By Wentworth S.B. No. 1382
74R3111 CAG-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the creation of the Texas Real Estate Inspector Board
1-3 and the regulation of real estate inspectors; providing a criminal
1-4 penalty.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Title 113A, Revised Statutes, is amended by
1-7 adding Article 6573a.3 to read as follows:
1-8 Art. 6573a.3. TEXAS REAL ESTATE INSPECTOR BOARD
1-9 Sec. 1. DEFINITIONS. In this article:
1-10 (1) "Board" means the Texas Real Estate Inspector
1-11 Board.
1-12 (2) "Core real estate inspection course" means an
1-13 educational course approved by the board relating to the profession
1-14 of real estate inspection, including a course on structural
1-15 principles, electrical, mechanical, plumbing, or roofing systems,
1-16 appliances or other improvements, the standards of practice,
1-17 conduct, or ethics of inspectors, inspection report writing, and
1-18 legal or business principles.
1-19 (3) "Direct supervision" means the instruction and
1-20 control by a professional inspector or a real estate inspector
1-21 license holder who is:
1-22 (A) responsible for the actions of a person
1-23 performing a real estate inspection or preparing a report of a real
1-24 estate inspection;
2-1 (B) available to consult with or assist a person
2-2 performing a real estate inspection or preparing a report of a real
2-3 estate inspection; and
2-4 (C) physically present at the inspection.
2-5 (4) "Indirect supervision" means the instruction and
2-6 control by a professional inspector license holder who is:
2-7 (A) responsible for the actions of a person
2-8 performing or preparing a real estate inspection;
2-9 (B) available to consult with or assist a person
2-10 performing a real estate inspection or preparing a report of a real
2-11 estate inspection; and
2-12 (C) not required to be physically present at the
2-13 inspection.
2-14 (5) "Inspector" means a person licensed by the board.
2-15 (6) "Real estate inspection" means a written or oral
2-16 opinion concerning the condition of an improvement to real
2-17 property, including an opinion on the condition of a structure, the
2-18 structure's electrical, mechanical, plumbing, roofing, or other
2-19 system, or other equipment on the property.
2-20 Sec. 2. POWERS AND DUTIES OF BOARD. (a) The Texas Real
2-21 Estate Inspector Board is an independent subdivision of the Texas
2-22 Real Estate Commission.
2-23 (b) The board may adopt:
2-24 (1) general rules for the licensing of inspectors;
2-25 (2) rules relating to the education and experience
2-26 requirements for licensing as an inspector;
2-27 (3) rules relating to the qualifying examination
3-1 required for licensing as an inspector;
3-2 (4) rules establishing a code of professional conduct
3-3 and ethics for an inspector;
3-4 (5) reasonable fees in amounts necessary to implement
3-5 this article, including a license application fee, an examination
3-6 fee, a license renewal fee, or any other fee required by law;
3-7 (6) rules relating to the length and content of core
3-8 real estate courses and continuing education requirements for an
3-9 inspector;
3-10 (7) rules relating to the standards of practice for
3-11 conducting a real estate inspection;
3-12 (8) rules relating to grounds for granting or denying
3-13 an application for the license; and
3-14 (9) rules prescribing the form and content of an
3-15 application or form required under this article.
3-16 (c) The board may employ personnel necessary to carry out
3-17 this article. The board may contract with another agency or board
3-18 for the provision of goods or services necessary to carry out this
3-19 article.
3-20 Sec. 3. TEXAS REAL ESTATE INSPECTOR BOARD. (a) The Texas
3-21 Real Estate Inspector Board consists of nine members appointed by
3-22 the governor with the advice and consent of the senate.
3-23 (b) Six members of the board shall be inspectors. Three
3-24 members of the board must be public members.
3-25 (c) The members of the board hold office for staggered terms
3-26 of six years, with the terms of three members expiring February 1
3-27 of each odd-numbered year. Each member holds office until the
4-1 member's successor is appointed.
4-2 (d) An appointment to the board shall be made without regard
4-3 to the sex, race, color, age, disability, religion, or national
4-4 origin of the appointee.
4-5 (e) A member of the board may not hold a real estate broker
4-6 or salesman license.
4-7 (f) A member of the board is entitled to compensation and
4-8 reimbursement of the member's travel expenses as provided by the
4-9 General Appropriations Act.
4-10 (g) The board shall elect annually from its membership a
4-11 presiding officer, assistant presiding officer, and secretary.
4-12 (h) Five members of the committee are necessary for a
4-13 quorum.
4-14 (i) The board shall adopt procedural rules to be used by the
4-15 board in implementing its powers and duties.
4-16 (j) The board is subject to Chapters 551 and 2001,
4-17 Government Code.
4-18 (k) The board shall meet semiannually. The board may also
4-19 meet at the call of a majority of its members.
