Free Texas State Law study sheet
Texas Standards of Conduct Texas Real Estate Exam Cheat Sheet
Quick answerStandards of Conduct contributes 9 scored Texas state-law items. It tests professional ethics, discipline, unauthorized practice of law, trust money, compensation, rebates, and advertising through fact patterns where one detail changes the lawful response.
Source-checked Texas State Law portion
Texas law controls this page. Do not replace a TREC or Texas rule with a generic national principle.
Name the conduct before choosing the consequence. Ask whose interest, money, words, payment, or public impression the rule protects.
Exam scope
What Pearson tests
Verified against the official content outline.
- A. Professional Ethics and Conduct: fidelity, integrity, competence, honesty, fair dealing, and timely response
- B. Grounds for Discipline: negligence, dishonesty, misrepresentation, nondisclosure, money violations, required forms, and misleading ads
- C-D. Unauthorized Practice of Law and Trust Accounts: form boundaries, legal advice, receipt, deposit, separation, records, and disbursement
- E-G. Splitting Fees, Rebates, and Advertising: licensed activity, compensation channels, consent, settlement-service limits, identity, size, and misleading impressions
Decision traps
Common traps to catch
Check the governing source material.
- Client loyalty never permits dishonesty to another party. Fidelity puts the client first and still requires fair treatment of others.
- Rule 537.11 is broader than the slogan "fill in the blanks." It permits informational items and a narrow written-instruction change, but never legal drafting or legal-effect advice.
- A sales agent delivers trust money to the sponsoring broker immediately. The broker's second-working-day default starts when the broker receives it.
- A sales agent may accept transaction compensation only from the sponsoring broker. Written broker consent does not authorize direct client payment.
- Disclosure does not cure a settlement-service referral payment prohibited by Rule 535.148.
- The $50 language in Rule 535.20 concerns merchandise. It does not make a small cash referral payment lawful.
- A broker may keep a reasonable documented amount in a trust account for bank fees. The rule sets no fixed dollar amount.
- A broker name appearing somewhere in an ad can still fail. It must be readily noticeable and at least half the size of the largest relevant contact information.
Essential vocabulary
Texas Standards of Conduct terms to know
- Fidelity
- The fiduciary standard that puts the client's interest first while requiring fair treatment of other parties.
- Integrity
- Prudence and caution used to avoid misrepresentation by act or omission.
- Competency
- Current knowledge and skill for the market, property type, and brokerage task.
- Ground for discipline
- Conduct authorizing TREC to suspend, revoke, reprimand, probate, or take another permitted action.
- Informational item
- A factual statement, form choice, or instruction that completes an authorized form without legal advice.
- Trust money
- Client money, earnest money, rent, unearned fees, security deposits, or other money held for another.
- Commingling
- Mixing trust money with a broker's personal, operating, or other non-trust money.
- Conversion
- Unauthorized use or control of money belonging to another.
- Fee splitting
- Sharing brokerage compensation, restricted when the recipient performed licensed activity without an active license.
- Rebate
- Payment of part of a fee or commission to a transaction party under the consent and anti-misrepresentation rules.
- Settlement service
- A service connected with prospective or actual settlement, including inspection, lending, title, appraisal, and closing services.
- Advertisement
- Public-facing communication designed to attract brokerage business, including social media, email, text, signs, and business cards.
- Team name
- A registered collective name under one sponsoring broker that ends in team or group and does not imply an independent brokerage.
- Contact information
- A name, phone number, email, website, social handle, scan code, or similar way to contact a featured license holder.
Check your recall
Can you answer these without notes?
Open each card only after you commit to an answer.
1What are the three TREC conduct canons?
Fidelity, integrity, and competency.
2What two known-defect acts are separate discipline grounds?
Material misrepresentation and failure to disclose.
3May a license holder invent a custom contingency clause?
No. Drafting language affecting rights or remedies is legal work.
4When does a sales agent deliver received trust money?
Immediately to the sponsoring broker.
5How do fee splitting and rebates differ?
Fee splitting asks who performed licensed activity and may be paid. A rebate pays a transaction party and adds written-consent and truthful-reporting rules.
6How large must the broker name be in an ad?
At least half the size of the largest relevant contact information, and readily noticeable.
7Who may pay a sales agent transaction compensation?
The sponsoring broker or the broker who sponsored the agent when it was earned.
8Does disclosure cure a paid inspector referral?
No. Rule 535.148 prohibits the settlement-service referral payment itself.
9What is the broker's default trust-money deposit limit?
Close of business on the second working day after broker receipt, unless the principals expressly agreed otherwise in writing.
Use the sheet, then retrieve
Turn recognition into recall.
Read the full lesson when a definition is fuzzy. Then answer the topic questions without looking back at this sheet.
Primary sources
Checked .
- Pearson VUE Texas Real Estate Content Outlines
- TREC Rules
- TRELA, Texas Occupations Code Chapter 1101
- Official Texas Administrative Code, Title 22, Part 23
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.