Starting a Team
What a Real Estate Team Agreement Covers and What the Broker Requires
Updated
Bottom line: TREC guidance says supervision and compensation belong in a written agreement with the sponsoring broker. The broker registers the team name, and the broker’s name runs with it in team ads.
What does TREC expect the written agreement with the sponsoring broker to spell out?
TREC’s advertising rules FAQ for license holders says the supervision a sponsoring broker exercises over a sales agent should be described in a written agreement between the two.
That same FAQ ties the level of supervision to the agent’s experience and ability. It also acknowledges that the broker is responsible for what the agent does.
The FAQ also wants the agreement to say how pay is handled with the broker.
So a team agreement starts from those two points for every member: who supervises them, and how their compensation is handled with the sponsoring broker.
Can the team leader take on supervision instead of the broker?
TREC’s FAQ on required information in advertisements says a broker does not have to supervise sponsored sales agents directly.
It lets the broker hand that duty to someone who has the experience and expertise the law requires for proper supervision.
The same FAQ warns that a complaint against a sponsored agent also counts as a complaint against the broker. It is used to judge the broker’s involvement and whether supervision was proper.
Where a team leader supervises members, that role runs from the broker’s delegation. The broker stays answerable for how it is carried out.
What rules apply to the team name itself?
TREC’s article on Rule 535.154 defines a team name as one used only by a team or group. That team or group is one or more sponsored agents or brokers tied to the broker.
Under that article, the name has to end in “team” or “group.” It cannot include “brokerage,” “company,” “associates” or other similar terms.
The same TREC article lets a sales agent pair her name with “Team” or “Group.” That holds only if the ad also carries the broker’s name and the broker has registered the name with the Commission.
TREC’s FAQ by category adds that any name an individual agent uses, other than the licensed name or a registered alternate name, counts as a team name. That FAQ says it then has to meet the team name requirements.
What does team advertising have to show?
TREC’s FAQ by category says that where a sales agent’s name or a team name appears, the broker’s name has to appear too, at half the size or larger.
That ratio applies whether the name on the piece is one agent’s or the whole team’s. A team agreement that assigns marketing work has to work inside it.
At Keller Williams Southwest, the office at 1650 Highway 6 has 14 people behind you, with compliance alongside marketing and technology.
Who holds the listings and buyer agreements a team member signs?
TREC’s FAQ by category says a listing agreement is a private contract that binds the property owner and the broker, not the sales agent.
TREC’s FAQ on required information in advertisements treats a buyer representation agreement the same way. It is a private contract between the buyer and the broker, not the sales agent.
A team agreement written on that footing describes how members work listings and buyer clients. The contracts themselves stay with the broker.
Filed in The team.
Questions & answers
What do Sugar Land agents ask about this?
Does TREC check whether another team already uses the name we want to register?
No. TREC’s article on advertising name types under Rule 535.154 says the Commission does not vet team names or assumed names submitted for registration for exclusivity, and is not required to. Meeting the format rules and being free to use are two separate questions. A name can pass every TREC format test and still be one that another team already uses.
For a team leader choosing a name, that leaves two checks. One is the TREC format, which the broker’s registration step depends on. The other is whether anyone else is already trading under the name, which the Commission leaves open. We would talk that second check through with your broker and the compliance staff in our office at 1650 Highway 6 before anything is printed or posted.
Can my team members’ commissions be paid straight to me as the team leader?
No. TREC’s advertising rules FAQ for license holders says all commissions must be paid through the agent’s sponsoring broker. A team leader does not sit between the closing and the broker on that payment. Whatever a team agreement says about dividing money among members applies to funds the sponsoring broker has already received.
For anyone drafting a team agreement, that sets the order of events. The commission reaches the sponsoring broker first. Any division among team members follows from there, under terms the broker has agreed to. It also means a member’s own agreement with the broker carries weight on money questions. A side arrangement between a team leader and a member does not route a commission around the broker who sponsors that member.
Does my broker have to keep written rules on how my team advertises?
Yes. TREC’s advertising rules FAQ for license holders says your broker must maintain written policies and procedures, kept current, so that each sponsored sales agent complies with the Commission’s advertising rules. A team is made up of sponsored agents, so each member’s ads fall under those policies. A team’s own marketing standards sit beneath the broker’s, never in place of them.
In practice, a team leader writing marketing rules into a team agreement starts by reading the broker’s current policies. Anything the team adds, such as review steps before an ad runs, works inside that framework. At Keller Williams Southwest, marketing, technology and compliance are among the 14 people in the office behind you, so those questions have somewhere to go.
When did TREC’s current team name and advertising rules take effect?
TREC’s news listing on rule changes gives May 15, 2018 as the date these rules took effect. License holders had six months from that date to comply with the updated requirements. The same listing places alternate, assumed business and team name registration in §535.154, and the revised advertising requirements in §535.155.
For a team leader, these are settled rules, not a recent change. Any team name or ad layout drafted today has to meet them as written, and the compliance window that opened in 2018 closed long ago.