TREC Duties & Powers Practice Questions
Commission duties and powers is 3 scored items on the Texas state-law portion. It covers TREC's role, how TREC handles complaints and discipline, penalties for unlicensed activity, and the Real Estate Recovery Trust Account. The Legislature writes TRELA; TREC enforces it and adopts the Rules. Work the questions below, then read every explanation.
Exam prep only
These few questions test who does what. TREC administers and enforces The Real Estate License Act and adopts the TREC Rules, while the Texas Legislature writes the statute.
Use the who-makes-the-law read. Distinguish the body that writes the statute from the body that enforces it. Confirm live procedures and statutory caps against current TRELA when applying outside exam practice.
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TREC Duties & Powers Practice Questions
15 scenario-based 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.
Every question explained
Prefer to study at your own pace? Here are all 15 questions. Read each one and pick your answer, then reveal the correct answer, the reasoning, and the trap that catches most candidates.
1. Which body writes the Texas Real Estate License Act (TRELA), and which body enforces it and adopts the rules?
- A.TREC writes the statute; the courts enforce it
- B.The Texas Legislature writes the statute; TREC enforces it and adopts the TREC Rules
- C.TREC writes both the statute and the rules
- D.The Governor writes the statute; TREC enforces it
Show answer and explanation
Correct answer: B. The Texas Legislature writes the statute; TREC enforces it and adopts the TREC Rules
Why B is correct: The Texas Legislature enacts TRELA, the statute. The Texas Real Estate Commission (TREC) administers and enforces the Act and adopts the TREC Rules. TREC does not write the statute itself.
Trap: The Legislature writes the law; TREC enforces it and makes rules. Do not give TREC the statute-writing power.
Source: Texas Occ. Code §1101.151
2. A consumer files a complaint against a license holder. TREC's role is to
- A.automatically revoke the license
- B.investigate the complaint and, where warranted, hold a hearing and impose sanctions such as fines, suspension, or revocation
- C.decide the matter in criminal court
- D.refer all complaints to the Legislature
Show answer and explanation
Correct answer: B. investigate the complaint and, where warranted, hold a hearing and impose sanctions such as fines, suspension, or revocation
Why B is correct: TREC evaluates and investigates complaints within its authority. A disputed disciplinary case may go to SOAH, while the Commission renders the final agency decision. A complaint alone does not prove a violation or revoke a license.
Trap: A complaint does not automatically revoke a license. TREC investigates, then may impose sanctions after due process.
Source: Texas Occ. Code §§1101.204, 1101.657-1101.658; 22 TAC §533.7
3. The Real Estate Recovery Trust Account exists primarily to
- A.pay TREC's operating expenses
- B.compensate certain consumers who obtain a judgment against a license holder for specified violations and cannot collect it
- C.fund continuing education for agents
- D.hold earnest money for all transactions
Show answer and explanation
Correct answer: B. compensate certain consumers who obtain a judgment against a license holder for specified violations and cannot collect it
Why B is correct: The account may pay qualifying claims based on specified actual damages and a civil judgment, subject to statutory collection steps and caps. It is not automatic complaint compensation. If the holder does not repay a payment before the 31st day after TREC gives notice, the license must be revoked, although TREC may probate the order.
Trap: The recovery account pays wronged consumers who cannot collect a judgment, not TREC's budget or education costs.
Source: Texas Occ. Code §§1101.601-1101.610, 1101.655
4. The Texas Real Estate Commission is composed of
- A.three members, all attorneys
- B.nine members appointed by the Governor, including public members
- C.fifty members elected by license holders
- D.one commissioner appointed for life
Show answer and explanation
Correct answer: B. nine members appointed by the Governor, including public members
Why B is correct: TREC consists of nine members appointed by the Governor with the advice and consent of the Senate. Six must have worked in brokerage as licensed brokers as their major occupation for the five years before appointment, and three represent the public.
Trap: TREC is a nine-member appointed commission, with public members included, not an elected or single-officer body.
