BILL ANALYSIS C.S.S.B. 1398 By: Barrientos Economic Development 05-10-95 Committee Report (Substituted) BACKGROUND The Real Estate License Act requires that those persons operating residential real estate rental locator services be licensed. In many cities, locator services advertise property in a manner some consider to be deceptive. Often, locators steer prospective clients inquiring about lower priced advertised units to higher priced properties. An investigation of the practices is currently being conducted by the attorney general's office. PURPOSE As proposed, C.S.S.B. 1398 regulates certain residential real estate rental locators and provides penalties. RULEMAKING AUTHORITY It is the committee's opinion that rulemaking authority is granted to the Texas Real Estate Commission under SECTION 1 (Section 24(c), Article 6573a, V.T.C.S.) of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Article 6573a, V.T.C.S. (Real Estate License Act), by adding Section 24, as follows: Sec. 24. RESIDENTIAL RENTAL LOCATORS. (a) Defines "residential rental locator." (b) Prohibits a person from engaging in business as a residential rental locator (locator) in this state unless the person holds a license issued under this Act to operate as a real estate broker or real estate salesman. (c) Requires the Texas Real Estate Commission (commission), by rule, to adopt regulations and to establish standards relating to the permissible forms of advertising by a person licensed under this section. (d) Requires each residential rental locator to post in a conspicuous place accessible to clients and prospective clients the locator's license, a statement that the locator is licensed by the commission, and the name, mailing address, and telephone number of the commission as provided by Section 5(q) of this Act. (e) Provides that a violation of this section by a locator constitutes grounds under this Act for the suspension or revocation of the person's license, and for the assessment of an administrative penalty under Section 19A of this Act. (f) Provides that a person commits an offense if the person engages in business as a locator in this state without a license issued under this Act. Provides that an offense under this subsection is a Class B misdemeanor. SECTION 2. Makes application of Section 24(f), Article 6573a, V.T.C.S., as added by this Act, prospective. SECTION 3. Requires the commission to adopt rules as required by this Act by December 1, 1995. SECTION 4. Effective date: September 1, 1995. SECTION 5. Emergency clause.