Paragraph 4 – LICENSE HOLDER DISCLOSURE
[NEW]: “Texas law requires a real estate license holder who is a party to a transaction or acting on behalf of a spouse, parent, child, business entity in which the license holder owns more than 10%, or a trust for which the license holder acts as a trustee, or of which the license holder or the license holder’s spouse, parent or child is a beneficiary, to notify the other party in writing BEFORE entering into a contract of sale. Disclose if applicable: __________________________________________________.”
The License Holder Disclosure paragraph is likely to see only limited use – Most of the time it is simply N/A. It addresses the need for persons who are both licensed as a broker or salesperson, and involved in the transaction either directly as a party, or indirectly as a representative of a close family relation.
Examples for filling in the Disclosure Blank:
“N/A”
“Buyer is a licensed Texas Real Estate Broker”
Business Owner’s Only – Over 10% Owner: “Seller is a Real Estate License holder who owns over 10% of biz name> + LLC, INC. etc."
Remember: WHEN IN DOUBT - DISCLOSE!!!
NOTE: This paragraph requires the license holder to divulge any relationship of the listed types that exist in the contract. It is a TREC rule now and can be a subject of disciplinary action if omitted by the license holder who engages in misrepresentations, dishonesty, or fraud when selling, buying, trading or leasing real property in the name of: [A] the license holder; [B] the license holder’s spouse; or [C] a person related to the license holder within the first degree by consanguinity.
When to DISCLOSE BEING A LICENSE HOLDER: Under the license act and its associated TREC rules, the disclosure that one is licensed must be made BEFORE entering into a contract. The Safest Rule is to DISCLOSE EARLY and OFTEN.
[excerpts from Attorney/Professor James I. Wiedemer]
Unit 6 QuizQUESTION# 1Which aspect of the Canons of Professional Ethics and Conduct requires a real estate agent torepresent the interests of the client?
QUESTION# 2Which aspect of the Canons of Professional Ethics and Conduct requires the broker or salesagent to employ prudence and caution in the discharge of duties so as to avoidmisrepresentation?
QUESTION# 3Which rule of conduct in the Canons of Professional Ethics and Conduct requires a real estateagent to be informed on market conditions and on national/state/local issues?
QUESTION# 4Under the discriminatory practices canon of the Canons of Professional Ethics and Conduct,which practice is permitted?
Newly uploaded documents
Chapter 8 – EthicKey TermsCanons Of Professional Ethics And Conduct- Part of the TREC Rules requiring, fidelity,integrity, competency, the use of Consumer Information Notice, and the refraining ofdiscriminating practices.National Association Of REALTORS® - Founded in 1908, the largest trade association inthe United States, the National Association of Realtors supports its members andprotects the public through the association's Code of Ethics.Consumer Information- A written notice published by TREC to be provided by a brokeror a sales person to a consumer.Discriminatory Practices- No real estate license holder shall inquire about, respond toor facilitate inquiries about, or make disclosure which is intended to indicate anypreference, limitation, or discrimination of a protected class of people.Competency -The broker or sales agent must be knowledgeable and competent as areal estate brokerage practitioner.Fidelity -A real estate broker or sales agent, while acting as an agent for another is afiduciary and must place the interest of the client above that of the agent.Integrity -A real estate broker or sales agent has a special obligation to exercise integrityin the discharge of the license holder’s responsibilities by employing prudence of cautionso as to avoid misrepresentation by acts of omission or commission.