Real estate professionals, including real estate sales agents, individual real estate brokers, real estate inspectors, and business entity real estate brokers, must obtain licenses through the Texas Real Estate Commission (TREC). As a result, TREC also investigates allegations of misconduct by real estate professionals and takes enforcement action as needed. Findings of misconduct can lead to a loss of licensure and other severe consequences. Having a real estate license defense attorney on your side can make a significant difference in the outcome of your case.
TREC’s Jurisdiction Over Complaints
Anyone can file complaints before TREC, including members of the public and other real estate professionals. An individual must file a complaint with TREC within four years of the incident that is the subject of the complaint.
TREC only has jurisdiction to address certain types of disputes with real estate professionals or those violating the rules and laws governing real estate professionals. TREC cannot license holders to pay damages to other people. Individuals must pursue damages through independent civil lawsuits filed in court. However, TREC does maintain a Real Estate Recovery Trust Account to pay for judgments that courts may award people in lawsuits against real estate sales agents or brokers.
TREC does not handle personal or contractual disputes between real estate professionals and individuals. Additionally, TREC has no jurisdiction to address rude, unprofessional, disparaging, or offensive comments on social media, except if the comments or actions constitute unlawful discrimination stemming from a real estate action.
What are Some Common Violations by Texas Real Estate Professionals?
TREC pursues disciplinary action against real estate professionals for various types of violations. Some examples of potential violations of the laws or rules that govern real estate professionals include:
- Engaging in discrimination based on race, color, religion, sex, disability, familial status, national origin, or ancestry
- Commits a felony or criminal offense involving fraud
- Fraudulently pursuing a license
- Making false promises during a real estate transaction
- Failing to segregate or handle trust money properly
- Splitting fees with unlicensed persons
- Receiving undisclosed commissions or rebates
- Engaging in lotteries or deceptive trade practices
- Failing to use a required contract form
- Acting negligently or incompetently
- Violating an exclusive agency
- Failing to obey an order or requirement of TREC
- Violated rules related to advertising
- Engaging in dishonest, bad faith, or untrustworthiness
Furthermore, Tex. Occ. Code § 1101.652 lists additional grounds for suspension, revocation, or other disciplinary action against a real estate professional’s license.
What Types of Discipline can a Real Estate License Holder Receive?
If a TREC Enforcement staff attorney determines that formal disciplinary action is warranted, license holders can face any of the following types of discipline:
- Monetary fees
- Injunctive action
- License suspension
- License revocation
If TREC decides that a violation has occurred, it will send a written Notice of Alleged Violation (NOAV) to the license holder. The respondent or license holder then has 30 days to respond to the NOAV, either by accepting the recommended sanction and resolving the matter by agreement or by asking for a hearing on the violation, the proposed penalty, or both. Under Tex. Occ. Code § 1101.657, if the respondent requests a hearing, the case goes to the State Office of Administrative Hearings (SOAH) to schedule a hearing before an administrative law judge (ALJ). Following the hearing, the ALJ typically has 60 days to issue a Proposal for Decision (PFD). TREC then considers the PFD during an open meeting and issues a Final Order.
Schedule of Administrative Penalties
22 Tex. Admin. Code § 535.191 assigns different levels of administrative penalties to the different rule violations based on severity. These penalties depend on the following criteria, as outlined in Tex. Occ. Code § 1101.702:
- the seriousness of the violation, including the nature, circumstances, extent, and gravity of the prohibited acts;
- the individual’s history of previous violations;
- the amount necessary to deter a future violation;
- efforts to correct the violation; and
- any other matter that justice may require.
The least severe violations can result in administrative penalties of $100 to $1,500 per daily violation. The mid-range group of violations can result in penalties ranging from $500 to $3,000 per violation per day. Finally, the most severe violations are subject to administrative penalties of $1,000 to $5,000 per day. Furthermore, if the individual has a previous history of violations, TREC may assess additional administrative penalties of up to two times the penalties assessed under this section, subject to a maximum of $5,000 per violation.
We Will Stand Up for Your Rights Before TREC
You can count on the experienced real estate license defense lawyers at Bertolino LLP, to defend you when you receive notice of disciplinary proceedings against you from TREC. We will investigate the circumstances that led to the disciplinary proceedings and devise the best defense strategy for your case. Together, we will work to clear your name and protect your teaching license. Call us at (512) 515-9518 or contact us online.
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