Texas Real Estate Sales Agent ExamTexas Real Estate LawHard
A licensed real estate sales agent is experiencing a dispute with their sponsoring broker over earned commissions. The sales agent believes the broker is wrongfully withholding payment. Which of the following is the MOST appropriate recourse for the sales agent to resolve this dispute?
- AContact the Texas Association of REALTORS® for arbitration services.
- BFile a complaint with TREC against the broker for withholding commissions.
- CReport the broker to the Attorney General's office for fraud.
- DSue the broker in civil court for breach of contract.
Show answer & explanationAnswer & explanation
Correct answer: D. Sue the broker in civil court for breach of contract.
Disputes over commissions between a sales agent and their sponsoring broker are typically contractual matters. TREC generally does not intervene in commission disputes between licensees. The most appropriate legal recourse is usually a civil lawsuit for breach of contract.
Why the other options are wrong
- A. Arbitration through TAR is an option, but it's often voluntary and depends on both parties agreeing to it. A lawsuit is a more direct legal recourse if arbitration isn't agreed upon or successful.
- B. TREC typically does not handle commission disputes between licensees, viewing them as private contractual matters.
- C. While fraud could be alleged, a simple commission dispute is usually a breach of contract, and the Attorney General's office typically handles consumer protection, not individual licensee disputes.
TREC Jurisdiction over Disputes
The Texas Real Estate Commission (TREC) primarily regulates licensee conduct and protects the public, but generally does not intervene in contractual disputes between licensees (e.g., commission disputes).
- TREC investigates violations of TRELA and TREC Rules.
- Commission disputes between agents and brokers are private contractual matters.
- Aggrieved parties typically seek resolution through civil courts or arbitration.
Memory trick: Licensee disputes need 'Contract Clarity, Court Call'.