Texas Real Estate Sales Agent ExamTexas Real Estate LawHard
A buyer is interested in purchasing a property in Texas and asks their real estate agent about the mineral rights associated with the property. The agent, who is not an attorney, provides detailed advice on how to reserve mineral rights and drafts a complex addendum for the buyer to include in the contract. Which of the following statements is true regarding the agent's actions?
- AThe agent acted appropriately by assisting their client with contract provisions.
- BThe agent engaged in the unauthorized practice of law.
- CThe agent should have only used a TREC-promulgated addendum for mineral rights.
- DThe agent should have referred the buyer to a licensed landman.
Show answer & explanationAnswer & explanation
Correct answer: B. The agent engaged in the unauthorized practice of law.
Providing detailed advice on complex legal matters like mineral rights and drafting non-promulgated addenda constitutes the unauthorized practice of law. Real estate agents are prohibited from doing this and should advise clients to seek legal counsel.
Why the other options are wrong
- A. While agents assist clients, drafting complex legal addenda goes beyond the scope of their license.
- C. TREC does not promulgate a specific addendum for complex mineral rights reservations; such matters typically require an attorney.
- D. While a landman might be involved in mineral rights, the agent's primary duty when legal advice is needed is to refer to an attorney.
Unauthorized Practice of Law (TRELA)
Under TRELA, real estate licensees are prohibited from giving legal advice, drafting legal documents (beyond filling in blanks on TREC forms), or interpreting the legal effect of contracts.
- Licensees must advise clients to consult an attorney for legal questions.
- Filling in blanks on TREC-promulgated forms is permitted.
- Drafting complex legal addenda or advising on legal consequences is prohibited.
Memory trick: Agents must 'Stick to Sales, Shun the Scales' of justice.