The Texas Real Estate Commission met in early August. Here are a few actions from TREC’s meeting you should know about.

Realty can be used in team names

An adopted amendment to TREC rule 535.155, Advertisements, removes the term realty from the list of prohibited terms in a team name. A team’s name must still end in the words team or group to adhere to TREC rules.

Directional signs get an exception to advertising rules

A directional sign won’t be considered an advertisement if it includes only directional arrows or directional arrows and the broker’s name or logo.

Have questions about complying with Texas Real Estate Commission rules? Call the association’s Legal Hotline at 800-873-9155. It’s a free member benefit for all Texas REALTORS®.

New form adopted: Notice of Seller’s Termination of Contract

  1. This new form is for the seller to notify the buyer the contract is terminated because either: The buyer failed to deliver the earnest money within the time required under Paragraph 5 of the contract and before the time the seller provided this notice to buyer; or
  2. Another reason identified by the paragraph number of the contract or addendum.

Once available, this form will be added to, zipForm, and other forms vendors as quickly as possible.

TREC will not create its own earnest money form

TREC in May proposed creating a new earnest money form, but formally withdrew the form at this meeting after receiving comments from members like you.

TAR continues to offer to members its Release of Earnest Money form, one of the 136 forms available exclusively to Texas REALTORS® at

Proposals from the meeting

The proposed form and rule changes outlined here were posted in the Texas Register in late August, and the public had 30 days to comment by contacting

The earliest these proposed changes could be adopted is at TREC’s November meeting.

Proposed form revisions

In addition to the revisions proposed in May, TREC proposed additional revisions recommended by the Broker Lawyer Committee to the Third Party Financing Addendum. If adopted at the November TREC meeting, the revisions would:

  • Revise the current language in Paragraph B2, Property Approval, to require that if the buyer wants to terminate the contract under this paragraph, the buyer must give the seller written notice not later than three days before the contract’s closing date and must provide the seller written evidence of lender’s determination.
  • Reformat the form for consistency with other TREC-promulgated forms.
  • Change the last sentence of Paragraph E2 so that it states “ … brokers and sales agents provided under Broker Information.”

TREC also proposed additional revisions to the Notice of Buyer’s Termination of Contract. If adopted at the November TREC meeting, the revisions would:

  • Add a statement that a buyer terminating the contract under the Property Approval section of the Third Party Financing Addendum has delivered to the seller a written statement from the lender as to why the property isn’t approved in line with the proposed changes to the Third Party Financing Addendum.
  • Add a box to check if the buyer is terminating under Paragraph 3 of the Addendum Concerning Right to Terminate Due to Lender’s Appraisal.
  • Add a box to check if the buyer is terminating under Paragraph 6D of the contract because buyer’s or lender’s timely objections were not cured by the end of the cure period.

Finally, TREC proposed revisions to Addendum Concerning Right to Terminate Due to Lender’s Appraisal recommended by the Broker Lawyer Committee to help make the options clearer. Learn more about how to use the current version of the addendum.

Proposed changes to 535.2, Broker Responsibility

TREC proposed changes to this section, which includes the following:

  • A broker would have to designate anyone who leads, supervises, or directs a team in the brokerage as a delegated supervisor with TREC. In addition, the proposed changes would reduce the time frame when a license holder must be delegated as a supervisor to three months. Currently, a broker has to appoint someone as a delegated supervisor if he or she has or will be supervising for more than six months.
  • The time frame that a broker or delegated supervisor has to respond to clients, agents, or other brokers would be reduced from three to two days.
  • The time frame that a broker or delegated supervisor has to deliver TREC correspondence to their agents would be reduced from 10 to three days.
  • In the section covering records retention, the term “work files” would be deleted and replaced with “communications with parties to the transaction” for clarity on what should be retained.
  • Brokers would have to add to their brokerage policies and procedures manual that brokers will ensure agents are geographically competent in the market area being served; and that brokers will ensure training or coaching for new agents when they undertake new tasks.

If these proposed changes are adopted at TREC’s November meeting, TAR will update its Model Brokerage Policies and Procedures Manual as necessary, which gives brokerages instant compliance with TREC requirements to maintain written policies and procedures. The manual is $99.99 plus tax, but if you have previously purchased the manual, you will receive the updates for free. Learn more.

Other proposed changes

A proposed amendment to TREC rule 535.101, Fees, would reduce the fee from $20 to $10 for an agent establishing or changing sponsorship.

A proposed amendment to TREC rule 535.191, Schedule of Administrative Penalties, moves several violations to a lower tier of penalties and adds several violations from recently adopted rules and those missing from the penalty matrix.