By Stiles H.B. No. 991
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the regulation of real estate brokers, salesmen, and
1-3 inspectors.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 2(1), The Real Estate License Act
1-6 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
1-7 as follows:
1-8 (1) "Real estate" means a leasehold, as well as any
1-9 other interest or estate in land, whether corporeal, incorporeal,
1-10 freehold, or nonfreehold, and whether the real estate is situated
1-11 in this state or elsewhere. The term does not include an interest
1-12 given as security for the performance of an obligation.
1-13 SECTION 2. Section 2(5), The Real Estate License Act
1-14 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
1-15 as follows:
1-16 (5) "Person" means an individual, a limited liability
1-17 company, or a corporation, foreign or domestic.
1-18 SECTION 3. Section 5(t), The Real Estate License Act
1-19 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
1-20 as follows:
1-21 (t) The commission may authorize specific employees to
1-22 conduct hearings and render final decisions in contested cases.
1-23 The commission may employ a general counsel, attorneys,
1-24 investigators, and support staff to administer and enforce this
2-1 Act.
2-2 SECTION 4. Section 6, The Real Estate License Act (Article
2-3 6573a, Vernon's Texas Civil Statutes), is amended to read as
2-4 follows:
2-5 Sec. 6. (a) A person desiring to act as a real estate
2-6 broker in this state shall file an application for a license with
2-7 the commission on a form prescribed by the commission. A broker
2-8 desiring to engage a person to participate in real estate brokerage
2-9 activity shall join the person in filing an application for a
2-10 salesman license on a form prescribed by the commission. A person
2-11 previously licensed as a broker may apply for inactive status. A
2-12 person previously licensed as a salesman may apply for inactive
2-13 status without the participation of a broker. The person must
2-14 apply for inactive status on a form prescribed by the commission
2-15 not later than the first anniversary of the date of the expiration
2-16 of the broker or salesman license.
2-17 (b) To be eligible for a license, an individual must be a
2-18 citizen of the United States or a lawfully admitted alien, be at
2-19 least 18 years of age, and be a legal resident of Texas <for> at
2-20 the time of <least 60 days immediately preceding> the filing of an
2-21 application, and must satisfy the commission as to his honesty,
2-22 trustworthiness, integrity, and competency. However, the
2-23 competency of the individual, for the purpose of qualifying for the
2-24 granting of a license, shall be judged solely on the basis of the
2-25 examination referred to in Section 7 of this Act.
2-26 (c) To be eligible for or to renew a license, a corporation
2-27 must designate one of its officers and a limited liability company
3-1 must designate one of its managers to act for it. The designated
3-2 person must be a <citizen of the United States or a lawfully
3-3 admitted alien, be at least 18 years of age, and be a resident of
3-4 Texas for at least 60 days immediately preceding the filing of an
3-5 application, and must be qualified to be> licensed <individually as
3-6 a> real estate broker as shown in the records of the commission. A
3-7 corporation or limited liability company may not act as a real
3-8 estate broker unless the designated person is a licensed real
3-9 estate broker <However, the competency of the person shall be
3-10 judged solely on the basis of the examination referred to in
3-11 Section 7 of this Act>.
3-12 SECTION 5. Section 6A(a), The Real Estate License Act
3-13 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
3-14 as follows:
3-15 (a) If, at any time before a person applies for a license
3-16 under this Act, the person requests the commission to determine
3-17 whether his moral character complies with the commission's moral
3-18 character requirements for licensing under this Act and the person
3-19 pays a <$10> fee set by the commission for the moral character
3-20 determination, the commission shall make its determination of the
3-21 person's moral character.
3-22 SECTION 6. Sections 7(a), (e), and (f), The Real Estate
3-23 License Act (Article 6573a, Vernon's Texas Civil Statutes), are
3-24 amended to read as follows:
3-25 (a) Competency as referred to in Section 6 of this Act shall
3-26 be established by an examination prepared by or contracted for by
3-27 the commission. The examination shall be given at such times and
4-1 at such places within the state as the commission shall prescribe.
4-2 The examination shall be of scope sufficient in the judgment of the
4-3 commission to determine that a person is competent to act as a real
4-4 estate broker or salesman in a manner to protect the interest of
4-5 the public. The examination for a salesman license shall be less
4-6 exacting and less stringent than the examination for a broker
4-7 license. The commission shall furnish each applicant with study
4-8 material and references on which his examination shall be based.
4-9 When an applicant for a real estate license fails a qualifying
4-10 examination, he may apply for reexamination by filing a request
4-11 therefor together with the proper fee. The examination requirement
4-12 must be satisfied not later than six months after the date on which
4-13 the application for a license is filed. Courses of study required
4-14 for a license may include but are not limited to the following,
4-15 which shall be considered core real estate courses for all purposes
4-16 of this Act:
4-17 (1) Principles of Real Estate (or equivalent) shall
4-18 include but not be limited to an overview of licensing as a real
4-19 estate broker and salesman, ethics of practice, titles to and
4-20 conveyancing of real estate, legal descriptions, law of agency,
4-21 deeds, encumbrances and liens, distinctions between personal and
4-22 real property, contracts, appraisal, finance and regulations,
4-23 closing procedures, real estate mathematics, and at least three
4-24 classroom hours of instruction on federal, state, and local laws
4-25 relating to housing discrimination, housing credit discrimination,
4-26 and community reinvestment.
4-27 (2) Real Estate Appraisal (or equivalent) shall
5-1 include but not be limited to the central purposes and functions of
5-2 an appraisal, social and economic determinant of value, appraisal
5-3 case studies, cost, market data and income approaches to value
5-4 estimates, final correlations, and reporting.
5-5 (3) Real Estate Law (or equivalent) shall include but
5-6 not be limited to legal concepts of real estate, land description,
5-7 real property rights and estates in land, contracts, conveyances,
5-8 encumbrances, foreclosures, recording procedures, and evidence of
5-9 titles.
5-10 (4) Real Estate Finance (or equivalent) shall include
5-11 but not be limited to monetary systems, primary and secondary money
5-12 markets, sources of mortgage loans, federal government programs,
5-13 loan applications, processes and procedures, closing costs,
5-14 alternative financial instruments, equal credit opportunity acts,
5-15 community reinvestment act, and state housing agency.
5-16 (5) Real Estate Marketing (or equivalent) shall
5-17 include but not be limited to real estate professionalism and
5-18 ethics, characteristics of successful salesmen, time management,
5-19 psychology of marketing, listing procedures, advertising,
5-20 negotiating and closing, financing, and the Deceptive Trade
5-21 Practices-Consumer Protection Act, as amended, Section 17.01 et
5-22 seq., Business & Commerce Code.
5-23 (6) Real Estate Mathematics (or equivalent) shall
5-24 include but not be limited to basic arithmetic skills and review of
5-25 mathematical logic, percentages, interest, time-valued money,
5-26 depreciation, amortization, proration, and estimation of closing
5-27 statements.
6-1 (7) Real Estate Brokerage (or equivalent) shall
6-2 include but not be limited to law of agency, planning and
6-3 organization, operational policies and procedures, recruiting,
6-4 selection and training of personnel, records and control, and real
6-5 estate firm analysis and expansion criteria.
