During the May 2024 TREC Meeting, the Commission proposed a new rule to address broker succession when the designated broker for a business entity passes away.

Texas law requires that a licensed business entity name a designated broker that satisfies certain requirements. If that designated broker dies, then both the entity’s license and any sponsored sales agent licenses will become inactive, meaning neither the entity nor the sales agent can perform any real estate services that require a license—even if the agent is in the middle of a transaction.

Under this proposed rule, if the licensed business entity sponsors sales agents, neither the business entity license nor any sponsored sales agent license will become inactive right away after the designated broker’s death. Rather, the entity and agents will be given a “safe harbor” or grace period of 14 days from the broker’s death before their licenses inactivate, providing time for the entity to name a new designated broker prior to a license going inactive.

Select “535.124 – Death of a Designated Broker” in the dropdown menu to provide your public comments on this proposal until July 7. The earliest this rule could be adopted is at the August 19 TREC Meeting.