The August 12 Texas Real Estate Commission meeting covered 45 agenda items spread over 472 pages of meeting materials. See the full agenda and materials at TREC’s website, and read below for highlights relevant to your business.

Adopted Rules

Eliminated consideration of student loan default: Emergency amendments were adopted to §535.91, Renewal of a Real Estate License, which removed references to student loan default. This change was due to Senate Bill 37, passed by the 86th Texas Legislature and signed by the governor removes consideration of a student loan default as grounds to deny a license or license renewal.

Added geographic and property-type competency: TREC rule §531.3 was amended to make clear that license holders must be knowledgeable about local market issues in the geographic area in which they work and the characteristics involved in the specific type of property being sold or leased. Penalties for violating this requirement were added to §535.191, with a range of $500-3,000.

Education providers now approve instructors: The Texas Legislature removed TREC’s authority to approve instructors. Therefore, the commission adopted amendments to the rules to reflect this change. TREC will still determine qualifications that an instructor of a TREC-approved course must meet, but the instructor will be approved by the education provider. These amendments affect §535.63, §535.65, §535.74, and §535.75. The commission also eliminated the 8-hour adult education instructor training course required within four years of an application to teach qualifying or non-elective continuing education courses.

Undisclosed commission or rebate updates: TREC rule §535.148, Receiving an Undisclosed Commission or Rebate, was amended to conform with the federal Real Estate Settlement and Procedures Act (RESPA) and a similar provision in the rules applying to inspectors.

Proposed Rules Changes

Here are some of the changes proposed August 12, many of which were necessitated by action during the 2019 legislative session. Download the meeting materials to see all the proposals, which will be discussed again at the November TREC meeting.

  • §535.112, Branch Office: As a result of Senate Bill 624, a branch office license is no longer required as of September 1, 2019. Therefore, proposed changes were made to TREC rules to remove references to a branch office license. For more information about this change, you can visit TREC’s website.
  • §535.101, Fees: The proposed amendments eliminate fees for a branch office license, establishing or changing a relationship with a sponsoring broker, change of address or name, an active license certificate, instructor approval, submitting paper application or forms, and certified copies. The fee for dishonored checks is also removed; however, the proposed rule would create a process for requesting payment and allowing the commission to place a license on inactive status if payment isn’t received.
  • §535.51, General Requirements for a Real Estate License: The Texas Legislature removed the residency requirement for real estate license eligibility. The proposed amendment removes that requirement from the rule and removes references to service members to incorporate them in a new section, §535.58, License for Military Service Members, Veterans, or Military Spouses.

All the proposed rule changes will be posted in an upcoming Texas Register, after which the public will have 30 days to comment. Once published in the register, you can send comments to general.counsel@trec.texas.gov.

Proposed Forms Changes

The commission proposed changes to its contract forms.

Language was added to Paragraph 4 to address leases to which the seller is a party and requires the seller to acknowledge that the buyer has received a copy of all leases or will receive a copy within three days after the effective date. The buyer may terminate the contract after receipt of the leases within a period of days set in the contract. Paragraph 4 also prohibits the seller from executing any new lease or amending any lease without buyer’s written consent after the effective date of the contract. The language of existing Paragraph 4 was moved to the end of Paragraph 8.

Language was deleted from the Broker Information page of all contracts except the Farm and Ranch Contract: “Listing Broker has agreed to pay Other Broker ___ of the total sales price when the Listing Broker’s fee is received. Escrow agent is authorized and directed to pay Other Broker from Listing Broker’s fee at closing.”

These proposed changes affect the following forms. Click here to see redlines:

  • Unimproved Property Contract
  • One to Four Family Residential Contract (Resale)
  • New Home Contract (Incomplete Construction)
  • New Home Contract (Completed Construction)
  • Farm and Ranch Contract
  • Residential Condominium Contract (Resale)

Changes were proposed to the Addendum for Property Subject to Mandatory Membership in a Property Owners Association. It was amended to add deposits and reserves to the list of payments the buyer will make in association with the transfer of the property. See the redline.

Changes were proposed to the Third Party Financing Addendum. It was amended to clarify that the three-day notice requirement in Paragraph 2B does not apply to Paragraph 4. See the redline.

Changes were proposed to the Addendum for Authorizing Hydrostatic Testing. It was amended to include a reference to the scope of hydrostatic testing in the top sentence. See the redline.

You can send comments on the proposed form changes to general.counsel@trec.texas.gov. The earliest the form changes could be adopted is November.

Oldmixon to Retire

After 10 years leading the Texas Real Estate Commission, Executive Director Douglas Oldmixon announced his retirement. During Oldmixon’s tenure at the commission, the agency improved broker responsibility, raised education standards, modernized rules, enhanced consumer protections, and improved its service to license holders. Texas REALTORS® thanks the executive director for his leadership.