By Danburg H.B. No. 265
74R1136 JMM-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the title of certain persons licensed to sell real
1-3 estate.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Sections 1(b)-(e), The Real Estate License Act
1-6 (Article 6573a, Vernon's Texas Civil Statutes), are amended to read
1-7 as follows:
1-8 (b) It is unlawful for a person to act in the capacity of,
1-9 engage in the business of, or advertise or hold that person
1-10 <himself> out as engaging in or conducting the business of a real
1-11 estate broker or a real estate salesperson <salesman> within this
1-12 state without first obtaining a real estate license from the Texas
1-13 Real Estate Commission. It is unlawful for a person licensed as a
1-14 real estate salesperson <salesman> to act or attempt to act as a
1-15 real estate broker or salesperson <salesman> unless that person
1-16 <he> is, at such time, associated with a licensed Texas real estate
1-17 broker and acting for the licensed real estate broker.
1-18 (c) Each real estate broker licensed pursuant to this Act is
1-19 responsible to the commission, members of the public, and the
1-20 broker's <his> clients for all acts and conduct performed under
1-21 this Act by the broker <himself> or by a real estate salesperson
1-22 <salesman> associated with or acting for the broker.
1-23 (d) No real estate salesperson <salesman> shall accept
1-24 compensation for real estate sales and transactions from any person
2-1 other than the broker under whom the salesperson <he> is at the
2-2 time licensed or under whom the salesperson <he> was licensed when
2-3 the salesperson <he> earned the right to compensation.
2-4 (e) No real estate salesperson <salesman> shall pay a
2-5 commission to any person except through the broker under whom the
2-6 salesperson <he> is at the time licensed.
2-7 SECTION 2. Section 2(4), The Real Estate License Act
2-8 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
2-9 as follows:
2-10 (4) "Real estate salesperson <salesman>" means a
2-11 person associated with a Texas licensed real estate broker for the
2-12 purposes of performing acts or transactions comprehended by the
2-13 definition of "real estate broker" as defined in this Act.
2-14 SECTION 3. Section 3, The Real Estate License Act (Article
2-15 6573a, Vernon's Texas Civil Statutes), is amended to read as
2-16 follows:
2-17 Sec. 3. The provisions of this Act shall not apply to any of
2-18 the following persons and transactions, and each and all of the
2-19 following persons and transactions are hereby exempted from the
2-20 provisions of this Act:
2-21 (1) an attorney at law licensed in this state or in
2-22 any other state;
2-23 (2) an attorney in fact under a duly executed power of
2-24 attorney authorizing the consummation of a real estate transaction;
2-25 (3) a public official in the conduct of that person's
2-26 <his> official duties;
2-27 (4) a person calling the sale of real estate by
3-1 auction under the authority of a license issued by this state
3-2 provided the person does not perform any other act of a real estate
3-3 broker or salesperson <salesman> as defined by this Act;
3-4 (5) a person acting under a court order or under the
3-5 authority of a will or a written trust instrument;
3-6 (6) a salesperson employed by an owner in the sale of
3-7 structures and land on which said structures are situated, provided
3-8 such structures are erected by the owner in the due course of the
3-9 owner's <his> business;
3-10 (7) an on-site manager of an apartment complex;
3-11 (8) transactions involving the sale, lease, or
3-12 transfer of any mineral or mining interest in real property;
3-13 (9) an owner or the owner's <his> employees in renting
3-14 or leasing the owner's <his> own real estate whether improved or
3-15 unimproved;
3-16 (10) transactions involving the sale, lease, or
3-17 transfer of cemetery lots; or
3-18 (11) transactions involving the renting, leasing, or
3-19 management of hotels or motels.
3-20 SECTION 4. Section 4, The Real Estate License Act (Article
3-21 6573a, Vernon's Texas Civil Statutes), is amended to read as
3-22 follows:
3-23 Sec. 4. A person who, directly or indirectly for another,
3-24 with the intention or on the promise of receiving any valuable
3-25 consideration, offers, attempts, or agrees to perform, or performs,
3-26 a single act defined in Subdivisions 2 and 3, Section 2 of this
3-27 Act, whether as a part of a transaction, or as an entire
4-1 transaction, is deemed to be acting as a real estate broker or
4-2 salesperson <salesman> within the meaning of this Act. The
4-3 commission of a single such act by a person required to be licensed
4-4 under this Act and not so licensed shall constitute a violation of
4-5 this Act.
4-6 SECTION 5. Sections 5(a), (f), (g), (i), and (m), The Real
4-7 Estate License Act (Article 6573a, Vernon's Texas Civil Statutes),
4-8 are amended to read as follows:
4-9 (a) The administration of the provisions of this Act is
4-10 vested in a commission, to be known as the "Texas Real Estate
4-11 Commission," consisting of nine members to be appointed by the
4-12 governor with the advice and consent of two-thirds of the senate
4-13 present. The commissioners hold office for staggered terms of six
4-14 years with the terms of three members expiring January 31 of each
4-15 odd-numbered year. Each member holds office until the member's
4-16 <his> successor is appointed and has qualified. Within 15 days
4-17 after <his> appointment, each member shall qualify by taking the
4-18 constitutional oath of office and furnishing a bond payable to the
4-19 Governor of Texas in the penal sum of $10,000, conditional on the
4-20 faithful performance of the member's <his> duties as prescribed by
4-21 law. A vacancy for any cause shall be filled by the governor for
4-22 the unexpired term. The governor shall designate as chairperson
4-23 <chairman> of the commission one member of the commission who is a
4-24 licensed real estate broker. The chairperson <chairman> serves in
4-25 that capacity at the pleasure of the governor. At a regular
4-26 meeting in February of each year, the commission shall elect from
4-27 its own membership a vice-chairperson <vice-chairman> and
5-1 secretary. A quorum of the commission consists of five members.
5-2 (f) If the administrator has knowledge that a potential
5-3 ground for removal exists, the administrator shall notify the
5-4 chairperson <chairman> of the commission of the ground. The
5-5 chairperson <chairman> shall then notify the governor that a
5-6 potential ground for removal exists.
5-7 (g) Each member of the commission shall receive as
5-8 compensation for each day actually spent on the member's <his>
5-9 official duties the sum of $75 and the <his> actual and necessary
5-10 expenses incurred in the performance of the member's <his> official
5-11 duties.
5-12 (i) The commission is empowered to select and name an
5-13 administrator and to select and employ such other subordinate
5-14 officers and employees as are necessary to administer this Act.
5-15 The salaries of the administrator and the officers and employees
5-16 shall be fixed by the commission not to exceed such amounts as are
5-17 fixed by the applicable general appropriations bill. The
5-18 commission may designate a subordinate officer as assistant
5-19 administrator who shall be authorized to act for the administrator
5-20 in the administrator's <his> absence. The administrator or the
5-21 administrator's designee shall develop a system of annual
5-22 performance evaluations. All merit pay for commission employees
5-23 must be based on the system established under this subsection. The
5-24 administrator or the administrator's designee shall develop an
5-25 intraagency career ladder program. The program shall require
5-26 intraagency postings of all nonentry level positions concurrently
5-27 with any public posting.
6-1 (m) Fifteen dollars received by the commission for a renewal
6-2 of a broker license before the expiration of the license or before
6-3 the first anniversary of the date the license expired and $7.50
6-4 received by the commission for a renewal of a salesperson
6-5 <salesman> license before the expiration of the license or before
6-6 the first anniversary of the date the license expired shall be
6-7 transmitted annually to Texas A&M University for deposit in a
6-8 separate banking account. The money in the separate account shall
6-9 be expended for the support and maintenance of the Texas Real
6-10 Estate Research Center and for carrying out the purposes,
6-11 objectives, and duties of the center. However, all money expended
6-12 from the separate account shall be as determined by legislative
6-13 appropriation.
