1-1 By: Stiles (Senate Sponsor - Harris of Dallas) H.B. No. 991
1-2 (In the Senate - Received from the House April 1, 1993;
1-3 April 5, 1993, read first time and referred to Committee on State
1-4 Affairs; April 14, 1993, reported favorably by the following vote:
1-5 Yeas 9, Nays 0; April 14, 1993, sent to printer.)
1-6 COMMITTEE VOTE
1-7 Yea Nay PNV Absent
1-8 Harris of Dallas x
1-9 Rosson x
1-10 Carriker x
1-11 Henderson x
1-12 Leedom x
1-13 Lucio x
1-14 Luna x
1-15 Nelson x
1-16 Patterson x
1-17 Shelley x
1-18 Sibley x
1-19 West x
1-20 Whitmire x
1-21 A BILL TO BE ENTITLED
1-22 AN ACT
1-23 relating to the regulation of real estate brokers, salesmen, and
1-24 inspectors.
1-25 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-26 SECTION 1. Section 2(1), The Real Estate License Act
1-27 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
1-28 as follows:
1-29 (1) "Real estate" means a leasehold, as well as any
1-30 other interest or estate in land, whether corporeal, incorporeal,
1-31 freehold, or nonfreehold, and whether the real estate is situated
1-32 in this state or elsewhere. The term does not include an interest
1-33 given as security for the performance of an obligation.
1-34 SECTION 2. Section 2(5), The Real Estate License Act
1-35 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
1-36 as follows:
1-37 (5) "Person" means an individual, a limited liability
1-38 company, or a corporation, foreign or domestic.
1-39 SECTION 3. Section 5(t), The Real Estate License Act
1-40 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
1-41 as follows:
1-42 (t) The commission may authorize specific employees to
1-43 conduct hearings and render final decisions in contested cases.
1-44 The commission may employ a general counsel, attorneys,
1-45 investigators, and support staff to administer and enforce this
1-46 Act.
1-47 SECTION 4. Section 6, The Real Estate License Act (Article
1-48 6573a, Vernon's Texas Civil Statutes), is amended to read as
1-49 follows:
1-50 Sec. 6. (a) A person desiring to act as a real estate
1-51 broker in this state shall file an application for a license with
1-52 the commission on a form prescribed by the commission. A broker
1-53 desiring to engage a person to participate in real estate brokerage
1-54 activity shall join the person in filing an application for a
1-55 salesman license on a form prescribed by the commission. A person
1-56 previously licensed as a broker may apply for inactive status. A
1-57 person previously licensed as a salesman may apply for inactive
1-58 status without the participation of a broker. The person must
1-59 apply for inactive status on a form prescribed by the commission
1-60 not later than the first anniversary of the date of the expiration
1-61 of the broker or salesman license.
1-62 (b) To be eligible for a license, an individual must be a
1-63 citizen of the United States or a lawfully admitted alien, be at
1-64 least 18 years of age, and be a legal resident of Texas <for> at
1-65 the time of <least 60 days immediately preceding> the filing of an
1-66 application, and must satisfy the commission as to his honesty,
1-67 trustworthiness, integrity, and competency. However, the
1-68 competency of the individual, for the purpose of qualifying for the
2-1 granting of a license, shall be judged solely on the basis of the
2-2 examination referred to in Section 7 of this Act.
2-3 (c) To be eligible for or to renew a license, a corporation
2-4 must designate one of its officers and a limited liability company
2-5 must designate one of its managers to act for it. The designated
2-6 person must be a <citizen of the United States or a lawfully
2-7 admitted alien, be at least 18 years of age, and be a resident of
2-8 Texas for at least 60 days immediately preceding the filing of an
2-9 application, and must be qualified to be> licensed <individually as
2-10 a> real estate broker as shown in the records of the commission. A
2-11 corporation or limited liability company may not act as a real
2-12 estate broker unless the designated person is a licensed real
2-13 estate broker <However, the competency of the person shall be
2-14 judged solely on the basis of the examination referred to in
2-15 Section 7 of this Act>.
2-16 SECTION 5. Section 6A(a), The Real Estate License Act
2-17 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
2-18 as follows:
2-19 (a) If, at any time before a person applies for a license
2-20 under this Act, the person requests the commission to determine
2-21 whether his moral character complies with the commission's moral
2-22 character requirements for licensing under this Act and the person
2-23 pays a <$10> fee set by the commission for the moral character
2-24 determination, the commission shall make its determination of the
2-25 person's moral character.
2-26 SECTION 6. Sections 7(a), (e), and (f), The Real Estate
2-27 License Act (Article 6573a, Vernon's Texas Civil Statutes), are
2-28 amended to read as follows:
2-29 (a) Competency as referred to in Section 6 of this Act shall
2-30 be established by an examination prepared by or contracted for by
2-31 the commission. The examination shall be given at such times and
2-32 at such places within the state as the commission shall prescribe.
2-33 The examination shall be of scope sufficient in the judgment of the
2-34 commission to determine that a person is competent to act as a real
2-35 estate broker or salesman in a manner to protect the interest of
2-36 the public. The examination for a salesman license shall be less
2-37 exacting and less stringent than the examination for a broker
2-38 license. The commission shall furnish each applicant with study
2-39 material and references on which his examination shall be based.
2-40 When an applicant for a real estate license fails a qualifying
2-41 examination, he may apply for reexamination by filing a request
2-42 therefor together with the proper fee. The examination requirement
2-43 must be satisfied not later than six months after the date on which
2-44 the application for a license is filed. Courses of study required
2-45 for a license may include but are not limited to the following,
2-46 which shall be considered core real estate courses for all purposes
2-47 of this Act:
2-48 (1) Principles of Real Estate (or equivalent) shall
2-49 include but not be limited to an overview of licensing as a real
2-50 estate broker and salesman, ethics of practice, titles to and
2-51 conveyancing of real estate, legal descriptions, law of agency,
2-52 deeds, encumbrances and liens, distinctions between personal and
2-53 real property, contracts, appraisal, finance and regulations,
2-54 closing procedures, real estate mathematics, and at least three
2-55 classroom hours of instruction on federal, state, and local laws
2-56 relating to housing discrimination, housing credit discrimination,
2-57 and community reinvestment.
2-58 (2) Real Estate Appraisal (or equivalent) shall
2-59 include but not be limited to the central purposes and functions of
2-60 an appraisal, social and economic determinant of value, appraisal
2-61 case studies, cost, market data and income approaches to value
2-62 estimates, final correlations, and reporting.
2-63 (3) Real Estate Law (or equivalent) shall include but
2-64 not be limited to legal concepts of real estate, land description,
2-65 real property rights and estates in land, contracts, conveyances,
2-66 encumbrances, foreclosures, recording procedures, and evidence of
2-67 titles.
2-68 (4) Real Estate Finance (or equivalent) shall include
2-69 but not be limited to monetary systems, primary and secondary money
2-70 markets, sources of mortgage loans, federal government programs,
3-1 loan applications, processes and procedures, closing costs,
3-2 alternative financial instruments, equal credit opportunity acts,
3-3 community reinvestment act, and state housing agency.
3-4 (5) Real Estate Marketing (or equivalent) shall
3-5 include but not be limited to real estate professionalism and
3-6 ethics, characteristics of successful salesmen, time management,
3-7 psychology of marketing, listing procedures, advertising,
3-8 negotiating and closing, financing, and the Deceptive Trade
3-9 Practices-Consumer Protection Act, as amended, Section 17.01 et
3-10 seq., Business & Commerce Code.
