Texas Real Estate Laws You Need to Know for the Exam

The state portion of the Texas real estate exam is where most test takers lose points, and it's almost all law. National concepts you can study anywhere. Texas law you have to learn cold.

This guide walks through the six Texas laws the exam tests hardest, starting with TRELA, the one the whole license system is built on. Each section ends with a sample question in the exam's format, so you can check yourself as you go.

What is TRELA?

TRELA is the Texas Real Estate License Act, the state law that requires a license to broker real estate in Texas and sets the rules every licensee must follow. It lives in Chapter 1101 of the Texas Occupations Code, and it's the legal foundation for everything else on this list. If the exam asks where an agent's authority or obligations come from, TRELA is usually the answer.

The Texas Real Estate License Act (TRELA) is the statute that defines who must hold a real estate license in Texas and what conduct can cost them that license.

What the exam expects you to know about TRELA:

1. Who needs a license. Anyone who sells, buys, leases, or negotiates real estate for another person for compensation. Doing it without a license is a criminal offense.
2. Who's exempt. Owners selling their own property, attorneys performing legal duties, and people acting under a power of attorney, among others.
3. Who enforces it. The Texas Real Estate Commission (TREC), a nine-member body appointed by the governor: six licensed brokers and three public members. TREC writes the rules that put TRELA into practice, issues licenses, and can fine, suspend, or revoke.
4. Key licensee duties. Give the Information About Brokerage Services (IABS) notice at first substantive contact, disclose who you represent, and put clients' interests first.
5. Texas-specific practice rules. Texas uses intermediary status instead of traditional dual agency when one brokerage represents both sides, and it requires written consent from both parties. TREC rules also tightly restrict net listings, allowing them only when the seller insists and a maximum sales price is stated.

Sample question: Under TRELA, which of the following people needs a real estate license?

• A. A homeowner selling their own house
• B. An attorney drafting a deed for a client
• C. A person negotiating home sales for others for a fee
• D. A property owner leasing their own duplex

Answer: C. Acting for another person, for compensation, is the licensing trigger.

Deceptive Trade Practices Act

The Texas Deceptive Trade Practices Act (DTPA) protects consumers from false, misleading, or deceptive business practices, and real estate agents can be sued under it. For the exam, focus on what counts as deceptive and what a consumer must do before suing.

Key points the exam tests:

• Who it protects: individuals, partnerships, corporations, and government entities that buy or lease goods or services.
• What it prohibits: false, misleading, or deceptive acts, like misrepresenting a property's condition or hiding known defects.
• Unconscionable actions: taking advantage of a consumer's lack of knowledge to a grossly unfair degree.
• Warranties: the act covers breaches of both express and implied warranties.
• Notice requirement: the consumer must send written notice at least 60 days before filing suit.
• Damages: a consumer who proves the seller acted knowingly can recover up to three times their economic damages.

Sample question: Which of the following actions would be considered a violation of the Texas Deceptive Trade Practices Act?

• A. Providing a comparative market analysis to a potential seller
• B. Failing to disclose known foundation issues to a buyer
• C. Hosting an open house for a listed property
• D. Placing a "For Sale" sign on a property with the owner's permission

Answer: B. Failing to disclose known foundation issues to a buyer.

What is the Texas homestead exemption in 2026?

The Texas homestead exemption now shields $140,000 of a home's value from school district taxes, and homeowners who are 65 or older or disabled get $200,000 combined. Both numbers are new: Texas voters approved Proposition 13 in November 2025, raising the general exemption from $100,000 to $140,000, and Proposition 11, raising the additional 65-plus and disabled exemption to $60,000. Beyond taxes, homestead law also shields a primary residence from forced sale by most creditors.

A homestead is a Texas resident's primary home, legally protected from forced sale by most creditors.

To qualify, the owner must live in the home as their principal residence, and their driver's license or state ID address must match. No filing is required to create homestead protection. It arises automatically from occupancy and intent. But filing the exemption with the county appraisal district is what gets you the tax break.

