Prohibited Statutory Conduct Under TRELA

The Texas Real Estate License Act (TRELA) establishes the absolute ethical and operational boundaries for license holders. Under TRELA §1101.652, the commission has the statutory power to suspend or revoke a real estate license if an agent or broker commits any of the enumerated prohibited acts.

Why This Rule Exists

These prohibitions represent the consumer-protection core of Texas license law. By enumerating and strictly enforcing these rules, the state maintains a trustworthy marketplace and penalizes agents who prioritize personal gain over client fidelity.

The Exam Trap

A massive exam trap is the “commingling” threshold. You are commingling the moment you place client earnest money or security deposits into your own business operating checking account—even if you “never spend a dime” of it. The act of mixing client funds with business/personal funds is the violation; you do not have to spend it (which is conversion) to be penalized.

Worked Texas Example

Scenario: Sales Agent Carlos in El Paso receives a cash deposit of $2,000 for a lease from a tenant. Carlos is busy, so he locks the cash in his personal desk drawer for three weeks instead of submitting it to his broker. Outcome: Carlos has committed a violation of TRELA §1101.652 by failing to account for or deposit trust money in a timely manner. He faces immediate disciplinary hearings before TREC, fine assessments, and potential license suspension.