3-11 (6) Real Estate Mathematics (or equivalent) shall
3-12 include but not be limited to basic arithmetic skills and review of
3-13 mathematical logic, percentages, interest, time-valued money,
3-14 depreciation, amortization, proration, and estimation of closing
3-15 statements.
3-16 (7) Real Estate Brokerage (or equivalent) shall
3-17 include but not be limited to law of agency, planning and
3-18 organization, operational policies and procedures, recruiting,
3-19 selection and training of personnel, records and control, and real
3-20 estate firm analysis and expansion criteria.
3-21 (8) Property Management (or equivalent) shall include
3-22 but not be limited to role of property manager, landlord policies,
3-23 operational guidelines, leases, lease negotiations, tenant
3-24 relations, maintenance, reports, habitability laws, and the Fair
3-25 Housing Act.
3-26 (9) Real Estate Investments (or equivalent) shall
3-27 include but not be limited to real estate investment
3-28 characteristics, techniques of investment analysis, time-valued
3-29 money, discounted and nondiscounted investment criteria, leverage,
3-30 tax shelters depreciation, and application to property tax.
3-31 (10) Law of Agency (or equivalent) shall include but
3-32 not be limited to the principal-agent and master-servant
3-33 relationships, the authority of an agent, the termination of an
3-34 agent's authority, the fiduciary and other duties of an agent,
3-35 employment law, deceptive trade practices, listing or buying
3-36 representation procedures, and the disclosure of agency.
3-37 (e) Each <As a prerequisite for applying for a salesman
3-38 license; each> applicant for a salesman license shall furnish the
3-39 commission satisfactory evidence of having completed 12 semester
3-40 hours, or equivalent classroom hours, of postsecondary education,
3-41 six hours of which must be completed in core real estate courses,
3-42 of which a minimum of two hours must be completed in Principles of
3-43 Real Estate as described in Subsection (a)(1) of this section and a
3-44 minimum of two hours must be completed in Law of Agency as
3-45 described in Subsection (a)(10) of this section. The remaining six
3-46 hours shall be completed in core real estate courses or related
3-47 courses. As a condition for the first renewal of a salesman
3-48 license, the applicant shall furnish the commission satisfactory
3-49 evidence of having completed a minimum of 14 semester hours, or
3-50 equivalent classroom hours, eight hours of which must be completed
3-51 in core real estate courses. As a condition for the second renewal
3-52 of a salesman license, the applicant shall furnish the commission
3-53 satisfactory evidence of having completed a minimum of 16 semester
3-54 hours, or equivalent classroom hours, 10 hours of which must be
3-55 completed in core real estate courses. As a condition for the
3-56 third renewal of a salesman license, the applicant shall furnish
3-57 the commission satisfactory evidence of having completed a minimum
3-58 of 18 semester hours, or equivalent classroom hours, 12 hours of
3-59 which must be completed in core real estate courses.
3-60 (f) Insofar as is necessary for the administration of this
3-61 Act, the commission is authorized to inspect and accredit
3-62 educational programs or courses of study in real estate and real
3-63 estate inspection and to establish standards of accreditation for
3-64 such programs conducted in the State of Texas, other than
3-65 accredited colleges and universities. The commission shall
3-66 determine the acceptability of real estate courses and real estate
3-67 inspection courses offered to satisfy the requirements of this Act,
3-68 and by rule may provide reasonable criteria for the approval of
3-69 those courses. Schools, other than accredited colleges and
3-70 universities, which are authorized to offer real estate educational
4-1 courses pursuant to provisions of this section, shall be required
4-2 to maintain a corporate surety bond, or other security acceptable
4-3 to the commission, in the sum of $10,000, payable to the
4-4 commission, for the benefit of a party who may suffer damages
4-5 resulting from failure of a commission approved school or course to
4-6 fulfill obligations attendant to the approval.
4-7 SECTION 7. Sections 7A(a) and (b), The Real Estate License
4-8 Act (Article 6573a, Vernon's Texas Civil Statutes), are amended to
4-9 read as follows:
4-10 (a) To renew an active <a> real estate broker license or an
4-11 active real estate salesman license that is not subject to the
4-12 annual education requirements of this Act, the licensee must
4-13 provide the commission proof of attendance at at least 15 classroom
4-14 hours of continuing education courses approved by the commission
4-15 during the term of the current license. The commission by rule may
4-16 provide for the substitution of relevant educational experience or
4-17 correspondence courses approved by the commission instead of
4-18 classroom attendance. In addition, supervised video instruction
4-19 may be approved by the commission as a course counting as classroom
4-20 hours of mandatory continuing education. At least six hours of
4-21 instruction must be devoted to the rules of the commission, fair
4-22 housing laws, agency laws, antitrust laws, the Deceptive Trade
4-23 Practices-Consumer Protection Act (Subchapter E, Chapter 17,
4-24 Business & Commerce Code), disclosures to buyers and sellers,
4-25 current contract and addendum forms, the unauthorized practice of
4-26 law, case studies involving violations of laws and regulations,
4-27 current Federal Housing Administration and Veterans Administration
4-28 regulations, tax laws, and other legal topics approved by the
4-29 commission. The remaining hours may be devoted to other real
4-30 estate-related topics approved by the commission. The commission
4-31 may consider equivalent courses for continuing education credit.
4-32 The commission, on the request of a provider of education, shall
4-33 review a core real estate course authorized under Section 7 of this
4-34 Act and may approve it as a mandatory continuing education course.
4-35 Real estate related courses approved by the State Bar of Texas for
4-36 minimum continuing legal education participatory credit shall
4-37 automatically be approved as mandatory continuing education courses
4-38 under this Act. The commission may not require examinations except
4-39 for correspondence courses. Daily course segments must be at least
4-40 three hours long but not more than 10 hours long. If the license
4-41 being renewed under this section was issued for less than two
4-42 years, the licensee must provide the commission proof of attendance
4-43 at at least eight classroom hours of continuing education within
4-44 the term of the current license, three classroom hours of which
4-45 must have been devoted to the legal topics specified in this
4-46 section.
4-47 (b) An applicant for an active <a> real estate broker
4-48 license or an active real estate salesman license who is not
4-49 subject to the education requirements of Section 7 of this Act must
4-50 provide the commission with proof of attendance of the number of
4-51 <at at least 15> classroom hours of continuing education that would
4-52 have been required for a timely renewal as specified in Subsection
4-53 (a) of this section during the two-year period preceding the filing
4-54 of the application.
4-55 SECTION 8. Section 11, The Real Estate License Act (Article
4-56 6573a, Vernon's Texas Civil Statutes), is amended to read as
4-57 follows:
4-58 Sec. 11. (a) The commission shall charge and collect the
4-59 following fees:
4-60 (1) a fee not to exceed $100 for the filing of an
4-61 original application for a real estate broker license;
4-62 (2) a fee not to exceed $100 for annual renewal of a
4-63 real estate broker license;
4-64 (3) a fee not to exceed $50 for the filing of an
4-65 original application for a real estate salesman license;
4-66 (4) a fee not to exceed $50 for annual renewal of a
4-67 real estate salesman license;
4-68 (5) a fee not to exceed $25 for an application for a
4-69 license examination;
4-70 (6) a fee not to exceed $20 <$10> for filing a request
5-1 for a license for each additional office or place of business;
5-2 (7) a fee not to exceed $20 for filing a request for a
5-3 license for a change for a place of business, change of name,
5-4 return to active status, or change of sponsoring broker;
5-5 (8) a fee not to exceed $20 <$10> for filing a request
5-6 to replace a license lost or destroyed;
5-7 (9) a fee not to exceed $400 for filing an application
5-8 for approval of an <a real estate> education program under Section
5-9 7(f) of this Act;
5-10 (10) a fee not to exceed $200 a year for operation of
5-11 an <a real estate> education program under Section 7(f) of this
5-12 Act; <and>
5-13 (11) a fee of $15 for transcript evaluation;
5-14 (12) a fee not to exceed $10 for preparing a license
5-15 history; and
5-16 (13) a fee not to exceed $50 for the filing of an
5-17 application for a moral character determination.
