TREC TREC Complaint and Enforcement Process 2 — Questions and Answers
Question 1: If TREC finds a violation after investigation, which of the following is NOT a possible disciplinary action?
- Reprimand
- Suspension of license
- Criminal imprisonment directly imposed by TREC (Correct answer)
- Revocation of license
Correct answer: Criminal imprisonment directly imposed by TREC
TREC is an administrative agency and cannot impose criminal imprisonment — criminal prosecution requires referral to appropriate law enforcement authorities.
Question 2: The Texas Real Estate Recovery Trust Account is funded by:
- Federal HUD grants
- A portion of license fees paid by real estate licensees (Correct answer)
- Fines collected from disciplined licensees
- Voluntary contributions from brokers
Correct answer: A portion of license fees paid by real estate licensees
The Real Estate Recovery Trust Account is funded by fees collected from licensees and is used to compensate consumers who suffer actual damages due to licensee fraud or misconduct.
Question 3: A consumer who obtains a judgment against a Texas licensee and cannot collect may apply to the Real Estate Recovery Trust Account for reimbursement up to:
- $10,000 per transaction
- $50,000 per transaction, up to $100,000 per licensee (Correct answer)
- $25,000 per claim with no cap
- $5,000 per transaction
Correct answer: $50,000 per transaction, up to $100,000 per licensee
The Recovery Trust Account will pay up to $50,000 per transaction and a maximum of $100,000 against any single licensee for valid unpaid judgments.
Question 4: When a payment is made from the Real Estate Recovery Trust Account on behalf of a licensee, TREC must:
- Allow the licensee to continue practicing immediately
- Automatically revoke the licensee's license until the amount is repaid (Correct answer)
- Notify the licensee but take no further action
- Reduce the licensee's commission authority
Correct answer: Automatically revoke the licensee's license until the amount is repaid
If TREC pays from the Recovery Trust Account on a licensee's behalf, the licensee's license is automatically revoked and may not be reinstated until the full amount is repaid with interest.
Question 5: Which of the following actions by a licensee could result in immediate license suspension without a prior hearing?
- Late renewal of a license
- Conviction of a felony or a crime involving moral turpitude (Correct answer)
- Failure to complete CE hours on time
- Advertising without a team designation
Correct answer: Conviction of a felony or a crime involving moral turpitude
Conviction of a felony or a crime involving moral turpitude can result in immediate emergency license suspension to protect the public.
Question 6: A licensee who disagrees with a TREC disciplinary order may:
- Ignore the order if they believe it is unjust
- Appeal the order through the State Office of Administrative Hearings (SOAH) (Correct answer)
- File a complaint against the TREC commissioner personally
- Only appeal after their license expires
Correct answer: Appeal the order through the State Office of Administrative Hearings (SOAH)
Licensees have the right to contest TREC disciplinary actions through the State Office of Administrative Hearings, where an Administrative Law Judge reviews the case.
TREC TREC Complaint and Enforcement Process 2
If TREC finds a violation after investigation, which of the following is NOT a possible disciplinary action?