TL;DR
The Texas Real Estate License Act (TRELA) is codified at CHAPTER 1101 of the Texas Occupations Code, and it is the statute that creates the Texas Real Estate Commission (TREC), defines what activity requires a license, and supplies TREC's enforcement powers. Section 1101.351 states the core prohibition: unless a person holds a license issued under the chapter, that person may not act as, or represent that the person is, a broker or sales agent. Section 1101.004, headed "Real Estate Brokerage," supplies the operative test — a person is ENGAGED IN REAL ESTATE BROKERAGE if, WITH THE EXPECTATION OF RECEIVING VALUABLE CONSIDERATION, the person directly or indirectly performs or offers, attempts, or agrees to perform for another person any act described by §1101.002(1), whether as part of a transaction or as an entire transaction. Two elements therefore drive licensure: acting FOR ANOTHER PERSON, and expecting COMPENSATION. Section 1101.005 lists who is EXEMPT — including an attorney licensed in this state, an attorney-in-fact conducting not more than three transactions annually, a public official on official duties, a licensed auctioneer, a person acting under a court order, will, or written trust instrument, an on-site apartment complex manager, a person employed by an owner selling structures the owner erected in the course of business, and an owner or owner's employee leasing the owner's property, plus certain exempt TRANSACTIONS including mineral interests, cemetery lots, hotel or motel management, and sales under a power of sale in a deed of trust. Business entities that perform brokerage must themselves be licensed under §1101.351(a-1) and must designate an active individual broker who is a managing officer in good standing. Chapter 1101 also seats TREC as a nine-member commission appointed by the governor with senate confirmation, empowers it to adopt rules (published in the Texas Administrative Code), and provides for discipline ranging from administrative penalties to suspension and revocation, with contested cases heard at SOAH and temporary suspension available through a disciplinary panel under §1101.662.
What TRELA is
Texas has regulated real estate brokerage since the 1930s. The statute was renamed the Texas Real Estate License Act and, in the modern codification, sits at Chapter 1101 of the Texas Occupations Code, within Title 7 (Practices and Professions Related to Real Property and Housing). Its companion, Chapter 1102, governs real estate INSPECTORS, while the Texas Real Estate Research Center sits in CHAPTER 221 OF THE PROPERTY CODE rather than in the Occupations Code. Section 1101.006 makes TREC subject to the Texas Sunset Act, and the Sunset provision reaches Chapter 1101, Chapter 1102, and Chapter 1303 of the Occupations Code together with Chapter 221 of the Property Code. For exam purposes, keep the licensing and inspection chapters separate from the research-center framework.
TRELA is the source of everything a Texas license holder does. It creates the licensing requirement, defines the regulated activity, establishes the agency, authorizes the rules, and sets out the consequences of violating any of it. Where TREC rules govern day-to-day conduct, those rules exist because §1101.151 and §1101.155 give the Commission power to adopt them. For the practical conduct rules built on this foundation, see our guide to key Texas license law rules.
When a license is required
Section 1101.351 states the prohibition: unless a person holds a license issued under the chapter, the person may not act as or represent that the person is a broker or sales agent. The definition that gives that prohibition content is §1101.004, headed "Real Estate Brokerage," which provides that a person is ENGAGED IN REAL ESTATE BROKERAGE if the person, WITH THE EXPECTATION OF RECEIVING VALUABLE CONSIDERATION, directly or indirectly performs or offers, attempts, or agrees to perform for another person any act described by §1101.002(1), as part of a transaction or as an entire transaction.
Pull that apart and the licensure test has two hinges:
For another person. Acting on your OWN behalf is not brokerage. An owner selling their own property, or a buyer purchasing for themselves, is not acting for another and needs no license.
Expectation of valuable consideration. The activity must be undertaken expecting compensation. Note that the statute reaches an EXPECTATION — the person need not actually be paid, and need not succeed. Offering, attempting, or agreeing to perform the act is enough.
The breadth is deliberate. "Directly or indirectly" and "offers, attempts, or agrees to perform" close the gaps that a narrower definition would leave open, and the acts described in §1101.002(1) cover selling, buying, leasing, negotiating, listing, and related activity. This is why unlicensed assistants must stay clear of anything resembling negotiation or solicitation.
The §1101.005 exemptions
Section 1101.005, titled "Applicability of Chapter," is where the exemptions live — and knowing that this section is the exemption location is itself a commonly tested point. The statute provides that the chapter does not apply to: an ATTORNEY LICENSED IN THIS STATE; an ATTORNEY-IN-FACT authorized under a power of attorney to conduct NOT MORE THAN THREE real estate transactions annually; a PUBLIC OFFICIAL while engaged in official duties; an AUCTIONEER licensed under Chapter 1802 conducting the sale of real estate by auction, so long as the auctioneer performs no other act of a broker; a person conducting a real estate transaction under a COURT ORDER or the authority of a WILL or WRITTEN TRUST INSTRUMENT; a person employed by an owner in the sale of structures and the land they sit on, where the structures were erected by the owner in the course of the owner’s business; an ON-SITE MANAGER of an apartment complex; and an OWNER or the owner’s employee who leases the owner’s improved or unimproved real estate.