Source: Texas Occ. Code §1101.051
5. The TREC Rules that carry out TRELA are found in
- A.the United States Code
- B.Title 22, Part 23 of the Texas Administrative Code
- C.the Texas Constitution
- D.the local county clerk's office
Show answer and explanation
Correct answer: B. Title 22, Part 23 of the Texas Administrative Code
Why B is correct: TREC's rules are published in Title 22, Part 23 of the Texas Administrative Code. Relevant chapters include 531, 533, 535, and 537. The Legislature enacts TRELA; TREC adopts rules within delegated authority.
Trap: The rules and the statute are different sources. Do not reduce all TREC rules to Chapter 535 or give TREC power to enact TRELA.
Source: Texas Occ. Code §1101.151; 22 TAC pt. 23
6. The promulgated contract forms that license holders must use are drafted by the
- A.Texas Legislature
- B.Texas Real Estate Broker-Lawyer Committee, then adopted by TREC
- C.local Realtor association
- D.Texas Supreme Court
Show answer and explanation
Correct answer: B. Texas Real Estate Broker-Lawyer Committee, then adopted by TREC
Why B is correct: The Texas Real Estate Broker-Lawyer Committee drafts and revises standardized contract forms with safeguards for the principals. TREC adopts forms by rule.
Trap: The Broker-Lawyer Committee drafts the forms; TREC adopts them. Neither the Legislature nor a private association sets the promulgated forms.
Source: Texas Occ. Code §§1101.155, 1101.252, 1101.254
7. A contested enforcement case against a license holder is typically heard by an administrative law judge at the
- A.State Office of Administrative Hearings (SOAH)
- B.United States Supreme Court
- C.county justice of the peace court
- D.local zoning board
Show answer and explanation
Correct answer: A. State Office of Administrative Hearings (SOAH)
Why A is correct: A SOAH administrative law judge conducts the hearing and issues findings, conclusions, and a proposal for decision. The Commission renders the final agency decision.
Trap: SOAH conducts the hearing, but its proposal is not TREC's final order.
Source: Texas Occ. Code §§1101.657, 1101.705; 22 TAC §533.7
8. A person who performs brokerage for compensation without a license generally
- A.may still sue to collect the commission
- B.may not maintain a lawsuit to recover a commission and may face penalties
- C.is automatically granted a license
- D.is only subject to a warning
Show answer and explanation
Correct answer: B. may not maintain a lawsuit to recover a commission and may face penalties
Why B is correct: 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. Separate sections authorize administrative, civil, and criminal consequences for unlicensed activity.
Trap: Do not stop at the lost commission claim. Unlicensed activity can trigger several distinct enforcement paths.
Source: Texas Occ. Code §§1101.351, 1101.753-1101.754, 1101.758, 1101.806
9. Which of the following is within TREC's power to impose after due process?
- A.Criminal imprisonment
- B.A reprimand, administrative penalty, probation, suspension, or revocation
- C.A change to the state Constitution
- D.A new property tax
Show answer and explanation
Correct answer: B. A reprimand, administrative penalty, probation, suspension, or revocation
Why B is correct: TREC may reprimand, suspend, revoke, probate a suspension, or impose an administrative penalty when authorized. Criminal imprisonment is imposed through the criminal justice system, not by TREC.
Trap: TREC imposes administrative sanctions. Jail time is a criminal matter for the courts, not the Commission.
Source: Texas Occ. Code §§1101.656, 1101.701-1101.702
10. When TREC investigates a complaint, the license holder under investigation must
- A.ignore the inquiry
- B.cooperate and respond to TREC's requests for information
- C.file a counter-complaint in district court first
- D.surrender the license immediately
Show answer and explanation
Correct answer: B. cooperate and respond to TREC's requests for information
Why B is correct: Rule 535.142 defines a reasonable response time as 14 days from receipt of the request, unless staff extends it for good cause. Failing to provide requested information or records may support discipline.