4-20 Sec. 4. REMOVAL OF MEMBER. (a) It is a ground for removal
4-21 from the board if the member:
4-22 (1) does not have at the time of appointment or does
4-23 not maintain during service on the board the qualifications
4-24 required by Section 3;
4-25 (2) cannot discharge the member's duties for a
4-26 substantial part of the term for which the member is appointed
4-27 because of illness or disability;
5-1 (3) violates a prohibition established by Section 5;
5-2 or
5-3 (4) is absent from more than half of the regularly
5-4 scheduled board meetings that the member is eligible to attend
5-5 during each year, unless the absence is excused by the board.
5-6 (b) The validity of an action of the board is not affected
5-7 by the fact that it was taken when a ground for removal of a board
5-8 member existed.
5-9 (c) If a board member has knowledge that a potential ground
5-10 for removal exists, the member shall notify the presiding officer
5-11 of the board of the potential ground. The presiding officer shall
5-12 then notify the governor and the attorney general that a potential
5-13 ground for removal exists. If the potential ground for removal
5-14 involves the presiding officer, the member shall notify the next
5-15 highest officer of the board, who shall notify the governor and the
5-16 attorney general that a potential ground for removal exists.
5-17 Sec. 5. CONFLICTS OF INTEREST. (a) An officer, employee,
5-18 or paid consultant of a Texas trade association in the field of
5-19 real estate may not be a member of the board or employee of the
5-20 board who is exempt from the state's position classification plan
5-21 or is compensated at or above the amount prescribed by the General
5-22 Appropriations Act for step 1, salary group 17, of the position
5-23 classification salary schedule.
5-24 (b) A person who is the spouse of an officer, manager, or
5-25 paid consultant of a Texas trade association in the field of real
5-26 estate may not be a member of the board and may not be an employee
5-27 of the board who is exempt from the state's position classification
6-1 plan or is compensated at or above the amount prescribed by the
6-2 General Appropriations Act for step 1, salary group 17, of the
6-3 position classification salary schedule.
6-4 (c) For the purposes of this section, a Texas trade
6-5 association is a nonprofit, cooperative, and voluntarily joined
6-6 association of business or professional competitors in this state
6-7 designed to assist its members and its industry or profession in
6-8 dealing with mutual business or professional problems and in
6-9 promoting their common interest.
6-10 Sec. 6. LOBBYIST RESTRICTION. A person may not serve as a
6-11 member of the board or act as the general counsel to the board if
6-12 the person is required to register as a lobbyist under Chapter 305,
6-13 Government Code, because of the person's activities for
6-14 compensation on behalf of a profession related to the operation of
6-15 the board.
6-16 Sec. 7. PUBLIC PARTICIPATION. The board shall develop and
6-17 implement policies that provide the public with a reasonable
6-18 opportunity to appear before the board and to speak on any issue
6-19 under the jurisdiction of the board.
6-20 Sec. 8. MEMBER TRAINING. (a) Before a member of the board
6-21 may assume the member's duties and before the member may be
6-22 confirmed by the senate, the member must complete at least one
6-23 course of the training program established under this section.
6-24 (b) A training program established under this section shall
6-25 provide information to the member regarding:
6-26 (1) the enabling legislation that created the board to
6-27 which the member is appointed to serve;
7-1 (2) the programs operated by the board;
7-2 (3) the role and functions of the board;
7-3 (4) the rules of the board, with an emphasis on the
7-4 rules that relate to disciplinary and investigatory authority;
7-5 (5) the current budget for the board;
7-6 (6) the results of the most recent formal audit of the
7-7 board;
7-8 (7) the requirements of the:
7-9 (A) open meetings law, Chapter 551, Government
7-10 Code;
7-11 (B) open records law, Chapter 552, Government
7-12 Code; and
7-13 (C) administrative procedure law, Chapter 2001,
7-14 Government Code;
7-15 (8) the requirements of the conflict of interest laws
7-16 and other laws relating to public officials; and
7-17 (9) any applicable ethics policies adopted by the
7-18 agency or the Texas Ethics Commission.
7-19 Sec. 9. RESPONSIBILITIES OF BOARD AND STAFF. The board
7-20 shall develop and implement policies that clearly separate the
7-21 policy-making responsibilities of the board and the management
7-22 responsibilities of the board and the staff of the board.
7-23 Sec. 10. CAREER LADDER. The board or the board's designee
7-24 shall develop an intra-agency career ladder program that addresses
7-25 opportunities for mobility and advancement for employees within the
7-26 board. The program shall require intra-agency posting of all
7-27 positions concurrently with any public posting.
8-1 Sec. 11. PERFORMANCE REVIEW. The board or the board's
8-2 designee shall develop a system of annual performance evaluations
8-3 that are based on documented employee performance. All merit pay
8-4 for board employees must be based on the system established under
8-5 this section.
8-6 Sec. 12. PUBLIC INFORMATION. The board or the board's
8-7 designee shall provide to members of the board and to agency
8-8 employees, as often as necessary, information regarding their
8-9 qualifications for office or employment under this article and
8-10 their responsibilities under applicable laws relating to standards
8-11 of conduct for state officers or employees.
