Texas Real Estate Broker Exam — All Questions

A Texas wife inherits a rent house from her mother during the marriage. The house is:

• a.Her separate property, because it came to her by inheritance✓
• b.Community property, unless a separate-property schedule is recorded
• c.Community property, because it came to her during the marriage
• d.Half separate and half community, split at the date of the death

Family Code § 3.001: "A spouse's separate property consists of: (1) the property owned or claimed by the spouse before marriage; (2) the property acquired by the spouse during marriage by gift, devise, or descent; and (3) the recovery for personal injuries sustained by the spouse during marriage." An inheritance is acquired by devise or descent, so the timing does not convert it. Section 3.002 defines community property as "the property, other than separate property, acquired by either spouse during marriage," and the during-the-marriage answer is the classic error because it states that rule while ignoring the exception written into it. Section 3.003 does presume property possessed during marriage to be community, but it is a presumption, rebuttable by clear and convincing evidence, and § 3.004 makes recording a schedule of separate property optional — recording affects notice to a good-faith purchaser or creditor, not the character of the asset. Nothing in chapter 3 splits an inheritance between the two estates.

A single adult's rural Texas homestead is protected from creditors' claims up to:

• a.100 acres, together with the improvements on it✓
• b.200 acres, together with the improvements on it
• c.10 acres, together with the improvements on it
• d.A fixed dollar amount of the property's appraised value

Property Code § 41.002(b): a rural homestead "shall consist of: (1) for a family, not more than 200 acres, which may be in one or more parcels, with the improvements thereon; or (2) for a single, adult person, not otherwise entitled to a homestead, not more than 100 acres." So 200 acres is the family figure, and 10 acres is the urban figure at § 41.002(a), which applies where the property sits inside a municipality or its extraterritorial jurisdiction or a platted subdivision and is served by police protection, fire protection and at least three of the listed utilities under § 41.002(c). The dollar answer belongs to a different body of law entirely: Tax Code § 11.13 grants a residence homestead exemption from property TAX, which reduces a tax bill and protects nothing from a creditor, while Property Code § 41.001(a) is what exempts the homestead "from seizure for the claims of creditors." Texas has two homestead statutes and they answer different questions.

A Texas buyer sues her sales agent under the DTPA over the agent's estimate that the roof had five years left. The DTPA:

• a.Applies, because a license holder is a supplier of consumer services
• b.Does not apply to any claim brought against a license holder
• c.Applies, but caps the recovery at the agent's commission
• d.Does not apply, since the claim arises from advice or opinion✓

Business and Commerce Code § 17.49(i): "Nothing in this subchapter shall apply to a claim against a person licensed as a broker or salesperson under Chapter 1101, Occupations Code, arising from an act or omission by the person while acting as a broker or salesperson." An estimate of remaining roof life is advice or judgment, so it sits inside the exemption. The exemption is not total, though, which is why saying it bars every claim overstates it: the same subsection preserves "(1) an express misrepresentation of a material fact that cannot be characterized as advice, judgment, or opinion; (2) a failure to disclose information in violation of Section 17.46(b)(24); or (3) an unconscionable action or course of action that cannot be characterized as advice, judgment, or opinion." Treating the agent as an ordinary supplier of services ignores the subsection written for license holders specifically. And the Act never measures recovery by a commission: § 17.50(b)(1) awards economic damages and allows up to three times that amount where the conduct was committed knowingly.

A contractor wants an enforceable lien on a married couple's Texas homestead. The contract must be:

• a.Signed by the owner and delivered before the first payment falls due
• b.Signed by the owner and notarized before the lien affidavit is filed
• c.Signed by both spouses at any time before the work is completed
• d.Signed by both spouses before work begins, and filed with the clerk✓

Property Code § 53.254 sets out the whole checklist: (a) the person furnishing material or performing labor and the owner "must execute a written contract setting forth the terms of the agreement"; "(b) The contract must be executed before the material is furnished or the labor is performed"; "(c) If the owner is married, the contract must be signed by both spouses"; and "(e) The contract must be filed with the county clerk of the county in which the homestead is located." One spouse's signature is not enough on a homestead however the payment terms are arranged, and signing at any point before completion fails subsection (b), which fixes the moment as before the work rather than merely before the end of it. Notarising is the wrong formality: what § 53.254(f) requires of the affidavit is the conspicuous notice "NOTICE: THIS IS NOT A LIEN. THIS IS ONLY AN AFFIDAVIT CLAIMING A LIEN." Property Code § 41.001(b)(3) closes the circle by allowing an encumbrance on a homestead for work and material only "if contracted for in writing as provided by Sections 53.254(a), (b), and (c)."

A Texas property owners' association wants to foreclose its assessment lien. It may not do so where the debt consists solely of:

• a.Fines and the attorney's fees associated with those fines✓
• b.Regular annual assessments unpaid for more than two years
• c.Special assessments approved by a vote of the membership
• d.Transfer fees charged when the property last changed hands

Property Code § 209.009: "A property owners' association may not foreclose a property owners' association's assessment lien if the debt securing the lien consists solely of: (1) fines assessed by the association; (2) attorney's fees incurred by the association solely associated with fines assessed by the association; or (3) amounts added to the owner's account as an assessment under Section 209.005(i) or 209.0057(b-4)." The bar is drawn around fines, so unpaid assessments are outside it whether they are regular or special and however long they have gone unpaid; the word solely also means a debt mixing fines with real assessments is not protected. Transfer fees are not on the list either. Even where foreclosure is open to the association, § 209.0091 adds a prerequisite: written notice of the delinquency to any subordinate lienholder of record evidenced by a deed of trust, and an opportunity to cure "before the 61st day after the date the association mails the notice."

An unlicensed investor puts a Texas house under contract and then advertises the contract for assignment. Under the TREC rules he must:

• a.Obtain a real estate license before advertising the assignment
• b.Route the assignment through a licensed Texas real estate broker
• c.Disclose in writing the nature of his equitable interest✓
• d.Close on the purchase himself before he may assign the contract

22 TAC § 535.6(a): a person may acquire an option or enter into a contract to purchase real property "and then sell or offer to sell the option or assign or offer to assign the interest in the contract without having a real estate license if the person: does not use the option or contract to purchase to engage in real estate brokerage; and discloses in writing the nature of the equitable interest to any seller or potential buyer." Subsection (b) supplies the consequence and answers the first two options at once: a person who sells or assigns "without disclosing the nature of that interest as provided by subsection (a) of this section is engaging in real estate brokerage" — so neither a license nor a broker is required while the disclosure is made, and both become the problem the moment it is not. Nothing requires him to close first, because what he is marketing is the contract rather than the title; § 535.6(c) requires a license holder doing the same thing to disclose in writing that he "does not have legal title to the real property."