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.
Quiz mode · Test yourself
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: TRELA (Texas Occupations Code Ch. 1101); TREC authority
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 investigates complaints and, where warranted, pursues administrative action, including hearings (often through the State Office of Administrative Hearings) and sanctions such as fines, suspension, or revocation. Its decisions can be appealed.
Trap: A complaint does not automatically revoke a license. TREC investigates, then may impose sanctions after due process.
Source: TRELA (Texas Occupations Code Ch. 1101); complaints and discipline
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 Real Estate Recovery Trust Account compensates consumers who obtain a court judgment against a license holder for certain violations and cannot collect, subject to statutory caps. The license holder's license is typically suspended until the amount paid is repaid.
Trap: The recovery account pays wronged consumers who cannot collect a judgment, not TREC's budget or education costs.
Source: TRELA (Texas Occupations Code Ch. 1101 Subch. M); Recovery Trust Account
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 members are licensed real estate brokers or sales agents, and three are members of the public who are not in the industry.
Trap: TREC is a nine-member appointed commission, with public members included, not an elected or single-officer body.
Source: TRELA (Texas Occupations Code Ch. 1101); Commission membership
5. The TREC Rules that carry out TRELA are found in
- A.the United States Code
- B.Title 22, Chapter 535 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, Chapter 535 of the Texas Administrative Code
Why B is correct: TREC adopts rules to implement TRELA, and those rules are published in Title 22, Chapter 535 of the Texas Administrative Code (22 TAC Ch. 535). The Legislature writes the statute; TREC writes the rules within the authority the statute grants.
Trap: Rules (22 TAC Ch. 535) are different from the statute (TRELA). TREC makes rules; it does not write the Act.
Source: TREC Rules, 22 TAC Ch. 535
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 recommends the standard contract forms, which TREC then adopts by rule. License holders must use the appropriate promulgated form.
Trap: The Broker-Lawyer Committee drafts the forms; TREC adopts them. Neither the Legislature nor a private association sets the promulgated forms.
Source: TRELA (Texas Occupations Code Ch. 1101); Broker-Lawyer Committee
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: When a TREC enforcement matter becomes a contested case, it is generally referred to the State Office of Administrative Hearings (SOAH), where an administrative law judge hears the case and issues a proposal for decision.
Trap: Contested TREC cases go to SOAH, not to criminal or civil trial courts in the first instance.
Source: TRELA (Texas Occupations Code Ch. 1101); contested cases
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: A person who engages in real estate brokerage without the required license may not bring a lawsuit to recover a commission or other compensation, and may be subject to administrative and even criminal penalties for unlicensed activity.
Trap: No license, no claim to a commission. Unlicensed practice also carries penalties, not just a lost fee.
Source: TRELA (Texas Occupations Code Ch. 1101); unlicensed activity
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: After investigation and the required process, TREC may impose administrative sanctions, including a reprimand, an administrative penalty (fine), probation, suspension, or revocation of a license. Criminal punishment is handled by the courts, not TREC.
Trap: TREC imposes administrative sanctions. Jail time is a criminal matter for the courts, not the Commission.
Source: TRELA (Texas Occupations Code Ch. 1101); sanctions
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: A license holder is required to cooperate with a TREC investigation and to respond truthfully to the Commission's requests for information. Failing to provide requested information or making a material misrepresentation to TREC is itself a violation.
Trap: Stonewalling a TREC investigation is a separate violation. The duty to cooperate is mandatory.
Source: TRELA (Texas Occupations Code Ch. 1101); duty to respond
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 regulates more than brokers and sales agents. It also licenses and oversees real estate inspectors and certain other professionals, and approves the providers and courses that deliver real estate education.
Trap: TREC's reach includes inspectors and education providers, not just sales agents and brokers.
Source: TRELA / TREIA (Texas Occupations Code Ch. 1101 and 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: TREC requires brokers to provide and prominently display the Consumer Protection Notice, which tells consumers they can file a complaint with TREC and points to the recovery fund. 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: TREC Rules, 22 TAC Ch. 535; Consumer Protection Notice
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's enforcement, licensing, education, and rulemaking powers all serve a single core purpose: protecting the public. Consumer protection is the lens through which its duties are exercised.
Trap: TREC exists to protect consumers, not to advance license holders' income.
Source: TRELA (Texas Occupations Code Ch. 1101); purpose
14. TREC has adopted Canons of Professional Ethics and Conduct that include
- A.fidelity, integrity, and competency
- B.secrecy, speed, and salesmanship
- C.no written standards at all
- D.rules only for appraisers
Show answer and explanation
Correct answer: A. fidelity, integrity, and competency
Why A is correct: The TREC Rules include Canons of Professional Ethics and Conduct, which require fidelity to the client, integrity in dealings, and competency in the practice of real estate. They reinforce the statutory duties.
Trap: The canons are fidelity, integrity, and competency. They are adopted rules, not optional aspirations.
Source: TREC Rules, 22 TAC §531; Canons of Professional Ethics
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: TREC may investigate a license holder in response to a complaint or on its own motion. It is not limited to acting only when a consumer files a complaint.
Trap: TREC can act on its own initiative. A consumer complaint is not a prerequisite to enforcement.
Source: TRELA (Texas Occupations Code Ch. 1101); investigations
15 here, 1,200+ in the app
You found your gaps. Now close them across all 14 areas.
Pass Texas gives you 1,200+ Texas-specific questions, diagnostics across the 14 exam areas, Trap Library, Math Coach, offline access, and one $59.99 purchase. No subscription. No copied exam questions.
Get the full question bankFrequently asked questions
Who writes Texas real estate law, and who enforces it?+
The Texas Legislature writes the Texas Real Estate License Act (TRELA). The Texas Real Estate Commission (TREC) administers and enforces the Act and adopts the TREC Rules. TREC does not write the statute itself.
What happens when a consumer files a complaint with TREC?+
TREC investigates the complaint and, where warranted, pursues administrative action, including hearings often held through the State Office of Administrative Hearings, and sanctions such as fines, suspension, or revocation. TREC decisions can be appealed.
What is the Real Estate Recovery Trust Account?+
It compensates certain consumers who obtain a court judgment against a license holder for specified violations and cannot collect, subject to statutory caps. The license holder's license is typically suspended until the paid amount is repaid.