8-12 Sec. 13. EQUAL EMPLOYMENT OPPORTUNITY. (a) The board or
8-13 the board's designee shall prepare and maintain a written policy
8-14 statement to assure implementation of a program of equal employment
8-15 opportunity under which all personnel transactions are made without
8-16 regard to race, color, disability, sex, religion, age, or national
8-17 origin. The policy statement must include:
8-18 (1) personnel policies, including policies relating to
8-19 recruitment, evaluation, selection, appointment, training, and
8-20 promotion of personnel that are in compliance with requirements of
8-21 Chapter 21, Labor Code, and its subsequent amendments;
8-22 (2) a comprehensive analysis of the board workforce
8-23 that meets federal and state guidelines;
8-24 (3) procedures by which a determination can be made
8-25 about the extent of underuse in the board workforce of all persons
8-26 for whom federal or state guidelines encourage a more equitable
8-27 balance; and
9-1 (4) reasonable methods to appropriately address those
9-2 areas of underuse.
9-3 (b) A policy statement prepared under Subsection (a) must
9-4 cover an annual period, be updated annually and reviewed by the
9-5 Texas Commission on Human Rights for compliance with Subsection
9-6 (a)(1), and be filed with the governor's office.
9-7 (c) The governor's office shall deliver a biennial report to
9-8 the legislature based on the information received under Subsection
9-9 (b). The report may be made separately or as a part of other
9-10 biennial reports made to the legislature.
9-11 Sec. 14. PUBLIC INTEREST INFORMATION. (a) The board shall
9-12 prepare information of public interest describing the functions of
9-13 the board and the procedures by which complaints are filed with and
9-14 resolved by the board. The board shall make the information
9-15 available to the public and appropriate state agencies.
9-16 (b) The board by rule shall establish methods by which
9-17 consumers and service recipients are notified of the name, mailing
9-18 address, and telephone number of the board for the purpose of
9-19 directing complaints to the board. The board may provide for that
9-20 notification:
9-21 (1) on each registration form, application, or written
9-22 contract for services of an individual licensed under this article;
9-23 (2) on a sign prominently displayed in the place of
9-24 business of each individual licensed under this article; or
9-25 (3) in a bill for service provided by an individual
9-26 licensed under this article.
9-27 Sec. 15. INFORMATION ON COMPLAINTS. The board shall keep
10-1 information about each complaint filed with the board. The
10-2 information shall include:
10-3 (1) the date the complaint is received;
10-4 (2) the name of the complainant;
10-5 (3) the subject matter of the complaint;
10-6 (4) a record of all persons contacted in relation to
10-7 the complaint;
10-8 (5) a summary of the results of the review or
10-9 investigation of the complaint; and
10-10 (6) for complaints for which the board took no action,
10-11 an explanation of the reason the complaint was closed without
10-12 action.
10-13 Sec. 16. NOTIFICATION OF COMPLAINTS. The board shall keep
10-14 a file about each written complaint filed with the board that the
10-15 board has authority to resolve. The board shall provide to the
10-16 person filing the complaint and the persons or entities complained
10-17 about the board's policies and procedures pertaining to complaint
10-18 investigation and resolution. The board, at least quarterly and
10-19 until final disposition of the complaint, shall notify the person
10-20 filing the complaint and the persons or entities complained about
10-21 of the status of the complaint unless the notice would jeopardize
10-22 an undercover investigation.
10-23 Sec. 17. ACCESSIBILITY. The board shall comply with federal
10-24 and state laws related to program and facility accessibility. The
10-25 board shall also prepare and maintain a written plan that describes
10-26 how a person who does not speak English can be provided reasonable
10-27 access to the board's programs and services.
11-1 Sec. 18. LICENSE REQUIRED. A person may not act as a
11-2 professional inspector, real estate inspector, or apprentice
11-3 inspector license holder for a buyer or seller of real property
11-4 unless the person possesses the appropriate license issued by the
11-5 board.
11-6 Sec. 19. POWER AND DUTIES OF LICENSE HOLDER. (a) A
11-7 professional inspector license holder may represent to the public
11-8 that the person is trained and qualified to perform a real estate
11-9 inspection and may accept employment to perform a real estate
11-10 inspection for a buyer or seller of real property.
11-11 (b) A real estate inspector license holder may represent to
11-12 the public that the person is trained and qualified to perform real
11-13 estate inspections under the indirect supervision of a professional
11-14 inspector and may accept employment to perform a real estate
11-15 inspection for a buyer or seller of real property.
11-16 (c) An apprentice inspector license holder may perform
11-17 activities under the direct supervision of a professional inspector
11-18 or a real estate inspector license holder that are necessary to
11-19 become qualified to perform a real estate inspection.
