Brokers & Managers - Do You Have TREC Policies in Place?
Over the past several months MetroTex staff has responded to a large number of requests for more information regarding new Texas Real Estate Commission rules and it has become clear that many of the brokers and managers in North Texas do not fully understand the TREC rules that went into effect January 1, 2011, and include clarifications to many aspects of agents' and brokers' businesses. These changes do affect the way you do business and require all offices to keep their records in writing!
The following new requirements are included in §535.2, which articulate brokers' responsibilities to their sponsored salespeople, the public, and other brokers.
Scope of salesperson's activities
- A broker is required to advise a sponsored salesperson of the scope of the salesperson's authorized activities. If a broker permits a sponsored salesperson to conduct activities beyond the scope explicitly authorized by the broker, those activities will be deemed to have been authorized by the broker.
- A broker is responsible for any property-management activity that requires a real estate license that is conducted by the broker's sponsored salespeople.
- A broker is responsible to ensure that a sponsored salesperson's advertising complies with TREC rules.
- A broker may designate in writing another licensee to assist in administering the brokerage's compliance with the Real Estate License Act and TREC rules, but the broker may not relinquish overall responsibility for the supervision of his sponsored licensees.
- Listings may only be solicited and accepted in a broker's name.
For four years from the date of closing or the termination of a contract, a broker must maintain the following records:
- Commission agreements, such as listing agreements, buyer representation agreements, or other written agreement relied upon to claim compensation
- Work files
- Contracts and related addenda
- Receipts and disbursements of compensation for services subject to the Act;
- Property-management contracts
- Documents required by Uniform Standards of Professional Appraisal Standards
- Sponsorship agreements between the broker and sponsored salespeople
- A broker is required to maintain on a current basis written policies and procedures to ensure that:
- Each sponsored salesperson is advised of the scope of his authorized activities and is competent to conduct such activities
- Each sponsored salesperson maintains an active license
- Any and all compensation paid to a sponsored salesperson for acts or services is paid by, through, or with the written consent of the sponsoring broker
Compensation, disclosure, and money issues
- Compensation to or paid by a salesperson: An agreement between a broker and sponsored salesperson regarding the compensation a salesperson receives or pays to other licensees must be in writing. (§535.3)