Standards of Conduct accounts for 9 scored questions on the Texas State Law exam. This free 15-question quiz covers all seven outline groups: ethics, discipline, unauthorized practice of law, trust accounts, fee splitting, rebates and advertising. Each answer explains the rule and a common trap, with a source you can check. Start the quiz or study the explanations at your own pace.
15 questions on standards of conduct, 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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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
When convenience conflicts with a client's choice
A seller's property is not under contract. The listing agent prefers a quick cash closing and hides a higher financed offer solely to avoid extra work. Which answer best applies the fidelity canon?
A.The agent may screen out offers whenever financing could delay closing.
B.The agent put personal convenience above the client's interest.
C.The agent may withhold the offer if the advertised price was already met.
D.The agent fulfilled fidelity by choosing the easiest transaction to close.
Check answer and explanation
Correct answer: B. The agent put personal convenience above the client's interest.
Rule 531.2 makes the client's interests primary and prohibits putting personal interests first. The seller decides which offer to accept. Rule 535.156(a)'s written-instruction exception for later offers after a client enters a contract does not apply: this property is not under contract.
Watch for this: An offer with financing is not automatically better or worse. The violation is hiding it for the agent's convenience.
An agent experienced only with urban homes takes a remote ranch listing without learning the local market or the property's specialized characteristics. Which canon most directly addresses those gaps?
A.Fidelity, which makes the client's interests the agent's primary duty.
B.Integrity, which calls for care to avoid misrepresentation by act or omission.
C.Fidelity, because it requires fair treatment of other parties in the transaction.
D.Competency, which requires local-market and property-type knowledge.
Check answer and explanation
Correct answer: D. Competency, which requires local-market and property-type knowledge.
Rule 531.4 requires knowledge of the local market, industry developments and the characteristics of the property type, together with judgment and skill. The agent is not permanently barred from ranch work, but needs the competence to perform it.
Watch for this: Distinguish an unfamiliar assignment from a prohibited assignment. A license alone does not establish competence in every market.
While marketing a house, a license holder knows of a serious latent foundation defect that would matter to a reasonable buyer. The license holder tells a prospective buyer there are no known structural problems. Which statement is correct?
A.The false statement is a material misrepresentation and a ground for discipline.
B.The statement is protected sales opinion because an inspection is available.
C.Only failing to provide an inspection report could support discipline here.
D.Only the seller can face discipline because the seller owns the defective house.
Check answer and explanation
Correct answer: A. The false statement is a material misrepresentation and a ground for discipline.
Section 1101.652(b)(3) addresses a material misrepresentation about a known significant defect, including a latent structural defect. Subsection (b)(4) separately addresses failure to disclose it. The integrity canon also requires care to avoid misrepresentation. A buyer's opportunity to inspect does not excuse the false statement.
Watch for this: A known significant defect is a material fact, not puffing. Do not assume that a ground for discipline means an automatic, predetermined penalty.
A Texas sales agent is buying a home solely for the agent's own account. No license-status disclosure has been made. Which step satisfies Rule 535.144(b)?
A.Disclose the license orally to the seller before signing the purchase contract.
B.Disclose the license in writing for the first time when the transaction closes.
C.Include written license-status disclosure in the contract or an earlier writing.
D.Send written license-status disclosure only to TREC before making the offer.
Check answer and explanation
Correct answer: C. Include written license-status disclosure in the contract or an earlier writing.
The disclosure must identify the buyer as a licensed broker or sales agent acting on the buyer's own behalf. It can appear in the contract or in another writing given before the parties enter the agreement. The rule also covers the specified family, entity and trust capacities in subsection (a).
Watch for this: The transaction being personal does not remove the written-disclosure duty. Oral disclosure or a later closing disclosure is not a substitute.
A buyer asks a sales agent who is not an attorney to invent a contingency giving the buyer a new termination right. No applicable approved addendum addresses it. What should the agent do?
A.Write the clause after the buyer approves the wording in an email.
B.Advise the buyer to consult an attorney rather than draft the clause.
C.Draft the clause if the sponsoring broker agrees with its purpose.
D.Copy a clause from an unrelated sale and explain its legal effect.
Check answer and explanation
Correct answer: B. Advise the buyer to consult an attorney rather than draft the clause.
Rule 537.11(b)(5) prohibits drafting or recommending language that defines or affects legal rights, obligations or remedies, expressly including contingency clauses. Unusual matters call for the principal to consult an attorney under subsection (e). Client approval does not authorize the agent to invent legal wording.