6-14 SECTION 6. Sections 6(a) and (b), The Real Estate License
6-15 Act (Article 6573a, Vernon's Texas Civil Statutes), are amended to
6-16 read as follows:
6-17 (a) A person desiring to act as a real estate broker in this
6-18 state shall file an application for a license with the commission
6-19 on a form prescribed by the commission. A broker desiring to
6-20 engage a person to participate in real estate brokerage activity
6-21 shall join the person in filing an application for a salesperson
6-22 <salesman> license on a form prescribed by the commission. A
6-23 person previously licensed as a broker may apply for inactive
6-24 status. A person previously licensed as a salesperson <salesman>
6-25 may apply for inactive status without the participation of a
6-26 broker. The person must apply for inactive status on a form
6-27 prescribed by the commission not later than the first anniversary
7-1 of the date of the expiration of the broker or salesperson
7-2 <salesman> license.
7-3 (b) To be eligible for a license, an individual must be a
7-4 citizen of the United States or a lawfully admitted alien, be at
7-5 least 18 years of age, and be a legal resident of Texas at the time
7-6 of the filing of an application, and must satisfy the commission as
7-7 to the individual's <his> honesty, trustworthiness, integrity, and
7-8 competency. However, the competency of the individual, for the
7-9 purpose of qualifying for the granting of a license, shall be
7-10 judged solely on the basis of the examination referred to in
7-11 Section 7 of this Act.
7-12 SECTION 7. Section 6A(a), The Real Estate License Act
7-13 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
7-14 as follows:
7-15 (a) If, at any time before a person applies for a license
7-16 under this Act, the person requests the commission to determine
7-17 whether the person's <his> moral character complies with the
7-18 commission's moral character requirements for licensing under this
7-19 Act and the person pays a fee set by the commission for the moral
7-20 character determination, the commission shall make its
7-21 determination of the person's moral character.
7-22 SECTION 8. Sections 7(a), (c)-(e), (g), and (h), The Real
7-23 Estate License Act (Article 6573a, Vernon's Texas Civil Statutes),
7-24 are amended to read as follows:
7-25 (a) Competency as referred to in Section 6 of this Act shall
7-26 be established by an examination prepared by or contracted for by
7-27 the commission. The examination shall be given at such times and
8-1 at such places within the state as the commission shall prescribe.
8-2 The examination shall be of scope sufficient in the judgment of the
8-3 commission to determine that a person is competent to act as a real
8-4 estate broker or salesperson <salesman> in a manner to protect the
8-5 interest of the public. The examination for a salesperson
8-6 <salesman> license shall be less exacting and less stringent than
8-7 the examination for a broker license. The commission shall furnish
8-8 each applicant with study material and references on which the
8-9 <his> examination shall be based. When an applicant for a real
8-10 estate license fails a qualifying examination, the applicant <he>
8-11 may apply for reexamination by filing a request therefor together
8-12 with the proper fee. The examination requirement must be satisfied
8-13 not later than six months after the date on which the application
8-14 for a license is filed. Courses of study required for a license
8-15 may include but are not limited to the following, which shall be
8-16 considered core real estate courses for all purposes of this Act:
8-17 (1) Principles of Real Estate (or equivalent) shall
8-18 include but not be limited to an overview of licensing as a real
8-19 estate broker and salesperson <salesman>, ethics of practice,
8-20 titles to and conveyancing of real estate, legal descriptions, law
8-21 of agency, deeds, encumbrances and liens, distinctions between
8-22 personal and real property, contracts, appraisal, finance and
8-23 regulations, closing procedures, real estate mathematics, and at
8-24 least three classroom hours of instruction on federal, state, and
8-25 local laws relating to housing discrimination, housing credit
8-26 discrimination, and community reinvestment.
8-27 (2) Real Estate Appraisal (or equivalent) shall
9-1 include but not be limited to the central purposes and functions of
9-2 an appraisal, social and economic determinant of value, appraisal
9-3 case studies, cost, market data and income approaches to value
9-4 estimates, final correlations, and reporting.
9-5 (3) Real Estate Law (or equivalent) shall include but
9-6 not be limited to legal concepts of real estate, land description,
9-7 real property rights and estates in land, contracts, conveyances,
9-8 encumbrances, foreclosures, recording procedures, and evidence of
9-9 titles.
9-10 (4) Real Estate Finance (or equivalent) shall include
9-11 but not be limited to monetary systems, primary and secondary money
9-12 markets, sources of mortgage loans, federal government programs,
9-13 loan applications, processes and procedures, closing costs,
9-14 alternative financial instruments, equal credit opportunity acts,
9-15 community reinvestment act, and state housing agency.
9-16 (5) Real Estate Marketing (or equivalent) shall
9-17 include but not be limited to real estate professionalism and
9-18 ethics, characteristics of successful salespersons <salesmen>, time
9-19 management, psychology of marketing, listing procedures,
9-20 advertising, negotiating and closing, financing, and the Deceptive
9-21 Trade Practices-Consumer Protection Act, as amended, Section 17.01
9-22 et seq., Business & Commerce Code.
9-23 (6) Real Estate Mathematics (or equivalent) shall
9-24 include but not be limited to basic arithmetic skills and review of
9-25 mathematical logic, percentages, interest, time-valued money,
9-26 depreciation, amortization, proration, and estimation of closing
9-27 statements.
10-1 (7) Real Estate Brokerage (or equivalent) shall
10-2 include but not be limited to law of agency, planning and
10-3 organization, operational policies and procedures, recruiting,
10-4 selection and training of personnel, records and control, and real
10-5 estate firm analysis and expansion criteria.
10-6 (8) Property Management (or equivalent) shall include
10-7 but not be limited to role of property manager, landlord policies,
10-8 operational guidelines, leases, lease negotiations, tenant
10-9 relations, maintenance, reports, habitability laws, and the Fair
10-10 Housing Act.
10-11 (9) Real Estate Investments (or equivalent) shall
10-12 include but not be limited to real estate investment
10-13 characteristics, techniques of investment analysis, time-valued
10-14 money, discounted and nondiscounted investment criteria, leverage,
10-15 tax shelters depreciation, and applications to property tax.
10-16 (10) Law of Agency (or equivalent) shall include but
10-17 not be limited to the principal-agent and master-servant
10-18 relationships, the authority of an agent, the termination of an
10-19 agent's authority, the fiduciary and other duties of an agent,
10-20 employment law, deceptive trade practices, listing or buying
10-21 representation procedures, and the disclosure of agency.
10-22 (c) The commission shall waive the examination of an
10-23 applicant for a broker license who has, within one year previous to
10-24 the filing of the <his> application, been licensed in this state as
10-25 a broker, and shall waive the examination of an applicant for a
10-26 salesperson <salesman> license who has, within one year previous to
10-27 the filing of the <his> application, been licensed in this state as
11-1 either a broker or salesperson <salesman>.
11-2 (d) Each applicant for a broker license shall furnish the
11-3 commission satisfactory evidence that the applicant <he> has had
11-4 not less than two years active experience in this state as a
11-5 licensed real estate salesperson <salesman> or broker during the
11-6 36-month period immediately preceding the filing of the
11-7 application; and, in addition, shall furnish the commission
11-8 satisfactory evidence of having completed successfully 60 semester
11-9 hours, or equivalent classroom hours, of core real estate courses
11-10 or related postsecondary education courses accepted by the
11-11 commission. These qualifications for a broker license may not be
11-12 required of an applicant who, at the time of making the
11-13 application, is duly licensed as a real estate broker by any other
11-14 state in the United States if that state's requirements for
11-15 licensure are comparable to those of Texas. As a prerequisite for
11-16 applying for a broker license, those persons licensed as
11-17 salespersons <salesmen> subject to the annual education
11-18 requirements provided by Subsection (e) of this section shall, as
11-19 part of the hours required by this subsection, furnish the
11-20 commission satisfactory evidence of having completed all the
11-21 requirements of Subsection (e) of this section.