5-18 SECTION 9. Section 13A(c), The Real Estate License Act
5-19 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
5-20 as follows:
5-21 (c) If the person has been on inactive status <for 36
5-22 consecutive months or less>, the commission shall remove the person
5-23 from the list on application, payment of the required fee, and
5-24 proof of attendance of at least 15 classroom hours of continuing
5-25 education as specified in Subsection (a) of Section 7A of this Act
5-26 during the two-year period preceding the filing of the application.
5-27 <If the person has been on inactive status for more than 36
5-28 consecutive months, the commission may not remove the person from
5-29 the inactive status list until the person has complied with the
5-30 educational and examination requirements specified in Section 7 of
5-31 this Act.>
5-32 SECTION 10. Sections 14(b) and (c), The Real Estate License
5-33 Act (Article 6573a, Vernon's Texas Civil Statutes), are amended to
5-34 read as follows:
5-35 (b) A resident broker of another state who furnishes the
5-36 evidence required under Section 7(g) of this Act may apply for a
5-37 license as a broker in this state. A resident of another state who
5-38 is not licensed as a broker but who was formerly licensed as a
5-39 salesman or broker in this state may apply for a license in this
5-40 state not later than the first anniversary of the date of the
5-41 expiration of the previous license. An application by a
5-42 nonresident is subject to the requirements under this Act for the
5-43 type of license applied for. A nonresident licensee need not
5-44 maintain a place of business in this state. The commission may in
5-45 its discretion refuse to issue a license to an applicant who is not
5-46 a resident of this state for the same reasons that it may refuse to
5-47 license a resident of this state. The commission shall judge the
5-48 competency of a nonresident applicant solely on the basis of the
5-49 examination conducted under Section 7 of this Act.
5-50 (c) Each nonresident applicant shall file an irrevocable
5-51 consent that legal action may be commenced against him in the
5-52 proper court of any county of this state in which a cause of action
5-53 may arise, or in which the plaintiff may reside, by service of
5-54 process or pleading authorized by the laws of this state, or by
5-55 serving the administrator or assistant administrator of the
5-56 commission. The consent shall stipulate that the service of
5-57 process or pleading shall be valid and binding in all courts as if
5-58 personal service had been made on the nonresident <broker> in this
5-59 state. The consent shall be duly acknowledged, and if made by a
5-60 corporation, shall be authenticated by its seal. A service of
5-61 process or pleading served on the commission shall be by duplicate
5-62 copies, one of which shall be filed in the office of the commission
5-63 and the other forwarded by registered mail to the last known
5-64 principal address which the commission has for the nonresident
5-65 <broker> against whom the process or pleading is directed. No
5-66 default in an action may be taken except on certification by the
5-67 commission that a copy of the process or pleading was mailed to the
5-68 defendant as provided in this section, and no default judgment may
5-69 be taken in an action or proceeding until 20 days after the day of
5-70 mailing of the process or pleading to the defendant.
6-1 Notwithstanding any other provisions of this subsection, a
6-2 nonresident of this state who resides in a city whose boundaries
6-3 are contiguous at any point to the boundaries of a city of this
6-4 state, and who has been an actual bona fide resident of that city
6-5 for at least 60 days immediately preceding the filing of his
6-6 application, is eligible to be licensed as a real estate broker or
6-7 salesman under this Act in the same manner as a resident of this
6-8 state. If he is licensed in this manner, he shall at all times
6-9 maintain a place of business either in the city in which he resides
6-10 or in the city in this state which is contiguous to the city in
6-11 which he resides, and he may not maintain a place of business at
6-12 another location in this state unless he also complies with the
6-13 requirements of Section 14(b) of this Act. The place of business
6-14 must satisfy the requirements of Subsection (a) of Section 12 of
6-15 this Act, but the place of business shall be deemed a definite
6-16 place of business in this state within the meaning of Subsection
6-17 (a) of Section 12.
6-18 SECTION 11. Section 15(c), The Real Estate License Act
6-19 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
6-20 as follows:
6-21 (c) Notwithstanding Subsection (b) of this section, a person
6-22 is not subject to civil liability or criminal prosecution because
6-23 the person did not inquire about, make a disclosure related to, or
6-24 release information related to whether a previous or current
6-25 occupant of real property had, may have had, has, or may have AIDS,
6-26 HIV-related illnesses, or HIV infection as defined by the Centers
6-27 for Disease Control of the U.S. Public Health Service. <A person
6-28 who has actual knowledge that the previous or current occupant of
6-29 real property had or has AIDS, HIV-related illnesses, or HIV
6-30 infection shall provide that information to a potential purchaser
6-31 or lessee of the real property on receiving a specific request for
6-32 the information from the potential purchaser or lessee.>
6-33 SECTION 12. Section 15D, The Real Estate License Act
6-34 (Article 6573a, Vernon's Texas Civil Statutes), is amended as
6-35 follows:
6-36 Sec. 15D. No licensed real estate broker, licensed real
6-37 estate salesman, or not for profit real estate board or association
6-38 which provides information about real property sales prices or
6-39 terms of sale for the purpose of facilitating the listing, selling,
6-40 leasing, financing, or appraisal of real property shall be liable
6-41 to any other person as a result of so providing such information
6-42 unless the disclosure of same is otherwise specifically prohibited
6-43 by statute <or written contract>.
6-44 SECTION 12A. Section 15E, The Real Estate License Act
6-45 (Article 6573a, Vernon's Texas Civil Statutes), is amended as
6-46 follows:
6-47 Sec. 15E. Notwithstanding any other provision of this Act or
6-48 any other law, a licensee shall have no duty to inquire about, make
6-49 a disclosure related to, or release information related to whether
6-50 a:
6-51 (1) previous or current occupant of real property had,
6-52 may have had, has, or may have AIDS, HIV-related illnesses, or HIV
6-53 infection as defined by the Centers for Disease Control of the U.S.
6-54 Public Health Service; or
6-55 (2) death occurred on a property by natural causes,
6-56 suicide, or accident unrelated to the condition of the property.
6-57 SECTION 13. Section 17(b), The Real Estate License Act
6-58 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
6-59 as follows:
6-60 (b) The commission may issue subpoenas for the attendance of
6-61 witnesses and the production of records or documents. Process
6-62 issued by the commission may extend to all parts of the state and
6-63 may be served by any person designated by the commission.
6-64 SECTION 14. Section 19(a), The Real Estate License Act
6-65 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
6-66 as follows:
6-67 (a) A person acting as a real estate broker or real estate
6-68 salesman without first obtaining a license is guilty of a
6-69 misdemeanor and on conviction shall be punishable by a fine of not
6-70 less than $100 nor more than $500, or by imprisonment in the county
7-1 jail for a term not to exceed one year, or both; and if a
7-2 corporation or a limited liability company, shall be punishable by
7-3 a fine not less than $1,000 nor more than $2,000. A person, on
7-4 conviction of a second or subsequent offense, shall be punishable
7-5 by a fine of not less than $500 nor more than $1,000, or by
7-6 imprisonment for a term not to exceed two years, or both; and if a
7-7 corporation or a limited liability company, shall be punishable by
7-8 a fine of not less than $2,000 nor more than $5,000.