Section 1101.005 also exempts certain TRANSACTIONS rather than persons: the sale, lease, or transfer of a MINERAL OR MINING INTEREST in real property; the sale, lease, or transfer of a CEMETERY LOT; the lease or management of a HOTEL OR MOTEL; and the sale of real property under a POWER OF SALE conferred by a deed of trust or other contract lien — which is where foreclosure sales sit.
Two related points sit just outside the statute. A person acting on their OWN behalf needs no license, which follows from the "for another person" element rather than from an exemption. And under TREC Rule §535.5, a license holder's clerical or administrative assistant who does not perform brokerage activity does not need a license — the line being that the assistant may handle logistics and paperwork but may not negotiate, solicit, or advise. The exemption list is amended by the Legislature from time to time, so a license holder should read the current §1101.005 text rather than rely on memory.
| Situation | License required? | Why |
|---|---|---|
| Selling your own property | No | Not acting "for another person" (§1101.004) |
| Attorney licensed in this state | No | Exempt under §1101.005(1) |
| Attorney-in-fact, 3 or fewer transactions a year | No | Exempt under §1101.005(2) |
| Sale under power of sale in a deed of trust | No | Exempt transaction under §1101.005(9)(D) |
| Onsite apartment complex manager | No | Exempt under §1101.005 |
| Employee of a builder | No | Exempt under §1101.005 |
| Unlicensed assistant doing clerical work only | No | TREC Rule §535.5 — no brokerage activity |
| Entity receiving brokerage compensation | YES | §1101.351(a-1) — entities must be licensed |
Business entity licensure
Under §1101.351(a-1), a business entity that engages in brokerage activity in Texas must be LICENSED BY TREC before performing brokerage services. This catches a structure license holders often assume is invisible to regulation: an entity owned by a license holder for the sole purpose of receiving the compensation that license holder earns must itself be licensed, under TREC Rule §535.4(g).
A qualifying entity may be a corporation, limited liability company, general partnership, limited partnership, or limited liability partnership. An entity created outside Texas must be licensed as a broker in another state or, where that state has no such licensure, be lawfully engaged in real estate broker activity there. Critically, the entity must DESIGNATE AN ACTIVE INDIVIDUAL BROKER to act on its behalf for all brokerage activity before it can be licensed, and that designated broker must be a MANAGING OFFICER of the entity and in good standing with the Commission. The designation is the mechanism that keeps a human licensee accountable for an entity's conduct. For how supervisory responsibility flows within a brokerage, see our guide to TREC broker supervision rules.
TREC: structure and rulemaking
The Legislature created TREC to administer Chapter 1101 and safeguard consumers of real estate services. The Commission consists of NINE members appointed by the governor and confirmed by the senate, with membership and eligibility governed by §§1101.051 and 1101.052 and public-member requirements ensuring the agency is not composed solely of industry participants.
Chapter 1101 assigns the Commission general powers and duties under §1101.151 and rulemaking authority under §1101.155. The rules TREC adopts are published in the Texas Administrative Code and carry the force of law for license holders — which is why a violation of a TREC rule, not just of the statute, is a disciplinary matter. Section 1101.103 addresses the code of ethics, and §1101.101 and following establish the executive director and staff structure. Under §1101.006 the Commission is subject to the Texas Sunset Act, meaning the agency is periodically reviewed and reauthorized. For the ethical standards TREC administers, see our guide to the TREC canons of professional ethics.
Enforcement and discipline
TREC's enforcement authority covers violations of Chapter 1101 and Chapter 1102 and of the Commission rules adopted under those chapters. Sanctions include ADMINISTRATIVE PENALTIES and disciplinary or remedial action up to suspension and revocation of a license.
Contested disciplinary matters proceed as adjudicative proceedings, with hearings conducted at the STATE OFFICE OF ADMINISTRATIVE HEARINGS (SOAH) rather than before the Commission itself — an independent-tribunal structure that separates the agency's prosecutorial and adjudicative functions. Separately, TREC provides a mechanism for TEMPORARY SUSPENSION: three Commission members from the Enforcement Committee, appointed by the chair, serve as a disciplinary panel under §1101.662, and staff may ask that panel to temporarily suspend a license where a complaint has been opened, the license holder may continue conduct that would violate Chapter 1101 or 1102 or Commission rules, and the conduct involves recent or current activity requiring a license.
For a license holder, the operational takeaway is that exposure runs to the statute AND the rules, that an entity's conduct is attributed through its designated broker, and that a temporary suspension can arrive before any final disciplinary determination. For renewal and education obligations that also carry disciplinary consequences, see our guide to license renewal and continuing education.
