and supporting evidence provide reasonable cause within TREC's authority. What follows under Section 1101.204(b)?
A.TREC must investigate; the complaint does not itself establish a violation.
B.TREC must suspend the license until the holder proves the complaint false.
C.TREC must send the consumer directly to SOAH without investigating the facts.
D.TREC must wait for a civil damages judgment before reviewing the records.
Check answer and explanation
Correct answer: A. TREC must investigate; the complaint does not itself establish a violation.
Section 1101.204(b) requires an investigation when the signed, written complaint and evidence provide reasonable cause. Staff evaluates jurisdiction and evidence. A case can be dismissed if no violation exists or proof is insufficient; filing a complaint is not a disciplinary finding.
Watch for this: Investigation is a fact-finding step, not an automatic punishment or promise of compensation.
A consumer has an unpaid final civil judgment based on qualifying licensed conduct. What is the Real Estate Recovery Trust Account's role?
A.It pays any unpaid judgment once the consumer sends TREC a complaint number.
B.It guarantees every license holder's contract debts, including unpaid commissions.
C.It replaces the civil judgment with a disciplinary fine paid to the consumer.
D.It may pay a qualifying claim after the statutory recovery requirements are met.
Check answer and explanation
Correct answer: D. It may pay a qualifying claim after the statutory recovery requirements are met.
The account addresses qualifying actual damages, not every loss involving real estate. The ordinary claim process requires a final judgment, unsuccessful execution, a perfected judgment lien and proof of eligibility. Bankruptcy and multiple-defendant provisions can affect the steps. Payment is subject to statutory limits and is not automatic.
Watch for this: An unpaid judgment is a starting point, not a guarantee. A license holder cannot use this account to recover transaction compensation, including a commission.
Which description matches the statutory composition of TREC?
A.Nine appointed members: three qualifying brokers and six public members.
B.Nine appointed members: six qualifying brokers and three public members.
C.Thirteen appointed members: six brokers, six lawyers and one public member.
D.Nine elected members: six brokers chosen by license holders and three public members.
Check answer and explanation
Correct answer: B. Nine appointed members: six qualifying brokers and three public members.
The Governor appoints nine commissioners with the Senate's advice and consent. Six must have worked in brokerage as licensed brokers as their major occupation for the five years before appointment; three represent the public. Each commissioner must be a qualified voter.
Watch for this: The Commission and the Broker-Lawyer Committee are different bodies. Do not transfer a committee's membership count to TREC.
Where are the TREC Rules published, as distinct from TRELA itself?
A.Occupations Code Chapter 1101, including every administrative rule.
B.Government Code Chapter 2001, which contains TREC's complete rulebook.
C.Title 22, Part 23 of the Texas Administrative Code.
D.The Broker-Lawyer Committee's meeting minutes, once a motion is approved.
Check answer and explanation
Correct answer: C. Title 22, Part 23 of the Texas Administrative Code.
TREC's rules are in Title 22, Part 23 of the Texas Administrative Code. They span several chapters, including 531, 533, 535 and 537. TRELA is Occupations Code Chapter 1101; Chapter 2001 of the Government Code supplies administrative-procedure rules rather than TREC's complete rulebook.
Watch for this: Chapter 535 is important, but it is not the whole set of TREC Rules.
Rule: Texas Occupations Code 1101.151; 22 TAC Part 23
The Broker-Lawyer Committee revises a standardized real estate contract. Which statement correctly describes the committee's role and TREC's role?
A.The committee drafts and revises; TREC adopts forms by rule.
B.The committee adopts binding forms; TREC only hosts the download.
C.TREC drafts every form; the committee enacts it as part of TRELA.
D.The committee's vote makes the form mandatory before TREC takes action.
Check answer and explanation
Correct answer: A. The committee drafts and revises; TREC adopts forms by rule.
Section 1101.254 assigns the committee the work of drafting and revising standardized contract forms with safeguards for the principals. Section 1101.155 authorizes TREC to adopt rules requiring forms prepared by the committee and adopted by the Commission. A draft is not an adopted rule.