6-6 (8) Property Management (or equivalent) shall include
6-7 but not be limited to role of property manager, landlord policies,
6-8 operational guidelines, leases, lease negotiations, tenant
6-9 relations, maintenance, reports, habitability laws, and the Fair
6-10 Housing Act.
6-11 (9) Real Estate Investments (or equivalent) shall
6-12 include but not be limited to real estate investment
6-13 characteristics, techniques of investment analysis, time-valued
6-14 money, discounted and nondiscounted investment criteria, leverage,
6-15 tax shelters depreciation, and application to property tax.
6-16 (10) Law of Agency (or equivalent) shall include but
6-17 not be limited to the principal-agent and master-servant
6-18 relationships, the authority of an agent, the termination of an
6-19 agent's authority, the fiduciary and other duties of an agent,
6-20 employment law, deceptive trade practices, listing or buying
6-21 representation procedures, and the disclosure of agency.
6-22 (e) Each <As a prerequisite for applying for a salesman
6-23 license; each> applicant for a salesman license shall furnish the
6-24 commission satisfactory evidence of having completed 12 semester
6-25 hours, or equivalent classroom hours, of postsecondary education,
6-26 six hours of which must be completed in core real estate courses,
6-27 of which a minimum of two hours must be completed in Principles of
7-1 Real Estate as described in Subsection (a)(1) of this section and a
7-2 minimum of two hours must be completed in Law of Agency as
7-3 described in Subsection (a)(10) of this section. The remaining six
7-4 hours shall be completed in core real estate courses or related
7-5 courses. As a condition for the first renewal of a salesman
7-6 license, the applicant shall furnish the commission satisfactory
7-7 evidence of having completed a minimum of 14 semester hours, or
7-8 equivalent classroom hours, eight hours of which must be completed
7-9 in core real estate courses. As a condition for the second renewal
7-10 of a salesman license, the applicant shall furnish the commission
7-11 satisfactory evidence of having completed a minimum of 16 semester
7-12 hours, or equivalent classroom hours, 10 hours of which must be
7-13 completed in core real estate courses. As a condition for the
7-14 third renewal of a salesman license, the applicant shall furnish
7-15 the commission satisfactory evidence of having completed a minimum
7-16 of 18 semester hours, or equivalent classroom hours, 12 hours of
7-17 which must be completed in core real estate courses.
7-18 (f) Insofar as is necessary for the administration of this
7-19 Act, the commission is authorized to inspect and accredit
7-20 educational programs or courses of study in real estate and real
7-21 estate inspection and to establish standards of accreditation for
7-22 such programs conducted in the State of Texas, other than
7-23 accredited colleges and universities. The commission shall
7-24 determine the acceptability of real estate courses and real estate
7-25 inspection courses offered to satisfy the requirements of this Act,
7-26 and by rule may provide reasonable criteria for the approval of
7-27 those courses. Schools, other than accredited colleges and
8-1 universities, which are authorized to offer real estate educational
8-2 courses pursuant to provisions of this section, shall be required
8-3 to maintain a corporate surety bond, or other security acceptable
8-4 to the commission, in the sum of $10,000, payable to the
8-5 commission, for the benefit of a party who may suffer damages
8-6 resulting from failure of a commission approved school or course to
8-7 fulfill obligations attendant to the approval.
8-8 SECTION 7. Sections 7A(a) and (b), The Real Estate License
8-9 Act (Article 6573a, Vernon's Texas Civil Statutes), are amended to
8-10 read as follows:
8-11 (a) To renew an active <a> real estate broker license or an
8-12 active real estate salesman license that is not subject to the
8-13 annual education requirements of this Act, the licensee must
8-14 provide the commission proof of attendance at at least 15 classroom
8-15 hours of continuing education courses approved by the commission
8-16 during the term of the current license. The commission by rule may
8-17 provide for the substitution of relevant educational experience or
8-18 correspondence courses approved by the commission instead of
8-19 classroom attendance. In addition, supervised video instruction
8-20 may be approved by the commission as a course counting as classroom
8-21 hours of mandatory continuing education. At least six hours of
8-22 instruction must be devoted to the rules of the commission, fair
8-23 housing laws, agency laws, antitrust laws, the Deceptive Trade
8-24 Practices-Consumer Protection Act (Subchapter E, Chapter 17,
8-25 Business & Commerce Code), disclosures to buyers and sellers,
8-26 current contract and addendum forms, the unauthorized practice of
8-27 law, case studies involving violations of laws and regulations,
9-1 current Federal Housing Administration and Veterans Administration
9-2 regulations, tax laws, and other legal topics approved by the
9-3 commission. The remaining hours may be devoted to other real
9-4 estate-related topics approved by the commission. The commission
9-5 may consider equivalent courses for continuing education credit.
9-6 The commission, on the request of a provider of education, shall
9-7 review a core real estate course authorized under Section 7 of this
9-8 Act and may approve it as a mandatory continuing education course.
9-9 Real estate related courses approved by the State Bar of Texas for
9-10 minimum continuing legal education participatory credit shall
9-11 automatically be approved as mandatory continuing education courses
9-12 under this Act. The commission may not require examinations except
9-13 for correspondence courses. Daily course segments must be at least
9-14 three hours long but not more than 10 hours long. If the license
9-15 being renewed under this section was issued for less than two
9-16 years, the licensee must provide the commission proof of attendance
9-17 at at least eight classroom hours of continuing education within
9-18 the term of the current license, three classroom hours of which
9-19 must have been devoted to the legal topics specified in this
9-20 section.
9-21 (b) An applicant for an active <a> real estate broker
9-22 license or an active real estate salesman license who is not
9-23 subject to the education requirements of Section 7 of this Act must
9-24 provide the commission with proof of attendance of the number of
9-25 <at at least 15> classroom hours of continuing education that would
9-26 have been required for a timely renewal as specified in Subsection
9-27 (a) of this section during the two-year period preceding the filing
10-1 of the application.
10-2 SECTION 8. Section 11, The Real Estate License Act (Article
10-3 6573a, Vernon's Texas Civil Statutes), is amended to read as
10-4 follows:
10-5 Sec. 11. (a) The commission shall charge and collect the
10-6 following fees:
10-7 (1) a fee not to exceed $100 for the filing of an
10-8 original application for a real estate broker license;
10-9 (2) a fee not to exceed $100 for annual renewal of a
10-10 real estate broker license;
10-11 (3) a fee not to exceed $50 for the filing of an
10-12 original application for a real estate salesman license;
10-13 (4) a fee not to exceed $50 for annual renewal of a
10-14 real estate salesman license;
10-15 (5) a fee not to exceed $25 for an application for a
10-16 license examination;
10-17 (6) a fee not to exceed $20 <$10> for filing a request
10-18 for a license for each additional office or place of business;
10-19 (7) a fee not to exceed $20 for filing a request for a
10-20 license for a change for a place of business, change of name,
10-21 return to active status, or change of sponsoring broker;
10-22 (8) a fee not to exceed $20 <$10> for filing a request
10-23 to replace a license lost or destroyed;
10-24 (9) a fee not to exceed $400 for filing an application
10-25 for approval of an <a real estate> education program under Section
10-26 7(f) of this Act;
10-27 (10) a fee not to exceed $200 a year for operation of
11-1 an <a real estate> education program under Section 7(f) of this
11-2 Act; <and>
11-3 (11) a fee of $15 for transcript evaluation;
11-4 (12) a fee not to exceed $10 for preparing a license
11-5 history; and
11-6 (13) a fee not to exceed $50 for the filing of an
11-7 application for a moral character determination.