11-22 (e) Each applicant for a salesperson <salesman> license
11-23 shall furnish the commission satisfactory evidence of having
11-24 completed 12 semester hours, or equivalent classroom hours, of
11-25 postsecondary education, six hours of which must be completed in
11-26 core real estate courses, of which a minimum of two hours must be
11-27 completed in Principles of Real Estate as described in Subsection
12-1 (a)(1) of this section and a minimum of two hours must be completed
12-2 in Law of Agency as described in Subsection (a)(10) of this
12-3 section. The remaining six hours shall be completed in core real
12-4 estate courses or related courses. As a condition for the first
12-5 renewal of a salesperson <salesman> license, the applicant shall
12-6 furnish the commission satisfactory evidence of having completed a
12-7 minimum of 14 semester hours, or equivalent classroom hours, eight
12-8 hours of which must be completed in core real estate courses. As a
12-9 condition for the second renewal of a salesperson <salesman>
12-10 license, the applicant shall furnish the commission satisfactory
12-11 evidence of having completed a minimum of 16 semester hours, or
12-12 equivalent classroom hours, 10 hours of which must be completed in
12-13 core real estate courses. As a condition for the third renewal of
12-14 a salesperson <salesman> license, the applicant shall furnish the
12-15 commission satisfactory evidence of having completed a minimum of
12-16 18 semester hours, or equivalent classroom hours, 12 hours of which
12-17 must be completed in core real estate courses.
12-18 (g) Notwithstanding any other provision of this Act, each
12-19 applicant for a broker license shall furnish the commission with
12-20 satisfactory evidence:
12-21 (1) that the applicant <he> has satisfied the
12-22 requirements of Subsection (d) of this section;
12-23 (2) that the applicant <he> is a licensed real estate
12-24 broker in another state, <that he> has had not less than two years'
12-25 active experience in the other state as a licensed real estate
12-26 salesperson <salesman> or broker during the 36-month period
12-27 immediately preceding the filing of the application, and <that he>
13-1 has satisfied the educational requirements for a broker license as
13-2 provided by Subsection (d) of this section; or
13-3 (3) that the applicant <he> has, within one year
13-4 previous to the filing of the <his> application, been licensed in
13-5 this state as a broker.
13-6 (h) Notwithstanding any other provision of this Act, the
13-7 commission shall waive the requirements of Subsection (e) of this
13-8 section for an applicant for a salesperson <salesman> license who
13-9 has, within one year previous to the filing of the <his>
13-10 application, been licensed in this state as a broker or salesperson
13-11 <salesman>. However, with respect to an applicant for a
13-12 salesperson <salesman> license who was licensed as a salesperson
13-13 <salesman> within one year previous to the filing of the
13-14 application but whose original license was issued under the
13-15 provisions that the first, second, and third renewal of the license
13-16 would be conditioned upon furnishing satisfactory evidence of
13-17 successful completion of additional education, the commission shall
13-18 require the applicant to furnish satisfactory evidence of
13-19 successful completion of any additional education that would have
13-20 been required if the license had been maintained without
13-21 interruption during the previous year.
13-22 SECTION 9. Sections 7A(a)-(c), The Real Estate License Act
13-23 (Article 6573a, Vernon's Texas Civil Statutes), are amended to read
13-24 as follows:
13-25 (a) To renew an active real estate broker license or an
13-26 active real estate salesperson <salesman> license that is not
13-27 subject to the annual education requirements of this Act, the
14-1 licensee must provide the commission proof of attendance at at
14-2 least 15 classroom hours of continuing education courses approved
14-3 by the commission during the term of the current license. The
14-4 commission by rule may provide for the substitution of relevant
14-5 educational experience or correspondence courses approved by the
14-6 commission instead of classroom attendance. In addition,
14-7 supervised video instruction may be approved by the commission as a
14-8 course counting as classroom hours of mandatory continuing
14-9 education. At least six hours of instruction must be devoted to
14-10 the rules of the commission, fair housing laws, agency laws,
14-11 antitrust laws, the Deceptive Trade Practices-Consumer Protection
14-12 Act (Subchapter E, Chapter 17, Business & Commerce Code),
14-13 disclosures to buyers and sellers, current contract and addendum
14-14 forms, the unauthorized practice of law, case studies involving
14-15 violations of laws and regulations, current Federal Housing
14-16 Administration and Veterans Administration regulations, tax laws,
14-17 and other legal topics approved by the commission. The remaining
14-18 hours may be devoted to other real estate-related topics approved
14-19 by the commission. The commission may consider equivalent courses
14-20 for continuing education credit. The commission, on the request of
14-21 a provider of education, shall review a core real estate course
14-22 authorized under Section 7 of this Act and may approve it as a
14-23 mandatory continuing education course. Real estate related courses
14-24 approved by the State Bar of Texas for minimum continuing legal
14-25 education participatory credit shall automatically be approved as
14-26 mandatory continuing education courses under this Act. The
14-27 commission may not require examinations except for correspondence
15-1 courses. Daily course segments must be at least three hours long
15-2 but not more than 10 hours long. If the license being renewed
15-3 under this section was issued for less than two years, the licensee
15-4 must provide the commission proof of attendance at at least eight
15-5 classroom hours of continuing education within the term of the
15-6 current license, three classroom hours of which must have been
15-7 devoted to the legal topics specified in this section.
15-8 (b) An applicant for an active real estate broker license or
15-9 an active real estate salesperson <salesman> license who is not
15-10 subject to the education requirements of Section 7 of this Act must
15-11 provide the commission with proof of attendance of the number of
15-12 classroom hours of continuing education that would have been
15-13 required for a timely renewal as specified in Subsection (a) of
15-14 this section during the two-year period preceding the filing of the
15-15 application.
15-16 (c) As a condition of returning to active status, an
15-17 inactive salesperson <salesman> whose license is not subject to the
15-18 annual education requirements of this Act must provide the
15-19 commission with proof of attendance at at least 15 hours of
15-20 continuing education as specified in Subsection (a) of this section
15-21 during the two-year period preceding the filing of the application.
15-22 SECTION 10. Sections 8(a)-(f), (h), (i), (l), (n), and (q),
15-23 The Real Estate License Act (Article 6573a, Vernon's Texas Civil
15-24 Statutes), are amended to read as follows:
15-25 (a) The commission shall establish a real estate recovery
15-26 fund which shall be set apart and maintained by the commission as
15-27 provided in this section. The fund shall be used in the manner
16-1 provided in this section for reimbursing aggrieved persons who
16-2 suffer actual damages by reason of certain acts committed by a duly
16-3 licensed real estate broker or salesperson <salesman>, or by an
16-4 unlicensed employee or agent of a broker or salesperson <salesman>,
16-5 provided the broker or salesperson <salesman> was licensed by the
16-6 State of Texas at the time the act was committed and provided
16-7 recovery is ordered by a court of competent jurisdiction against
16-8 the broker or salesperson <salesman>. The use of the fund is
16-9 limited to an act that constitutes a violation of Section 15(a)(3)
16-10 or (6) of this Act.
16-11 (b) On application for an original license pursuant to this
16-12 Act, the applicant shall pay, in addition to the <his> original
16-13 license application fee, a fee of $10 which shall be deposited in
16-14 the real estate recovery fund.