Watch for this: This question identifies who does what. It does not say a promulgated form is required without regard to the transaction or permitted exceptions.
A contested TREC disciplinary case proceeds to a hearing. Which division of responsibility is correct?
A.TREC staff issues the final court judgment; SOAH collects the penalty.
B.A SOAH judge hears the case and proposes a decision; TREC makes the final agency decision.
C.The SOAH proposal automatically becomes final unless the complainant signs an objection.
D.A district court investigates first; TREC then advises the court on the license.
Check answer and explanation
Correct answer: B. A SOAH judge hears the case and proposes a decision; TREC makes the final agency decision.
A State Office of Administrative Hearings (SOAH) administrative law judge conducts the hearing and issues a proposal for decision. Under Rule 533.7, TREC renders the final contested-case decision or remands the matter for further consideration. A disciplinary appeal proceeds to district court under Section 1101.658 and Government Code Chapter 2001.
Watch for this: An agency decision is not a court judgment. SOAH's proposal, TREC's final order and judicial review are distinct stages.
An individual who is not an attorney negotiates a Texas sale for someone else for a fee. A real estate license is required, but the individual is unlicensed when the brokerage act begins and obtains a license later. Can the later license cure the licensing defect in a suit for that fee?
A.Yes, if the license is active before the lawsuit is filed.
B.Yes, if the client signed a written promise to pay the fee.
C.Yes, if the individual obtained a license before closing and kept the proceeds separate.
D.No. Later licensing does not satisfy the status requirement when the act began.
Check answer and explanation
Correct answer: D. No. Later licensing does not satisfy the status requirement when the act began.
Section 1101.806(b) requires the claimant to allege and prove qualifying status when the act commenced. Its attorney alternative does not apply to this scenario. A written compensation agreement does not cure missing license status. Unlicensed brokerage can also carry separate consequences, including the Class A misdemeanor in Section 1101.758.
Watch for this: Check the status at the start of the act, not just at closing or filing suit. Do not apply the attorney alternative to an unlicensed non-attorney.
After the required proceedings establish an authorized disciplinary ground, which action belongs to TREC's administrative role?
A.Sentencing the license holder to confinement for a criminal offense.
B.Reprimanding, suspending or revoking the license under its statutory authority.
C.Awarding all consequential damages the consumer alleges in the complaint.
D.Voiding the parties' purchase contract as the remedy for every license violation.
Check answer and explanation
Correct answer: B. Reprimanding, suspending or revoking the license under its statutory authority.
Section 1101.656 authorizes license discipline, including reprimand, suspension and revocation, with probation available as the statute permits. TREC can also assess authorized administrative penalties. It does not impose criminal imprisonment or decide every private contract or damages dispute.
Watch for this: Identify the remedy being requested. License discipline, a consumer refund, a civil claim and a criminal case are not interchangeable.
A respondent receives TREC staff's request for transaction records during a complaint investigation. Staff has not granted an extension. What response period does Rule 535.142 define as reasonable?
A.Seven days from the date the complainant filed the complaint.
B.Thirty days from the date staff assigned the complaint a case number.
C.Fourteen days from receipt of staff's request.
D.Fourteen business days after a hearing date is assigned.
Check answer and explanation
Correct answer: C. Fourteen days from receipt of staff's request.
Rule 535.142 defines reasonable time as 14 days from receipt of the request. Staff may extend that time for good cause upon a written request. Failing to respond can itself support a violation under Section 1101.652; disputing the complaint does not remove the duty to respond.
Watch for this: The trigger is receipt of the information request. Asking for an extension is not the same as receiving one.
A consumer paid a broker $1,800 for a regulated service and claims another $9,000 in resulting losses. In a refund order under Section 1101.659, what is the maximum refund based on those facts?
A.$1,800, without adding the claimed consequential losses.
B.$9,000, because the alleged harm sets the refund amount.
C.$10,800, because TREC must include every claimed loss.
D.$5,000, because the administrative penalty ceiling also caps refunds.
Check answer and explanation
Correct answer: A. $1,800, without adding the claimed consequential losses.