7-9 SECTION 15. Section 23, The Real Estate License Act (Article
7-10 6573a, Vernon's Texas Civil Statutes), is amended to read as
7-11 follows:
7-12 Sec. 23. REAL ESTATE INSPECTORS. (a) Definitions. In this
7-13 section:
7-14 (1) "Apprentice inspector" means a person who is in
7-15 training under the direct supervision of a professional <real
7-16 estate> inspector or a real estate inspector
7-17 <inspector-in-training> to become qualified to perform real estate
7-18 inspections.
7-19 (2) "Committee" means the Texas Real Estate Inspector
7-20 Committee.
7-21 (3) "Core real estate inspection courses" means
7-22 educational courses approved by the commission, including but not
7-23 limited to structural, electrical, mechanical, plumbing, roofing,
7-24 business, legal, standards of practice, report writing, appliances
7-25 or ethics, all of which must relate to a real estate inspection
7-26 <and ethical courses of study>.
7-27 (4) "Direct supervision" means the instruction and
7-28 control by a professional <real estate> inspector or a real estate
7-29 inspector <inspector-in-training> licensed under this section who
7-30 is:
7-31 (A) responsible for the actions of an individual
7-32 performing a real estate inspection or preparing a report of a real
7-33 estate inspection;
7-34 (B) available if and when needed to consult with
7-35 or assist an individual performing a real estate inspection or
7-36 preparing a report of a real estate inspection; and
7-37 (C) physically present at the time and place of
7-38 the inspection.
7-39 (5) "Indirect supervision" means the instruction and
7-40 control by a professional <real estate> inspector licensed under
7-41 this section who is:
7-42 (A) responsible for the actions of an individual
7-43 performing or preparing a real estate inspection; and
7-44 (B) available if and when needed to consult with
7-45 or assist an individual performing a real estate inspection or
7-46 preparing a report of a real estate inspection, but who is not
7-47 required to be physically present at the time and place of the
7-48 inspection.
7-49 (6) "Inspector" means a person who is licensed as an
7-50 apprentice inspector, real estate inspector, or professional
7-51 inspector under this section <"Inspector-in-training" means a
7-52 person who represents to the public that the person is trained and
7-53 qualified to perform a real estate inspection under the indirect
7-54 supervision of a real estate inspector and who accepts employment
7-55 for the purpose of performing a real estate inspection for a buyer
7-56 or seller of real property>.
7-57 (7) "License" means an apprentice license, a real
7-58 estate inspector license or a professional inspector <an
7-59 inspector-in-training> license issued under this section.
7-60 (8) "Licensee" means a person holding an apprentice
7-61 inspector license, a real estate inspector license or a
7-62 professional inspector <inspector-in-training> license issued under
7-63 this section.
7-64 (9) "Professional inspector" means a person who
7-65 represents to the public that the person is trained and qualified
7-66 to perform a real estate inspection and who accepts employment for
7-67 the purpose of performing a real estate inspection for a buyer or
7-68 seller of real property.
7-69 (10) <(9)> "Real estate inspection" means a written or
7-70 oral opinion as to the condition of the improvements to real
8-1 property, including structural items, electrical items, mechanical
8-2 systems, plumbing systems, or equipment<, and systems>.
8-3 (11) <(10)> "Real estate inspector" means a person who
8-4 represents to the public that the person is trained and qualified
8-5 to perform real estate inspections under the indirect supervision
8-6 of a professional inspector and who accepts employment for the
8-7 purpose of performing a real estate inspection for a buyer or
8-8 seller of real property.
8-9 <(11) "Registered" means a person who holds a
8-10 registration as an apprentice inspector issued under this section.>
8-11 (b) Texas Real Estate Inspector Committee. (1) The Texas
8-12 Real Estate Inspector Committee is created. In addition to other
8-13 powers and duties delegated to it by the commission, the committee
8-14 shall recommend:
8-15 (A) rules for the <registration and> licensing
8-16 of <apprentice> inspectors<, inspectors-in-training, and real
8-17 estate inspectors> in this state in accordance with this section;
8-18 (B) rules relating to the education and
8-19 experience requirements for <registration and> licensing as an
8-20 <apprentice> inspector<, inspector-in-training, and real estate
8-21 inspector> under this section;
8-22 (C) rules relating to the qualifying examination
8-23 required for <registration or> licensing as an inspector under this
8-24 section;
8-25 (D) rules establishing a code of professional
8-26 conduct and ethics for an <apprentice> inspector<,
8-27 inspector-in-training, and real estate inspector> under this
8-28 section;
8-29 (E) reasonable fees to implement this section,
8-30 including an application fee for <registration or> licensing, an
8-31 examination fee, a renewal fee for a <registration or> license, and
8-32 any other fee required by law;
8-33 (F) rules relating to continuing education
8-34 requirements for a <registered or> licensed inspector;
8-35 (G) rules relating to the standards of practice
8-36 for a real estate inspection;
8-37 (H) rules relating to granting or denying an
8-38 application for the <registration of an apprentice inspector and>
8-39 licensing of an <inspector-in-training and real estate> inspector;
8-40 (I) the form and format for any applications and
8-41 forms required under this section; and
8-42 (J) any other action by the commission as may
8-43 provide a high degree of service and protection to the public when
8-44 dealing with <registered or> licensed inspectors.
8-45 (2) The committee is composed of nine members
8-46 appointed by the commission. The members of the committee hold
8-47 office for staggered terms of six years, with the terms of three
8-48 members expiring February 1 of each odd-numbered year. Each member
8-49 holds office until the member's successor is appointed.
8-50 Appointments to the committee shall be made without regard to the
8-51 sex, race, color, age, handicap, religion, or national origin of
8-52 the appointees. In the event of a vacancy during a term, the
8-53 commission shall appoint a replacement who meets the qualifications
8-54 for appointment under this subdivision to fill the unexpired part
8-55 of the term. A member of the committee must be a professional
8-56 <licensed real estate> inspector actively engaged in the practice
8-57 of real estate inspecting at the time of appointment and must have
8-58 been primarily engaged in the practice of real estate inspecting
8-59 <inspection business> for at least five years before the member's
8-60 appointment. A member of the committee may not hold a real estate
8-61 broker or salesman license. Each member of the committee is
8-62 entitled to a per diem allowance and to reimbursement of travel
8-63 expenses necessarily incurred in performing functions as a member
8-64 of the committee, subject to any applicable limitation in the
8-65 General Appropriations Act. The committee shall annually elect
8-66 from its members a chairman, a vice-chairman, and secretary. A
8-67 quorum of the committee consists of five members.
8-68 (3) The commission may remove a committee member if
8-69 the member:
8-70 (A) does not have at the time of appointment the
9-1 qualifications required by Subdivision (2) of this subsection;
9-2 (B) cannot discharge the member's duties for a
9-3 substantial part of the term for which the member is appointed
9-4 because of illness or disability; or
9-5 (C) is absent from more than half of the
9-6 regularly scheduled committee meetings that the member is eligible
9-7 to attend during each year, unless the absence is excused by the
9-8 committee.
