Real Estate Salesperson · Texas: Standards of conduct · 9 min read
Professional ethics and grounds for discipline in Texas
- Identify the core fiduciary duties, competency requirements, and mandatory consumer notices governing Texas license holders.
- Distinguish between lawful conduct and statutory grounds for license suspension, revocation, or administrative discipline under Texas law.
- Explain strict Texas limitations regarding unauthorized practice of law, trust account handling, and representations to clients and the public.
Fiduciary Obligations and Core Standards of Conduct
Under Texas law, a license holder acting as an agent for another is a fiduciary (22 TAC §531.2). Your primary duty as a license holder is to represent the interests of your client, and this position should be clear to all parties in a transaction (22 TAC §531.2(1)). While performing duties to your client, you shall treat other parties to a transaction fairly (22 TAC §531.2(1)). You must be faithful and observant to the trust placed in you, be scrupulous and meticulous in performing functions (22 TAC §531.2(2)), and place no personal interest above that of your client (22 TAC §531.2(3)).
Integrity demands that you exercise prudence and caution to avoid misrepresentation by acts of commission or omission (22 TAC §531.3). You have an affirmative duty to keep your principal informed at all times of significant information applicable to the transaction (22 TAC §535.156(c)). You must convey all known information affecting a principal's decision regarding offers unless the principal agreed in writing not to submit offers after entering a contract (22 TAC §535.156(a)). Furthermore, you owe a duty to convey accurate information to members of the public with whom you deal (22 TAC §535.156(d)). For example, if Elena represents a seller and receives an offer, she must promptly present it to her seller unless her client has given prior written instruction not to submit further offers after accepting a contract.
Texas rules also impose strict responsiveness and non-discrimination mandates. A broker or sales agent must respond to their principal, another party's broker or sales agent, or an unrepresented party within two calendar days (22 TAC §535.157). In addition, you may not inquire about, respond to or facilitate inquiries about, or make a disclosure concerning specified persons that indicates or is intended to indicate a preference, limitation, or discrimination based on race, color, religion, sex, national origin, ancestry, familial status, or disability (22 TAC §531.19(a)). For discriminatory practice prohibitions under TREC rules, disability includes AIDS, HIV-related illnesses, or HIV infection (22 TAC §531.19(b)).
Common mistakes
- Believing you can draft custom escalation or contingency clauses for a client; drafting such clauses defining rights or remedies constitutes unauthorized practice of law under Texas rules (22 TAC §537.11(b)(5)).
- Failing to disclose licensed status in writing when buying or selling property on behalf of a parent, child, spouse, or entity in which you own more than 10 percent (22 TAC §535.144(a)-(b)).
- Assuming the parol evidence rule or a standard contract disclaimer protects you from TREC disciplinary action if you make deceptive oral promises to induce an agreement (22 TAC §535.145).
- Disbursing escrow funds before the transaction has completely closed or properly terminated (Tex. Occ. Code §1101.652(b)(31)).
Key points
- A Texas license holder acts as a fiduciary, bound to put the client's interests first, avoid misrepresentation, and treat all parties fairly (22 TAC §531.2, 22 TAC §531.3).
- The notice must be displayed in a readily noticeable location in each place of business the broker maintains, and a readily noticeable homepage link is required on each business website; a required link provided on a social media platform may appear on the account holder profile or on a separate page or website reached by a direct link (22 TAC §531.18).
- A broker or sales agent must respond within two calendar days to their principal, a broker or sales agent representing another party to a real estate transaction, or an unrepresented party to a real estate transaction (22 TAC §535.157).
- Written disclosure of license status is required when transacting on your own behalf or in the capacities specified in 22 TAC §535.144(a), which include acting for a spouse, parent, child, qualifying business entity, or qualifying trust (22 TAC §535.144(a), (b)).
- For a nonattorney holder acting under the conditions specified in Tex. Occ. Code §1101.654(a), TREC must suspend or revoke the license or certificate for drafting a covered instrument other than a form described by §1101.155 or advising on an instrument's validity or legal sufficiency or the validity of title; separately, 22 TAC §537.11(b)(5) prohibits drafting or recommending contract language defining or affecting a principal's rights, obligations, or remedies.
- When an offer is signed, you must advise the buyer in writing to have an abstract examined by an attorney or to obtain title insurance (Tex. Occ. Code §1101.555).
- Client representation agreements must contain a definite termination date not subject to prior notice, except for property management contracts (Tex. Occ. Code §1101.652(b)(12)).
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Original lesson written for Real Estate Salesperson practice · updated October 30, 2026. Exam names are trademarks of their owners; tests.global is not affiliated with them.