11-8 SECTION 9. Section 13A(c), The Real Estate License Act
11-9 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
11-10 as follows:
11-11 (c) If the person has been on inactive status <for 36
11-12 consecutive months or less>, the commission shall remove the person
11-13 from the list on application, payment of the required fee, and
11-14 proof of attendance of at least 15 classroom hours of continuing
11-15 education as specified in Subsection (a) of Section 7A of this Act
11-16 during the two-year period preceding the filing of the application.
11-17 <If the person has been on inactive status for more than 36
11-18 consecutive months, the commission may not remove the person from
11-19 the inactive status list until the person has complied with the
11-20 educational and examination requirements specified in Section 7 of
11-21 this Act.>
11-22 SECTION 10. Sections 14(b) and (c), The Real Estate License
11-23 Act (Article 6573a, Vernon's Texas Civil Statutes), are amended to
11-24 read as follows:
11-25 (b) A resident broker of another state who furnishes the
11-26 evidence required under Section 7(g) of this Act may apply for a
11-27 license as a broker in this state. A resident of another state who
12-1 is not licensed as a broker but who was formerly licensed as a
12-2 salesman or broker in this state may apply for a license in this
12-3 state not later than the first anniversary of the date of the
12-4 expiration of the previous license. An application by a
12-5 nonresident is subject to the requirements under this Act for the
12-6 type of license applied for. A nonresident licensee need not
12-7 maintain a place of business in this state. The commission may in
12-8 its discretion refuse to issue a license to an applicant who is not
12-9 a resident of this state for the same reasons that it may refuse to
12-10 license a resident of this state. The commission shall judge the
12-11 competency of a nonresident applicant solely on the basis of the
12-12 examination conducted under Section 7 of this Act.
12-13 (c) Each nonresident applicant shall file an irrevocable
12-14 consent that legal action may be commenced against him in the
12-15 proper court of any county of this state in which a cause of action
12-16 may arise, or in which the plaintiff may reside, by service of
12-17 process or pleading authorized by the laws of this state, or by
12-18 serving the administrator or assistant administrator of the
12-19 commission. The consent shall stipulate that the service of
12-20 process or pleading shall be valid and binding in all courts as if
12-21 personal service had been made on the nonresident <broker> in this
12-22 state. The consent shall be duly acknowledged, and if made by a
12-23 corporation, shall be authenticated by its seal. A service of
12-24 process or pleading served on the commission shall be by duplicate
12-25 copies, one of which shall be filed in the office of the commission
12-26 and the other forwarded by registered mail to the last known
12-27 principal address which the commission has for the nonresident
13-1 <broker> against whom the process or pleading is directed. No
13-2 default in an action may be taken except on certification by the
13-3 commission that a copy of the process or pleading was mailed to the
13-4 defendant as provided in this section, and no default judgment may
13-5 be taken in an action or proceeding until 20 days after the day of
13-6 mailing of the process or pleading to the defendant.
13-7 Notwithstanding any other provisions of this subsection, a
13-8 nonresident of this state who resides in a city whose boundaries
13-9 are contiguous at any point to the boundaries of a city of this
13-10 state, and who has been an actual bona fide resident of that city
13-11 for at least 60 days immediately preceding the filing of his
13-12 application, is eligible to be licensed as a real estate broker or
13-13 salesman under this Act in the same manner as a resident of this
13-14 state. If he is licensed in this manner, he shall at all times
13-15 maintain a place of business either in the city in which he resides
13-16 or in the city in this state which is contiguous to the city in
13-17 which he resides, and he may not maintain a place of business at
13-18 another location in this state unless he also complies with the
13-19 requirements of Section 14(b) of this Act. The place of business
13-20 must satisfy the requirements of Subsection (a) of Section 12 of
13-21 this Act, but the place of business shall be deemed a definite
13-22 place of business in this state within the meaning of Subsection
13-23 (a) of Section 12.
13-24 SECTION 11. Section 15(c), The Real Estate License Act
13-25 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
13-26 as follows:
13-27 (c) Notwithstanding Subsection (b) of this section, a person
14-1 is not subject to civil liability or criminal prosecution because
14-2 the person did not inquire about, make a disclosure related to, or
14-3 release information related to whether a previous or current
14-4 occupant of real property had, may have had, has, or may have AIDS,
14-5 HIV-related illnesses, or HIV infection as defined by the Centers
14-6 for Disease Control of the U.S. Public Health Service. <A person
14-7 who has actual knowledge that the previous or current occupant of
14-8 real property had or has AIDS, HIV-related illnesses, or HIV
14-9 infection shall provide that information to a potential purchaser
14-10 or lessee of the real property on receiving a specific request for
14-11 the information from the potential purchaser or lessee.>
14-12 SECTION 12. Section 15D, The Real Estate License Act
14-13 (Article 6573a, Vernon's Texas Civil Statutes), is amended as
14-14 follows:
14-15 Sec. 15D. No licensed real estate broker, licensed real
14-16 estate salesman, or not for profit real estate board or association
14-17 which provides information about real property sales prices or
14-18 terms of sale for the purpose of facilitating the listing, selling,
14-19 leasing, financing, or appraisal of real property shall be liable
14-20 to any other person as a result of so providing such information
14-21 unless the disclosure of same is otherwise specifically prohibited
14-22 by statute <or written contract>.
14-23 SECTION 12A. Section 15E, The Real Estate License Act
14-24 (Article 6573a, Vernon's Texas Civil Statutes), is amended as
14-25 follows:
14-26 Sec. 15E. Notwithstanding any other provision of this Act or
14-27 any other law, a licensee shall have no duty to inquire about, make
15-1 a disclosure related to, or release information related to whether
15-2 a:
15-3 (1) previous or current occupant of real property had,
15-4 may have had, has, or may have AIDS, HIV-related illnesses, or HIV
15-5 infection as defined by the Centers for Disease Control of the U.S.
15-6 Public Health Service; or
15-7 (2) death occurred on a property by natural causes,
15-8 suicide, or accident unrelated to the condition of the property.
15-9 SECTION 13. Section 17(b), The Real Estate License Act
15-10 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
15-11 as follows:
15-12 (b) The commission may issue subpoenas for the attendance of
15-13 witnesses and the production of records or documents. Process
15-14 issued by the commission may extend to all parts of the state and
15-15 may be served by any person designated by the commission.
15-16 SECTION 14. Section 19(a), The Real Estate License Act
15-17 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
15-18 as follows:
15-19 (a) A person acting as a real estate broker or real estate
15-20 salesman without first obtaining a license is guilty of a
15-21 misdemeanor and on conviction shall be punishable by a fine of not
15-22 less than $100 nor more than $500, or by imprisonment in the county
15-23 jail for a term not to exceed one year, or both; and if a
15-24 corporation or a limited liability company, shall be punishable by
15-25 a fine not less than $1,000 nor more than $2,000. A person, on
15-26 conviction of a second or subsequent offense, shall be punishable
15-27 by a fine of not less than $500 nor more than $1,000, or by
16-1 imprisonment for a term not to exceed two years, or both; and if a
16-2 corporation or a limited liability company, shall be punishable by
16-3 a fine of not less than $2,000 nor more than $5,000.