11-20 Sec. 20. ELIGIBILITY; APPLICATION. (a) To receive a
11-21 license as an apprentice inspector, an applicant must:
11-22 (1) be a citizen of the United States or a lawfully
11-23 admitted alien;
11-24 (2) be a resident of this state at the time of the
11-25 filing of the application;
11-26 (3) be sponsored by a professional inspector license
11-27 holder;
12-1 (4) be 18 years of age or older; and
12-2 (5) satisfy the board as to the applicant's honesty,
12-3 trustworthiness, and integrity.
12-4 (b) To receive a license as a real estate inspector, an
12-5 applicant must:
12-6 (1) have been licensed as an apprentice inspector for
12-7 three months or more;
12-8 (2) have performed 25 or more real estate inspections
12-9 under direct supervision before the date of the filing of an
12-10 application for the license;
12-11 (3) satisfy the board as to the applicant's honesty,
12-12 trustworthiness, integrity, and competency;
12-13 (4) present satisfactory evidence to the board of
12-14 completion by the applicant of 90 or more classroom hours in core
12-15 real estate inspection courses;
12-16 (5) satisfy the examination requirements under Section
12-17 21 of this article; and
12-18 (6) be sponsored by a professional inspector license
12-19 holder.
12-20 (c) To receive a license as a professional inspector, an
12-21 applicant must:
12-22 (1) have been licensed as a real estate inspector for
12-23 at least one year;
12-24 (2) have performed 175 or more real estate inspections
12-25 under indirect supervision before filing an application for the
12-26 license;
12-27 (3) submit satisfactory evidence to the board of the
13-1 completion by the applicant, since the issuance of a real estate
13-2 inspector license, of 30 or more classroom hours of core real
13-3 estate inspection courses and eight classroom hours related to the
13-4 study of standards of practice or ethics of real estate inspection
13-5 or legal issues related to the profession of real estate
13-6 inspections; and
13-7 (4) satisfy the examination requirements under Section
13-8 21 of this article.
13-9 (d) The board by rule may provide for the substitution of
13-10 relevant experience or education for the number of real estate
13-11 inspections required by this section.
13-12 (e) An applicant shall file an application for a license on
13-13 a form prescribed by the board.
13-14 Sec. 21. EXAMINATION. (a) The board shall prescribe and
13-15 prepare or contract for the preparation of a licensing examination.
13-16 (b) A licensing examination shall evaluate competency in the
13-17 subject matter of any core real estate inspection courses.
13-18 (c) The licensing examination shall be offered at least once
13-19 every two months in Austin.
13-20 (d) If an applicant fails the examination, the applicant may
13-21 apply for reexamination by filing a request with the board and
13-22 paying the examination fee.
13-23 (e) An applicant must satisfy the examination requirement
13-24 during the six-month period after the date the license application
13-25 is filed. A license applicant who fails to satisfy the examination
13-26 requirement within that time must submit a new license application
13-27 to the board and pay the examination fee to be eligible for
14-1 examination.
14-2 (f) If a license applicant fails the examination three
14-3 consecutive times in connection with an application for the same
14-4 license, the applicant may not apply for reexamination or submit a
14-5 new license application with the board until the expiration of six
14-6 months after the date the applicant failed the last examination.
14-7 (g) Not later than the 30th day after the date on which a
14-8 licensing examination is administered under this section, the board
14-9 shall notify each examinee of the results of the examination.
14-10 However, if an examination is graded or reviewed by a national
14-11 testing service, the board shall notify examinees of the results of
14-12 the examination not later than the 14th day after the date on which
14-13 the board receives the results from the testing service. If the
14-14 notice of examination results graded or reviewed by a national
14-15 testing service will be delayed for longer than 90 days after the
14-16 examination date, the board shall notify the examinee of the reason
14-17 for the delay before the 90th day after the examination date.
14-18 (h) If requested in writing by a person who fails a
14-19 licensing examination administered under this section, the board
14-20 shall furnish the person with an analysis of the person's
14-21 performance on the examination.
14-22 Sec. 22. ISSUANCE OF LICENSE. (a) The board shall issue an
14-23 apprentice license, a real estate inspector license, or a
14-24 professional inspector license to an applicant who possesses the
14-25 required qualifications, passes the appropriate examination, if
14-26 required, and pays the fee required by Section 28 of this article.
14-27 (b) The board may waive a license requirement for an
15-1 applicant with a valid license from another state having license
15-2 requirements substantially equivalent to those of this state.
15-3 (c) On receipt of notice that the person has successfully
15-4 completed the licensing examination under Section 21 of this
15-5 article, the person must pay, in addition to any other fees, a fee
15-6 not to exceed $200, to be deposited in the real estate inspection
15-7 recovery fund before the board issues the person a license.
15-8 Sec. 23. RECIPROCAL LICENSES. The board may waive any
15-9 prerequisite to obtaining a license for an applicant with a valid
15-10 license from another state with which the State of Texas has a
15-11 reciprocity agreement. The board may enter into reciprocal
15-12 agreements with other states to allow for licensing by reciprocity.