9-9 (4) The validity of an action of the committee is not
9-10 affected by the fact that it was taken when a ground for removal of
9-11 a committee member exists.
9-12 (5) If the administrator of the commission has
9-13 knowledge that a potential ground for removal exists, the
9-14 administrator shall notify the chairman of the commission that a
9-15 potential ground exists.
9-16 (6) <(3)> The commission shall adopt procedural rules
9-17 to be used by the committee in implementing its powers and duties.
9-18 (7) <(4)> The committee is subject to the open
9-19 meetings law, Chapter 271, Acts of the 60th Legislature, Regular
9-20 Session, 1967 (Article 6252-17, Vernon's Texas Civil Statutes), the
9-21 open records law, Chapter 424, Acts of the 63rd Legislature,
9-22 Regular Session, 1973 (Article 6252-17a, Vernon's Texas Civil
9-23 Statutes), and the Administrative Procedure and Texas Register Act
9-24 (Article 6252-13a, Vernon's Texas Civil Statutes).
9-25 (8) <(5)> The committee shall meet semiannually and at
9-26 the call of the commission. The committee may also meet at the
9-27 call of a majority of its members.
9-28 (9) <(6)> The committee shall act in an advisory
9-29 capacity to develop and recommend to the commission <for approval
9-30 the> rules <of the commission> under this section. The committee
9-31 <periodically> shall review commission rules relating to this
9-32 section and recommend changes in the rules to the commission. The
9-33 <Notwithstanding Subsection (f), Section 5, Administrative
9-34 Procedure and Texas Register Act (Article 6252-13a, Vernon's Texas
9-35 Civil Statutes), the> commission shall submit all proposed rules,
9-36 <and> all proposed rule changes and all requests for proposed rules
9-37 or rule changes <additions to the rules> that relate to the
9-38 regulation and licensing of <real estate> inspectors under this
9-39 section to the committee for development or recommendation. The
9-40 commission may modify the rules developed by the committee if the
9-41 commission finds such modifications are in the public interest.
9-42 This section does not prohibit the commission from developing and
9-43 adopting rules relating to the regulation and licensing of
9-44 inspectors under this section if the committee fails to develop or
9-45 recommend rules under this section within a reasonable period of
9-46 time after the commission submits the proposed rules, rule changes
9-47 or requests for proposed rules or rule changes to the committee.
9-48 If the committee determines that a rule requested by the commission
9-49 should not be developed or recommended for adoption by the
9-50 commission, the committee shall submit a report on the matter to
9-51 the commission. The chairman of the commission and the chairman of
9-52 the committee shall then appoint three members each from their
9-53 respective bodies to meet as an ad hoc committee to consider the
9-54 report and recommend possible action by the commission. The
9-55 chairman of the commission or a member of the commission designated
9-56 by the chairman shall serve as the seventh member of the ad hoc
9-57 committee. At least one member of the ad hoc committee must be a
9-58 public member of the commission <If the commission does not approve
9-59 a rule developed by the committee, the commission shall indicate to
9-60 the committee the reasons that the commission did not approve the
9-61 rule and return the rule to the committee for further development>.
9-62 (c) License <or registration> required. (1) A person may
9-63 not act <or attempt to act> as a professional <real estate>
9-64 inspector in this state for a buyer or seller of real property
9-65 unless the person possesses a professional <real estate> inspector
9-66 license issued under this section.
9-67 (2) A person may not act or attempt to act as a real
9-68 estate inspector <an inspector-in-training> in this state for a
9-69 buyer or seller of real property unless the person possesses a real
9-70 estate inspector <an inspector-in-training> license issued under
10-1 this section and is under the indirect supervision of a
10-2 professional <real estate> inspector.
10-3 (3) A person may not act or attempt to act as an
10-4 apprentice inspector in this state for a buyer or seller of real
10-5 property unless the person is licensed <registered> under this
10-6 section and is under the direct supervision of a real estate
10-7 inspector or professional inspector <inspector-in-training>.
10-8 (d) Eligibility; application. (1) To be eligible for a
10-9 license <registration> as an apprentice inspector, an applicant
10-10 must be an individual, a citizen of the United States or a lawfully
10-11 admitted alien, and a resident of this state at the time of the
10-12 <for at least 60 days immediately before the date of> filing of the
10-13 application. The applicant must be sponsored by a professional
10-14 <real estate> inspector licensed under this section. The applicant
10-15 must be at least 18 years old. The applicant must satisfy the
10-16 commission as to the applicant's honesty, trustworthiness, and
10-17 integrity.
10-18 (2) To be eligible for a license as a real estate
10-19 inspector <an inspector-in-training>, an applicant must have met
10-20 the requirements and been licensed <be registered> as an apprentice
10-21 inspector for at least three months and have performed at least 25
10-22 real estate inspections under direct supervision before filing an
10-23 application. The applicant must satisfy the commission as to the
10-24 applicant's honesty, trustworthiness, integrity, and competency.
10-25 An applicant for an original real estate inspector
10-26 <inspector-in-training> license must submit satisfactory evidence
10-27 to the commission of successful completion of not less than 90
10-28 classroom hours of core real estate inspection courses. The
10-29 commission by rule may specify the length and content of the core
10-30 real estate inspection courses required by this subdivision. The
10-31 commission shall determine the competency of an applicant on the
10-32 basis of an examination required by Subsection (i) of this section.
10-33 The applicant must be sponsored by a professional <real estate>
10-34 inspector licensed under this section. Notwithstanding this
10-35 subdivision of this subsection, an applicant is eligible for and
10-36 has satisfied all requirements for a license as a real estate
10-37 inspector if the applicant was previously licensed as a real estate
10-38 inspector during the preceding 24-month period immediately
10-39 preceding the filing of the application, the applicant is sponsored
10-40 by a professional inspector, and the applicant satisfies the
10-41 commission as to the applicant's honesty, trustworthiness, and
10-42 integrity.
10-43 (3) To be eligible for a license as a professional
10-44 <real estate> inspector, an applicant must have met the
10-45 requirements and have been licensed <registered> as an apprentice
10-46 inspector for at least three months and licensed as a real estate
10-47 inspector <an inspector-in-training> for at least 12 months had
10-48 have performed at least 175 real estate inspections under indirect
10-49 supervision before filing an application. An applicant for an
10-50 original professional <real estate> inspector license must submit
10-51 satisfactory evidence to the commission of successful completion of
10-52 not less than 30 classroom hours of core real estate inspection
10-53 courses and eight classroom hours related to the study of standards
10-54 of <professional> practice, legal issues, or <and> ethics related
10-55 to the profession of real estate inspections. These classroom
10-56 hours are in addition to those required for <registration as> an
10-57 apprentice inspector license or a real estate inspector license
10-58 <licensing as an inspector-in-training>. The commission shall
10-59 determine the competency of an applicant on the basis of an
10-60 examination required by Subsection (i) of this section.
10-61 Notwithstanding this subsection, an applicant is eligible for and
10-62 has satisfied all requirements for a license as a professional
10-63 inspector if the applicant was previously licensed as a
10-64 professional inspector during the preceding 24-month period
10-65 immediately preceding the filing of the application and the
10-66 applicant satisfies the commission as to the applicant's honesty,
10-67 trustworthiness, and integrity.
10-68 (4) The commission by rule may provide for the
10-69 substitution of relevant experience or education in lieu of the
10-70 number of real estate inspections required by this section.
11-1 (5) <(4)> An applicant must file an application for
11-2 <registration or> a license with the commission on forms prescribed
11-3 by the commission.