Section 1101.659 allows a consumer refund through the specified settlement or enforcement process. It cannot exceed what the consumer paid the regulated person for the service or accommodation. TREC may not add other damages or estimate harm in that refund order. This ceiling does not mean a refund is automatically owed.
Watch for this: A refund returns payment for a regulated service. The administrative penalty ceiling and a possible civil damages claim answer different questions.
A brokerage website needs the TREC notice that explains consumer complaint information. Which notice serves that purpose?
A.Information About Brokerage Services, which replaces the separate complaint notice.
B.Seller's Disclosure Notice, which explains how TREC decides consumer claims.
C.The buyer representation agreement, which serves as TREC's complaint form.
D.Consumer Protection Notice, separate from the IABS notice.
Check answer and explanation
Correct answer: D. Consumer Protection Notice, separate from the IABS notice.
Rule 531.18 adopts the Consumer Protection Notice and specifies the display and business-website link requirements. Rule 531.20 separately addresses Information About Brokerage Services (IABS). These notices have different jobs; providing one does not substitute for the other.
Watch for this: Do not confuse a notice about TREC and consumer protection with a notice about brokerage relationships.
Which statement correctly describes the administrative penalty ceiling in Section 1101.702(a)?
A.The total is capped at $5,000 for all violations in a single complaint.
B.Each proven violation automatically requires a $5,000 payment to the complainant.
C.The ceiling is $5,000 per violation; each day may count separately.
D.The ceiling is $125,000 per transaction, with no separate daily violations.
Check answer and explanation
Correct answer: C. The ceiling is $5,000 per violation; each day may count separately.
The statutory maximum is $5,000 for each violation, and each day a violation continues or occurs may be treated as a separate violation. The amount is determined under statutory criteria and the applicable penalty schedule; the maximum is not automatic. Collected administrative penalties go into the Recovery Trust Account, not directly to the complainant.
Watch for this: Separate a maximum from a mandatory amount. The $125,000 transaction limit concerns recovery-account payments, not administrative fines.
A TREC advisory committee recommends changing a regulatory rule. What legal effect does the recommendation have by itself?
A.It advises the Commission; a recommendation alone does not amend the rule.
B.It changes the rule once the committee approves its meeting minutes.
C.It becomes binding when a majority of affected brokers support it.
D.It replaces the Legislature's approval whenever a change also requires amending TRELA.
Check answer and explanation
Correct answer: A. It advises the Commission; a recommendation alone does not amend the rule.
Section 1101.158 authorizes advisory committees to advise TREC. The Commission retains its delegated rulemaking authority under Section 1101.151. A committee recommendation is not an adopted rule or an amendment to TRELA; changing a statute is the Legislature's role.
Watch for this: Look for the legal step that actually changes the requirement, not just the group that proposed it.
Which statement correctly describes how TREC may start enforcement under Section 1101.204?
A.Only a consumer's signed complaint can start an investigation of a license holder.
B.TREC or its staff may file a complaint and investigate within its authority.
C.An anonymous complaint alone is enough to initiate action against a license holder.
D.Only a court order or a license-renewal application permits TREC to investigate.
Check answer and explanation
Correct answer: B. TREC or its staff may file a complaint and investigate within its authority.
Section 1101.204(a) allows TREC or its staff to file a complaint and investigate as necessary to enforce the covered chapters and rules. Subsection (f) separately prohibits initiating an investigation or other action against a covered license holder on the basis of an anonymous complaint. Agency initiative does not erase that restriction.
Watch for this: Distinguish staff-initiated enforcement from action based on an anonymous complaint. Both rules belong in the answer, not a claim that TREC can investigate without limits.
A SOAH judge hears the case and proposes a decision. TREC makes the final agency decision or remands. A disciplinary appeal goes to district court under the applicable procedures.
A Section 1101.659 refund cannot exceed the amount paid for the regulated service or accommodation. TREC cannot add other damages to that refund order.
A separate statutory process for qualifying actual damages. A final judgment alone does not satisfy every requirement, and payment limits are not guaranteed awards.
For a deadline, identify the proceeding and the event that starts the clock. The complaint-investigation limit, a response to staff and a recovery-related lawsuit use different rules.