16-15 (c) If on December 31 of any year the balance remaining in
16-16 the real estate recovery fund is less than $1 million, each real
16-17 estate broker and each real estate salesperson <salesman>, on the
16-18 next renewal of the <his> license, shall pay, in addition to the
16-19 <his> license renewal fee, a fee of $10, which shall be deposited
16-20 in the real estate recovery fund, or a pro rata share of the amount
16-21 necessary to bring the fund to $1.7 million, whichever is less. If
16-22 on December 31 of any year the balance remaining in the real estate
16-23 recovery fund is more than $3.5 million or more than the total
16-24 amount of claims paid from the fund during the previous four fiscal
16-25 years, whichever is greater, the amount of money in excess of the
16-26 greater amount shall be transferred to the general revenue fund.
16-27 (d) No action for a judgment which subsequently results in
17-1 an order for collection from the real estate recovery fund shall be
17-2 started later than two years from the accrual of the cause of
17-3 action. When an aggrieved person commences action for a judgment
17-4 which may result in collection from the real estate recovery fund,
17-5 the real estate broker or real estate salesperson <salesman> shall
17-6 notify the commission in writing to this effect at the time of the
17-7 commencement of the action.
17-8 (e) When an aggrieved person recovers a valid judgment in a
17-9 court of competent jurisdiction against a real estate broker or
17-10 real estate salesperson <salesman>, on the grounds described in
17-11 Subsection (a) of this section that occurred on or after May 19,
17-12 1975, the aggrieved person may, after final judgment has been
17-13 entered, execution returned nulla bona, and a judgment lien
17-14 perfected, file a verified claim in the court in which the judgment
17-15 was entered and, on 20 days' written notice to the commission, and
17-16 to the judgment debtor, may apply to the court for an order
17-17 directing payment out of the real estate recovery fund of the
17-18 amount unpaid on the judgment, subject to the limitations stated in
17-19 Subsection (n) of this section.
17-20 (f) The court shall proceed on the application forthwith.
17-21 On the hearing on the application, the aggrieved person is required
17-22 to show that:
17-23 (1) the judgment is based on facts allowing recovery
17-24 under Subsection (a) of this section;
17-25 (2) the person <he> is not a spouse of the debtor, or
17-26 the personal representative of the spouse; and the person <he> is
17-27 not a real estate broker or salesperson <salesman>, as defined by
18-1 this Act, who is seeking to recover a real estate commission in the
18-2 transaction or transactions for which the application for payment
18-3 is made;
18-4 (3) the person <he> has obtained a judgment under
18-5 Subsection (e) of this section that is not subject to a stay or
18-6 discharge in bankruptcy, stating the amount of the judgment and the
18-7 amount owing on the judgment at the date of the application;
18-8 (4) based on the best available information, the
18-9 judgment debtor lacks sufficient attachable assets in this state or
18-10 any other state to satisfy the judgment; and
18-11 (5) the amount that may be realized from the sale of
18-12 real or personal property or other assets liable to be sold or
18-13 applied in satisfaction of the judgment and the balance remaining
18-14 due on the judgment after application of the amount that may be
18-15 realized.
18-16 (h) The court shall make an order directed to the commission
18-17 requiring payment from the real estate recovery fund of whatever
18-18 sum it finds to be payable on the claim, pursuant to and in
18-19 accordance with the limitations contained in this section, if the
18-20 court is satisfied, on the hearing, of the truth of all matters
18-21 required to be shown by the aggrieved person by Subsection (f) of
18-22 this section and that the aggrieved person has satisfied all of the
18-23 requirements of Subsections (e) and (f) of this section. The
18-24 commission may relitigate any issue material and relevant in the
18-25 hearing on the application that was determined in the underlying
18-26 action on which the judgment in favor of the applicant was based.
18-27 If the court finds that the aggregate amount of claims against a
19-1 real estate broker or salesperson <salesman> exceeds the
19-2 limitations contained in this section, the court shall reduce
19-3 proportionately the amount it finds payable on the claim.
19-4 (i) A license granted under the provisions of this Act may
19-5 be revoked by the commission on proof that the commission has made
19-6 a payment from the real estate recovery fund of any amount toward
19-7 satisfaction of a judgment against a licensed real estate broker or
19-8 salesperson <salesman>. The commission may probate an order
19-9 revoking a license. No broker or salesperson <salesman> is
19-10 eligible to receive a new license until the broker or salesperson
19-11 <he> has repaid in full, plus interest at the current legal rate,
19-12 the amount paid from the real estate recovery fund on the broker's
19-13 or salesperson's <his> account.
19-14 (l) When, on the order of the court, the commission has paid
19-15 from the real estate recovery fund any sum to the judgment
19-16 creditor, the commission shall be subrogated to all of the rights
19-17 of the judgment creditor to the extent of the amount paid. The
19-18 judgment creditor shall assign all of the creditor's <his> right,
19-19 title, and interest in the judgment up to the amount paid by the
19-20 commission which amount shall have priority for repayment in the
19-21 event of any subsequent recovery on the judgment. Any amount and
19-22 interest recovered by the commission on the judgment shall be
19-23 deposited to the fund.
19-24 (n) Notwithstanding any other provision, payments from the
19-25 real estate recovery fund are subject to the following conditions
19-26 and limitations:
19-27 (1) payments may be made only pursuant to an order of
20-1 a court of competent jurisdiction, as provided in Subsection (e) of
20-2 this section, and in the manner prescribed by this section;
20-3 (2) payments for claims, including attorneys' fees,
20-4 interest, and court costs, arising out of the same transaction
20-5 shall be limited in the aggregate to $50,000 regardless of the
20-6 number of claimants; and
20-7 (3) payments for claims based on judgments against any
20-8 one licensed real estate broker or salesperson <salesman> may not
20-9 exceed in the aggregate $100,000 until the fund has been reimbursed
20-10 by the licensee for all amounts paid.
20-11 (q) A broker or salesperson <salesman> licensed under this
20-12 Act shall notify consumers and service recipients of the
20-13 availability of the real estate recovery fund established under
20-14 this section for reimbursing certain aggrieved persons. The notice
20-15 must include the name, mailing address, and telephone number of the
20-16 commission and any other information required by commission rule.
20-17 The notification may be provided with the notice required by
20-18 Section 5(q) of this Act or:
20-19 (1) on a written contract for the services of a broker
20-20 or salesperson <salesman>;
20-21 (2) on a brochure distributed by a broker or
20-22 salesperson <salesman>;
20-23 (3) on a sign prominently displayed in the place of
20-24 business of a salesperson <salesman> or broker; or
20-25 (4) in a bill or receipt for service provided by a
20-26 broker or salesperson <salesman>.
20-27 SECTION 11. Sections 9(a), (b), and (e), The Real Estate
21-1 License Act (Article 6573a, Vernon's Texas Civil Statutes), are
21-2 amended to read as follows:
21-3 (a) When an applicant has satisfactorily met all
21-4 requirements and conditions of this Act, a license shall be issued
21-5 which may remain in force and effect so long as the holder of the
21-6 license remains in compliance with the obligations of this Act,
21-7 which include payment of the renewal fee as provided in Section 11
21-8 of this Act. Each active salesperson <salesman> license issued
21-9 shall be delivered or mailed to the broker with whom the
21-10 salesperson <salesman> is associated and shall be kept under the
21-11 broker's <his> custody and control.
21-12 (b) An applicant is not permitted to engage in the real
21-13 estate business either as a broker or salesperson <salesman> until
21-14 a license evidencing the applicant's <his> authority to engage in
21-15 the real estate business has been received.
21-16 (e) The commission shall require in any application for a
21-17 broker or salesperson <salesman> license or a renewal of a broker
21-18 or salesperson <salesman> license the applicant to disclose whether
21-19 the applicant has entered a plea of guilty or nolo contendere to,
21-20 been found guilty of, or been convicted of a felony and the time
21-21 for appeal has elapsed or the judgment or conviction has been
21-22 affirmed on appeal, irrespective of an order granting probation
21-23 following the conviction or suspending the imposition of sentence.
