A Municipal Utility District (MUD) notice must be given to buyers when the property lies within a MUD.
Before you read
Test yourself first: 5 questions
Question 1 of 5
Which additional disclosure is commonly required for Texas properties in certain locations, such as near the coast or in a floodplain?
Answer: B. Texas requires several location-based notices when applicable, such as the coastal area property notice for property seaward of the Gulf Intracoastal Waterway and disclosures about whether the property is in a floodplain or flood pool, alongside the standard condition disclosure.
Question 2 of 5
Texas requires the Legal Update CE specifically so license holders stay current on which of the following?
Answer: D. The mandatory TREC Legal Update courses keep license holders current on changes in Texas statutes, TREC rules, promulgated contract forms, and required practices and disclosures, which is why they are a fixed component of the 18-hour CE requirement.
Question 3 of 5
How long must a Texas broker generally retain records of trust-account transactions and other required documents under TREC rules?
Answer: A. TREC requires brokers to keep relevant records, including trust-account documentation, for a defined minimum number of years and to make them available for inspection by the Commission.
Question 4 of 5
The Texas Seller's Disclosure Notice is generally NOT required when the transfer is:
Answer: A. Texas exempts certain transfers (e.g., by an executor/administrator, trustee in foreclosure, or between co-owners) from the standard Seller's Disclosure Notice.
Question 5 of 5
Under TREC rules, where must a Texas broker deposit earnest money and other client funds that the broker holds on behalf of others?
Answer: B. TREC requires a broker who accepts money belonging to others to maintain a separate trust or escrow account, kept distinct from the broker's operating funds, to safeguard client money.
Keep the streak going with more questions like these, each with a full rationale.
Must-know rules
- Sellers of residential property generally must provide the Seller's Disclosure Notice about the property's condition.
- A Municipal Utility District (MUD) notice must be given to buyers when the property lies within a MUD.
- TREC-promulgated contract forms are used for standard residential transactions.
- The buyer may pay an option fee for an unrestricted right to terminate during the option period.
- Earnest money is held in a trust or escrow account by the designated escrow agent.
- Brokers must keep client funds in a trust account separate from operating funds (no commingling).
- Disclosure and trust-handling duties are enforced by TREC.
Texas Required Disclosures & Escrow/Trust Timeframes: FAQs
Is Texas Required Disclosures & Escrow/Trust Timeframes on the real estate exam?
Yes. State License Law is a scored domain on the Texas real estate licensing exam, and this topic appears in the state license-law portion.
Is this cheat sheet free?
Yes — every page on Cinna RE's resource library is free to read, print and share. The app adds practice questions, mock exams and a readiness score.
Does Texas test this differently?
Texas applies its own license law on top of the national portion. This page covers the Texas rules specifically, which is what the state section of your exam tests.