16-4 SECTION 15. Section 23, The Real Estate License Act (Article
16-5 6573a, Vernon's Texas Civil Statutes), is amended to read as
16-6 follows:
16-7 Sec. 23. REAL ESTATE INSPECTORS. (a) Definitions. In this
16-8 section:
16-9 (1) "Apprentice inspector" means a person who is in
16-10 training under the direct supervision of a professional <real
16-11 estate> inspector or a real estate inspector
16-12 <inspector-in-training> to become qualified to perform real estate
16-13 inspections.
16-14 (2) "Committee" means the Texas Real Estate Inspector
16-15 Committee.
16-16 (3) "Core real estate inspection courses" means
16-17 educational courses approved by the commission, including but not
16-18 limited to structural, electrical, mechanical, plumbing, roofing,
16-19 business, legal, standards of practice, report writing, appliances
16-20 or ethics, all of which must relate to a real estate inspection
16-21 <and ethical courses of study>.
16-22 (4) "Direct supervision" means the instruction and
16-23 control by a professional <real estate> inspector or a real estate
16-24 inspector <inspector-in-training> licensed under this section who
16-25 is:
16-26 (A) responsible for the actions of an individual
16-27 performing a real estate inspection or preparing a report of a real
17-1 estate inspection;
17-2 (B) available if and when needed to consult with
17-3 or assist an individual performing a real estate inspection or
17-4 preparing a report of a real estate inspection; and
17-5 (C) physically present at the time and place of
17-6 the inspection.
17-7 (5) "Indirect supervision" means the instruction and
17-8 control by a professional <real estate> inspector licensed under
17-9 this section who is:
17-10 (A) responsible for the actions of an individual
17-11 performing or preparing a real estate inspection; and
17-12 (B) available if and when needed to consult with
17-13 or assist an individual performing a real estate inspection or
17-14 preparing a report of a real estate inspection, but who is not
17-15 required to be physically present at the time and place of the
17-16 inspection.
17-17 (6) "Inspector" means a person who is licensed as an
17-18 apprentice inspector, real estate inspector, or professional
17-19 inspector under this section <"Inspector-in-training" means a
17-20 person who represents to the public that the person is trained and
17-21 qualified to perform a real estate inspection under the indirect
17-22 supervision of a real estate inspector and who accepts employment
17-23 for the purpose of performing a real estate inspection for a buyer
17-24 or seller of real property>.
17-25 (7) "License" means an apprentice license, a real
17-26 estate inspector license or a professional inspector <an
17-27 inspector-in-training> license issued under this section.
18-1 (8) "Licensee" means a person holding an apprentice
18-2 inspector license, a real estate inspector license or a
18-3 professional inspector <inspector-in-training> license issued under
18-4 this section.
18-5 (9) "Professional inspector" means a person who
18-6 represents to the public that the person is trained and qualified
18-7 to perform a real estate inspection and who accepts employment for
18-8 the purpose of performing a real estate inspection for a buyer or
18-9 seller of real property.
18-10 (10) <(9)> "Real estate inspection" means a written or
18-11 oral opinion as to the condition of the improvements to real
18-12 property, including structural items, electrical items, mechanical
18-13 systems, plumbing systems, or equipment<, and systems>.
18-14 (11) <(10)> "Real estate inspector" means a person who
18-15 represents to the public that the person is trained and qualified
18-16 to perform real estate inspections under the indirect supervision
18-17 of a professional inspector and who accepts employment for the
18-18 purpose of performing a real estate inspection for a buyer or
18-19 seller of real property.
18-20 <(11) "Registered" means a person who holds a
18-21 registration as an apprentice inspector issued under this section.>
18-22 (b) Texas Real Estate Inspector Committee. (1) The Texas
18-23 Real Estate Inspector Committee is created. In addition to other
18-24 powers and duties delegated to it by the commission, the committee
18-25 shall recommend:
18-26 (A) rules for the <registration and> licensing
18-27 of <apprentice> inspectors<, inspectors-in-training, and real
19-1 estate inspectors> in this state in accordance with this section;
19-2 (B) rules relating to the education and
19-3 experience requirements for <registration and> licensing as an
19-4 <apprentice> inspector<, inspector-in-training, and real estate
19-5 inspector> under this section;
19-6 (C) rules relating to the qualifying examination
19-7 required for <registration or> licensing as an inspector under this
19-8 section;
19-9 (D) rules establishing a code of professional
19-10 conduct and ethics for an <apprentice> inspector<,
19-11 inspector-in-training, and real estate inspector> under this
19-12 section;
19-13 (E) reasonable fees to implement this section,
19-14 including an application fee for <registration or> licensing, an
19-15 examination fee, a renewal fee for a <registration or> license, and
19-16 any other fee required by law;
19-17 (F) rules relating to continuing education
19-18 requirements for a <registered or> licensed inspector;
19-19 (G) rules relating to the standards of practice
19-20 for a real estate inspection;
19-21 (H) rules relating to granting or denying an
19-22 application for the <registration of an apprentice inspector and>
19-23 licensing of an <inspector-in-training and real estate> inspector;
19-24 (I) the form and format for any applications and
19-25 forms required under this section; and
19-26 (J) any other action by the commission as may
19-27 provide a high degree of service and protection to the public when
20-1 dealing with <registered or> licensed inspectors.
20-2 (2) The committee is composed of nine members
20-3 appointed by the commission. The members of the committee hold
20-4 office for staggered terms of six years, with the terms of three
20-5 members expiring February 1 of each odd-numbered year. Each member
20-6 holds office until the member's successor is appointed.
20-7 Appointments to the committee shall be made without regard to the
20-8 sex, race, color, age, handicap, religion, or national origin of
20-9 the appointees. In the event of a vacancy during a term, the
20-10 commission shall appoint a replacement who meets the qualifications
20-11 for appointment under this subdivision to fill the unexpired part
20-12 of the term. A member of the committee must be a professional
20-13 <licensed real estate> inspector actively engaged in the practice
20-14 of real estate inspecting at the time of appointment and must have
20-15 been primarily engaged in the practice of real estate inspecting
20-16 <inspection business> for at least five years before the member's
20-17 appointment. A member of the committee may not hold a real estate
20-18 broker or salesman license. Each member of the committee is
20-19 entitled to a per diem allowance and to reimbursement of travel
20-20 expenses necessarily incurred in performing functions as a member
20-21 of the committee, subject to any applicable limitation in the
20-22 General Appropriations Act. The committee shall annually elect
20-23 from its members a chairman, a vice-chairman, and secretary. A
20-24 quorum of the committee consists of five members.
20-25 (3) The commission may remove a committee member if
20-26 the member:
20-27 (A) does not have at the time of appointment the
21-1 qualifications required by Subdivision (2) of this subsection;
21-2 (B) cannot discharge the member's duties for a
21-3 substantial part of the term for which the member is appointed
21-4 because of illness or disability; or
21-5 (C) is absent from more than half of the
21-6 regularly scheduled committee meetings that the member is eligible
21-7 to attend during each year, unless the absence is excused by the
21-8 committee.