Watch for this: Filling in a factual blank is different from creating a legal right. The agent should not act as the client's legal adviser.
Before anyone signs a proposed contract, the seller gives the agent a specific written instruction identifying a sentence to delete from an authorized form. The agent strikes it through conspicuously, without choosing new wording or giving legal advice. Under Rule 537.11, this act is:
A.Within the narrow provision for a principal's specific written instructions.
B.Prohibited solely because any deletion from an authorized form is legal drafting.
C.Allowed only if the agent first advises the seller about its legal consequences.
D.Allowed only if the agent substitutes wording approved by the sponsoring broker.
Check answer and explanation
Correct answer: A. Within the narrow provision for a principal's specific written instructions.
Rule 537.11(d)(2) permits adding or striking language at a principal's specific written instruction when the change is conspicuous. This is not authority to invent the language or advise on its legal effect. The question describes an unsigned proposal, not permission to alter an executed agreement without the other party.
Watch for this: Read who supplied the instruction. An agent's own drafting does not become lawful just because the client later approves it.
A buyer hands an earnest-money check to a sponsored Texas sales agent to hold for the transaction. What does Rule 535.146 require the sales agent to do with that trust money?
A.Keep the check until the broker's second-working-day deadline arrives.
B.Place it in the sales agent's own separately labeled trust account.
C.Deposit it in an operating account while keeping a separate client ledger.
D.Deliver it immediately to the sales agent's sponsoring broker.
Check answer and explanation
Correct answer: D. Deliver it immediately to the sales agent's sponsoring broker.
Rule 535.146(b)(2) says a sales agent may not maintain a trust account and must immediately deliver received trust money to the sponsoring broker. The broker has separate handling duties. A deadline that applies to the broker does not give the sales agent a holding period.
Watch for this: Separate receipt by the sales agent from receipt by the broker. Do not start with the broker's deadline before identifying who has the money.
A broker receives trust money on Monday. Tuesday and Wednesday are ordinary working days, and the principals have not agreed in writing to different deposit timing. By when must the broker deposit it in the trust account or deliver it to an authorized escrow agent?
A.Close of business Monday, the same day the broker receives it.
B.Close of business Tuesday, one working day after receipt.
C.Close of business Wednesday, two working days after receipt.
D.Close of business Thursday, three working days after receipt.
Check answer and explanation
Correct answer: C. Close of business Wednesday, two working days after receipt.
Rule 535.146(b)(3) sets the outside limit at close of business on the second working day after the broker receives the money, unless the principals expressly agree to a different time in writing. Tuesday is day one and Wednesday is day two.
Watch for this: This is the broker's regulatory handling deadline. It does not replace the buyer's separate contractual earnest-money delivery deadline.
A broker takes a buyer's earnest money from the trust account to pay the brokerage's office rent, intending to replace it next week. Which answer best describes the conduct?
A.It is a permitted temporary advance if the broker repays it before closing.
B.It is an improper withdrawal and evidence of commingling under the rule.
C.It is a permitted bank-service-fee reserve if the broker records the amount.
D.It is permitted whenever the trust account still has enough for other clients.
Check answer and explanation
Correct answer: B. It is an improper withdrawal and evidence of commingling under the rule.
Rule 535.146(b)(4)-(5) prohibits commingling and identifies operating-expense payments or other improper withdrawals as prima facie evidence of it. Subsection (d)(1) limits disbursements to the agreement under which the money was received. Using another person's funds for the broker's own purpose is commonly described as conversion.
Watch for this: The narrow, documented bank-service-fee reserve in subsection (c)(4) is not permission to use a buyer's money for office rent. A promise to repay does not cure the withdrawal.
A broker promises an unlicensed neighbor $30 cash for referring a prospective buyer. The neighbor makes the referral expecting that payment. The neighbor sells no goods or services to the broker and has no applicable license exemption. Which statement is correct?
A.The payment is allowed because its cash value is less than $50.
B.The payment is allowed if the neighbor does not discuss price or terms.
C.The payment is allowed if described as a thank-you rather than commission.
D.The expected cash payment makes this referral an act requiring a license.
Check answer and explanation
Correct answer: D. The expected cash payment makes this referral an act requiring a license.
Rule 535.20(a) treats a referral made with the expectation of valuable consideration as licensed activity and expressly includes money. Its separate threshold for gifts of merchandise is not a cash allowance. The stem rules out the goods-or-services arrangement described in subsection (b).