21-24 SECTION 12. Section 10(a), The Real Estate License Act
21-25 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
21-26 as follows:
21-27 (a) If the commission declines or fails to license an
22-1 applicant, it shall immediately give written notice of the refusal
22-2 to the applicant. Before the applicant may appeal to a district
22-3 court as provided in Section 18 of this Act, the applicant <he>
22-4 must file within 10 days after the receipt of the notice an appeal
22-5 from the ruling, requesting a time and place for a hearing before
22-6 the commission. The commission shall set a time and place for the
22-7 hearing within 30 days from the receipt of the appeal, giving 10
22-8 days' notice of the hearing to the applicant. The time of the
22-9 hearing may be continued from time to time with the consent of the
22-10 applicant. Following the hearing, the commission shall enter an
22-11 order which is, in its opinion, appropriate in the matter
22-12 concerned.
22-13 SECTION 13. Section 11, The Real Estate License Act (Article
22-14 6573a, Vernon's Texas Civil Statutes), is amended to read as
22-15 follows:
22-16 Sec. 11. <(a)> The commission shall charge and collect the
22-17 following fees:
22-18 (1) a fee not to exceed $100 for the filing of an
22-19 original application for a real estate broker license;
22-20 (2) a fee not to exceed $100 for annual renewal of a
22-21 real estate broker license;
22-22 (3) a fee not to exceed $50 for the filing of an
22-23 original application for a real estate salesperson <salesman>
22-24 license;
22-25 (4) a fee not to exceed $50 for annual renewal of a
22-26 real estate salesperson <salesman> license;
22-27 (5) a fee not to exceed $25 for an application for a
23-1 license examination;
23-2 (6) a fee not to exceed $20 for filing a request for a
23-3 license for each additional office or place of business;
23-4 (7) a fee not to exceed $20 for filing a request for a
23-5 license for a change of place of business, change of name, return
23-6 to active status, or change of sponsoring broker;
23-7 (8) a fee not to exceed $20 for filing a request to
23-8 replace a license lost or destroyed;
23-9 (9) a fee not to exceed $400 for filing an application
23-10 for approval of an education program under Section 7(f) of this
23-11 Act;
23-12 (10) a fee not to exceed $200 a year for operation of
23-13 an education program under Section 7(f) of this Act;
23-14 (11) a fee of $15 for transcript evaluation;
23-15 (12) a fee not to exceed $10 for preparing a license
23-16 history; and
23-17 (13) a fee not to exceed $50 for the filing of an
23-18 application for a moral character determination.
23-19 SECTION 14. Sections 12(a), (b), and (d), The Real Estate
23-20 License Act (Article 6573a, Vernon's Texas Civil Statutes), are
23-21 amended to read as follows:
23-22 (a) Each resident broker shall maintain a fixed office
23-23 within this state. The address of the office shall be designated
23-24 on the broker's license. Within 10 days after a move from a
23-25 previously designated address, the broker shall submit an
23-26 application for a new license, designating the new location of the
23-27 broker's <his> office, together with the required fee, whereupon
24-1 the commission shall issue a license, reflecting the new location,
24-2 provided the new location complies with the terms of this section.
24-3 (b) If a broker maintains more than one place of business
24-4 within this state, the broker <he> shall apply for, pay the
24-5 required fee for, and obtain an additional license to be known as a
24-6 branch office license for each additional office the broker <he>
24-7 maintains.
24-8 (d) Each broker shall also prominently display in the
24-9 broker's <his> place or in one of the broker's <his> places of
24-10 business the license of each real estate salesperson <salesman>
24-11 associated with the broker <him>.
24-12 SECTION 15. Section 13, The Real Estate License Act (Article
24-13 6573a, Vernon's Texas Civil Statutes), is amended to read as
24-14 follows:
24-15 Sec. 13. (a) When the association of a salesperson
24-16 <salesman> with the salesperson's <his> sponsoring broker is
24-17 terminated, the broker shall immediately return the salesperson
24-18 <salesman> license to the commission. The salesperson <salesman>
24-19 license then becomes inactive.
24-20 (b) The salesperson <salesman> license may be activated if,
24-21 before the license expires, a request, accompanied by the required
24-22 fee, is filed with the commission by a licensed broker advising
24-23 that the broker <he> assumes sponsorship of the salesperson
24-24 <salesman>.
24-25 SECTION 16. Section 13A(a), The Real Estate License Act
24-26 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
24-27 as follows:
25-1 (a) A real estate broker who holds a license issued under
25-2 this Act and who is not acting as a broker or sponsoring a
25-3 salesperson <salesman> may apply to the commission in writing to be
25-4 placed on the inactive status list maintained by the commission.
25-5 The broker must apply for inactive status before the expiration of
25-6 the broker's license. The broker shall terminate the broker's
25-7 association with any salesperson <salesmen> sponsored by the broker
25-8 by giving written notice to the salesperson <salesmen> before the
25-9 30th day before the date the broker applies for inactive status. A
25-10 person on inactive status under this section is required to pay the
25-11 annual renewal fees.
25-12 SECTION 17. Section 14, The Real Estate License Act (Article
25-13 6573a, Vernon's Texas Civil Statutes), is amended to read as
25-14 follows:
25-15 Sec. 14. (a) It is unlawful for a licensed broker to employ
25-16 or compensate directly or indirectly a person for performing an act
25-17 enumerated in the definition of real estate broker in Section 2 of
25-18 this Act if the person is not a licensed broker or licensed
25-19 salesperson <salesman> in this state. However, a licensed broker
25-20 may pay a commission to a licensed broker of another state if the
25-21 foreign broker does not conduct in this state any of the
25-22 negotiations for which the fee, compensation, or commission is
25-23 paid.
25-24 (b) A resident broker of another state who furnishes the
25-25 evidence required under Section 7(g) of this Act may apply for a
25-26 license as a broker in this state. A resident of another state who
25-27 is not licensed as a broker but who was formerly licensed as a
26-1 salesperson <salesman> or broker in this state may apply for a
26-2 license in this state not later than the first anniversary of the
26-3 date of the expiration of the previous license. An application by
26-4 a nonresident is subject to the requirements under this Act for the
26-5 type of license applied for. A nonresident licensee need not
26-6 maintain a place of business in this state. The commission may in
26-7 its discretion refuse to issue a license to an applicant who is not
26-8 a resident of this state for the same reasons that it may refuse to
26-9 license a resident of this state. The commission shall judge the
26-10 competency of a nonresident applicant solely on the basis of the
26-11 examination conducted under Section 7 of this Act.
26-12 (c) Each nonresident applicant shall file an irrevocable
26-13 consent that legal actions may be commenced against the applicant
26-14 <him> in the proper court of any county of this state in which a
26-15 cause of action may arise, or in which the plaintiff may reside, by
26-16 service of process or pleading authorized by the laws of this
26-17 state, or by serving the administrator or assistant administrator
26-18 of the commission. The consent shall stipulate that the service of
26-19 process or pleading shall be valid and binding in all courts as if
26-20 personal service had been made on the nonresident in this state.
26-21 The consent shall be duly acknowledged, and if made by a
26-22 corporation, shall be authenticated by its seal. A service of
26-23 process or pleading served on the commission shall be by duplicate
26-24 copies, one of which shall be filed in the office of the commission
26-25 and the other forwarded by registered mail to the last known
26-26 principal address which the commission has for the nonresident
26-27 against whom the process or pleading is directed. No default in an
27-1 action may be taken except on certification by the commission that
27-2 a copy of the process or pleading was mailed to the defendant as
27-3 provided in this section, and no default judgment may be taken in
27-4 an action or proceeding until 20 days after the day of mailing of
27-5 the process or pleading to the defendant.
