Is there liability for being called an “expert”?

Question: Is there liability for being called an “expert”?
Answer: Possibly. When an agent uses the word “expert” to describe themselves it can create the impression that they have a greater proficiency than other individuals in the same area of practice. Adopting the title of expert is going to be adopting a higher standard of care.

For example, if an agent holds themselves out as an expert in short sales or leasing the consumer is likely to get the impression they specialize in this area of practice. If a problem arises and litigation ensues, because the agent has held themselves out as an expert there is a great likelihood the attorney for the other side would exploit the representation as an expert to their benefit. Attorneys would argue that because the agent represented themselves as an expert there was little room for error on behalf of the agent. Additionally, lawyers would have an argument that because they are considered an expert the agent operated at a higher level than other agents. Lawyers will generally look to websites and other advertisements to find these representations in preparing their case.

Agents should be advised that representing themselves as experts has its consequences and thus should be used cautiously.

Should you have a “no texting while driving” policy in your Policies and Procedures manual?

Question:  Should you have a “no texting while driving” policy in your Policies and Procedures manual?

Answer:  Yes.  While it might seem redundant to place something in your Policies and Procedures manual that is already against the law, it is still a good idea. The policy could be that agents agree to abide by all traffic and safety laws. The reason to take this step is oftentimes liability may extend to a brokerage for the actions of an agent where the brokerage has not been proactive in advising agents of their expectations. Plaintiffs will seek to bring into litigation those who have insurance. By placing this type of language into your Policies and Procedures manual, you proactively work to minimize your risks.

Should Commission Rebates be included as part of the Residential Contract for resale?

Question:  Should Commission Rebates be included as part of the Residential Contract for resale?

Answer:  No. A rebate of any commission between an agent and the party they represent is an independent agreement to the resale contract. It should not be included as part of the underlying transaction. The reason to avoid making it a part of the contract is because should there be a problem with the payment of the commission then it would affect the underlying contract.
With that said, TREC rule 535.147 does require that this information be disclosed to all parties. While it should not be included as part of the sales contract it should be included as part of the HUD-1 Settlement Statement and in the representation agreement.

Can a commission listed in the MLS be changed once an offer has been submitted?

Question: Can a commission listed in the MLS be changed once an offer has been submitted?

Answer: Yes it can, but only when both parties consent to the change. The value of the MLS is that it serves as the unilateral offer of compensation amongst members. Therefore, if a commission is offered in the MLS it is considered the agreement of the parties once an offer has been received. If an offer has not been received then it is acceptable to change the offered amount. The only way to change a commission after the offer has been received is to have the change agreed to by both parties by executing a written document stating the change. Submitting a contract for the property with a different commission offered on page nine of the contract does not satisfy this requirement.

May an unlicensed individual manage a trust account for a broker?

Question:  May an unlicensed individual manage a trust account for a broker?

Answer:  No. Under TREC Rule §535.146(C)(7) it provides: “A broker may only authorize another license holder to withdraw or transfer money from any trust account but the broker remains responsible and accountable for all trust money received by that broker and all deposits to or disbursements from the trust account.”

Can an agent share a commission with an agent who is licensed in another state?

Question:  Can an agent share a commission with an agent who is licensed in another state?
Answer:  Yes. A broker licensed in Texas can share a commission with a broker from another state as long as that broker is licensed under the laws of the state in which they practice. For example, a Texas agent can share a commission with an agent licensed in California as long as the agent in California has the appropriate license to practice real estate in that state.  The one requirement is that the Texas licensed agent must be the person handling all the negotiations in the state of Texas.

Am I in violation of the rules for not returning phone calls?

Question: Am I in violation of the rules for not returning phone calls?

Answer: Yes. Failing to return phone calls or emails can sometimes happen. Most would agree it is not the best practice but would not consider it a violation of the TREC rules. There is a provision that actually creates a responsibility to return communications within a timely manner. Under Section §535.2(j) titled Broker Responsibility it provides: “a broker or [delegated supervisor] must respond to sponsored salesperson, clients, and license holders representing other parties in real estate transactions within three calendar days.”

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