Real Estate Salesperson · Texas: Standards of conduct · 11 min read
Trust money, compensation, rebates and advertising rules
- Identify the strict Texas requirements for handling trust funds, avoiding commingling, and maintaining trust account records.
- Explain the Texas legal standards governing commission payments, compensation from multiple parties, fee sharing, and rebates.
- Apply Texas Real Estate Commission rules regarding lawful advertising, team names, assumed business names, and mandatory broker disclosures.
Handling Trust Money and Avoiding Commingling
In Texas real estate practice, trust money means client money, earnest money, rent, unearned fees, security deposits, or any money held on behalf of another person (22 TAC §535.146(a)(1)). A trust account is an account managed by one party for the benefit of another in a banking institution authorized to do business in Texas (22 TAC §535.146(a)(2)). Any trust money accepted by a broker is held in a fiduciary capacity and must be maintained in a designated trust account maintained by the broker or delivered to an escrow agent authorized in Texas in accordance with the agreement of the principals (22 TAC §535.146(b)(1)).
As a sales agent, you must understand your limitations. A sales agent shall not maintain a trust account (22 TAC §535.146(b)(2)). Any trust money received by a sales agent must be immediately delivered to the sales agent sponsoring broker (22 TAC §535.146(b)(2)). For instance, if a buyer hands earnest money to Carlos, a sales agent, Carlos cannot deposit that money anywhere himself; Carlos must deliver it immediately to his sponsoring broker.
Unless a different time is agreed upon in writing by the principals, trust money received by a broker must be deposited in a trust account or delivered to an authorized escrow agent not later than the close of business of the second working day after the broker receives it (22 TAC §535.146(b)(3)). A broker shall not commingle trust money with personal money or other non-trust money, nor deposit or maintain trust money in a personal or business account (22 TAC §535.146(b)(4)). Placing trust money in a broker personal or operating account is prima facie evidence of commingling (22 TAC §535.146(b)(5)(A)). Similarly, paying operating expenses or making withdrawals from a trust account for any purpose other than proper disbursement of trust money is prima facie evidence of commingling (22 TAC §535.146(b)(5)(B)). TREC may suspend or revoke a license if a license holder commingles money of another person with their own money (Tex. Occ. Code §1101.652(b)(10)).
| Action / Requirement | Texas Rule Specifics | Legal Citation |
|---|---|---|
| Sales agent handling | Cannot maintain a trust account; must immediately deliver funds to sponsoring broker | 22 TAC §535.146(b)(2) |
| Broker deposit deadline | Close of business of the second working day after receipt, unless agreed otherwise in writing | 22 TAC §535.146(b)(3) |
| Commingling prohibition | No mixing trust funds with personal or operating money; grounds for license suspension or revocation | 22 TAC §535.146(b)(4), Tex. Occ. Code §1101.652(b)(10) |
| Bank service fees | A broker may maintain a reasonable amount of money in the account to cover fees if detailed records are kept | 22 TAC §535.146(c)(4) |
Common mistakes
- Believing a sales agent can open and manage a client trust account if given written broker permission (Texas law strictly states a sales agent shall not maintain a trust account under 22 TAC §535.146(b)(2)).
- Assuming an unrepresented person can receive unlimited gift cards or merchandise for referring clients (valuable consideration for unlicensed referrals includes gifts of merchandise having a retail value greater than $50 under 22 TAC §535.20(a)(2)).
- Using a team name that implies brokerage services independent of the sponsoring broker, for example, one using 'brokerage' or 'company' in that manner, or failing to end the name with 'team' or 'group' violates the cited rules.
- Failing to disclose required rebate conditions in advertising (an advertisement offering to rebate compensation must disclose that payment is subject to the consent of the represented party under 22 TAC §535.155(d)(16)).
Key points
- Trust money includes earnest money, rent, and client deposits; sales agents cannot maintain trust accounts and must deliver trust funds immediately to their sponsoring broker (22 TAC §535.146(a)(1), (b)(2)).
- Unless the principals expressly agree in writing to a different deposit time, brokers must deposit trust money or deliver it to an authorized escrow agent within a reasonable time, no later than the close of business of the second working day after receipt; brokers may not commingle it with personal or other non-trust money (22 TAC §535.146(b)(3)-(5)).
- Trust account and transaction documentation must be retained for at least four years (22 TAC §535.146(e), 22 TAC §535.2(h)).
- A sales agent may accept transaction compensation only from the current sponsoring broker or the broker who sponsored the agent when it was earned; the agent may pay a commission only through the broker sponsoring the agent at the time, subject to the applicable written-consent requirements (Tex. Occ. Code §1101.651(b)-(c), 22 TAC §535.3).
- Rebates to transaction parties are lawful with appropriate client and sponsoring broker consent, but cannot mislead lenders or other transaction entities (22 TAC §535.147(d)).
- Advertisements must show the broker’s name in at least half the size of the largest contact information for any sales agent, associated broker, or team name; team names must end with 'team' or 'group'; and the required notices that use of an alternate, team, or assumed business name has stopped must be given within 10 days (22 TAC §535.154, §535.155).
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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.