Texas Real Estate Brokerage Sales Apprentice Education (SAE) Practice Exam

Which laws prevent the broker from becoming a common law dual agent in Texas?

1. Real Estate Laws

2. Intermediary Laws

3. Agency Laws

4. Contract Laws

The correct answer is: Intermediary Laws

In Texas, the laws that specifically govern the situation where a broker cannot act as a common law dual agent are the intermediary laws. These laws are designed to provide clear guidelines on how brokers can represent both the buyer and the seller in a real estate transaction without creating a conflict of interest. Intermediary laws require brokers to act as intermediaries, facilitating communication and negotiations between parties while maintaining the fiduciary duties owed to each. This system allows brokers to serve both sides of a transaction but under strict conditions, ensuring fair representation and transparency. This differs from common law dual agency, which does not have the same level of regulation and can lead to increased risks of conflicts of interest or breaches of fiduciary duty. Real estate laws, agency laws, and contract laws all play parts in the broader legal landscape of real estate transactions, but it is the intermediary laws that directly address the broker's ability to represent multiple parties in a transaction. These laws help protect the interests of all parties involved while allowing the broker to effectively facilitate the sale.