11-4 (e) Issuance of <registration or> license. The commission
11-5 shall issue an apprentice license <registration>, <an
11-6 inspector-in-training license, or> a real estate inspector license,
11-7 or a professional inspector license to an applicant who possesses
11-8 the required qualifications, passes the appropriate examination if
11-9 required, and pays the fee required by Subdivision (2) of
11-10 Subsection (o) of this section.
11-11 (f) Expiration of <registration or> license; renewal. (1)
11-12 A <registration or> license issued under this section expires one
11-13 year after the date it is issued.
11-14 (2) A person may renew an unexpired <registration or>
11-15 license by paying to the commission before the expiration date of
11-16 the <registration or> license the required renewal fee.
11-17 (3) If a person's <registration or> license has been
11-18 expired for 90 days or less, the person may renew the <registration
11-19 or> license by paying to the commission the required renewal fee
11-20 and a fee that is one-half of the examination fee, if any, for the
11-21 registration or license.
11-22 (4) If a person's <registration or> license has been
11-23 expired for longer than 90 days but less than one year, the person
11-24 may renew the <registration or> license by paying to the commission
11-25 all unpaid renewal fees and a fee that is equal to the examination
11-26 fee, if any, for the <registration or> license.
11-27 (5) If a person's <registration or> license has been
11-28 expired for one year or longer, the person may not renew the
11-29 <registration or> license. The person may obtain a new
11-30 <registration or> license by submitting to reexamination, if
11-31 <originally> required, and complying with the requirements and
11-32 procedures for obtaining an original <registration or> license.
11-33 However, the commission may renew without reexamination an expired
11-34 license of a person who was licensed in this state, moved to
11-35 another state, and is currently licensed and has been in practice
11-36 in the other state for the one year preceding application. The
11-37 person must pay to the commission a fee that is equal to the
11-38 examination fee for the license.
11-39 (6) At least 30 days before the expiration of a
11-40 person's <registration or> license, the commission shall send
11-41 written notice of the impending <registration or> license
11-42 expiration to the person at the person's last known address
11-43 according to the records of the commission.
11-44 (g) Change of address. A licensee <or person registered>
11-45 under this section shall notify the commission and pay the required
11-46 fee within 30 days after the date a change of place of business
11-47 occurs.
11-48 (h) Fees. (1) The commission shall charge and collect
11-49 reasonable and necessary fees to recover the cost of administering
11-50 this section as follows:
11-51 (A) a fee not to exceed $75 for the filing of an
11-52 original application for a license <registration> as an apprentice
11-53 inspector;
11-54 (B) a fee not to exceed $125 for the filing of
11-55 an original application for a license as a real estate inspector
11-56 <an inspector-in-training>;
11-57 (C) a fee not to exceed $150 for the filing of
11-58 an original application for a license as a professional <real
11-59 estate> inspector;
11-60 (D) a fee not to exceed $125 for the annual
11-61 license <registration> renewal of an apprentice inspector;
11-62 (E) a fee not to exceed $175 for the annual
11-63 license renewal of a real estate inspector <an
11-64 inspector-in-training>;
11-65 (F) a fee not to exceed $200 for the annual
11-66 license renewal of a professional <real estate> inspector;
11-67 (G) a fee not to exceed $100 for taking a
11-68 license examination; and
11-69 (H) a fee not to exceed $20 for a request for a
11-70 change of place of business or to replace a lost or destroyed
12-1 license <or registration>.
12-2 (2) All fees may be paid by cash, check, cashier's
12-3 check, or money order.
12-4 (3) The fees shall be reviewed annually and reduced to
12-5 the extent that the costs of administering this section are funded
12-6 by the real estate inspector regulation account established under
12-7 Subdivision (4) of Subsection (o) of this section.
12-8 (i) Examination. (1) The commission shall prescribe the
12-9 licensing examinations, which shall be prepared by or contracted
12-10 for by the commission. A licensing examination shall evaluate
12-11 competency in the subject matter of all required core real estate
12-12 inspection courses. The licensing examination shall be offered not
12-13 less often than once every two months in Austin. If a license
12-14 applicant fails the examination, the applicant may apply for
12-15 reexamination by filing a request with the commission and paying
12-16 the examination fee. Each license applicant must satisfy the
12-17 examination requirement not later than six months after the date on
12-18 which the license application is filed. A license applicant who
12-19 fails to satisfy the examination requirement within six months
12-20 after the date on which the license application is filed must
12-21 submit a new license application with the commission and pay the
12-22 examination fee to be eligible for examination. If a license
12-23 applicant fails the examination three consecutive times in
12-24 connection with the same application, the applicant may not apply
12-25 for reexamination or submit a new license application with the
12-26 commission for six months from the date he failed the last
12-27 examination.
12-28 (2) Not later than the 30th day after the date on
12-29 which a licensing examination is administered under this section,
12-30 the commission shall notify each examinee of the results of the
12-31 examination. However, if an examination is graded or reviewed by a
12-32 national testing service, the commission shall notify examinees of
12-33 the results of the examination not later than the 14th day after
12-34 the date on which the commission receives the results from the
12-35 testing service. If the notice of examination results graded or
12-36 reviewed by a national testing service will be delayed for longer
12-37 than 90 days after the examination date, the commission shall
12-38 notify the examinee of the reason for the delay before the 90th
12-39 day.
12-40 (3) If requested in writing by a person who fails a
12-41 licensing examination administered under this section, the
12-42 commission shall furnish the person with an analysis of the
12-43 person's performance on the examination.
12-44 (j) Waiver of out-of-state applicants. The commission may
12-45 waive any license requirement for an applicant with a valid license
12-46 from another state having license requirements substantially
12-47 equivalent to those of this state.
12-48 (k) Continuing education programs. The commission shall
12-49 recognize, prepare, or administer continuing education programs for
12-50 inspectors. Participation in the programs is mandatory. A real
12-51 estate inspector <An inspector-in-training> must submit
12-52 satisfactory evidence to the commission of successful completion of
12-53 at least four classroom hours of core real estate inspection
12-54 courses annually before a licensed renewal is issued. A
12-55 professional <real estate> inspector must submit satisfactory
12-56 evidence to the commission of successful completion of at least
12-57 eight classroom hours of core related real estate inspection
12-58 courses annually before a license renewal is issued.
12-59 (l) Prohibited acts. A professional <real estate>
12-60 inspector, real estate inspector <or inspector-in-training licensed
12-61 under this section> or an apprentice inspector licensed
12-62 <registered> under this section may not:
12-63 (1) accept an assignment for real estate inspection if
12-64 the employment or fee is contingent on the reporting of a specific,
12-65 predetermined condition of the improvements to real property or is
12-66 contingent on the reporting of specific findings other than those
12-67 known by the inspector to be facts at the time of accepting the
12-68 assignment;
12-69 (2) act in a manner or engage in a practice that is
12-70 dishonest or fraudulent or that involves deceit or
13-1 misrepresentation;
13-2 (3) perform a real estate inspection in a negligent or
13-3 incompetent manner;
13-4 (4) act in the dual capacity of <real estate>
13-5 inspector and undisclosed principal in a transaction;
13-6 (5) act in the dual capacity of <real estate>
13-7 inspector and real estate broker or salesman in a transaction;
13-8 (6) perform or agree to perform any repairs or
13-9 maintenance in connection with a real estate inspection pursuant to
13-10 the provisions of any earnest money contract, lease agreement, or
13-11 exchange of real estate; or
13-12 (7) violate the rules adopted by the commission or any
13-13 provisions of this section.