Know the scope
How this set fits the Texas State Law outline.
The official topic has 3 scored items. The counts below describe our 15-question sample, not a promise of which questions you will see. Pearson does not publish per-subtopic item counts or a cognitive mix for this State topic.
TREC Duties & Powers: official groups and our sample counts
Texas subtopic
Our questions
General Powers
6
Handling of Complaints
4
Penalties for Violation
5
A sample is not complete coverage of every possible question. See Pearson VUE's Texas Sales Agent outline, section I. Sources beside each answer explain the underlying principle. Texas-specific rules and examples link to their own authority.
These are original, hypothetical practice scenarios, not official Pearson VUE questions or accounts of real enforcement cases. The cited statutes and rules are real. This short set helps you spot misunderstandings; it is not a calibrated prediction of passing.
Pearson lists three groups and seven named subtopics for this area without publishing per-subtopic item counts or a cognitive mix. Our sample includes general powers, committees, investigations, hearings and appeals, unlicensed activity, disciplinary authority and the Recovery Trust Account.
Start by naming the decision-maker and the remedy. The Legislature enacts the Act; TREC administers it. A SOAH judge's proposal, a Commission order and a court decision are different steps. A penalty, a refund and a recovery-account payment are different remedies.
Choose what to study next.
Start with the lesson behind a missed question, then try another problem without notes.
How many TREC duties and powers questions are on the Texas Sales Agent exam?
Pearson assigns 3 scored State Law items to Commission Duties and Powers. The three groups are General Powers, Handling of Complaints and Penalties for Violation. Our 15-question sample is study coverage, not a promise of the questions or subtopic counts on your exam.
Can TREC investigate an anonymous or late complaint?
Section 1101.204(f) prohibits initiating an investigation or other action against a covered license holder on the basis of an anonymous complaint. Subsection (c) bars investigation in connection with a complaint submitted later than the fourth anniversary of the incident. TREC and its staff can initiate complaints within their statutory authority; that does not remove these limits.
Who hears a contested case, and where does a disciplinary appeal go?
A SOAH administrative law judge conducts the hearing and issues a proposal for decision. TREC renders the final agency decision or remands the case. Under Section 1101.658, a person aggrieved by a disciplinary ruling may appeal to district court in the county where the administrative hearing was held, using Government Code Chapter 2001 procedures.
Does a successful TREC complaint automatically pay the consumer?
No. Administrative penalties are deposited into the Recovery Trust Account, not paid directly to the complainant. A refund under Section 1101.659 is limited to the amount paid for the regulated service or accommodation. A recovery-account claim has separate judgment, eligibility and collection requirements. The applicable process determines whether money is payable.
What are the Real Estate Recovery Trust Account payment limits?
Section 1101.610 caps payments arising from one transaction at $125,000 total, regardless of the number of claimants. That limit includes attorney's fees, interest and court costs. Payments based on judgments against one license or certificate holder are capped at $250,000 until full reimbursement. The caps do not establish eligibility or guarantee payment.
What happens to a license after the account pays a claim?
Under Section 1101.655, TREC must revoke if the holder does not repay the full payment before the 31st day after TREC gives notice. TREC may probate the revocation order. Eligibility for a license or certificate requires repayment of the amount paid plus legal interest. Do not describe this as automatic immediate suspension.
Is the recovery-related lawsuit deadline the same as the TREC complaint limit?
No. Section 1101.605 says an action for a judgment that may lead to a recovery-account payment cannot be brought after the second anniversary of accrual. The complaint-investigation limit in Section 1101.204(c) runs from the incident and uses the fourth anniversary. These concern different proceedings; a TREC complaint is not a substitute for timely legal action.
Sources and review notes
Reviewed September 7, 2026 for rules effective through September 5, 2026. Every explanation links to the Texas statute or official TREC rule supporting it. Pearson supplies the syllabus, not these questions. People, payments and transactions in the scenarios are hypothetical. The reference table separates agency authority from court remedies; it is not a complete guide to filing a complaint or recovering money. This page is exam preparation, not advice for a transaction.
Use the source beside an answer to check the specific rule.
