Standards of Conduct
Standards questions are where Texas tests ethics, advertising, trust money, rebates, fee splitting, and unauthorized legal practice.
How to study this exam
Use the guide to learn the rule pattern first, then lock it in with flashcards, drills, and a Texas-weighted mock.
Core concepts
Concept 1
License holders owe fidelity, integrity, competency, consumer information, and honesty in advertising and brokerage conduct.
Exam cue: Ask whether the answer protects the client and treats other parties fairly.
Concept 2
Trust-account and fee questions turn on who owns the money, whether it is commingled, and whether compensation flows through the right broker.
Exam cue: Follow the money: trust funds, rebates, referrals, and commission payments all have rule boundaries.
Concept 3
Unauthorized practice of law questions usually punish custom drafting, legal advice, or altering legal effect outside authorized form use.
Exam cue: If the answer writes legal language or hides an ad identity problem, it is probably the trap.
Risk pitfalls and guardrails
Calling a misleading ad harmless because the property still exists.
Guardrail: Name the rule trigger in one sentence before you evaluate the choices.
Confusing broker-controlled compensation with direct third-party payment to a sales agent.
Guardrail: Name the rule trigger in one sentence before you evaluate the choices.
Treating form explanation as permission to draft legal advice.
Guardrail: Pause and identify the controlling Texas rule or form boundary before you choose.
Memory anchors
FIT
Fidelity, integrity, trustworthiness: the conduct lens.
No Commingling
Client funds do not belong in personal operating money.
Ad Identity
Advertising must not mislead about property, services, or license-holder identity.
Broker Pay Path
Sales-agent compensation generally flows through the sponsoring broker.
Rebate Rule
Rebates are tested through disclosure, consent, and proper handling.
Fee Split
Fee splitting with unlicensed people is a standards trap.
Form Boundary
Explain approved forms; do not draft legal clauses.
Trust Money
Identify whose money it is before deciding where it belongs.
Discipline Grounds
Fraud, dishonesty, misrepresentation, and incompetence invite discipline.
Competency
License holders should stay within competence and advise expert help when needed.
Disclosure Ethics
Required notices and material facts cannot be buried for convenience.
Lottery Trap
Property lotteries and gimmicks often point to disciplinary concerns.
Written Consent
Some compensation or rebate facts turn on documented consent.
No Secret Profit
Personal interest should not outrank the client's interest.
Public Lens
Standards rules are designed around public protection.
Checkpoint rule
Do the check-up only after you can summarize each concept in one sentence and identify one dangerous pitfall from memory.
Knowledge Check (after reading)
Short check-up to confirm understanding of this module.
Check-up Questions
A Standards of Conduct item describes professional ethics and conduct. Which answer is strongest?
Which choice best handles unauthorized practice of law under Texas conduct rules?
Answer all questions to submit.
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Move forward only after this module is stable.