21-9 (4) The validity of an action of the committee is not
21-10 affected by the fact that it was taken when a ground for removal of
21-11 a committee member exists.
21-12 (5) If the administrator of the commission has
21-13 knowledge that a potential ground for removal exists, the
21-14 administrator shall notify the chairman of the commission that a
21-15 potential ground exists.
21-16 (6) <(3)> The commission shall adopt procedural rules
21-17 to be used by the committee in implementing its powers and duties.
21-18 (7) <(4)> The committee is subject to the open
21-19 meetings law, Chapter 271, Acts of the 60th Legislature, Regular
21-20 Session, 1967 (Article 6252-17, Vernon's Texas Civil Statutes), the
21-21 open records law, Chapter 424, Acts of the 63rd Legislature,
21-22 Regular Session, 1973 (Article 6252-17a, Vernon's Texas Civil
21-23 Statutes), and the Administrative Procedure and Texas Register Act
21-24 (Article 6252-13a, Vernon's Texas Civil Statutes).
21-25 (8) <(5)> The committee shall meet semiannually and at
21-26 the call of the commission. The committee may also meet at the
21-27 call of a majority of its members.
22-1 (9) <(6)> The committee shall act in an advisory
22-2 capacity to develop and recommend to the commission <for approval
22-3 the> rules <of the commission> under this section. The committee
22-4 <periodically> shall review commission rules relating to this
22-5 section and recommend changes in the rules to the commission. The
22-6 <Notwithstanding Subsection (f), Section 5, Administrative
22-7 Procedure and Texas Register Act (Article 6252-13a, Vernon's Texas
22-8 Civil Statutes), the> commission shall submit all proposed rules,
22-9 <and> all proposed rule changes and all requests for proposed rules
22-10 or rule changes <additions to the rules> that relate to the
22-11 regulation and licensing of <real estate> inspectors under this
22-12 section to the committee for development or recommendation. The
22-13 commission may modify the rules developed by the committee if the
22-14 commission finds such modifications are in the public interest.
22-15 This section does not prohibit the commission from developing and
22-16 adopting rules relating to the regulation and licensing of
22-17 inspectors under this section if the committee fails to develop or
22-18 recommend rules under this section within a reasonable period of
22-19 time after the commission submits the proposed rules, rule changes
22-20 or requests for proposed rules or rule changes to the committee.
22-21 If the committee determines that a rule requested by the commission
22-22 should not be developed or recommended for adoption by the
22-23 commission, the committee shall submit a report on the matter to
22-24 the commission. The chairman of the commission and the chairman of
22-25 the committee shall then appoint three members each from their
22-26 respective bodies to meet as an ad hoc committee to consider the
22-27 report and recommend possible action by the commission. The
23-1 chairman of the commission or a member of the commission designated
23-2 by the chairman shall serve as the seventh member of the ad hoc
23-3 committee. At least one member of the ad hoc committee must be a
23-4 public member of the commission <If the commission does not approve
23-5 a rule developed by the committee, the commission shall indicate to
23-6 the committee the reasons that the commission did not approve the
23-7 rule and return the rule to the committee for further development>.
23-8 (c) License <or registration> required. (1) A person may
23-9 not act <or attempt to act> as a professional <real estate>
23-10 inspector in this state for a buyer or seller of real property
23-11 unless the person possesses a professional <real estate> inspector
23-12 license issued under this section.
23-13 (2) A person may not act or attempt to act as a real
23-14 estate inspector <an inspector-in-training> in this state for a
23-15 buyer or seller of real property unless the person possesses a real
23-16 estate inspector <an inspector-in-training> license issued under
23-17 this section and is under the indirect supervision of a
23-18 professional <real estate> inspector.
23-19 (3) A person may not act or attempt to act as an
23-20 apprentice inspector in this state for a buyer or seller of real
23-21 property unless the person is licensed <registered> under this
23-22 section and is under the direct supervision of a real estate
23-23 inspector or professional inspector <inspector-in-training>.
23-24 (d) Eligibility; application. (1) To be eligible for a
23-25 license <registration> as an apprentice inspector, an applicant
23-26 must be an individual, a citizen of the United States or a lawfully
23-27 admitted alien, and a resident of this state at the time of the
24-1 <for at least 60 days immediately before the date of> filing of the
24-2 application. The applicant must be sponsored by a professional
24-3 <real estate> inspector licensed under this section. The applicant
24-4 must be at least 18 years old. The applicant must satisfy the
24-5 commission as to the applicant's honesty, trustworthiness, and
24-6 integrity.
24-7 (2) To be eligible for a license as a real estate
24-8 inspector <an inspector-in-training>, an applicant must have met
24-9 the requirements and been licensed <be registered> as an apprentice
24-10 inspector for at least three months and have performed at least 25
24-11 real estate inspections under direct supervision before filing an
24-12 application. The applicant must satisfy the commission as to the
24-13 applicant's honesty, trustworthiness, integrity, and competency.
24-14 An applicant for an original real estate inspector
24-15 <inspector-in-training> license must submit satisfactory evidence
24-16 to the commission of successful completion of not less than 90
24-17 classroom hours of core real estate inspection courses. The
24-18 commission by rule may specify the length and content of the core
24-19 real estate inspection courses required by this subdivision. The
24-20 commission shall determine the competency of an applicant on the
24-21 basis of an examination required by Subsection (i) of this section.
24-22 The applicant must be sponsored by a professional <real estate>
24-23 inspector licensed under this section. Notwithstanding this
24-24 subdivision of this subsection, an applicant is eligible for and
24-25 has satisfied all requirements for a license as a real estate
24-26 inspector if the applicant was previously licensed as a real estate
24-27 inspector during the preceding 24-month period immediately
25-1 preceding the filing of the application, the applicant is sponsored
25-2 by a professional inspector, and the applicant satisfies the
25-3 commission as to the applicant's honesty, trustworthiness, and
25-4 integrity.
25-5 (3) To be eligible for a license as a professional
25-6 <real estate> inspector, an applicant must have met the
25-7 requirements and have been licensed <registered> as an apprentice
25-8 inspector for at least three months and licensed as a real estate
25-9 inspector <an inspector-in-training> for at least 12 months had
25-10 have performed at least 175 real estate inspections under indirect
25-11 supervision before filing an application. An applicant for an
25-12 original professional <real estate> inspector license must submit
25-13 satisfactory evidence to the commission of successful completion of
25-14 not less than 30 classroom hours of core real estate inspection
25-15 courses and eight classroom hours related to the study of standards
25-16 of <professional> practice, legal issues, or <and> ethics related
25-17 to the profession of real estate inspections. These classroom
25-18 hours are in addition to those required for <registration as> an
25-19 apprentice inspector license or a real estate inspector license
25-20 <licensing as an inspector-in-training>. The commission shall
25-21 determine the competency of an applicant on the basis of an
25-22 examination required by Subsection (i) of this section.
25-23 Notwithstanding this subsection, an applicant is eligible for and
25-24 has satisfied all requirements for a license as a professional
25-25 inspector if the applicant was previously licensed as a
25-26 professional inspector during the preceding 24-month period
25-27 immediately preceding the filing of the application and the
26-1 applicant satisfies the commission as to the applicant's honesty,
26-2 trustworthiness, and integrity.
