Texas Standards of Conduct — Printable Practice Pack

Answer key & explanations

1. 1. B — Commingling personal and client funds is a serious violation that can lead to the permanent revocation of a sales agent's license.
2. 2. C — Unlicensed assistants can perform administrative tasks such as answering phone calls and scheduling appointments, but cannot engage in activities that require a license like showing properties or negotiating transactions.
3. 3. D — Making false statements to induce a purchase is both a deceptive practice and a misrepresentation, and can also be a breach of fiduciary duty, making all of the above correct.
4. 4. B — Converting client trust funds for personal use is a serious offense that can result in the revocation of a sales agent's license and potential criminal charges.
5. 5. A — TREC rules require the broker's name to be included in advertisements, not just the license number, to ensure accountability.
6. 6. A — The unlicensed assistant is not allowed to prepare a sales contract as this task requires a license. Unlicensed assistants can perform administrative tasks such as answering phone calls and scheduling appointments, but cannot engage in activities that require a real estate license, such as preparing contracts or showing properties.
7. 7. A — The primary reason for a real estate broker to maintain a trust account is to hold client funds separate from the broker's own funds, ensuring that client money is protected and not commingled with the broker's personal or business funds.
8. 8. C — Engaging in deceptive advertising by misrepresenting the features of a property can lead to the agent's license being suspended or revoked, as this is a violation of the standards of conduct and unethical behavior.
9. 9. C — Commingling of trust funds occurs when a broker uses client funds for personal or business expenses, such as paying business expenses with client money. This is a violation of the standards of conduct and can result in disciplinary action.
10. 10. D — Failing to disclose a known defect in a property to a potential buyer is an example of misrepresentation, deceptive practice, and breach of fiduciary duty, as the broker has a duty to act with honesty and integrity and disclose all known facts about the property.
11. 11. B — The broker's name must be included in a real estate advertisement, as this is a requirement of the advertising rules and ensures that the public can identify the responsible broker.
12. 12. A — Engaging in conduct that demonstrates a lack of competency can result in the agent's license being suspended or revoked, as this is a violation of the standards of conduct and can put the public at risk.
13. 13. C — The purpose of TREC's canons of ethics is to promote ethical conduct and professionalism in the real estate industry, ensuring that licensees act with honesty, integrity, and competency.
14. 14. A — Failing to disclose known defects is a violation of the duty of honesty and fairness to clients, and can result in disciplinary action.
15. 15. B — Commingling personal and client funds is a serious violation of TREC rules, and can result in a fine and suspension of the sales agent's license.
16. 16. B — TREC rules require that the broker's name be included in all advertising materials, to ensure transparency and accountability.
17. 17. D — All of the above options are considered deceptive practices, as they involve misleading or manipulating clients for personal gain.
18. 18. D — Misrepresentation is a serious violation of TREC rules, and can result in loss of licensure, a fine, suspension of license, or mandatory additional education.
19. 19. C — Sales agents have a fiduciary duty to maintain client trust funds in a separate account, and to account for all transactions to ensure transparency and accountability.
20. 20. D — Conduct that poses a threat to the public may result in suspension or revocation of the sales agent's license, as well as a fine and mandatory additional education.