TREC Legal Update I and II: Renewal Credits and Deadlines

Every active Texas real estate sales agent and broker has to complete TREC Legal Update I and II before each license renewal. The two courses run four hours each, for a combined eight hours of required legal education every two-year term, and TREC rewrites the content each cycle to reflect new legislation, rule changes, and enforcement patterns. The current edition covers the 2026–2027 renewal period.

Where the Two Courses Fit in Your Renewal

Active licensees owe 18 hours of continuing education per two-year term. Eight of those hours are fixed: four hours of Legal Update I and four hours of Legal Update II. You choose the other 10 from TREC’s approved elective list.¹

Brokers carry more. As of January 1, 2026, every broker must complete a six-hour Broker Responsibility Course at renewal, whether or not they sponsor sales agents. The earlier rule limited this requirement to brokers who supervised agents or served as designated brokers for a business entity; TREC extended it to all brokers.² With Legal Update I, Legal Update II, and electives added in, a broker’s renewal education totals 24 hours.

First-time renewals work differently. You must finish 270 hours of Sales Apprentice Education, on top of Legal Update I and Legal Update II, before TREC will process the renewal.³ SAE hours cannot be deferred, so plan the timing early.

What Legal Update I Covers

Legal Update I carries the subtitle “Laws, Rules and Forms” and focuses on the mechanics of practice.¹ The 2026–2027 edition runs four chapters.

The first chapter walks through legislation from the 89th Texas Legislature’s 2025 regular session. Because the Legislature meets only in odd-numbered years, each new Legal Update edition is the primary way TREC pushes statutory changes out to the roughly 200,000 active licensees.² The same chapter highlights TREC rules licensees routinely forget, including the two-calendar-day response deadline to clients and other parties, and the 10-day deadline to update your contact information with the commission.

The contract chapter covers updates to TREC’s promulgated forms, which licensees must use for sales, exchanges, options, and leases. It draws the line between filling in blanks and drafting new legal language, and uses real enforcement cases to show when a licensee has crossed into the unauthorized practice of law. Seller’s disclosure obligations and common contract mistakes round out the chapter.

A water rights chapter explains how Texas splits water into groundwater (governed by the rule of capture) and surface water (state-owned, permitted separately), and what a licensee needs to check when handling rural or undeveloped land.

Fair housing closes the course, covering federal and state anti-discrimination protections, steering during showings, marketing restrictions, and disability accommodations, with real-world violation examples.

What Legal Update II Covers

Legal Update II carries the subtitle “Agency, Ethics and Hot Topics.”¹ The 2026–2027 edition reflects major agency-law changes from the 2025 session and adds an entirely new AI chapter.

The opening chapter covers TREC’s Canons of Professional Ethics and Conduct along with agency relationships: how they form, what fiduciary duties they create, and what paperwork they require. It walks through when the Information About Brokerage Services notice must be delivered, with limited exceptions for short-term residential leases, open houses involving the same property, and communications with a party who is already represented.⁴ The 2025 Legislature created a new “non-representation status” under TRELA Sections 1101.562 and 1101.563 and added new written agreement requirements, both covered here.⁵ Competency rules and advertising requirements for team names and assumed business names finish the chapter.

The AI chapter is new for this cycle. It looks at machine learning and natural language processing tools showing up in real estate work, from automated valuations to virtual staging, and it lays out the risks: inaccurate output, facilitation of scams, and unauthorized practice of law when a licensee lets an AI tool draft contract language. The chapter offers seven considerations for using AI while staying compliant with TREC rules.⁵

A veterans chapter covers the VA-guaranteed home loan program alongside the Texas Veterans Land Board programs, including eligibility, debt-to-income rules, funding fees, and the amendatory clause that lets a veteran walk away if the appraisal comes in low. It also distinguishes the federal VA loan from the state Veterans Housing Assistance Program and Veterans Land Program.⁵

The final chapter walks through TREC’s Enforcement Division: how complaints move from intake through investigation and resolution, illustrated with real cases.

Taking the Courses and Confirming Your Credits

TREC does not teach these courses. You take them through approved education providers listed on the commission’s website, in classroom or online format. Pricing generally runs $20 to $30 per four-hour course, and many providers bundle Legal Update I and II together.

After you finish a course, the provider must post your credit to TREC’s system within 10 calendar days.⁶ Verify it. Log into the TREC License Holder Search tool and confirm the hours appear on your education history before you file to renew. If credits are still missing after 10 days, contact the provider; correcting the record is their obligation.

Build in a buffer of a few weeks between finishing your courses and your expiration date. Finding out about a reporting gap on renewal day is what turns a routine renewal into a $200 problem.⁷

What Happens If You Miss the Deadline

If TREC’s records don’t show your CE as complete when you file for renewal, you have two choices: pay a $200 CE deferral fee, which buys 60 additional days to finish while staying active, or renew on inactive status. If you don’t complete the courses within that 60-day window, your license drops to inactive automatically.⁸

Once the license itself expires, recovery gets steadily more expensive:

Up to 90 days late: you can still late-renew, paying an added half-fee on top of the standard renewal. Total comes to $143 for a sales agent, $254 for a broker.⁷
90 days to six months late: the late fee doubles. Sales agent, $176; broker, $290.⁷
Six months to two years: you can no longer renew. You must apply for reinstatement, at $196 for a sales agent or $298 for a broker, and the license comes back on inactive status.⁷
After two years: the license is gone. You must reapply as a new applicant and retake the licensing exam.⁸

Any brokerage activity on an inactive or expired license is unlicensed activity, with a minimum fine of $1,000.⁸

Inactive Status as an Alternative

If you’re stepping away from practice temporarily, moving your license to inactive status removes the CE requirement while it sits. You still pay the renewal fee every two years to keep the license alive, but you don’t have to complete Legal Update I, Legal Update II, or elective hours while inactive.⁹

You cannot conduct any brokerage activity while inactive. When you’re ready to come back, complete all required CE first, then submit an activation request. And if you still owe Sales Apprentice Education hours from your initial licensing, going inactive won’t get you around them: SAE cannot be deferred, and you can’t renew in any status until those hours are done.⁹

1
Legal Information Institute. Texas Administrative Code 535.92 – Continuing Education Requirements
2
Texas Real Estate Commission. Legal Update I 2026-2027 Course Manual
3
Texas Real Estate Commission. First-Time Renewal Legal Update Requirements
4
Texas Real Estate Commission. Agency Disclosure Requirements for Real Estate License Holders
5
Texas Real Estate Commission. Legal Update II 2026-2027 Course Manual
6
Texas Real Estate Commission. Responsibilities and Operations of CE Providers
7
Texas Real Estate Commission. Fee Schedule
8
Texas Real Estate Commission. If Your License Expires, It Also Goes Inactive
9
Texas Real Estate Commission. What Every License Holder Needs to Know About Going Inactive