Trap: Ignoring TREC can create another violation. Respond within the rule-defined time or request an extension for good cause.
Source: Texas Occ. Code §1101.652(a)(4), (a-1)(2); 22 TAC §535.142
11. In addition to brokers and sales agents, TREC also regulates
- A.real estate inspectors and approved education providers
- B.licensed physicians
- C.commercial truck drivers
- D.public school teachers
Show answer and explanation
Correct answer: A. real estate inspectors and approved education providers
Why A is correct: TREC administers Occupations Code Chapters 1101 and 1102, which cover real estate brokerage, specified education approvals, and real estate inspectors.
Trap: TREC's reach includes inspectors and education providers, not just sales agents and brokers.
Source: Texas Occ. Code §1101.151; chs. 1101-1102
12. TREC requires brokers to make available to consumers a notice describing how to file a complaint, known as the
- A.Consumer Protection Notice
- B.Notice of Buyer's Termination
- C.Seller's Disclosure Notice
- D.Homestead Designation
Show answer and explanation
Correct answer: A. Consumer Protection Notice
Why A is correct: Rule 531.18 adopts the Consumer Protection Notice and requires each license holder to display or link it in the ways the rule specifies. It is separate from the IABS notice.
Trap: The Consumer Protection Notice (how to complain to TREC) is distinct from the IABS (representation) notice.
Source: 22 TAC §531.18; Texas Occ. Code §§1101.202, 1101.615
13. The fundamental purpose of TREC's duties and powers is to
- A.maximize commissions for license holders
- B.protect the public in real estate transactions
- C.set property values across Texas
- D.collect property taxes
Show answer and explanation
Correct answer: B. protect the public in real estate transactions
Why B is correct: TREC administers Texas real estate licensing and enforcement to protect the public. It does not set property taxes or exist to maximize license-holder compensation.
Trap: TREC exists to protect consumers, not to advance license holders' income.
Source: Texas Occ. Code §1101.151
14. Which statement correctly describes a TREC advisory committee?
- A.It advises, drafts, or recommends within its assigned role, while the Commission retains its authority
- B.It may enact amendments to TRELA without the Legislature
- C.It replaces TREC in every final disciplinary decision
- D.It can impose criminal sentences on license holders
Show answer and explanation
Correct answer: A. It advises, drafts, or recommends within its assigned role, while the Commission retains its authority
Why A is correct: Section 1101.158 allows TREC to appoint advisory committees. The Broker-Lawyer Committee, for example, drafts and revises standardized forms, but TREC adopts the forms and retains its regulatory authority.
Trap: The word advisory is decisive. A committee does not become the Legislature, the Commission, or a criminal court.
Source: Texas Occ. Code §§1101.158, 1101.252, 1101.254
15. TREC may begin an investigation of a license holder
- A.only after a consumer complaint
- B.on its own motion as well as in response to a complaint
- C.only with permission from the Legislature
- D.only during license renewal
Show answer and explanation
Correct answer: B. on its own motion as well as in response to a complaint
Why B is correct: Section 1101.204(a) allows the Commission or Commission staff to file a complaint and investigate as necessary to enforce the chapters and rules within its authority.
Trap: TREC can act on its own initiative. A consumer complaint is not a prerequisite to enforcement.
Source: Texas Occ. Code §1101.204(a)
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Get the full question bankFrequently asked questions
Who writes Texas real estate law, and who enforces it?+
The Texas Legislature enacts the Texas Real Estate License Act. TREC administers and enforces the Act and adopts rules within its statutory authority.
What happens when a consumer files a complaint with TREC?+
TREC first evaluates jurisdiction and reasonable cause. It may investigate, dismiss, issue an advisory letter, seek an agreed order, or pursue a contested SOAH hearing. The Commission renders the final agency decision.
What is the Real Estate Recovery Trust Account?+
It is a statutory account that may pay qualifying judgment-based claims under detailed conditions. Current limits are $125,000 for one transaction and $250,000 for one license or certificate holder until repayment.