The Texas Real Estate Commission met February 13 in Austin. In addition to hearing updates from TREC staff, the Commission elected Mark Woodruff as vice chair and Ben Peña as secretary. Read on for information on adopted and proposed rule changes.
Honoring Committee Volunteers
Commissioners took a moment at the beginning of the meeting to honor the service of two Texas Real Estate Commission committee volunteers: Marion Napoleon and Chuck Jacobus. Executive Director Chelsea Buchholtz said both are wonderful examples of how valuable TREC committee members' expertise and time are and that she appreciates their service to the Commission.
Texas Real Estate Commission Chair Scott Kesner presents TREC committee volunteer Chuck Jacobus with a certificate for his volunteer service.
Adopted Changes
Section 535.223, Standard Inspection Report Form
What Changes?
The adopted amendments to Section 535.223 clarify that when multiple boxes are checked for a particular item on the Property Inspection Report Form (REI 7-6), the inspector must also explain the reason for checking multiple boxes. The adopted amendments also remove single-system inspections from the list of exemptions—meaning the requirements in Section 535.223 would apply to those inspections.
When Does the Rule Change Become Effective?
March 7, 2023
Provide Your Input on Proposed Changes
Written public comments on proposed rules from the February meeting are now being accepted. Public comments are provided to the advisory committees and working groups from which a recommendation originated for their review and discussion. The most effective and useful comments detail specific issues with proposals.
- Submit comments through the online public comment tool. Use the dropdown menu under Proposed Rule* to select what you are commenting on. If you would like to comment on multiple proposals, submit each one individually.
You can also send comments to general.counsel@trec.texas.gov or General Counsel, Texas Real Estate Commission, P.O. Box 12188, Austin, Texas 78711-2188.
Proposed Changes
The following list highlights some of the proposed change but does not include them all.
Unauthorized Practice of Law
The Commission re-proposed the new Rule Section 537.1, Definitions, and amendments to Section 537.11, Use of Standard Contract Forms, but without a prohibition for license holders to use brokerage forms prepared by an attorney when no mandatory TREC form exists.
- Section 537.1 includes a definition for the new term "informational items," which is intended to better describe the type of information that a license holder can add to a contract form. This definition mirrors the new language in Paragraph 11 of the Commission's contract forms.
- The proposed amendments to Section 537.11 reorganize and consolidate the rule for clarity and simplify the language regarding when a license holder is required to use a Commission-approved contract form and what is considered the unauthorized practice of law.
- Specifically, the proposed changes in subsection (a) align the rule language more closely with the applicable statutory language and simplify the list of exceptions related to contract form use by license holders.
- Subsections (b) through (d) provide further guidance to license holders and members of the public on what the Commission considers to be the unauthorized practice of law.
- Subsection (d)(2) provides that it is not the practice of law to add language to or strike language from a contract form, if specifically instructed in writing by a principal, as long as any change is made conspicuous, including underlining additions, striking through deletions, or employing some other method which clearly indicates the change being made.
Choose 22 TAC Section 537.1 – Definitions and 22 TAC Section 537.11 – Use of Standard Contract Forms from the dropdown menu to provide comments.
Broker Responsibility
Proposed Rule on Response Times
Proposed new rule 535.157, Obligation to Respond Timely, requires a broker or sales agent to respond to his or her principal, a broker or sales agent representing another party to a real estate transaction, or an unrepresented party to a real estate transaction within two calendar days.
Choose 22 TAC Section 535.157 – Obligation to Respond Timely from the dropdown menu to provide comments.
Proposed Rule Amendments on Oversight of New Brokerage Activities
The Commission proposed amending 535.2(i)(5) to increase the minimum number of times a broker must ensure assistance and coaching for a new type of brokerage activity performed by an agent from one time to three times.
Choose 22 TAC Section 535.2 – Broker Responsibility from the dropdown menu to provide comments.
Education
Residential Property Management Course Outline and Real Estate Brokerage Course Outline Proposed
The proposed changes to the Property Management course outline (being renamed Residential Property Management) more accurately reflect the agency’s jurisdiction and ensure relevancy.
The proposed changes to the agency’s Real Estate Brokerage course approval form to better address the broker-agent relationship and associated responsibilities.
Choose 22 TAC Section 535.64 – Content Requirements for Qualifying Real Estate Courses from the dropdown menu to provide comments.
Proposal to Require Qualifying Real Estate Brokerage Course in SAE Hours
The Commission proposed an amendment to 535.55, Education and Sponsorship Requirements for Sales Agent License, to make the 30-hour Real Estate Brokerage course a mandatory course as part of the SAE requirement. This would not remove the statutory requirement that a broker applicant have taken this course not more than two years prior to submitting his or her application, meaning broker applicants would likely have to take this course twice.
Choose 22 TAC 535.55 – Education and Sponsorship Requirements for a Sales Agent License from the dropdown menu to provide comments.
Inspectors
Proposal to Clarify Delivery Deadlines for Inspection Reports
The proposed change to Section 535.222(a)(2) clarifies that in instances where payments are provided in full prior to the inspection, the inspector is required deliver the report to the client within two days of completion of the inspection.
Choose 22 TAC Section 535.222 – Inspection Reports from the dropdown menu to provide comments.
Licensing
Proposed Changes Related to License Expiration and Renewal
The proposed amendments to Section 535.91, Renewal of a Real Estate License, eliminate the "lookback period" currently found in §535.93, which allows a license holder to renew after the expiration date of their license without any lapse in active licensure, as long as certain certifications are made. Under these proposed changes, a license holder who late renews, meaning no later than six months after the expiration date, would automatically renew on inactive status.
Choose 22 TAC Section 535.91 – Renewal of a Real Estate License from the dropdown menu to provide comments.
A corresponding change is being made to section 535.216 to eliminate the "lookback period" as it relates to inspectors.
Choose 22 TAC Section – 535.216 Renewal of License from the dropdown menu to provide comments.
These earliest these proposed changes could be adopted is at the next TREC Meeting on May 16 in Houston.
Customer Survey
Rules and Laws
Contract Forms