26-3 (4) The commission by rule may provide for the
26-4 substitution of relevant experience or education in lieu of the
26-5 number of real estate inspections required by this section.
26-6 (5) <(4)> An applicant must file an application for
26-7 <registration or> a license with the commission on forms prescribed
26-8 by the commission.
26-9 (e) Issuance of <registration or> license. The commission
26-10 shall issue an apprentice license <registration>, <an
26-11 inspector-in-training license, or> a real estate inspector license,
26-12 or a professional inspector license to an applicant who possesses
26-13 the required qualifications, passes the appropriate examination if
26-14 required, and pays the fee required by Subdivision (2) of
26-15 Subsection (o) of this section.
26-16 (f) Expiration of <registration or> license; renewal. (1)
26-17 A <registration or> license issued under this section expires one
26-18 year after the date it is issued.
26-19 (2) A person may renew an unexpired <registration or>
26-20 license by paying to the commission before the expiration date of
26-21 the <registration or> license the required renewal fee.
26-22 (3) If a person's <registration or> license has been
26-23 expired for 90 days or less, the person may renew the <registration
26-24 or> license by paying to the commission the required renewal fee
26-25 and a fee that is one-half of the examination fee, if any, for the
26-26 registration or license.
26-27 (4) If a person's <registration or> license has been
27-1 expired for longer than 90 days but less than one year, the person
27-2 may renew the <registration or> license by paying to the commission
27-3 all unpaid renewal fees and a fee that is equal to the examination
27-4 fee, if any, for the <registration or> license.
27-5 (5) If a person's <registration or> license has been
27-6 expired for one year or longer, the person may not renew the
27-7 <registration or> license. The person may obtain a new
27-8 <registration or> license by submitting to reexamination, if
27-9 <originally> required, and complying with the requirements and
27-10 procedures for obtaining an original <registration or> license.
27-11 However, the commission may renew without reexamination an expired
27-12 license of a person who was licensed in this state, moved to
27-13 another state, and is currently licensed and has been in practice
27-14 in the other state for the one year preceding application. The
27-15 person must pay to the commission a fee that is equal to the
27-16 examination fee for the license.
27-17 (6) At least 30 days before the expiration of a
27-18 person's <registration or> license, the commission shall send
27-19 written notice of the impending <registration or> license
27-20 expiration to the person at the person's last known address
27-21 according to the records of the commission.
27-22 (g) Change of address. A licensee <or person registered>
27-23 under this section shall notify the commission and pay the required
27-24 fee within 30 days after the date a change of place of business
27-25 occurs.
27-26 (h) Fees. (1) The commission shall charge and collect
27-27 reasonable and necessary fees to recover the cost of administering
28-1 this section as follows:
28-2 (A) a fee not to exceed $75 for the filing of an
28-3 original application for a license <registration> as an apprentice
28-4 inspector;
28-5 (B) a fee not to exceed $125 for the filing of
28-6 an original application for a license as a real estate inspector
28-7 <an inspector-in-training>;
28-8 (C) a fee not to exceed $150 for the filing of
28-9 an original application for a license as a professional <real
28-10 estate> inspector;
28-11 (D) a fee not to exceed $125 for the annual
28-12 license <registration> renewal of an apprentice inspector;
28-13 (E) a fee not to exceed $175 for the annual
28-14 license renewal of a real estate inspector <an
28-15 inspector-in-training>;
28-16 (F) a fee not to exceed $200 for the annual
28-17 license renewal of a professional <real estate> inspector;
28-18 (G) a fee not to exceed $100 for taking a
28-19 license examination; and
28-20 (H) a fee not to exceed $20 for a request for a
28-21 change of place of business or to replace a lost or destroyed
28-22 license <or registration>.
28-23 (2) All fees may be paid by cash, check, cashier's
28-24 check, or money order.
28-25 (3) The fees shall be reviewed annually and reduced to
28-26 the extent that the costs of administering this section are funded
28-27 by the real estate inspector regulation account established under
29-1 Subdivision (4) of Subsection (o) of this section.
29-2 (i) Examination. (1) The commission shall prescribe the
29-3 licensing examinations, which shall be prepared by or contracted
29-4 for by the commission. A licensing examination shall evaluate
29-5 competency in the subject matter of all required core real estate
29-6 inspection courses. The licensing examination shall be offered not
29-7 less often than once every two months in Austin. If a license
29-8 applicant fails the examination, the applicant may apply for
29-9 reexamination by filing a request with the commission and paying
29-10 the examination fee. Each license applicant must satisfy the
29-11 examination requirement not later than six months after the date on
29-12 which the license application is filed. A license applicant who
29-13 fails to satisfy the examination requirement within six months
29-14 after the date on which the license application is filed must
29-15 submit a new license application with the commission and pay the
29-16 examination fee to be eligible for examination. If a license
29-17 applicant fails the examination three consecutive times in
29-18 connection with the same application, the applicant may not apply
29-19 for reexamination or submit a new license application with the
29-20 commission for six months from the date he failed the last
29-21 examination.
29-22 (2) Not later than the 30th day after the date on
29-23 which a licensing examination is administered under this section,
29-24 the commission shall notify each examinee of the results of the
29-25 examination. However, if an examination is graded or reviewed by a
29-26 national testing service, the commission shall notify examinees of
29-27 the results of the examination not later than the 14th day after
30-1 the date on which the commission receives the results from the
30-2 testing service. If the notice of examination results graded or
30-3 reviewed by a national testing service will be delayed for longer
30-4 than 90 days after the examination date, the commission shall
30-5 notify the examinee of the reason for the delay before the 90th
30-6 day.
30-7 (3) If requested in writing by a person who fails a
30-8 licensing examination administered under this section, the
30-9 commission shall furnish the person with an analysis of the
30-10 person's performance on the examination.
30-11 (j) Waiver of out-of-state applicants. The commission may
30-12 waive any license requirement for an applicant with a valid license
30-13 from another state having license requirements substantially
30-14 equivalent to those of this state.
30-15 (k) Continuing education programs. The commission shall
30-16 recognize, prepare, or administer continuing education programs for
30-17 inspectors. Participation in the programs is mandatory. A real
30-18 estate inspector <An inspector-in-training> must submit
30-19 satisfactory evidence to the commission of successful completion of
30-20 at least four classroom hours of core real estate inspection
30-21 courses annually before a licensed renewal is issued. A
30-22 professional <real estate> inspector must submit satisfactory
30-23 evidence to the commission of successful completion of at least
30-24 eight classroom hours of core related real estate inspection
30-25 courses annually before a license renewal is issued.