13-14 (m) Offenses. (1) A person commits an offense if the
13-15 person knowingly or intentionally engages in the business of real
13-16 estate inspecting without a license <or registration> under this
13-17 section or performs an inspection during a period in which the
13-18 inspector's license <or registration> is revoked or suspended.
13-19 (2) An offense under this subsection is a Class B
13-20 misdemeanor.
13-21 (3) The commission may <shall> authorize the committee
13-22 to conduct administrative hearings or <and> recommend the entry of
13-23 final orders, or both, in contested cases regarding a <registered
13-24 or> licensed <real estate> inspector. The commission may authorize
13-25 specific employees to conduct hearings and render final decisions
13-26 in contested cases regarding a licensed inspector.
13-27 (4) The commission may investigate the actions of a
13-28 <registered or> licensed <real estate> inspector and may, after
13-29 notice and hearing in accordance with the provisions of Section 17
13-30 of this Act, reprimand, place on probation, suspend or revoke a
13-31 <registration or> license for a violation of this Act or a rule by
13-32 the commission. If the commission revokes a <registration or>
13-33 license of a person, the person may not apply to the commission for
13-34 one year after the revocation.
13-35 (n) Exemptions. This section does not apply to any
13-36 electrician, plumber, carpenter, any person engaged in the business
13-37 of structural pest control in compliance with the Texas Structural
13-38 Pest Control Act (Article 135b-6, Vernon's Texas Civil Statutes),
13-39 or any other person who repairs, maintains, or inspects
13-40 improvements to real property and who does not represent to the
13-41 public through personal solicitation or public advertising that the
13-42 person is in the business of inspecting such improvements. The
13-43 provisions of this section shall not be construed so as to prevent
13-44 any person from performing any and all acts which the person is
13-45 authorized to perform pursuant to a license or registration issued
13-46 by this state or any governmental subdivision of this state.
13-47 (o) Real estate inspection recovery fund. (1) The
13-48 commission shall establish a real estate inspection recovery fund
13-49 which shall be set apart and maintained by the commission as
13-50 provided by this subsection. The fund shall be used in the manner
13-51 provided by this subsection for reimbursing aggrieved persons who
13-52 suffer actual damages by reason of certain acts committed by a duly
13-53 licensed <or registered real estate> inspector, provided the <real
13-54 estate> inspector was licensed <or registered> by the State of
13-55 Texas at the time the act was committed and provided recovery is
13-56 ordered by a court of competent jurisdiction against the <real
13-57 estate> inspector. The use of the fund is limited to an act that
13-58 is a violation of Subsection (l) of this section.
13-59 (2) When a person receives notice that the person has
13-60 successfully completed the licensing examination provided by
13-61 Subsection (i) of this section, the person shall pay, in addition
13-62 to any other fees required by this section, a fee not to exceed
13-63 $200, which shall be deposited in the real estate inspection
13-64 recovery fund prior to the commission's issuing the person an <a
13-65 real estate> inspector license.
13-66 (3) If on December 31 of any year the balance
13-67 remaining in the real estate inspection recovery fund is less than
13-68 $300,000, each <real estate> inspector, on the next renewal of the
13-69 person's license, shall pay, in addition to the license renewal
13-70 fee, a fee of $75, or a pro rata share of the amount necessary to
14-1 bring the fund to $450,000, whichever is less, which shall be
14-2 deposited in the real estate inspection recovery fund.
14-3 (4) If on December 31 of any year the balance
14-4 remaining in the real estate inspection recovery fund is greater
14-5 than $600,000, the amount of money in excess of $600,000 shall be
14-6 transferred to a separate account in the general revenue fund to be
14-7 known as the real estate inspector regulation account. The money
14-8 in the real estate inspector regulation account may be used only
14-9 for the payment of costs incurred by the commission in the
14-10 regulation of <real estate> inspectors.
14-11 (5) No action for a judgment that results in an order
14-12 for collection from the real estate inspection recovery fund shall
14-13 be started later than two years from the accrual of the cause of
14-14 action. When an aggrieved person commences action for a judgment
14-15 that may result in collection from the real estate inspection
14-16 recovery fund, the <real estate> inspector shall notify the
14-17 commission in writing to this effect at the time of the
14-18 commencement of the action.
14-19 (6) When an aggrieved person recovers a valid judgment
14-20 in a court of competent jurisdiction against an <a real estate>
14-21 inspector on the grounds described in Subdivision (1) of this
14-22 subsection, the aggrieved person may, after final judgment has been
14-23 entered, execution returned nulla bona, and a judgment lien
14-24 perfected, file a verified claim in the court in which the judgment
14-25 was entered and, on 20 days' written notice to the commission and
14-26 to the judgment debtor, may apply to the court where the judgment
14-27 was rendered for an order directing payment out of the real estate
14-28 inspection recovery fund of the amount unpaid on the judgment,
14-29 subject to the limitations stated in Subdivision (15) of this
14-30 subsection.
14-31 (7) The court shall proceed on the application
14-32 forthwith. On the hearing on the application, the aggrieved person
14-33 is required to show:
14-34 (A) that the judgment is based on facts allowing
14-35 recovery under Subdivision (1) of this subsection;
14-36 (B) that the person is not a spouse of the
14-37 debtor or the personal representative of the spouse and the person
14-38 is not an <a real estate> inspector, as defined by this section;
14-39 (C) that the person has obtained a judgment
14-40 under Subdivision (6) of this subsection that is not subject to a
14-41 stay or discharge in bankruptcy, stating the amount of the judgment
14-42 and the amount owing on the judgment at the date of the
14-43 application;
14-44 (D) that based on the best information
14-45 available, the judgment debtor lacks sufficient attachable assets
14-46 in this state or any other state to satisfy the judgment; and
14-47 (E) the amount that may be realized from the
14-48 sale of real or personal property or other assets liable to be sold
14-49 or applied in satisfaction of the judgment and the balance
14-50 remaining due on the judgment after application of the amount that
14-51 may be realized.
14-52 (8) The court shall make an order directed to the
14-53 commission requiring payment out of the real estate inspection
14-54 recovery fund of whatever sum it finds to be payable on the claim,
14-55 pursuant to and in accordance with the limitations contained in
14-56 this subdivision, if the court is satisfied, on the hearing, of the
14-57 truth of all matters required to be shown by the aggrieved person
14-58 by Subdivision (7) of this subsection and that the aggrieved person
14-59 has satisfied all the requirements of Subdivisions (6) and (7) of
14-60 this subsection. The commission may relitigate any issue material
14-61 and relevant in the hearing on the application that was determined
14-62 in the underlying action on which the judgment in favor of the
14-63 applicant was based. If the court finds that the aggregate of
14-64 claims against an <a real estate> inspector exceeds the limitations
14-65 contained in this section, the court shall reduce proportionately
14-66 the amount it finds payable on the claim.
14-67 (9) A recovery on the judgment against a single
14-68 defendant made before payment from the real estate inspection
14-69 recovery fund must be applied by the creditor first to actual
14-70 damages.
15-1 (10) A license <or registration> granted under the
15-2 provisions of this section may be revoked by the commission on
15-3 proof that the commission has made a payment from the real estate
15-4 inspection recovery fund of any amount toward satisfaction of a
15-5 judgment against a licensed <or registered real estate> inspector.
