Texas statute on real estate license requirements and written commission agreements

Texas Statutes

Texas law generally requires a person collecting a real-estate commission to be properly licensed and acting within the statutory licensing framework. Tex. Occ. Code § 1101.351[2]

“A person may not maintain an action in this state to recover a commission for the sale or purchase of real estate unless the promise or agreement … or a memorandum, is in writing and signed by the party against whom the action is brought.” Tex. Occ. Code § 1101.806(a)[1]

Key provisions

IssueTexas rule
Who may act as a broker or sales agentA person generally must hold a license issued under Chapter 1101. A sales agent must be sponsored by and act for a licensed broker. Tex. Occ. Code § 1101.351[2]
Written commission agreementAn action to recover a commission for the sale or purchase of real estate requires a written promise, agreement, or memorandum signed by the party against whom recovery is sought, or that party’s authorized representative. Tex. Occ. Code § 1101.806(a)[1]
Failure to provide required buyer noticeA license holder who fails to provide the notice required by Section 1101.555 may not receive or recover the agreed commission. Tex. Occ. Code § 1101.806(d)[1]

Accordingly, the prudent rule is: the claimant must be properly licensed, and the commission agreement must be in writing and signed by the party being charged. An oral agreement generally will not support a commission-recovery action under Section 1101.806.

Sources & References

  1. Tex. Occ. Code § 1101.806
  2. Texas Occupations Code § 1101.351

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