15-13 Sec. 24. EXPIRATION OF LICENSE; RENEWAL. (a) A license
15-14 issued under this article expires on the first anniversary of the
15-15 date on which it is issued.
15-16 (b) A person may renew an unexpired license by paying to the
15-17 board before the expiration date of the license the required
15-18 renewal fee.
15-19 (c) If a person's license has been expired for 90 days or
15-20 less, the person may renew the license by paying to the board the
15-21 required renewal fee and a fee that is one-half of the examination
15-22 fee for the license.
15-23 (d) If a person's license has been expired for longer than
15-24 90 days but for less than one year, the person may renew the
15-25 license by paying to the board the unpaid renewal fees and a fee
15-26 that is equal to the examination fee for the license.
15-27 (e) Except as provided by Section 25 of this article, if a
16-1 person's license has been expired for one year or longer, the
16-2 person may not renew the license and may only obtain a new license
16-3 by submitting to reexamination, if required, and complying with the
16-4 requirements and procedures for obtaining an original license.
16-5 Sec. 25. LAPSED LICENSE. (a) The board may renew without
16-6 reexamination an expired license of a person who was licensed in
16-7 this state, moved to another state, and is currently licensed and
16-8 has been in practice in the other state for at least one year
16-9 before the date of the application. The person shall pay to the
16-10 board a fee that is equal to the examination fee for the license.
16-11 (b) The board may issue a license to an applicant under this
16-12 section who has satisfied all requirements for a license as a
16-13 professional inspector or real estate inspector if:
16-14 (1) the applicant was previously licensed as a
16-15 professional inspector or real estate inspector during the 24
16-16 months before the date of filing the application;
16-17 (2) the applicant is sponsored by a professional
16-18 inspector if the applicant is applying for a real estate inspector
16-19 license; and
16-20 (3) the applicant satisfies the board as to the
16-21 applicant's honesty, trustworthiness, and integrity.
16-22 Sec. 26. NOTIFICATION; CHANGE OF ADDRESS. (a) Before the
16-23 30th day preceding the expiration date of a person's license, the
16-24 board shall send written notice of the impending license expiration
16-25 to the person at the person's last known address according to the
16-26 records of the board.
16-27 (b) An inspector shall notify the board and pay the required
17-1 fee, if any, not later than the 30th day after the date a change of
17-2 place of business occurs.
17-3 Sec. 27. INACTIVE LICENSE. The board by rule may adopt
17-4 terms and conditions by which an inspector may apply for, renew, or
17-5 place a license on inactive status and rules by which an inactive
17-6 inspector may return to active status.
17-7 Sec. 28. FEES. (a) The board shall charge and collect
17-8 reasonable and necessary fees to recover the cost of administering
17-9 this article.
17-10 (b) A fee may be paid by cash, check, cashier's check, or
17-11 money order.
17-12 (c) A fee set by the board shall be reviewed annually and
17-13 reduced to the extent that the costs of administering this article
17-14 are funded by the real estate inspector regulation account
17-15 established under Section 41 of this article.
17-16 Sec. 29. CONTINUING EDUCATION STANDARDS. (a) The board
17-17 shall recognize, prepare, or administer continuing education
17-18 programs for inspectors.
17-19 (b) Before a real estate inspector license holder may renew
17-20 a license, the holder must submit satisfactory evidence to the
17-21 board of successful completion of at least four classroom hours of
17-22 core real estate inspection courses in the year preceding the date
17-23 of renewal.
17-24 (c) Before a professional inspector license holder may renew
17-25 a license, the holder must submit satisfactory evidence to the
17-26 board of successful completion of at least eight classroom hours of
17-27 core related real estate inspection courses in the year preceding
18-1 the date of renewal.
18-2 Sec. 30. PROHIBITED ACTS. An inspector may not:
18-3 (1) accept an assignment for real estate inspection if
18-4 the employment or fee is contingent on the reporting of a specific,
18-5 predetermined condition of the improvements to real property or is
18-6 contingent on the reporting of specific findings other than those
18-7 known by the inspector to be facts at the time of accepting the
18-8 assignment;
18-9 (2) act in a manner or engage in a practice that is
18-10 dishonest or fraudulent or that involves deceit or
18-11 misrepresentation;
18-12 (3) perform a real estate inspection in a negligent or
18-13 incompetent manner;
18-14 (4) act in the dual capacity of inspector and
18-15 undisclosed principal in a transaction;
18-16 (5) act in the dual capacity of inspector and real
18-17 estate broker or salesman in a transaction;
18-18 (6) perform or agree to perform any repair or
18-19 maintenance in connection with a real estate inspection under the
18-20 terms of the provisions of an earnest money contract, lease
18-21 agreement, or exchange of real estate; or
18-22 (7) violate a rule adopted by the board or this
18-23 article.
18-24 Sec. 31. OFFENSE. (a) A person commits an offense if the
18-25 person knowingly engages in the business of real estate inspection
18-26 and does not hold a license issued under this article.
18-27 (b) An offense under this section is a Class B misdemeanor.