Watch for this: Identify what is being paid for and the form of payment. Thirty dollars in cash is not treated as a small merchandise gift.
A Texas broker wants to share an earned commission with a broker licensed in another state who does not hold a Texas license. Which condition fits the exception in TRELA 1101.651(a)(2)?
A.The out-of-state broker conducts none of the compensated negotiations in Texas.
B.The out-of-state broker conducts Texas negotiations only with the Texas broker present.
C.The out-of-state broker conducts Texas negotiations only by obtaining the client's consent.
D.The out-of-state broker conducts Texas negotiations only after disclosing the other-state license.
Check answer and explanation
Correct answer: A. The out-of-state broker conducts none of the compensated negotiations in Texas.
The statute permits compensation to a real estate broker licensed in another state who does not conduct in Texas any of the negotiations for which the compensation is paid. That exception allows cooperation; it does not authorize unlicensed negotiating activity in Texas.
Watch for this: The location of the compensated negotiations matters. Client permission or a Texas broker's presence does not replace the stated condition.
A sales agent proposes a lawful rebate of part of the commission to the buyer the agent represents. Which statement correctly identifies the written-consent requirement in Rule 535.147(d)?
A.The buyer's written consent alone satisfies the rule for a sales agent's rebate.
B.The sponsoring broker's written consent alone satisfies the rule for this rebate.
C.Written consent is required from both the sponsoring broker and the represented buyer.
D.Written consent is required from TREC and the seller rather than the represented buyer.
Check answer and explanation
Correct answer: C. Written consent is required from both the sponsoring broker and the represented buyer.
The rule requires the sales agent's sponsoring broker and the represented party to give written consent. The payment also must not mislead a broker, lender, title company or governmental agency about the transaction or the buyer's finances. Written consent is necessary, not a way around other applicable requirements.
Watch for this: A rebate to a transaction party is different from paying an unlicensed person to perform a licensed referral. Neither a label nor a hidden payment makes the arrangement compliant.
Disclosure does not cure a prohibited referral fee
An inspector pays a sales agent $100 solely for each home-inspection referral. The agent performs no separate goods-or-services work for the inspector. The buyer is told about the payment and consents. Does that disclosure make the fee permissible under Rule 535.148?
A.No; the payment is for an inspection referral, which the rule prohibits.
B.Yes; the client's consent replaces the prohibition on referral payments.
C.Yes; disclosure permits any payment if the inspector charges market rates.
D.No; but the same referral payment becomes lawful if labeled a marketing fee.
Check answer and explanation
Correct answer: A. No; the payment is for an inspection referral, which the rule prohibits.
Rule 535.148(d)(1) prohibits paying or receiving consideration for inspection referrals, and subsection (e) includes inspectors as settlement-service providers. Disclosure and consent do not cure the prohibition. Subsection (h) preserves specified exceptions, including market-rate payment for actual goods or services; the stem excludes that situation.
Watch for this: Ask whether the fee is permitted before asking whether it was disclosed. A referral cannot be turned into actual marketing work just by renaming the payment.
A team postcard uses 24-point type for its phone number, the largest contact information for any sales agent, associated broker or team in the ad. The broker's name is 8 points. Assuming the other ad requirements are met, what is the minimum compliant broker-name size?
A.8 points, because identifying the broker somewhere is sufficient.
B.12 points, with the broker's name in a readily noticeable location.
C.18 points, with the broker's name in a readily noticeable location.
D.24 points, because the broker must match the largest contact information.
Check answer and explanation
Correct answer: B. 12 points, with the broker's name in a readily noticeable location.
Rule 535.155(a)(2) requires the broker's name to be at least half the size of the largest relevant contact information. Half of 24 is 12, so 8 points is too small. Subsection (b)(4) includes names, phone numbers, email and website addresses, social handles and scan codes as contact information.
Watch for this: The benchmark is the largest relevant contact information, not automatically the agent's name or the smallest text in the ad.
A sponsored sales agent plans to advertise a new team as 'Capitol Realty Associates.' It is not the broker's licensed or assumed business name. Which change addresses the team-name requirements?
A.Keep the proposed name and add the broker's name elsewhere in the first ad.
B.Add 'Team' to the proposed name but keep 'Associates' and skip registration.
C.Use a nonmisleading name ending in 'Team' or 'Group' and have the broker register it before use.
D.Have the agent register the proposed name after its first advertising use.
Check answer and explanation
Correct answer: C. Use a nonmisleading name ending in 'Team' or 'Group' and have the broker register it before use.