15-6 The commission may probate an order revoking a license <or
15-7 registration>. No <real estate> inspector is eligible to receive a
15-8 new license <or registration> until the person has repaid in full,
15-9 plus interest, at the current legal rate, the amount paid from the
15-10 real estate inspection recovery fund on the person's account.
15-11 (11) The sums received by the commission for deposit
15-12 in the real estate inspection recovery fund shall be held by the
15-13 commission in trust for carrying out the purpose of the real estate
15-14 inspection recovery fund. These funds may be invested and
15-15 reinvested in the same manner as funds of the Employees Retirement
15-16 System of Texas, and the interest from these investments shall be
15-17 deposited to the credit of the real estate inspection recovery
15-18 fund. However, investments may not be made that will impair the
15-19 necessary liquidity required to satisfy judgment payments awarded
15-20 pursuant to this subsection.
15-21 (12) When the commission receives notice of entry of a
15-22 final judgment and a hearing is conducted under Subdivision (8) of
15-23 this subsection, the commission may notify the Attorney General of
15-24 Texas of the commission's desire to enter an appearance, file a
15-25 response, appear at the court hearing, defend the action, or take
15-26 whatever other action it deems appropriate. In taking such action,
15-27 the commission and the attorney general shall act only to protect
15-28 the fund from spurious or unjust claims or to ensure compliance
15-29 with the requirements for recovery under this subsection.
15-30 (13) When, on the order of the court, the commission
15-31 has paid from the real estate inspection recovery fund any sum to
15-32 the judgment creditor, the commission shall be subrogated to all of
15-33 the rights of the judgment creditor to the extent of the amount
15-34 paid. The judgment creditor shall assign all his right, title, and
15-35 interest in the judgment up to the amount paid by the commission.
15-36 The amount paid by the commission shall have priority for repayment
15-37 in the event of any subsequent recovery on the judgment. Any
15-38 amount in interest recovered by the commission on the judgment
15-39 shall be deposited to the fund.
15-40 (14) The failure of an aggrieved person to comply with
15-41 the provisions of this subsection relating to the real estate
15-42 inspection recovery fund shall constitute a waiver of any rights
15-43 under this subsection.
15-44 (15) Notwithstanding any other provision, payments
15-45 from the real estate inspection recovery fund are subject to the
15-46 following conditions and limitations:
15-47 (A) payments may be made only pursuant to an
15-48 order of a court of competent jurisdiction, as provided by
15-49 Subdivision (6) of this subsection, and in the manner prescribed by
15-50 this subsection;
15-51 (B) payments for claims, including attorney
15-52 fees, interest, and court costs, arising out of the same
15-53 transaction shall be limited in the aggregate to $7,500 regardless
15-54 of the number of claimants; and
15-55 (C) payments for claims based on judgments
15-56 against a licensed <or registered real estate> inspector may not
15-57 exceed in the aggregate $15,000 until the fund has been reimbursed
15-58 by the licensee for all amounts paid.
15-59 (16) Nothing contained in this subsection shall limit
15-60 the authority of the commission to take disciplinary action against
15-61 a person licensed <or registered> under this section for a
15-62 violation of this section or the rules of the commission, nor shall
15-63 the repayment in full of all obligations to the real estate
15-64 inspection recovery fund by a person nullify or modify the effect
15-65 of any other disciplinary proceeding brought pursuant to this
15-66 section.
15-67 (17) A person receiving payment out of the real estate
15-68 inspection recovery fund under Subdivision (15) of this subsection
15-69 shall be entitled to receive reasonable attorney fees as determined
15-70 by the court, subject to the limitations stated in that
16-1 subdivision.
16-2 (18) An <A real estate> inspector licensed <or
16-3 registered> under this section shall notify consumers and service
16-4 recipients of the availability of the real estate inspection
16-5 recovery fund established under this section for reimbursing
16-6 certain aggrieved persons. The notice must include the name,
16-7 mailing address, and telephone number of the commission and any
16-8 other information required by commission rule. The notification
16-9 may be provided:
16-10 (A) on a written contract for the services of an
16-11 <a real estate> inspector;
16-12 (B) on a brochure distributed by an <a real
16-13 estate> inspector;
16-14 (C) on a sign prominently displayed in the place
16-15 of business of an <a real estate> inspector; or
16-16 (D) in a bill or receipt for service provided by
16-17 an <a real estate> inspector.
16-18 (p) Inactive licenses. The commission by rule may adopt
16-19 terms and conditions by which an inspector may apply for, renew, or
16-20 place a license on inactive status and rules by which an inactive
16-21 inspector may return to active status.
16-22 (q) The commission shall consider the recommendations of the
16-23 Texas Real Estate Inspector Committee relating to the
16-24 qualifications and licensure of inspectors to assure the public of
16-25 a quality professional inspection system in real estate
16-26 transactions in Texas.
16-27 SECTION 16. Persons licensed as real estate inspectors on
16-28 the effective date of this Act are deemed to be professional
16-29 inspectors for the purposes of this Act. Persons licensed as
16-30 inspectors-in-training on the effective date of this Act are deemed
16-31 to be real estate inspectors for the purposes of this Act. Persons
16-32 registered as apprentice inspectors on the effective date of this
16-33 Act are deemed to be licensed apprentice inspectors for the
16-34 purposes of this Act.
16-35 SECTION 17. For the sole purpose of satisfying eligibility
16-36 requirements under Subdivision (2) of Subsection (d) of Section 23
16-37 of The Real Estate License Act (Article 6573a, Vernon's Texas Civil
16-38 Statutes), a person who was previously licensed as an
16-39 inspector-in-training or a real estate inspector at any time during
16-40 the 24-month period before the effective date of this Act is
16-41 deemed to have been previously licensed as a real estate inspector.
16-42 SECTION 18. (a) Except as provided by Subsection (b) of
16-43 this section, this Act takes effect September 1, 1993.
16-44 (b) The provision of Section 6 of this Act amending the
16-45 minimum number of hours required to be completed in a course in the
16-46 Law of Agency by an applicant for a salesman license takes effect
16-47 for all applications filed on or after September 1, 1994.
16-48 SECTION 19. The importance of this legislation and the
16-49 crowded condition of the calendars in both houses create an
16-50 emergency and an imperative public necessity that the
16-51 constitutional rule requiring bills to be read on three several
16-52 days in each house be suspended, and this rule is hereby suspended.
16-53 * * * * *
16-54 Austin,
16-55 Texas
16-56 April 14, 1993
16-57 Hon. Bob Bullock
16-58 President of the Senate
16-59 Sir:
16-60 We, your Committee on State Affairs to which was referred H.B.
16-61 No. 991, have had the same under consideration, and I am instructed
16-62 to report it back to the Senate with the recommendation that it do
16-63 pass and be printed.
16-64 Harris of
16-65 Dallas, Chairman
16-66 * * * * *
16-67 WITNESSES
16-68 FOR AGAINST ON
16-69 ___________________________________________________________________
16-70 Name: Parker McCollough x
17-1 Representing: Tx Assn Realtors
17-2 City: Austin
17-3 -------------------------------------------------------------------
17-4 Name: Mark Moseley x
17-5 Representing: Tx Real Estate Commission
17-6 City: Austin
17-7 -------------------------------------------------------------------
17-8 Name: Eden Box x
17-9 Representing: Tx Real Estate Commission
17-10 City: Austin
17-11 -------------------------------------------------------------------
17-12 Name: Ronald Walker x
17-13 Representing: Tx Assn of Realtors
17-14 City: Austin
17-15 -------------------------------------------------------------------