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What are the minimum services a broker must provide?

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From the Texas Association of Realtors (TAR) Legal FAQ. Updated August, 2016.

When representing a client in a real estate transaction, what are the minimum services that I must provide as a real estate license holder (Updated August 26, 2016)

The Real Estate License Act contains provisions that impose requirements on all brokers representing a party regarding client communications and negotiations. A broker must …

 

1. inform his client if he receives material information related to the transaction, including the receipt of an offer
2. answer his client’s questions and present any offers to or from his client.

 

These duties exist regardless of the agreed-upon compensation payable to the broker. A broker cannot avoid these requirements by removing himself from negotiations. The minimum-services provisions also prohibit a broker from negotiating or attempting to negotiate directly with the represented party.

There are certain circumstances in which a broker may deliver an offer to a represented party without violating the Real Estate License Act, but the broker must have the other broker’s consent to the delivery and send him a copy of the offer. At no time may the broker cross the boundary into negotiations with the represented party.

As stated in the Texas Real Estate Licensing Act (TRELA).

Sec. 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) .

Section 1101.652(b)(22) A broker violates this section if he negotiates or attempts to negotiate the sale, exchange, or lease of real property with an owner, landlord, buyer, or tenant with knowledge that that person is a party to an outstanding written contract that grants exclusive agency to another broker in connection with the transaction.

Section 1101.005(6) Does not apply to a person employed by an owner in the sale of structures and land on which structures are located if the structures are erected by the owner in the course of the owner’s business;)

Notice: This website contains general information about legal and financial matters. The information is not advice, and should not be treated as such. You must not rely on the information on this website as an alternative to legal or financial advice from your attorney, accountant or other professional services provider. If you have any specific questions about any legal and financial matter you should consult your attorney, accountant or other professional services provider. 

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