Lesson 10
Lesson 10: Additional Broker Duties Learning Objectives * Informing and Responding to Clients * Minimum Services Requirements TREC Rules 535.2 (f) Listings and other agreements for real estate brokerage services must be solicited and accepted in a broker s name. (j) A broker or supervisor delegated under Subsection (e) must respond to sponsored sales agents, clients, and license holders representing other parties in real estate transactions within three calendar days. (k) A sponsoring broker or supervisor delegated under Subsection (e) shall deliver mail and other correspondence from the Commission to their sponsored sales agents within 10 calendar days after receipt. Informing and Responding to Clients Duty to Respond A supervising broker, perhaps more so than other license holders, has a duty to respond to parties in a transaction. A sponsoring broker must also promptly respond to a sponsored sales agent. Promptness will be judged on the nature of the request, the time of day and the type of transaction. A supervising broker should be reasonably available to supervised sales agents to provide needed advice and counsel. Being responsible for the supervised sales agent, the supervising broker should be available during all normal business hours of the brokerage to provide experienced, informed advice and counsel to assist the sales agents and the brokerage s clients. The supervising broker should monitor transactions handled by sales agents.
Minimum Services Requirements TRELA 1101.557 ACTING AS AGENT; REGULATION OF CERTAIN TRANSACTIONS (a) A broker who represents a party in a real estate transaction or who lists real estate for sale under an exclusive agreement for a party is that party s agent. (b) A broker described by Subsection (a): (1) may not instruct another broker to directly or indirectly violate Section 1101.652(b)(22); (2) must inform the party if the broker receives material information related to a transaction to list, buy, sell, or lease the party s real estate, including the receipt of an offer by the broker; and (3) shall, at a minimum, answer the party s questions and present any offer to or from the party. (c) For the purposes of this section: (1) a license holder who has the authority to bind a party to a lease or sale under a power of attorney or a property management agreement is also a party to the lease or sale; (2) an inquiry to a person described by Section 1101.005(6) about contract terms or forms required by the person s employer does not violate Section 1101.652(b)(22) if the person does not have the authority to bind the employer to the contract; and (3) the sole delivery of an offer to a party does not violate Section 1101.652(b)(22) if: (A) the party s broker consents to the delivery; (B) a copy of the offer is sent to the party s broker, unless a governmental agency using a sealed bid process does not allow a copy to be sent; and (C) the person delivering the offer does not engage in another activity that directly or indirectly violates Section 1101.652(b)(22).
DISCUSSION 1. The term minimum services broker is confusing to me. How is it defined? Is there something between a minimum service broker and a full service broker? The purpose of this question is to have the students engage in a conversation relating to the various level of services that a broker or agent may offer. How is the consumer to know the level of different services? Minimum services are set out in the statute at the beginning of the chapter. 2. I encountered a sales agent in a transaction a few months ago. This agent had no clue what he was doing and did not seem to want to work the transaction. I felt as though I should step in and just deal with his clients directly. It would have been more efficient. What is the best way to handle this situation and are there concerns under the Real Estate License Act? This question poses the common question of the less than efficient agent. The concern is balancing several issues such as the best interest of one s own client, fairness to the other party, prohibitions against dealing with another s client, and moving the transaction along in a manner that the agent believes is most efficient. A good place to start is to contact the agent s broker and describe the problems you are having. 3. A broker told me to contact his seller directly to submit an offer, I am not sure I can do that. How should I proceed? The listing broker needs to be made aware that the agent may only deliver the offer to the seller directly if a copy is also delivered to the broker. See 1101.557(c)(3). The listing broker must be available to answer any questions the seller may have about the offer. 4. A seller has his property listed for sale with another brokerage firm. I showed the property. The seller told me that he was not satisfied with the listing broker and that I should communicate with him directly if my client was interested. How should I proceed? The agent should inform the seller that the agent must respect the agency relationship that the seller s broker maintains with the seller. The agent should suggest that the seller speak with the listing broker. The agent should also advise the listing broker of the discussion.
TREC Case Study 7 Hold On to Your Wallet! A national company, licensed as an entity broker in Texas, maintained a national website and solicited Texas homeowners to join their program for a future referral to list property for sale. The website advertised You [Homeowners] pay 0 and other information that was not accurate. Homeowners got a debit card with up to $2,000 for signing up. The company s agreement failed to include a definite termination date and included a homeowner s obligation to pay the company if the homeowner opted to terminate the agreement. The company also engaged a marketing company that hired unlicensed subcontractors to go door-to-door to market the program to homeowners. Although a few cooperating Texas real estate brokers unilaterally terminated their cooperating real estate broker referral agreements with the company, the company did not remove these brokers from their website s list of cooperating real estate brokers viewed by consumers. DISCUSSION TREC entered into an Agreed Order with the entity broker and its designated broker for acting negligently or incompetently while acting as a broker [1101.652(b)(1)] and for failing to specify a definite termination date in a contract for brokerage services [1101.652(b)(12)]. Both were also cited for failing to timely respond to TREC s request for information and documents [1101.652(a)(4)]. The company agreed to suspend active marketing of the program in Texas until they could make it compliant with Texas law. The entity broker and the designated broker were each assessed an administrative penalty of $2,500.
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