Rule 535.154(c) requires a team name to end in 'team' or 'group,' not imply an independent brokerage, and be registered by the broker before use. Rule 535.155(d)(5) specifically identifies 'associates' among terms implying independence. Adding 'Team' does not resolve a misleading term.
Watch for this: A team name is not automatically a broker DBA. Both the wording and pre-use registration must comply.
The sales agent delivers it immediately to the sponsor. The broker's separate handling limit is the second working day after receipt, unless the principals expressly agree otherwise in writing.
Measure against the largest relevant contact information. The broker's name must be at least half that size and readily noticeable. A team also needs a compliant, registered name.
This is a decision aid, not every exception. For example, the social-media placement rule differs from the printed-postcard scenario. The source beside each answer controls the specific question.
Know the scope
How this set fits the Texas State Law outline.
The official topic has 9 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.
Standards of Conduct: official groups and our sample counts
Texas subtopic
Our questions
Professional Ethics and Conduct
2
Grounds for Discipline
2
Unauthorized Practice of Law
2
Trust Accounts
3
Splitting Fees
2
Rebates
2
Advertising
2
A sample is not complete coverage of every possible question. See Pearson VUE's Texas Sales Agent outline, section III. Sources beside each answer explain the underlying principle. Texas-specific rules and examples link to their own authority.
Look for the action, not just the label. Who holds the money? Who is being paid? Who supplied the contract language? A small detail can turn a permitted act into a violation.
These are original practice questions with hypothetical people, payments and transactions, not Pearson VUE questions or actual cases. They sample all seven Sales Agent outline groups, but do not test every rule or exception. A score here is not a calibrated prediction of passing.
Pearson assigns nine scored items to this State topic without publishing a per-subtopic count or cognitive mix. Our question counts are study coverage, not official exam quotas. Read the cited rule when an exception changes the answer.
Choose what to study next.
Start with the lesson behind a missed question, then try another problem without notes.
How many Standards of Conduct questions are on the Texas exam?
The Sales Agent State Law outline assigns nine scored items to this topic across seven groups, A through G. Pearson does not publish a per-group item count or cognitive mix. Our 15-question sample covers each broad group but is not a complete or calibrated replica of the exam.
What is the difference between commingling and conversion?
Commingling mixes trust money with the broker's own or other non-trust money. Conversion commonly describes using another person's funds for an unauthorized purpose. Rule 535.146(b)(5) treats paying operating expenses from the trust account as evidence of commingling. Subsection (c)(4) permits a reasonable, documented reserve for bank service fees, not the use of client funds for office expenses.
Does written client permission let an agent draft contract clauses?
No. Rule 537.11 distinguishes the agent's own legal drafting from a conspicuous addition or deletion made at a principal's specific written instruction. The narrow provision does not allow the agent to invent a contingency or advise on its legal effect. An unusual legal matter should go to the principal's attorney.
Can a Texas sales agent rebate commission to a buyer?
Yes, subject to Rule 535.147(d) and other applicable requirements. For the represented-buyer example here, both the sponsoring broker and the buyer must consent in writing. The payment cannot mislead transaction participants about the transaction or the buyer's finances. A rebate is not the same as paying someone to make an unlicensed referral.
Does a $50 threshold permit a small cash referral fee?
No. Rule 535.20 separately lists money and merchandise worth more than $50 as valuable consideration. The merchandise threshold is not a cash safe harbor. The question here concerns an expected payment to an unlicensed neighbor for a referral, with no applicable exemption.
Must the broker's name appear inside every social-media advertisement?
Rule 535.155(a) requires the broker's name and the placing license holder or team to be readily noticeable. For social media or text, subsection (c) allows the required information on a separate page or profile reached by a direct link, if it is readily noticeable there. Do not apply that placement accommodation to the printed postcard in question 14.
Will this quiz score be saved when I open the app?
This website topic-quiz result does not transfer to your account. You can sign in to save practice completed inside the app. Selected activities are free; full access is paid. All 15 questions and their explanations on this page remain available without signup.
Sources and review notes
Reviewed September 7, 2026 for rules effective through September 5, 2026. Each rule-based answer was checked against TRELA and TREC's current rule display. That display is provided by TREC as a courtesy; it links to the Secretary of State's official Texas Administrative Code. Pearson supplies the syllabus, not these questions. People, amounts and transactions in the scenarios are hypothetical; the cited requirements are not invented. This page is exam preparation, not advice for a transaction.
Use the source beside an answer to check the specific rule.