Sample question: In Texas, which of the following is a requirement for a property to be considered a homestead?

• A. The property must be located within a city's limits
• B. The property must be used exclusively for commercial purposes
• C. The owner must designate the property as a homestead in the county records
• D. The property must be the owner's primary residence

Answer: D. The property must be the owner's primary residence.

Is Texas a community property state?

Yes. Texas is a community property state, which means most property and income acquired during a marriage belongs to both spouses equally, no matter whose name is on it. Separate property is what a spouse owned before the marriage or received during it by gift, inheritance, or personal injury settlement.

On divorce, Texas courts divide community property in a way that is "just and right," which is not always 50/50. Judges weigh earning capacity, contributions to the marriage, child custody, and fault. Debts run the same direction: debts incurred during the marriage are generally community obligations, so both spouses can be on the hook.

For agents, this matters at the closing table. Both spouses generally must join in conveying a homestead, even if only one holds title.

Sample question: In a Texas divorce, how is community property generally divided?

• A. Equally between the spouses
• B. Based on each spouse's financial contribution to the property
• C. According to the terms of a prenuptial agreement
• D. At the discretion of the court, based on what is just and right

Answer: D. At the discretion of the court, based on what is just and right.

Landlord-tenant laws

Texas landlord-tenant law sets the ground rules for leases, deposits, repairs, and evictions, and the exam pulls several reliable questions from it. The numbers are the testable part:

• Security deposits: no cap on the amount, but the landlord must return the deposit within 30 days of move-out, with an itemized list of any deductions.
• Repairs: tenants can demand repair of conditions that materially affect health or safety. If the landlord won't act after proper notice, the tenant may terminate, repair and deduct, or sue.
• Security devices: rental units must have window latches and keyed deadbolts on exterior doors, installed at the landlord's expense.
• Evictions: landlords must give proper written notice and win a court order. Self-help evictions aren't legal.
• Leases: written leases are standard, but oral agreements are binding too. Changes should be in writing and initialed.

Sample question: In Texas, how long does a landlord have to return a security deposit after a tenant has vacated the property?

• A. 30 days
• B. 60 days
• C. 90 days
• D. There is no specific time frame mandated by law

Answer: A. 30 days.

Easements and encroachments

An easement is a legal right to use part of someone else's property for a specific purpose, while an encroachment is an intrusion onto someone else's property without permission. The exam wants you to tell them apart and know how easements are created.

The five ways to create an easement in Texas:

1. Express grant: agreed in writing, with the formalities of a real estate transaction.
2. Prescription: earned through continuous, exclusive, open use against the owner's wishes for at least 10 years.
3. Estoppel: based on the owner's promise that someone relied on to their detriment.
4. Implication: imposed by a court when use has continued without a formal agreement.
5. Necessity: granted when land would otherwise be landlocked.

An encroachment, by contrast, is never a right. A neighbor's fence or garage extending over the property line is a defect to resolve by negotiation, a survey, or court.

Sample question: Which of the following best describes an easement in Texas?

• A. A permanent structure built by a neighbor that extends onto another's property
• B. A written agreement between neighbors to share a driveway
• C. A right granted by a property owner to a utility company to install power lines
• D. A fence built by a property owner that encroaches on a neighbor's land

Answer: C. A right granted by a property owner to a utility company to install power lines.

The takeaway

Learn TRELA first, because it anchors the whole state section. Then drill the numbers: $140,000, 60 days, 30 days, 10 years. Those four figures alone show up in a surprising share of state-portion questions. When you're ready to see how the law content fits into the full test, our breakdown of the Texas real estate exam covers the format, question counts, and pass rates, and if you're still finishing your education hours, here's how to get your Texas real estate license start to finish.

Knowing the law is half the job. Recognizing how the exam asks about it is the other half, and that only comes from practice questions. Start the Texas Exam Prep program and drill unlimited practice exams until the state section feels routine.