30-26 (l) Prohibited acts. A professional <real estate>
30-27 inspector, real estate inspector <or inspector-in-training licensed
31-1 under this section> or an apprentice inspector licensed
31-2 <registered> under this section may not:
31-3 (1) accept an assignment for real estate inspection if
31-4 the employment or fee is contingent on the reporting of a specific,
31-5 predetermined condition of the improvements to real property or is
31-6 contingent on the reporting of specific findings other than those
31-7 known by the inspector to be facts at the time of accepting the
31-8 assignment;
31-9 (2) act in a manner or engage in a practice that is
31-10 dishonest or fraudulent or that involves deceit or
31-11 misrepresentation;
31-12 (3) perform a real estate inspection in a negligent or
31-13 incompetent manner;
31-14 (4) act in the dual capacity of <real estate>
31-15 inspector and undisclosed principal in a transaction;
31-16 (5) act in the dual capacity of <real estate>
31-17 inspector and real estate broker or salesman in a transaction;
31-18 (6) perform or agree to perform any repairs or
31-19 maintenance in connection with a real estate inspection pursuant to
31-20 the provisions of any earnest money contract, lease agreement, or
31-21 exchange of real estate; or
31-22 (7) violate the rules adopted by the commission or any
31-23 provisions of this section.
31-24 (m) Offenses. (1) A person commits an offense if the
31-25 person knowingly or intentionally engages in the business of real
31-26 estate inspecting without a license <or registration> under this
31-27 section or performs an inspection during a period in which the
32-1 inspector's license <or registration> is revoked or suspended.
32-2 (2) An offense under this subsection is a Class B
32-3 misdemeanor.
32-4 (3) The commission may <shall> authorize the committee
32-5 to conduct administrative hearings or <and> recommend the entry of
32-6 final orders, or both, in contested cases regarding a <registered
32-7 or> licensed <real estate> inspector. The commission may authorize
32-8 specific employees to conduct hearings and render final decisions
32-9 in contested cases regarding a licensed inspector.
32-10 (4) The commission may investigate the actions of a
32-11 <registered or> licensed <real estate> inspector and may, after
32-12 notice and hearing in accordance with the provisions of Section 17
32-13 of this Act, reprimand, place on probation, suspend or revoke a
32-14 <registration or> license for a violation of this Act or a rule by
32-15 the commission. If the commission revokes a <registration or>
32-16 license of a person, the person may not apply to the commission for
32-17 one year after the revocation.
32-18 (n) Exemptions. This section does not apply to any
32-19 electrician, plumber, carpenter, any person engaged in the business
32-20 of structural pest control in compliance with the Texas Structural
32-21 Pest Control Act (Article 135b-6, Vernon's Texas Civil Statutes),
32-22 or any other person who repairs, maintains, or inspects
32-23 improvements to real property and who does not represent to the
32-24 public through personal solicitation or public advertising that the
32-25 person is in the business of inspecting such improvements. The
32-26 provisions of this section shall not be construed so as to prevent
32-27 any person from performing any and all acts which the person is
33-1 authorized to perform pursuant to a license or registration issued
33-2 by this state or any governmental subdivision of this state.
33-3 (o) Real estate inspection recovery fund. (1) The
33-4 commission shall establish a real estate inspection recovery fund
33-5 which shall be set apart and maintained by the commission as
33-6 provided by this subsection. The fund shall be used in the manner
33-7 provided by this subsection for reimbursing aggrieved persons who
33-8 suffer actual damages by reason of certain acts committed by a duly
33-9 licensed <or registered real estate> inspector, provided the <real
33-10 estate> inspector was licensed <or registered> by the State of
33-11 Texas at the time the act was committed and provided recovery is
33-12 ordered by a court of competent jurisdiction against the <real
33-13 estate> inspector. The use of the fund is limited to an act that
33-14 is a violation of Subsection (l) of this section.
33-15 (2) When a person receives notice that the person has
33-16 successfully completed the licensing examination provided by
33-17 Subsection (i) of this section, the person shall pay, in addition
33-18 to any other fees required by this section, a fee not to exceed
33-19 $200, which shall be deposited in the real estate inspection
33-20 recovery fund prior to the commission's issuing the person an <a
33-21 real estate> inspector license.
33-22 (3) If on December 31 of any year the balance
33-23 remaining in the real estate inspection recovery fund is less than
33-24 $300,000, each <real estate> inspector, on the next renewal of the
33-25 person's license, shall pay, in addition to the license renewal
33-26 fee, a fee of $75, or a pro rata share of the amount necessary to
33-27 bring the fund to $450,000, whichever is less, which shall be
34-1 deposited in the real estate inspection recovery fund.
34-2 (4) If on December 31 of any year the balance
34-3 remaining in the real estate inspection recovery fund is greater
34-4 than $600,000, the amount of money in excess of $600,000 shall be
34-5 transferred to a separate account in the general revenue fund to be
34-6 known as the real estate inspector regulation account. The money
34-7 in the real estate inspector regulation account may be used only
34-8 for the payment of costs incurred by the commission in the
34-9 regulation of <real estate> inspectors.
34-10 (5) No action for a judgment that results in an order
34-11 for collection from the real estate inspection recovery fund shall
34-12 be started later than two years from the accrual of the cause of
34-13 action. When an aggrieved person commences action for a judgment
34-14 that may result in collection from the real estate inspection
34-15 recovery fund, the <real estate> inspector shall notify the
34-16 commission in writing to this effect at the time of the
34-17 commencement of the action.
34-18 (6) When an aggrieved person recovers a valid judgment
34-19 in a court of competent jurisdiction against an <a real estate>
34-20 inspector on the grounds described in Subdivision (1) of this
34-21 subsection, the aggrieved person may, after final judgment has been
34-22 entered, execution returned nulla bona, and a judgment lien
34-23 perfected, file a verified claim in the court in which the judgment
34-24 was entered and, on 20 days' written notice to the commission and
34-25 to the judgment debtor, may apply to the court where the judgment
34-26 was rendered for an order directing payment out of the real estate
34-27 inspection recovery fund of the amount unpaid on the judgment,
35-1 subject to the limitations stated in Subdivision (15) of this
35-2 subsection.
35-3 (7) The court shall proceed on the application
35-4 forthwith. On the hearing on the application, the aggrieved person
35-5 is required to show:
35-6 (A) that the judgment is based on facts allowing
35-7 recovery under Subdivision (1) of this subsection;
35-8 (B) that the person is not a spouse of the
35-9 debtor or the personal representative of the spouse and the person
35-10 is not an <a real estate> inspector, as defined by this section;
35-11 (C) that the person has obtained a judgment
35-12 under Subdivision (6) of this subsection that is not subject to a
35-13 stay or discharge in bankruptcy, stating the amount of the judgment
35-14 and the amount owing on the judgment at the date of the
35-15 application;
35-16 (D) that based on the best information
35-17 available, the judgment debtor lacks sufficient attachable assets
35-18 in this state or any other state to satisfy the judgment; and
35-19 (E) the amount that may be realized from the
35-20 sale of real or personal property or other assets liable to be sold
35-21 or applied in satisfaction of the judgment and the balance
35-22 remaining due on the judgment after application of the amount that
35-23 may be realized.
35-24 (8) The court shall make an order directed to the
35-25 commission requiring payment out of the real estate inspection
35-26 recovery fund of whatever sum it finds to be payable on the claim,
35-27 pursuant to and in accordance with the limitations contained in
36-1 this subdivision, if the court is satisfied, on the hearing, of the
36-2 truth of all matters required to be shown by the aggrieved person
36-3 by Subdivision (7) of this subsection and that the aggrieved person
36-4 has satisfied all the requirements of Subdivisions (6) and (7) of
36-5 this subsection. The commission may relitigate any issue material
36-6 and relevant in the hearing on the application that was determined
36-7 in the underlying action on which the judgment in favor of the
36-8 applicant was based. If the court finds that the aggregate of
36-9 claims against an <a real estate> inspector exceeds the limitations
36-10 contained in this section, the court shall reduce proportionately
36-11 the amount it finds payable on the claim.
