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TREC Duties and Powers Texas Real Estate Exam Cheat Sheet

Quick answerTREC Duties and Powers is 3 scored Texas state-law items covering General Powers, Handling of Complaints, and Penalties for Violation.

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PortionTexas State Law
Scored items3
Share of portion7.5%
Texas rule

Texas law controls this page. Do not replace a TREC or Texas rule with a generic national principle.

Study rule

Name the institution and the process before choosing a consequence. The Legislature enacts TRELA, TREC administers it, SOAH conducts specified hearings, the Commission renders the final agency decision, and courts handle judicial review.

Exam scope

What Pearson tests

Verified against the official content outline.

  • A. General Powers: nine-member composition, duties, powers, and real estate advisory committees
  • B. Handling of Complaints: initiation, investigation, processing, SOAH hearing, Final Order, and appeal
  • C. Penalties for Violation: unlicensed activity, disciplinary authority, refunds, and the Recovery Trust Account

Decision traps

Common traps to catch

Check the governing source material.

  1. TREC does not write TRELA. The Texas Legislature enacts the statute.
  2. The six industry seats on TREC are broker seats. Section 1101.051 does not say broker or sales agent.
  3. Advisory committees recommend or draft within an assigned role. They do not replace the Commission.
  4. TREC may initiate its own complaint. It is not limited to responding to a consumer filing.
  5. A complaint does not prove a violation. Investigation and due process come before final discipline.
  6. The four-year rule says later than the fourth anniversary of the incident. It is a TREC complaint rule, not a universal limitations period.
  7. SOAH conducts the contested-case hearing and issues a proposal for decision. TREC renders the final agency decision.
  8. The $5,000 figure is a maximum administrative penalty per violation, not the automatic penalty in every case.
  9. TREC cannot impose criminal imprisonment. Criminal punishment belongs to the courts.
  10. A complaint, consumer refund, and Recovery Trust Account claim are separate paths.
  11. Recovery payment is capped at $125,000 per transaction and $250,000 per license or certificate holder until repayment.
  12. Failure to repay after statutory notice requires revocation, which TREC may probate. It is not merely a typical suspension.

Essential vocabulary

TREC Duties and Powers terms to know

Open the full glossary
TREC
The Texas Real Estate Commission, the state agency that administers and enforces Texas real estate licensing law.
TRELA
The Real Estate License Act in Texas Occupations Code Chapter 1101.
TREC Rules
Administrative rules adopted by the Commission, principally in Title 22, Part 23 of the Texas Administrative Code.
Advisory committee
A group that studies, drafts, reviews, or recommends within an assigned role without replacing TREC's authority.
Complaint
An allegation or agency-initiated matter submitted for review, not a final finding.
Reasonable cause
The evidence threshold that, with a signed written complaint, requires TREC to investigate under Section 1101.204(b).
SOAH
The State Office of Administrative Hearings, where an administrative law judge conducts specified contested-case hearings.
Proposal for decision
The administrative law judge's findings, conclusions, and proposed result before the Commission's final decision.
Final Order
The Commission's written final agency decision in a contested case.
Administrative penalty
A monetary sanction TREC may impose, capped by statute at $5,000 per violation.
Disciplinary action
Agency action such as reprimand, suspension, or revocation when legally supported.
Cease-and-desist order
An agency order directing a person to stop activity that violates TREC-administered law.
Consumer refund
A limited TREC-ordered return of what the consumer paid for a regulated service, not other damages.
Recovery Trust Account
The statutory account that may pay qualifying judgment-based claims subject to eligibility and limits.
Nulla bona
A return showing that execution found no property available to satisfy the judgment.
Subrogation
TREC's right to take the judgment creditor's recovery rights up to the amount paid from the account.

Check your recall

Can you answer these without notes?

Open each card only after you commit to an answer.

1Who enacts TRELA, and who administers it?

The Texas Legislature enacts TRELA. TREC administers and enforces it and adopts rules within statutory authority.

2What is TREC's nine-member composition?

Six licensed broker members with the required brokerage history and three public members, appointed by the governor with Senate advice and consent.

3Can TREC investigate without a consumer complaint?

Yes. Section 1101.204(a) allows the Commission or staff to file a complaint and investigate within its authority.

4What happens after a disputed TREC case is heard at SOAH?

The administrative law judge issues a proposal for decision, and the Commission renders the final agency decision.

5What is the maximum administrative penalty?

$5,000 for each violation. Each day may count separately, but the maximum is not automatic.

6What are the Recovery Trust Account caps?

$125,000 for one transaction and $250,000 for one license or certificate holder until repayment.

7What must an outside complaint contain before Section 1101.204(b) requires an investigation?

A signed writing plus evidence that provides reasonable cause.

8What is the exact complaint timing rule?

TREC may not investigate in connection with a complaint submitted later than the fourth anniversary of the incident.

9Does a TREC complaint automatically create Recovery Trust Account eligibility?

No. Recovery is a separate judgment-based statutory process.

10What happens if a license holder does not repay a recovery payment after notice?

Before the 31st day after notice, nonpayment requires revocation. TREC may probate the order.

11Who drafts standardized TREC contract forms, and who adopts them?

The Broker-Lawyer Committee drafts and revises them. TREC adopts them by rule.

12Can TREC put an unlicensed broker in jail?

No. TREC may pursue administrative enforcement or referral, while criminal punishment is imposed by a court.

Use the sheet, then retrieve

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Read the full lesson when a definition is fuzzy. Then answer the topic questions without looking back at this sheet.

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Primary sources

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This is exam-prep education, not legal, tax, or transaction advice. Confirm the current law, form, and official exam materials before relying on a rule in practice.