An out-of-state broker licensed in another state wants to directly represent a buyer in the negotiation and closing of a Texas real estate transaction. The broker does not hold a Texas license. Under TRELA, which of the following correctly describes what the out-of-state broker may do?
Correct Answer
B) The out-of-state broker may not directly perform brokerage activities in Texas but may enter into a written cooperative agreement with a Texas broker and receive a referral fee for referring the client
Under TRELA §1101.651, an unlicensed out-of-state broker may not directly perform brokerage activities — such as negotiating or facilitating a Texas real estate transaction — without holding a Texas license. However, TRELA does permit an out-of-state broker to receive compensation from a Texas broker through a written cooperative brokerage or referral agreement, provided the out-of-state broker does not perform acts in Texas that require a license. This distinction between direct brokerage activity and receiving a referral fee through a Texas licensee is the critical legal boundary.
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