19-1 Sec. 32. DISCIPLINARY ACTIONS. (a) The board may conduct
19-2 an administrative hearing and may recommend disciplinary actions in
19-3 contested cases regarding an inspector.
19-4 (b) The board may authorize specific persons to conduct
19-5 hearings and render final decisions in contested cases regarding a
19-6 licensed inspector.
19-7 (c) The board may investigate the actions of a licensed
19-8 inspector and may, after notice and hearing, reprimand, place on
19-9 probation, or suspend or revoke the license of a person for a
19-10 violation of this article or a rule of the board.
19-11 (d) If the board revokes a person's license, the person may
19-12 not apply to the board before the first anniversary of the date of
19-13 revocation.
19-14 (e) A license granted under this article may be revoked by
19-15 the board on proof that the board has made a payment from the real
19-16 estate inspection recovery fund of any amount toward satisfaction
19-17 of a judgment against the inspector. The board may probate an
19-18 order revoking a license. An inspector is not eligible to receive
19-19 a new license until the person has repaid in full, including
19-20 interest at the current legal rate, the amount paid from the real
19-21 estate inspection recovery fund on the person's account.
19-22 (f) This section does not limit the authority of the board
19-23 to take disciplinary action against an inspector for a violation of
19-24 this article or a rule of the board. The repayment in full of an
19-25 obligation to the real estate inspection recovery fund by a person
19-26 does not nullify or modify the effect of any other disciplinary
19-27 proceeding of the board.
20-1 Sec. 33. PENALTIES. The board shall revoke, suspend, or
20-2 refuse to renew a license, place on probation a person whose
20-3 license has been suspended, or reprimand a license holder for a
20-4 violation of this article or a rule of the board. If a license
20-5 suspension is probated, the board may require the practitioner:
20-6 (1) to report regularly to the board on matters that
20-7 are the basis of the probation;
20-8 (2) to limit practice to the areas prescribed by the
20-9 board; or
20-10 (3) to continue or review professional education until
20-11 the practitioner attains a degree of skill satisfactory to the
20-12 board in those areas that are the basis of the probation.
20-13 Sec. 34. EXEMPTIONS. (a) This article does not apply to an
20-14 electrician, plumber, carpenter, any person engaged in the business
20-15 of structural pest control under the Texas Structural Pest Control
20-16 Act (Article 135b-6, Vernon's Texas Civil Statutes), or any other
20-17 person who repairs, maintains, or inspects improvements to real
20-18 property and who does not represent to the public through a
20-19 solicitation or public advertising that the person is in the
20-20 business of inspecting the improvements.
20-21 (b) This article does not prevent a person from performing
20-22 an act that the person is authorized to perform under a license,
20-23 permit, or registration issued by this state or a political
20-24 subdivision.
20-25 Sec. 35. REAL ESTATE INSPECTION RECOVERY FUND. (a) The
20-26 board shall establish a real estate inspection recovery fund.
20-27 (b) The fund shall be used to reimburse a person who suffers
21-1 actual damages by reason of an act committed by an inspector, if:
21-2 (1) the inspector was licensed at the time the act was
21-3 committed; and
21-4 (2) recovery of damages is ordered by a court of
21-5 competent jurisdiction against the inspector.
21-6 (c) The use of the fund is limited to an act that is a
21-7 violation of Section 30 of this article.
21-8 Sec. 36. FUND OPERATION. (a) The amounts received by the
21-9 board for deposit in the real estate inspection recovery fund shall
21-10 be held by the board in trust for carrying out the purpose of the
21-11 real estate inspection recovery fund.
21-12 (b) Sums received under Subsection (a) of this section may
21-13 be invested and reinvested in the same manner as the funds of the
21-14 Employees Retirement System of Texas and the interest from these
21-15 investments shall be deposited to the credit of the real estate
21-16 inspection recovery fund.
21-17 (c) An investment made under Subsection (b) of this section
21-18 may not impair the necessary liquidity required to satisfy a
21-19 judgment payment awarded under Section 35 of this article.
21-20 Sec. 37. LIMITATIONS ON CLAIMS AGAINST FUND. (a) An action
21-21 for a judgment that results in an order for collection from the
21-22 real estate inspection recovery fund must be commenced not later
21-23 than the second anniversary of the date of the accrual of the cause
21-24 of action.
21-25 (b) If an aggrieved person commences an action for a
21-26 judgment that may result in collection from the real estate
21-27 inspection recovery fund, the inspector who is the subject of the
22-1 lawsuit shall promptly notify the board in writing.
22-2 (c) The failure by an aggrieved person to comply with this
22-3 section constitutes a waiver of any right to recover from the real
22-4 estate inspection recovery fund.