27-6 Notwithstanding any other provision of this subsection, a
27-7 nonresident of this state who resides in a city whose boundaries
27-8 are contiguous at any point to the boundaries of a city of this
27-9 state, and who has been an actual bona fide resident of that city
27-10 for at least 60 days immediately preceding the filing of his
27-11 application, is eligible to be licensed as a real estate broker or
27-12 salesperson <salesman> under this Act in the same manner as a
27-13 resident of this state. If a person <he> is licensed in this
27-14 manner, the person <he> shall at all times maintain a place of
27-15 business either in the city in which the person <he> resides or in
27-16 the city in this state which is contiguous to the city in which the
27-17 person <he> resides, and the person <he> may not maintain a place
27-18 of business at another location in this state unless the person
27-19 <he> also complies with the requirements of Section 14(b) of this
27-20 Act. The place of business must satisfy the requirements of
27-21 Subsection (a) of Section 12 of this Act, but the place of business
27-22 shall be deemed a definite place of business in this state within
27-23 the meaning of Subsection (a) of Section 12.
27-24 SECTION 18. Sections 15(a) and (d), The Real Estate License
27-25 Act (Article 6573a, Vernon's Texas Civil Statutes), are amended to
27-26 read as follows:
27-27 (a) The commission may, on its own motion, and shall, on the
28-1 signed complaint in writing of a consumer or service recipient,
28-2 provided the complaint, or the complaint together with evidence,
28-3 documentary or otherwise, presented in connection with the
28-4 complaint, provides reasonable cause, investigate the actions and
28-5 records of a real estate broker or real estate salesperson
28-6 <salesman>. The commission may suspend or revoke a license issued
28-7 under the provisions of this Act at any time when it has been
28-8 determined that:
28-9 (1) the licensee has entered a plea of guilty or nolo
28-10 contendere to, or been found guilty of, or been convicted of, a
28-11 felony, in which fraud is an essential element, and the time for
28-12 appeal has elapsed or the judgment or conviction has been affirmed
28-13 on appeal, irrespective of an order granting probation following
28-14 such conviction, suspending the imposition of sentence;
28-15 (2) the licensee has procured, or attempted to
28-16 procure, a real estate license, for the licensee <himself> or a
28-17 salesperson <salesman>, by fraud, misrepresentation or deceit, or
28-18 by making a material misstatement of fact in an application for a
28-19 real estate license;
28-20 (3) the licensee, when selling, buying, trading, or
28-21 renting real property in the licensee's <his> own name, engaged in
28-22 misrepresentation or dishonest or fraudulent action;
28-23 (4) the licensee has failed within a reasonable time
28-24 to make good a check issued to the commission after the commission
28-25 has mailed a request for payment by certified mail to the
28-26 licensee's last known business address as reflected by the
28-27 commission's records;
29-1 (5) the licensee has disregarded or violated a
29-2 provision of this Act;
29-3 (6) the licensee, while performing an act constituting
29-4 an act of a broker or salesperson <salesman>, as defined by this
29-5 Act, has been guilty of:
29-6 (A) making a material misrepresentation, or
29-7 failing to disclose to a potential purchaser any latent structural
29-8 defect or any other defect known to the broker or salesperson
29-9 <salesman>. Latent structural defects and other defects do not
29-10 refer to trivial or insignificant defects but refer to those
29-11 defects that would be a significant factor to a reasonable and
29-12 prudent purchaser in making a decision to purchase;
29-13 (B) making a false promise of a character likely
29-14 to influence, persuade, or induce any person to enter into a
29-15 contract or agreement when the licensee could not or did not intend
29-16 to keep such promise;
29-17 (C) pursuing a continued and flagrant course of
29-18 misrepresentation or making of false promises through agents,
29-19 salespersons <salesmen>, advertising, or otherwise;
29-20 (D) failing to make clear, to all parties to a
29-21 transaction, which party the licensee <he> is acting for, or
29-22 receiving compensation from more than one party except with the
29-23 full knowledge and consent of all parties;
29-24 (E) failing within a reasonable time properly to
29-25 account for or remit money coming into the licensee's <his>
29-26 possession which belongs to others, or commingling money belonging
29-27 to others with the licensee's <his> own funds;
30-1 (F) paying a commission or fees to or dividing a
30-2 commission or fees with anyone not licensed as a real estate broker
30-3 or salesperson <salesman> in this state or in any other state for
30-4 compensation for services as a real estate agent;
30-5 (G) failing to specify in a listing contract a
30-6 definite termination date which is not subject to prior notice;
30-7 (H) accepting, receiving, or charging an
30-8 undisclosed commission, rebate, or direct profit on expenditures
30-9 made for a principal;
30-10 (I) soliciting, selling, or offering for sale
30-11 real property under a scheme or program that constitutes a lottery
30-12 or deceptive practice;
30-13 (J) acting in the dual capacity of broker and
30-14 undisclosed principal in a transaction;
30-15 (K) guaranteeing, authorizing, or permitting a
30-16 person to guarantee that future profits will result from a resale
30-17 of real property;
30-18 (L) placing a sign on real property offering it
30-19 for sale, lease, or rent without the written consent of the owner
30-20 or the owner's <his> authorized agent;
30-21 (M) inducing or attempting to induce a party to
30-22 a contract of sale or lease to break the contract for the purpose
30-23 of substituting in lieu thereof a new contract;
30-24 (N) negotiating or attempting to negotiate the
30-25 sale, exchange, lease, or rental of real property with an owner or
30-26 lessor, knowing that the owner or lessor had a written outstanding
30-27 contract, granting exclusive agency in connection with the property
31-1 to another real estate broker;
31-2 (O) offering real property for sale or for lease
31-3 without the knowledge and consent of the owner or the owner's <his>
31-4 authorized agent, or on terms other than those authorized by the
31-5 owner or the owner's <his> authorized agent;
31-6 (P) publishing, or causing to be published, an
31-7 advertisement including, but not limited to, advertising by
31-8 newspaper, radio, television, or display which is misleading, or
31-9 which is likely to deceive the public, or which in any manner tends
31-10 to create a misleading impression, or which fails to identify the
31-11 person causing the advertisement to be published as a licensed real
31-12 estate broker or agent;
31-13 (Q) having knowingly withheld from or inserted
31-14 in a statement of account or invoice, a statement that made it
31-15 inaccurate in a material particular;
31-16 (R) publishing or circulating an unjustified or
31-17 unwarranted threat of legal proceedings, or other action;
31-18 (S) establishing an association, by employment
31-19 or otherwise, with an unlicensed person who is expected or required
31-20 to act as a real estate licensee, or aiding or abetting or
31-21 conspiring with a person to circumvent the requirements of this
31-22 Act;
31-23 (T) failing or refusing on demand to furnish
31-24 copies of a document pertaining to a transaction dealing with real
31-25 estate to a person whose signature is affixed to the document;
31-26 (U) failing to advise a purchaser in writing
31-27 before the closing of a transaction that the purchaser should
32-1 either have the abstract covering the real estate which is the
32-2 subject of the contract examined by an attorney of the purchaser's
32-3 own selection, or be furnished with or obtain a policy of title
32-4 insurance;
32-5 (V) conduct which constitutes dishonest
32-6 dealings, bad faith, or untrustworthiness;
32-7 (W) acting negligently or incompetently in
32-8 performing an act for which a person is required to hold a real
32-9 estate license;
32-10 (X) disregarding or violating a provision of
32-11 this Act;
32-12 (Y) failing within a reasonable time to deposit
32-13 money received as escrow agent in a real estate transaction, either
32-14 in trust with a title company authorized to do business in this
32-15 state, or in a custodial, trust, or escrow account maintained for
32-16 that purpose in a banking institution authorized to do business in
32-17 this state;
32-18 (Z) disbursing money deposited in a custodial,
32-19 trust, or escrow account, as provided in Subsection (Y) before the
32-20 transaction concerned has been consummated or finally otherwise
32-21 terminated; or
32-22 (AA) discriminating against an owner, potential
32-23 purchaser, lessor, or potential lessee on the basis of race, color,
32-24 religion, sex, national origin, or ancestry, including directing
32-25 prospective home buyers or lessees interested in equivalent
32-26 properties to different areas according to the race, color,
32-27 religion, sex, national origin, or ancestry of the potential owner
33-1 or lessee;
33-2 (7) the licensee has failed or refused on demand to
33-3 produce a document, book, or record in the licensee's <his>
33-4 possession concerning a real estate transaction conducted by the
33-5 licensee <him> for inspection by the commission or its authorized
33-6 personnel or representative;
33-7 (8) the licensee has failed within a reasonable time
33-8 to provide information requested by the commission as a result of a
33-9 formal or informal complaint to the commission which would indicate
33-10 a violation of this Act; or
33-11 (9) the licensee has failed without just cause to
33-12 surrender to the rightful owner, on demand, a document or
33-13 instrument coming into the licensee's <his> possession.
