Agency Relationships

# Agency Relationships in Texas Real Estate — Broker Perspective ## Why Brokers Have a Higher Standard Texas brokers bear a fundamentally different level of accountability than sales agents. Brokers are the licensed principals — they are legally responsible for the acts of their sponsored sales agents, for maintaining proper trust accounts, and for running compliant brokerage operations. The Texas Real Estate License Act (TRELA), Tex. Occ. Code Chapter 1101, governs all of this. --- ## Definitions — The Statute's Framework ### Broker vs. Sales Agent (Tex. Occ. Code §1101.002) A broker performs real estate activities for commission or valuable consideration — the statute lists negotiating listings, sales, exchanges, purchases, and leases; managing rent deposits; providing written valuations; and procuring prospects. The definition is broad by design: virtually any person who earns money by facilitating real estate transactions qualifies and must be licensed. A sales agent is *"a person who is sponsored by a licensed broker for the purpose of performing an act"* that would constitute broker activity. Without a sponsoring broker, a sales agent cannot legally act (§1101.351). ### Broker License Requirements (Tex. Occ. Code §1101.356) To upgrade to a broker license, an applicant must meet two conditions: 1. Experience: *"at least four years of active experience as a license holder during the 60 months preceding the date the application is filed"* (§1101.356(a)) 2. Education: complete the number of hours of qualifying real estate and related courses required by commission rule, *"not to exceed 60 semester hours or equivalent classroom hours"* (§1101.356(a)) Exception: applicants already licensed as brokers…