Frequently Asked Questions
- What is TRELA and where is it found?
- The Texas Real Estate License Act, codified at Chapter 1101 of the Texas Occupations Code, within Title 7. It creates the Texas Real Estate Commission, defines what activity requires a real estate license, sets licensing requirements, authorizes TREC's rulemaking, and provides for enforcement and discipline. Chapter 1102 covers real estate inspectors; the Texas Real Estate Research Center sits in Chapter 221 of the PROPERTY CODE, not the Occupations Code. TREC's disciplinary authority reaches violations of Chapters 1101 and 1102 and the Commission rules adopted under them.
- What test determines whether a license is required?
- Section 1101.351 prohibits acting as, or representing yourself to be, a broker or sales agent without a license. Section 1101.004 defines acting as a broker or salesperson: performing, or offering, attempting, or agreeing to perform, FOR ANOTHER PERSON any act described by §1101.002(1), directly or indirectly, WITH THE EXPECTATION OF RECEIVING VALUABLE CONSIDERATION. So the two hinges are acting for another person and expecting compensation. You need not actually be paid — the expectation suffices.
- Who is exempt from the license requirement?
- Section 1101.005 lists the exemptions: an attorney licensed in this state; an attorney-in-fact under a power of attorney conducting NOT MORE THAN THREE real estate transactions annually; a public official engaged in official duties; an auctioneer licensed under Chapter 1802 who performs no other act of a broker; a person acting under a court order, will, or written trust instrument; a person employed by an owner selling structures the owner erected in the course of business; an on-site apartment complex manager; and an owner or the owner's employee leasing the owner's real estate. It also exempts certain transactions — mineral or mining interests, cemetery lots, hotel or motel lease or management, and sales under a power of sale in a deed of trust. A person acting on their own behalf needs no license at all, and under TREC Rule §535.5 a purely clerical assistant does not either.
- Does a business entity need its own real estate license?
- Yes. Under §1101.351(a-1), a business entity engaging in brokerage activity in Texas must be licensed by TREC before performing brokerage services, and under TREC Rule §535.4(g) that includes an entity owned by a license holder solely to receive compensation the license holder earns. The entity must designate an ACTIVE INDIVIDUAL BROKER to act for it in all brokerage activity, and that designated broker must be a managing officer of the entity and in good standing with the Commission.
- How is TREC structured?
- TREC is a nine-member commission appointed by the governor and confirmed by the senate, with membership and public-member eligibility set by §§1101.051 and 1101.052. Section 1101.151 grants general powers and duties and §1101.155 grants rulemaking authority; TREC's rules are published in the Texas Administrative Code and are enforceable against license holders. Section 1101.103 addresses the code of ethics, and under §1101.006 the agency is subject to periodic Sunset review.
- How does TREC discipline a license holder?
- Sanctions include administrative penalties and disciplinary or remedial action up to suspension and revocation, for violations of Chapter 1101 or Chapter 1102 or the Commission rules adopted under them. Contested cases are heard at the State Office of Administrative Hearings rather than by the Commission itself. In addition, a three-member disciplinary panel drawn from the Enforcement Committee may TEMPORARILY SUSPEND a license under §1101.662 where a complaint is open, the conduct may continue, and it involves recent or current activity requiring a license.
Bottom Line
TRELA is CHAPTER 1101 of the Texas Occupations Code — the statute behind every Texas license. Section 1101.351 forbids acting as or holding out as a broker or sales agent without a license, and §1101.004 defines that activity as performing, offering, attempting, or agreeing to perform for ANOTHER PERSON any act described by §1101.002(1), directly or indirectly, WITH THE EXPECTATION OF VALUABLE CONSIDERATION. Acting for yourself is not brokerage, and the expectation of payment — not actual payment — is what matters. Section 1101.005 holds the EXEMPTIONS: Texas-licensed attorneys, transactions under court order, will, trust, or foreclosure, onsite apartment managers, builders' employees, and owners or their employees leasing the owner's property; TREC Rule §535.5 separately clears purely clerical assistants. Under §1101.351(a-1) a BUSINESS ENTITY doing brokerage must be licensed and must designate an active individual broker who is a managing officer in good standing — including an entity formed only to receive a license holder's compensation. TREC is a nine-member gubernatorial-appointed commission with rulemaking power under §§1101.151 and 1101.155, its rules published in the Texas Administrative Code, and enforcement reaching Chapter 1101, Chapter 1102, and the Commission rules beneath them. Contested discipline is heard at SOAH, and a three-member panel may temporarily suspend a license under §1101.662. For related topics, see our guides to key Texas license law rules, TREC broker supervision rules, and the TREC canons of professional ethics.
Source: Tex. Occupations Code §1101.351 — License Required (full text and chapter index) · Tex. Occupations Code §1101.005 — Applicability of Chapter (exemptions) · Texas Real Estate Commission — Rules and Laws