33-14 (d) The commission may not investigate under this section a
33-15 complaint submitted more than four years after the date of the
33-16 incident involving a real estate broker or salesperson <salesman>
33-17 that is the subject of the complaint.
33-18 SECTION 19. Section 15D, The Real Estate License Act
33-19 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
33-20 as follows:
33-21 Sec. 15D. No licensed real estate broker, licensed real
33-22 estate salesperson <salesman>, or not for profit real estate board
33-23 or association which provides information about real property sales
33-24 prices or terms of sale for the purpose of facilitating the
33-25 listing, selling, leasing, financing, or appraisal of real property
33-26 shall be liable to any other person as a result of so providing
33-27 such information unless the disclosure of same is otherwise
34-1 specifically prohibited by statute.
34-2 SECTION 20. Sections 16(a), (b), (d), and (e), The Real
34-3 Estate License Act (Article 6573a, Vernon's Texas Civil Statutes),
34-4 are amended to read as follows:
34-5 (a) A license granted under the provisions of this Act shall
34-6 be suspended or revoked by the commission on proof that the
34-7 licensee, not being licensed and authorized to practice law in this
34-8 state, for a consideration, reward, pecuniary benefit, present or
34-9 anticipated, direct or indirect, or in connection with or as a part
34-10 of the licensee's <his> employment, agency, or fiduciary
34-11 relationship as a licensee, drew a deed, note, deed of trust, will,
34-12 or other written instrument that may transfer or anywise affect the
34-13 title to or an interest in land, except as provided in the
34-14 subsections below, or advised or counseled a person as to the
34-15 validity or legal sufficiency of an instrument or as to the
34-16 validity of title to real estate.
34-17 (b) Notwithstanding the provisions of this Act or any other
34-18 law, the completion of contract forms which bind the sale,
34-19 exchange, option, lease, or rental of any interest in real property
34-20 by a real estate broker or salesperson <salesman> incident to the
34-21 performance of the acts of a broker as defined by this article does
34-22 not constitute the unauthorized or illegal practice of law in this
34-23 state, provided the forms have been promulgated for use by the
34-24 commission for the particular kind of transaction involved, or the
34-25 forms have been prepared by an attorney at law licensed by this
34-26 state and approved by said attorney for the particular kind of
34-27 transaction involved, or the forms have been prepared by the
35-1 property owner or prepared by an attorney and required by the
35-2 property owner.
35-3 (d) The Texas Real Estate Broker-Lawyer Committee shall have
35-4 12 members including six members appointed by the commission and
35-5 six members of the State Bar of Texas appointed by the President of
35-6 the State Bar of Texas. The members of the committee shall hold
35-7 office for staggered terms of six years with the terms of two
35-8 commission appointees and two State Bar appointees expiring every
35-9 two years. Each member shall hold office until the member's <his>
35-10 successor is appointed. A vacancy for any cause shall be filled
35-11 for the expired term by the agency making the original appointment.
35-12 Appointments to the committee shall be made without regard to race,
35-13 creed, sex, religion, or national origin.
35-14 (e) In the best interest of the public the commission may
35-15 adopt rules and regulations requiring real estate brokers and
35-16 salespersons <salesmen> to use contract forms which have been
35-17 prepared by the Texas Real Estate Broker-Lawyer Committee and
35-18 promulgated by the commission; provided, however, that the
35-19 commission shall not prohibit a real estate broker or salesperson
35-20 <salesman> from using a contract form or forms binding the sale,
35-21 exchange, option, lease, or rental of any interest in real property
35-22 which have been prepared by the property owner or prepared by an
35-23 attorney and required by the property owner. For the purpose of
35-24 this section, contract forms prepared by the Texas Real Estate
35-25 Broker-Lawyer Committee appointed by the commission and the State
35-26 Bar of Texas and promulgated by the commission prior to the
35-27 effective date of this Act shall be deemed to have been prepared by
36-1 the Texas Real Estate Broker-Lawyer Committee. The commission may
36-2 suspend or revoke a license issued under the provisions of this
36-3 article when it has determined that the licensee failed to use a
36-4 contract form as required by the commission pursuant to this
36-5 section.
36-6 SECTION 21. Section 17(a), The Real Estate License Act
36-7 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
36-8 as follows:
36-9 (a) If the commission proposes to suspend or revoke a
36-10 person's license or registration, the person is entitled to a
36-11 hearing before the commission or a hearings officer appointed by
36-12 the commission. The commission shall prescribe procedures by which
36-13 all decisions to suspend or revoke are made by or are appealable to
36-14 the commission. The commission shall prescribe the time and place
36-15 of the hearing. However, the hearing shall be held, if the
36-16 licensee so desires, within the county where the licensee has the
36-17 licensee's <his> principal place of business, or if the licensee is
36-18 a nonresident, the hearing may be called for and held in any county
36-19 within this state. The hearing is governed by the procedures for a
36-20 contested case under Chapter 2001, Government Code <the
36-21 Administrative Procedure and Texas Register Act (Article 6252-13a,
36-22 Vernon's Texas Civil Statutes)>.
36-23 SECTION 22. Section 18A(a), The Real Estate License Act
36-24 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
36-25 as follows:
36-26 (a) Any listing contract form adopted by the commission
36-27 relating to the contractual obligations between a seller of real
37-1 estate and a real estate broker or salesperson <salesman> acting as
37-2 an agent for the seller shall include a section that informs the
37-3 parties to the contract that real estate commissions are
37-4 negotiable.
37-5 SECTION 23. Section 18B(a), The Real Estate License Act
37-6 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
37-7 as follows:
37-8 (a) If a person files a complaint with the commission
37-9 relating to a real estate broker or salesperson <salesman>, the
37-10 commission shall furnish to the person an explanation of the
37-11 remedies that are available to the person under this Act and
37-12 information about appropriate state or local agencies or officials
37-13 with which the person may file a complaint. The commission shall
37-14 furnish the same explanation and information to the person against
37-15 whom the complaint is filed.
37-16 SECTION 24. Sections 19(a) and (b), The Real Estate License
37-17 Act (Article 6573a, Vernon's Texas Civil Statutes), are amended to
37-18 read as follows:
37-19 (a) A person acting as a real estate broker or real estate
37-20 salesperson <salesman> without first obtaining a license is guilty
37-21 of a misdemeanor and on conviction shall be punishable by a fine of
37-22 not less than $100 nor more than $500, or by imprisonment in the
37-23 county jail for a term not to exceed one year, or both; and if a
37-24 corporation or a limited liability company, shall be punishable by
37-25 a fine of not less than $1,000 nor more than $2,000. A person, on
37-26 conviction of a second or subsequent offense, shall be punishable
37-27 by a fine of not less than $500 nor more than $1,000, or by
38-1 imprisonment for a term not to exceed two years, or both; and if a
38-2 corporation or a limited liability company, shall be punishable by
38-3 a fine of not less than $2,000 nor more than $5,000.
