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

Who must a business entity designate to act on its behalf in Texas?

1. An active individual broker

2. A managing partner

3. An employee with real estate license

4. A company officer

The correct answer is: An active individual broker

A business entity in Texas is required to designate an active individual broker to represent it in all real estate transactions. This is because, under Texas real estate law, a broker’s license is necessary to perform actions related to buying, selling, or leasing real estate on behalf of another party. The broker acts as the designated agent for the business entity, ensuring compliance with regulations and legal responsibilities. The requirement for an active individual broker ensures that there is a knowledgeable and licensed person who can manage transactions, represent the interest of the entity, and oversee the activities of any licensed employees working for the entity. This is critical for maintaining professional standards and safeguarding consumer interests in real estate transactions. While other roles like managing partners or company officers are important within a business organization, they do not fulfill the specific requirement of being an active individual broker licensed to engage directly in real estate activities. An employee with a real estate license could work under the supervision of the designated broker but cannot act on behalf of the business entity unless designated in the appropriate role.