36-12 (9) A recovery on the judgment against a single
36-13 defendant made before payment from the real estate inspection
36-14 recovery fund must be applied by the creditor first to actual
36-15 damages.
36-16 (10) A license <or registration> granted under the
36-17 provisions of this section may be revoked by the commission on
36-18 proof that the commission has made a payment from the real estate
36-19 inspection recovery fund of any amount toward satisfaction of a
36-20 judgment against a licensed <or registered real estate> inspector.
36-21 The commission may probate an order revoking a license <or
36-22 registration>. No <real estate> inspector is eligible to receive a
36-23 new license <or registration> until the person has repaid in full,
36-24 plus interest, at the current legal rate, the amount paid from the
36-25 real estate inspection recovery fund on the person's account.
36-26 (11) The sums received by the commission for deposit
36-27 in the real estate inspection recovery fund shall be held by the
37-1 commission in trust for carrying out the purpose of the real estate
37-2 inspection recovery fund. These funds may be invested and
37-3 reinvested in the same manner as funds of the Employees Retirement
37-4 System of Texas, and the interest from these investments shall be
37-5 deposited to the credit of the real estate inspection recovery
37-6 fund. However, investments may not be made that will impair the
37-7 necessary liquidity required to satisfy judgment payments awarded
37-8 pursuant to this subsection.
37-9 (12) When the commission receives notice of entry of a
37-10 final judgment and a hearing is conducted under Subdivision (8) of
37-11 this subsection, the commission may notify the Attorney General of
37-12 Texas of the commission's desire to enter an appearance, file a
37-13 response, appear at the court hearing, defend the action, or take
37-14 whatever other action it deems appropriate. In taking such action,
37-15 the commission and the attorney general shall act only to protect
37-16 the fund from spurious or unjust claims or to ensure compliance
37-17 with the requirements for recovery under this subsection.
37-18 (13) When, on the order of the court, the commission
37-19 has paid from the real estate inspection recovery fund any sum to
37-20 the judgment creditor, the commission shall be subrogated to all of
37-21 the rights of the judgment creditor to the extent of the amount
37-22 paid. The judgment creditor shall assign all his right, title, and
37-23 interest in the judgment up to the amount paid by the commission.
37-24 The amount paid by the commission shall have priority for repayment
37-25 in the event of any subsequent recovery on the judgment. Any
37-26 amount in interest recovered by the commission on the judgment
37-27 shall be deposited to the fund.
38-1 (14) The failure of an aggrieved person to comply with
38-2 the provisions of this subsection relating to the real estate
38-3 inspection recovery fund shall constitute a waiver of any rights
38-4 under this subsection.
38-5 (15) Notwithstanding any other provision, payments
38-6 from the real estate inspection recovery fund are subject to the
38-7 following conditions and limitations:
38-8 (A) payments may be made only pursuant to an
38-9 order of a court of competent jurisdiction, as provided by
38-10 Subdivision (6) of this subsection, and in the manner prescribed by
38-11 this subsection;
38-12 (B) payments for claims, including attorney
38-13 fees, interest, and court costs, arising out of the same
38-14 transaction shall be limited in the aggregate to $7,500 regardless
38-15 of the number of claimants; and
38-16 (C) payments for claims based on judgments
38-17 against a licensed <or registered real estate> inspector may not
38-18 exceed in the aggregate $15,000 until the fund has been reimbursed
38-19 by the licensee for all amounts paid.
38-20 (16) Nothing contained in this subsection shall limit
38-21 the authority of the commission to take disciplinary action against
38-22 a person licensed <or registered> under this section for a
38-23 violation of this section or the rules of the commission, nor shall
38-24 the repayment in full of all obligations to the real estate
38-25 inspection recovery fund by a person nullify or modify the effect
38-26 of any other disciplinary proceeding brought pursuant to this
38-27 section.
39-1 (17) A person receiving payment out of the real estate
39-2 inspection recovery fund under Subdivision (15) of this subsection
39-3 shall be entitled to receive reasonable attorney fees as determined
39-4 by the court, subject to the limitations stated in that
39-5 subdivision.
39-6 (18) An <A real estate> inspector licensed <or
39-7 registered> under this section shall notify consumers and service
39-8 recipients of the availability of the real estate inspection
39-9 recovery fund established under this section for reimbursing
39-10 certain aggrieved persons. The notice must include the name,
39-11 mailing address, and telephone number of the commission and any
39-12 other information required by commission rule. The notification
39-13 may be provided:
39-14 (A) on a written contract for the services of an
39-15 <a real estate> inspector;
39-16 (B) on a brochure distributed by an <a real
39-17 estate> inspector;
39-18 (C) on a sign prominently displayed in the place
39-19 of business of an <a real estate> inspector; or
39-20 (D) in a bill or receipt for service provided by
39-21 an <a real estate> inspector.
39-22 (p) Inactive licenses. The commission by rule may adopt
39-23 terms and conditions by which an inspector may apply for, renew, or
39-24 place a license on inactive status and rules by which an inactive
39-25 inspector may return to active status.
39-26 (q) The commission shall consider the recommendations of the
39-27 Texas Real Estate Inspector Committee relating to the
40-1 qualifications and licensure of inspectors to assure the public of
40-2 a quality professional inspection system in real estate
40-3 transactions in Texas.
40-4 SECTION 16. Persons licensed as real estate inspectors on
40-5 the effective date of this Act are deemed to be professional
40-6 inspectors for the purposes of this Act. Persons licensed as
40-7 inspectors-in-training on the effective date of this Act are deemed
40-8 to be real estate inspectors for the purposes of this Act. Persons
40-9 registered as apprentice inspectors on the effective date of this
40-10 Act are deemed to be licensed apprentice inspectors for the
40-11 purposes of this Act.
40-12 SECTION 17. For the sole purpose of satisfying eligibility
40-13 requirements under Subdivision (2) of Subsection (d) of Section 23
40-14 of The Real Estate License Act (Article 6573a, Vernon's Texas Civil
40-15 Statutes), a person who was previously licensed as an
40-16 inspector-in-training or a real estate inspector at any time during
40-17 the 24-month period before the effective date of this Act is
40-18 deemed to have been previously licensed as a real estate inspector.
40-19 SECTION 18. (a) Except as provided by Subsection (b) of
40-20 this section, this Act takes effect September 1, 1993.
40-21 (b) The provision of Section 6 of this Act amending the
40-22 minimum number of hours required to be completed in a course in the
40-23 Law of Agency by an applicant for a salesman license takes effect
40-24 for all applications filed on or after September 1, 1994.
40-25 SECTION 19. The importance of this legislation and the
40-26 crowded condition of the calendars in both houses create an
40-27 emergency and an imperative public necessity that the
41-1 constitutional rule requiring bills to be read on three several
41-2 days in each house be suspended, and this rule is hereby suspended.