38-4 (b) In case a person received money, or the equivalent
38-5 thereof, as a fee, commission, compensation, or profit by or in
38-6 consequence of a violation of Subsection (a) of this section, the
38-7 person <he> shall, in addition, be liable to a penalty of not less
38-8 than the amount of the sum of money so received and not more than
38-9 three times the sum so received, as may be determined by the court,
38-10 which penalty may be recovered in a court of competent jurisdiction
38-11 by an aggrieved person.
38-12 SECTION 25. Section 19A(o), The Real Estate License Act
38-13 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
38-14 as follows:
38-15 (o) A penalty collected under this section for a violation
38-16 by a person licensed as a real estate broker or salesperson
38-17 <salesman> shall be deposited in the real estate recovery fund. A
38-18 penalty collected under this section for a violation by a person
38-19 licensed or registered as a real estate inspector shall be
38-20 deposited in the real estate inspection recovery fund.
38-21 SECTION 26. Section 20, The Real Estate License Act (Article
38-22 6573a, Vernon's Texas Civil Statutes), is amended to read as
38-23 follows:
38-24 Sec. 20. (a) A person may not bring or maintain an action
38-25 for the collection of compensation for the performance in this
38-26 state of an act set forth in Section 2 of this Act without alleging
38-27 and proving that the person performing the brokerage services was a
39-1 duly licensed real estate broker or salesperson <salesman> at the
39-2 time the alleged services were commenced, or was a duly licensed
39-3 attorney at law in this state or in any other state.
39-4 (b) An action may not be brought in a court in this state
39-5 for the recovery of a commission for the sale or purchase of real
39-6 estate unless the promise or agreement on which the action is
39-7 brought, or some memorandum thereof, is in writing and signed by
39-8 the party to be charged or signed by a person lawfully authorized
39-9 by the party <him> to sign it.
39-10 (c) When an offer to purchase real estate in this state is
39-11 signed, the real estate broker or salesperson <salesman> shall
39-12 advise the purchaser or purchasers, in writing, that the purchaser
39-13 or purchasers should have the abstract covering the real estate
39-14 which is the subject of the contract examined by an attorney of the
39-15 purchaser's own selection, or that the purchaser or purchasers
39-16 should be furnished with or obtain a policy of title insurance.
39-17 Failure to advise the purchaser as provided in this subsection
39-18 precludes the payment of or recovery of any commission agreed to be
39-19 paid on the sale.
39-20 SECTION 27. Sections 23(b)(2), (5), and (9), The Real Estate
39-21 License Act (Article 6573a, Vernon's Texas Civil Statutes), are
39-22 amended to read as follows:
39-23 (2) The committee is composed of nine members
39-24 appointed by the commission. The members of the committee hold
39-25 office for staggered terms of six years, with the terms of three
39-26 members expiring February 1 of each odd-numbered year. Each member
39-27 holds office until the member's successor is appointed.
40-1 Appointments to the committee shall be made without regard to the
40-2 sex, race, color, age, handicap, religion, or national origin of
40-3 the appointees. In the event of a vacancy during a term, the
40-4 commission shall appoint a replacement who meets the qualifications
40-5 for appointment under this subdivision to fill the unexpired part
40-6 of the term. A member of the committee must be a professional
40-7 inspector actively engaged in the practice of real estate
40-8 inspecting at the time of appointment and must have been primarily
40-9 engaged in the practice of real estate inspecting for at least five
40-10 years before the member's appointment. A member of the committee
40-11 may not hold a real estate broker or salesperson <salesman>
40-12 license. Each member of the committee is entitled to a per diem
40-13 allowance and to reimbursement of travel expenses necessarily
40-14 incurred in performing functions as a member of the committee,
40-15 subject to any applicable limitation in the General Appropriations
40-16 Act. The committee shall annually elect from its members a
40-17 chairperson <chairman>, a vice-chairperson <vice-chairman>, and
40-18 secretary. A quorum of the committee consists of five members.
40-19 (5) If the administrator of the commission has
40-20 knowledge that a potential ground for removal exists, the
40-21 administrator shall notify the chairperson <chairman> of the
40-22 commission that a potential ground exists.
40-23 (9) The committee shall act in an advisory capacity to
40-24 develop and recommend to the commission rules under this section.
40-25 The committee shall review commission rules relating to this
40-26 section and recommend changes in the rules to the commission. The
40-27 commission shall submit all proposed rules, all proposed rule
41-1 changes and all requests for proposed rules or rule changes that
41-2 relate to the regulation and licensing of inspectors under this
41-3 section to the committee for development or recommendation. The
41-4 commission may modify the rules developed by the committee if the
41-5 commission finds such modifications are in the public interest.
41-6 This section does not prohibit the commission from developing and
41-7 adopting rules relating to the regulation and licensing of
41-8 inspectors under this section if the committee fails to develop or
41-9 recommend rules under this section within a reasonable period of
41-10 time after the commission submits the proposed rules, rule changes
41-11 or requests for proposed rules or rule changes to the committee.
41-12 If the committee determines that a rule requested by the commission
41-13 should not be developed or recommended for adoption by the
41-14 commission, the committee shall submit a report on the matter to
41-15 the commission. The chairperson <chairman> of the commission and
41-16 the chairperson <chairman> of the committee shall then appoint
41-17 three members each from their respective bodies to meet as an ad
41-18 hoc committee to consider the report and recommend possible action
41-19 by the commission. The chairperson <chairman> of the commission or
41-20 a member of the commission designated by the chairperson <chairman>
41-21 shall serve as the seventh member of the ad hoc committee. At
41-22 least one member of the ad hoc committee must be a public member of
41-23 the commission.
41-24 SECTION 28. Section 23(l), The Real Estate License Act
41-25 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
41-26 as follows:
41-27 (l) Prohibited acts. A professional inspector, real estate
42-1 inspector or an apprentice inspector licensed under this section
42-2 may not:
42-3 (1) accept an assignment for real estate inspection if
42-4 the employment or fee is contingent on the reporting of a specific,
42-5 predetermined condition of the improvements to real property or is
42-6 contingent on the reporting of specific findings other than those
42-7 known by the inspector to be facts at the time of accepting the
42-8 assignment;
42-9 (2) act in a manner or engage in a practice that is
42-10 dishonest or fraudulent or that involves deceit or
42-11 misrepresentation;
42-12 (3) perform a real estate inspection in a negligent or
42-13 incompetent manner;
42-14 (4) act in the dual capacity of inspector and
42-15 undisclosed principal in a transaction;
42-16 (5) act in the dual capacity of inspector and real
42-17 estate broker or salesperson <salesman> in a transaction;
42-18 (6) perform or agree to perform any repairs or
42-19 maintenance in connection with a real estate inspection pursuant to
42-20 the provisions of any earnest money contract, lease agreement, or
42-21 exchange of real estate; or
42-22 (7) violate the rules adopted by the commission or any
42-23 provisions of this section.
42-24 SECTION 29. (a) This Act takes effect September 1, 1995.
42-25 (b) The change made by this Act in the title of a person
42-26 licensed to sell real estate does not affect the validity of a
42-27 license issued or an act performed before the effective date of
43-1 this Act.
43-2 SECTION 30. The importance of this legislation and the
43-3 crowded condition of the calendars in both houses create an
43-4 emergency and an imperative public necessity that the
43-5 constitutional rule requiring bills to be read on three several
43-6 days in each house be suspended, and this rule is hereby suspended.