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

Who must a real estate company hire to operate if an unlicensed person owns it?

1. Broker of Record

2. Managing Partner

3. Sponsoring Broker

4. Principal Broker

The correct answer is: Sponsoring Broker

In Texas real estate, if an unlicensed individual owns a real estate company, the company must have a licensed individual overseeing its operations to comply with state regulations. The correct choice reflects that the unlicensed owner must employ a sponsoring broker. The sponsoring broker is a licensed individual who assumes responsibility for the company's activities and ensures compliance with the Texas Real Estate Commission (TREC) rules. The sponsoring broker is essential because they provide oversight, guidance, and the legal authority for the company to conduct real estate transactions. This role is critical to uphold the ethical and legal standards of real estate practices in Texas. While a broker of record or a principal broker could be terms used interchangeably or in various contexts, the term specific to Texas real estate regulations is the sponsoring broker, who is directly accountable for the company's actions. The managing partner could refer to a different organizational structure and does not necessarily denote a licensed individual responsible for compliance within the real estate context.