top 5 trec complaint categories

2 min read 11-03-2025

The Texas Real Estate Commission (TREC) receives numerous complaints annually regarding real estate transactions. Understanding the most frequent complaint categories can help both consumers and real estate professionals navigate the system more effectively and avoid potential issues. This article outlines the top five TREC complaint categories, providing insights into common problems and preventative measures.

1. Misrepresentation or Omission of Material Facts

This category consistently ranks as the top complaint against Texas real estate licensees. It encompasses a broad range of issues where agents fail to accurately disclose crucial information about a property. This can include:

Property Defects: Failing to disclose known material defects, such as foundation problems, plumbing issues, or pest infestations. A thorough inspection and transparent communication are vital.
Disclosing only positive information: Agents need to present a balanced picture. Withholding negative aspects to secure a sale is unethical and illegal.
Accuracy of property information: Ensuring all marketing materials and disclosures are accurate and up-to-date is crucial.

2. Failure to Properly Disclose Agency Relationships

Texas law mandates clear disclosure of agency relationships. Confusion or lack of clarity about who the agent represents (buyer, seller, or both) frequently leads to complaints. Understanding the nuances of buyer's agency, seller's agency, and dual agency is essential.

Proper documentation: All parties should receive and understand agency disclosure forms. It's crucial to ensure these are completed and signed properly before any transactions occur.
Transparent communication: Openly discussing representation and responsibilities helps maintain trust and avoid misunderstandings.
Maintaining clear lines of communication: Keeping separate communications regarding client information prevents conflicts of interest.

3. Commission Disputes

Disagreements over commissions are another common source of TREC complaints. This often arises from unclear contracts, disputes about earned fees, or disagreements over splitting commissions between agents.

Detailed contracts: Thoroughly reviewed and clearly defined contracts prevent misunderstandings.
Specific commission agreements: Explicitly detail commission rates, payment schedules, and responsibilities in the agreement.
Accurate record-keeping: Maintaining thorough documentation of all transactions and agreements protects all parties involved.

4. Unfair or Deceptive Practices

This wide-ranging category includes a variety of actions considered unethical or misleading. It can range from making false promises about a property to engaging in high-pressure sales tactics.

Truth in advertising: All marketing and promotional materials must be accurate and truthful.
Fair dealing: Agents should act honestly and fairly at all times.
Professional conduct: Adhering to a strict code of ethics is a cornerstone of maintaining a good reputation and avoiding complaints.

5. Lack of Competence or Due Diligence

This category focuses on instances where agents demonstrate a lack of professionalism or competency in handling real estate transactions. This can include failing to properly vet buyers, neglecting essential paperwork, or mismanaging escrow funds.

Continuing education: Keeping up-to-date with the latest regulations and best practices through continuing education courses is crucial.
Thorough preparation: Completing all necessary paperwork accurately and timely minimizes the risk of error.
Professional expertise: Agents should only handle transactions within their area of expertise.

Preventing TREC Complaints: Best Practices

By following these best practices, real estate professionals can minimize their risk of receiving TREC complaints:

Open Communication: Maintain clear and transparent communication with all parties.
Thorough Documentation: Meticulously document all aspects of a transaction.
Continuing Education: Stay abreast of changes in real estate laws and best practices.
Ethical Conduct: Prioritize ethical and professional behavior at all times.

Navigating the Texas real estate landscape requires careful attention to detail and adherence to regulations. Understanding the most frequent TREC complaint categories allows agents to better protect themselves and their clients, fostering smoother and more successful transactions. Remember, preventing issues through proactive measures is always better than reacting to a complaint.