1. © 2012 Cengage Learning

2. Licensing Laws and Professional Affiliation Chapter 18

3. © 2012 Cengage Learning In This Chapter You will cover the various licensing law requirements, emphasizing the provisions of the Texas Real Estate License Act.

4. © 2012 Cengage Learning Rationale for a Real Estate Licensing Does the public have a vested interest in seeing that real estate salespersons & brokers have the qualifications of honesty, truthfulness, good reputation, & real estate knowledge before they are allowed to negotiate real estate transactions on behalf of others?

5. © 2012 Cengage Learning It was this concern that brought about real estate licensing laws as we know them today.

6. © 2012 Cengage Learning Real Estate Agent A person who, for compensation or promise of compensation, lists or offers to list, sells or offers to sell, buy or offers to buy, negotiates or offers to negotiate either directly or indirectly for the purpose of bring about a sale, purchase or option to purchase, exchange, auction, lease, or rental of real estate, or any interest in real estate Must hold a valid real estate license.

7. © 2012 Cengage Learning License Types Real Estate Broker  A person who, for another person and for a fee, commission, or other valuable consideration, or with the intention or in the expectation or on the promise of receiving or collecting a fee, commission, or other valuable consideration from another person for conducting real estate brokerage activity as defined by TRELA. Real Estate Salesperson  A person associated with a Texas licensed real estate broker for the purposes of performing acts or transactions comprehended by the definition of "real estate broker" as defined in this TRELA.

8. © 2012 Cengage Learning Exemptions 1. An attorney licensed in this state or in any other state. 2. An attorney in fact under a duly executed power of attorney authorizing the consummation of a real estate transaction. 3. A public official in the conduct of that person's official duties. 4. A person conducting an auction under the authority of a license issued by this state, provided the person does not perform any other act of a real estate broker or salesman as defined by this Act. 5. A person acting under a court order or under the authority of a will or a written trust instrument. 6. A person employed by an owner in the sale of structures and land on which said structures are located if the structures are erected by the owner in the course of the owner’s business. 7. An on-site manager of an apartment complex.

9. © 2012 Cengage Learning Exemptions 8. An owner or his employees in renting or leasing the owner's own real estate whether improved or unimproved. 9. A partnership or limited liability partnership performing an act constituting an act of a broker or salesman, as defined by this Act, through a partner who is duly licensed as a real estate broker. 10. Transactions involving the sale, lease, or transfer of any mineral or mining interest in real property. 11. involving the sale, lease, or transfer of cemetery lots. 12. Transactions involving the renting, leasing, or management of hotels or motels. 13. The sale of real property under a power of sale conferred by a deed of trust or other contract lien.

10. © 2012 Cengage Learning Texas License Requirements Before applying for a real estate Salesperson License (210 classroom hours), an individual must first furnish the Commission satisfactory evidence of successfully completing the following education: Principles of Real Estate core real estate course (60 classroom hours) Law of Agency core real estate course (30 classroom hours) Law of Contracts core real estate course (30 classroom hours) An additional core real estate course (30 classroom hours) Another four semester (60 classroom) hours in core courses or in related courses acceptable to the Commission.

11. © 2012 Cengage Learning Texas Broker License 900 classroom hours To be eligible to apply for a real estate Broker License, you must have: More than two (2) years active experience plus 270 classroom hours of core real estate courses plus An additional 630 classroom hours in related courses acceptable to the Texas Real Estate Commission

12. © 2012 Cengage Learning Continuing Education A licensee must furnish TREC proof of completing at least 15 classroom hours of continuing education course approved by TREC taken during the term of the current license.

13. © 2012 Cengage Learning License Required A person may not act as a professional inspector in this state for a buyer or seller of real property unless the person possesses a professional inspector license issued under this section.

14. © 2012 Cengage Learning Home Inspectors Professional inspector means a person who represents to the public that the person is trained and qualified to perform a real estate inspection and who accepts employment for the purpose of performing a real estate inspection for a buyer or seller of real property. Real estate inspector means a person who represents to the public that the person is trained and qualified to perform real estate inspections under the indirect supervision of a professional inspector and who accepts employment for the purpose of performing a real estate inspection for a buyer or seller of real property.

15. © 2012 Cengage Learning A licensed inspector may not:  accept an assignment for real estate inspection if the employment or fee is contingent on the reporting of a specific, predetermined condition of the improvements to real property or is contingent on the reporting of specific findings other than those known by the inspector to be facts at the time of accepting the assignment.  act in a manner or engage in a practice that is dishonest or fraudulent or that involves deceit or misrepresentation.  perform a real estate inspection in a negligent or incompetent manner.  act in the dual capacity of inspector and undisclosed principal in a transaction.  act in the dual capacity of inspector and real estate broker or salesperson in a transaction.  perform or agree to perform any repairs or maintenance in connection with a real estate inspection pursuant to the provisions of any earnest money contract, lease agreement, or exchange of real estate.

16. © 2012 Cengage Learning http://www.TREC.state.Tx.us

17. © 2012 Cengage Learning Chapter 1101, Texas Occupations Code - The Real Estate License Act (Real Estate Brokers and Salespersons) and Chapter 1102, Texas Occupations Code (Real Estate Inspectors), which include revisions made by H.B. 3507, H.B. 1508 and S.B. 287, 78th Leg., R.S. (2003).

18. © 2012 Cengage Learning License Suspension & Revocation The commission may, on its own motion, and shall, on the signed complaint in writing of any person, provided the complaint, or the complaint together with evidence, documentary or otherwise, presented in connection with the complaint, provides reasonable cause, investigate the actions and records of a real estate broker or real estate salesperson. The commission may suspend or revoke a license issued under the provisions of this Act or take other disciplinary action authorized by this Act at any time when it has been determined that: See Appendix A in text.

19. © 2012 Cengage Learning Recovery Fund Will pay damages in the event a judgment is obtained against a licensee and there are no other funds recoverable from licensee. Limits are $50,000 per transaction and $100,000 against any one licensee.

20. © 2012 Cengage Learning Broker Affiliation Training – complement, enhance, and encourage your personal development. Compensation – usually a percentage of earned commissions. Support – what services do they offer. Franchise offices

21. © 2012 Cengage Learning Independent Contractor Paid only if a sale produces a commission and is responsible for income taxes and social security.

22. © 2012 Cengage Learning REALTOR® Registered trade name Member of NAR and not synonymous with real estate agent Code of ethics first adopted in 1913 GRI designation by taking sponsored education courses by NAR

23. © 2012 Cengage Learning Texas Association of REALTORS ® headquartered in Austin, represents over 50,000 members statewide involved in all aspects of the real estate industry. www.Texasrealtors.com 1115 San Jacinto Blvd., Ste. 200 Austin, TX 78701-1906

24. © 2012 Cengage Learning Code of Ethics www.Realtor.org

25. © 2012 Cengage Learning Key Terms Broker Independent contractor License revocation License suspension Licensee REALTOR ® Recovery fund Sales associate Salesperson TREC