22-5 Sec. 38. PREREQUISITES FOR CLAIMS AGAINST FUND. (a) If an
22-6 aggrieved person recovers a valid judgment in a court of competent
22-7 jurisdiction against an inspector on the grounds described in
22-8 Section 35 of this article, the aggrieved person may, after final
22-9 judgment has been entered, execution returned nulla bona, and a
22-10 judgment lien perfected, file a verified claim in the court in
22-11 which the judgment was entered. After the 20th day after the date
22-12 that written notice was given to the board and the judgment debtor,
22-13 the aggrieved person may apply to the court in which the judgment
22-14 was rendered for an order directing payment out of the real estate
22-15 inspection recovery fund in the amount unpaid on the judgment,
22-16 subject to the limitations stated in Section 39 of this article.
22-17 (b) The court shall promptly proceed on the aggrieved
22-18 person's application. On hearing the application, the aggrieved
22-19 person is required to show:
22-20 (1) that the judgment is based on facts allowing
22-21 recovery under Section 35 of this article;
22-22 (2) that the person is not a spouse of the debtor or
22-23 the personal representative of the spouse and the person is not an
22-24 inspector;
22-25 (3) that the person has obtained a judgment under
22-26 Section 35 of this article that is not subject to a stay or
22-27 discharge in bankruptcy, stating the amount of the judgment and the
23-1 amount owing on the judgment at the date of the application;
23-2 (4) that based on the best information available, the
23-3 judgment debtor lacks sufficient attachable assets in this state or
23-4 any other state to satisfy the judgment; and
23-5 (5) the amount that may be realized from the sale of
23-6 real or personal property or other assets liable to be sold or
23-7 applied in satisfaction of the judgment and the balance remaining
23-8 due on the judgment after application of the amount that may be
23-9 realized.
23-10 (c) The court shall order the board to pay from the real
23-11 estate inspection recovery fund the amount the court finds to be
23-12 payable on the claim, consistent with the limitations contained in
23-13 Section 39 of this article, if the court is satisfied after
23-14 hearing:
23-15 (1) of the truth of all matters required to be shown
23-16 by the aggrieved person under Subsection (b) of this section; and
23-17 (2) that the aggrieved person has satisfied all the
23-18 requirements of Subsections (b)(4) and (5) of this section.
23-19 (d) On receipt of notice of entry of a final judgment and
23-20 that a hearing is to be conducted under Subsection (b), the board
23-21 may notify the attorney general of the board's desire to enter an
23-22 appearance, file a response, appear at the court hearing, defend
23-23 the action, or take whatever other appropriate action. In taking
23-24 action, the board and the attorney general shall act only to
23-25 protect the fund from spurious or unjust claims or to ensure
23-26 compliance with the requirements for recovery under this
23-27 subsection.
24-1 (e) In hearing the application, the board may relitigate any
24-2 material and relevant issue that was determined in the underlying
24-3 action on which the judgment in favor of the applicant was based.
24-4 (f) A recovery on the judgment against a single defendant
24-5 made before payment from the real estate inspection recovery fund
24-6 must be applied by the creditor first to actual damages.
24-7 (g) If, on the order of the court, the board pays from the
24-8 real estate inspection recovery fund an amount to the judgment
24-9 creditor, the board is subrogated to all of the rights of the
24-10 judgment creditor to the extent of the amount paid. The judgment
24-11 creditor shall assign all the creditor's right, title, and interest
24-12 in the judgment up to the amount paid by the board. The amount
24-13 paid by the board has priority for repayment on a subsequent
24-14 recovery on the judgment. Any amount in interest recovered by the
24-15 board on the judgment shall be deposited to the credit of the fund.
24-16 Sec. 39. LIMITATIONS ON PAYMENT FROM FUND. (a)
24-17 Notwithstanding any other provision, payments from the real estate
24-18 inspection recovery fund are subject to the following conditions
24-19 and limitations:
24-20 (1) payments may be made only under an order by a
24-21 court of competent jurisdiction, as provided by Section 38 of this
24-22 article, and in the manner prescribed by this section;
24-23 (2) payments for claims, including attorney's fees,
24-24 interest, and court costs, arising out of the same transaction are
24-25 limited in the aggregate to $7,500 regardless of the number of
24-26 claimants; and
24-27 (3) payments for claims based on judgments against an
25-1 inspector may not exceed in the aggregate $15,000 until the fund
25-2 has been reimbursed by the inspector for all amounts paid.
25-3 (b) A person receiving payment from the real estate
25-4 inspection recovery fund under Subsection (a) of this section is
25-5 entitled to receive reasonable attorney's fees as determined by the
25-6 court, subject to the limitations stated in that subsection.
25-7 Sec. 40. CONSUMER NOTIFICATION. An inspector licensed under
25-8 this article shall notify consumers and service recipients of the
25-9 availability of the real estate inspection recovery fund for
25-10 reimbursing certain aggrieved persons. The notice must include the
25-11 name, mailing address, and telephone number of the board and any
25-12 other information required by board rule. The notification may be
25-13 provided:
25-14 (1) on a written contract for the services of an
25-15 inspector;
25-16 (2) on a brochure distributed by an inspector;
25-17 (3) on a sign prominently displayed in the place of
25-18 business of an inspector; or
25-19 (4) in a bill or receipt for service provided by an
25-20 inspector.
25-21 Sec. 41. OPERATION OF FUND; NECESSARY BALANCES. (a)
25-22 Sections 403.904 and 403.905, Government Code, do not apply to the
25-23 real estate inspection recovery fund or the real estate inspector
25-24 regulation account.
25-25 (b) If on December 31 of any year the balance remaining in
25-26 the real estate inspection recovery fund is less than $300,000,
25-27 each inspector, on the next renewal of the person's license, shall
26-1 pay, in addition to the license renewal fee, a fee of $75, or a pro
26-2 rata share of the amount necessary to bring the fund to $450,000,
26-3 whichever is less, to be deposited in the real estate inspection
26-4 recovery fund.
26-5 (c) If on December 31 of any year the balance remaining in
26-6 the real estate inspection recovery fund is greater than $600,000,
26-7 the amount of money in excess of $600,000 shall be transferred to a
26-8 separate account in the general revenue fund to be known as the
26-9 real estate inspector regulation account. The money in the real
26-10 estate inspector regulation account may be used only for the
26-11 payment of costs incurred by the board in the regulation of
26-12 inspectors.
26-13 Sec. 42. RECOMMENDATIONS BY REAL ESTATE COMMISSION. The
26-14 board shall consider the recommendations of the Texas Real Estate
26-15 Commission relating to the qualifications and licensure of
26-16 inspectors to assure the public of a quality professional
26-17 inspection system in real estate transactions in this state.
26-18 Sec. 43. ADVERTISING. (a) The board may not adopt rules
26-19 restricting competitive bidding or advertising by a license holder
26-20 except to prohibit false, misleading, or deceptive practices.
26-21 (b) In its rules to prohibit false, misleading, or deceptive
26-22 practices, the board may not include a rule that:
26-23 (1) restricts the use of any medium for advertising;
26-24 (2) restricts the use of a license holder's personal
26-25 appearance or voice in an advertisement;
26-26 (3) relates to the size or duration of an
26-27 advertisement by the license holder; or
27-1 (4) restricts the license holder's advertisement under
27-2 a trade name.
27-3 SECTION 2. Section 23, The Real Estate License Act (Article
27-4 6573a, Vernon's Texas Civil Statutes), is repealed.
27-5 SECTION 3. (a) The initial members appointed to the Texas
27-6 Real Estate Inspector Board under this Act shall be appointed as
27-7 follows:
27-8 (1) for public members:
27-9 (A) one member for a term expiring February 1,
27-10 1997;
27-11 (B) one member for a term expiring February 1,
27-12 1999; and
27-13 (C) one member for a term expiring February 1,
27-14 2001; and
27-15 (2) for inspector members:
27-16 (A) two members for terms expiring February 1,
27-17 1997;
27-18 (B) two members for terms expiring February 1,
27-19 1999; and
27-20 (C) two members for terms expiring February 1,
27-21 2001.
27-22 (b) The initial members of the Texas Real Estate Inspector
27-23 Board appointed under this section shall be required to have been
27-24 issued an inspectors license from the Texas Real Estate Commission.
27-25 SECTION 4. (a) The unobligated and unexpended balance of
27-26 the appropriation made to the Texas Real Estate Commission for the
27-27 regulation of real estate inspectors for the fiscal year ending
28-1 August 31, 1995, is transferred to the Texas Real Estate Inspector
28-2 Board, an independent subdivision of the Texas Real Estate
28-3 Commission, for the purposes of implementing this Act.
28-4 (b) The administrator of the Texas Real Estate Commission
28-5 shall identify the records and property in the custody of the
28-6 commission relating to the certification of real estate inspectors
28-7 under Section 23, The Real Estate License Act (Article 6573a,
28-8 Vernon's Texas Civil Statutes), as that section existed on the day
28-9 before the effective date of this Act, and those records and
28-10 property, including the real estate inspector regulation account
28-11 and the real estate inspection recovery fund, shall be transferred
28-12 to the Texas Real Estate Inspector Board.
28-13 (c) The Texas Real Estate Inspector Committee is abolished
28-14 on the effective date of this Act.
28-15 (d) A person licensed as a real estate inspector,
28-16 professional inspector, or apprentice inspector under Section 23,
28-17 The Real Estate License Act (Article 6573a, Vernon's Texas Civil
28-18 Statutes), on the day before the effective date of this Act shall
28-19 be issued an appropriate license under Article 6573a.3, Revised
28-20 Statutes, as added by this Act.
28-21 (e) The Texas Real Estate Inspector Board may adopt
28-22 emergency rules under Chapter 2001, Government Code, as necessary
28-23 to provide a smooth transition between the former law and this Act.
28-24 SECTION 5. (a) The change in law made by this Act applies
28-25 only to an offense committed on or after the effective date of this
28-26 Act. For purposes of this section, an offense is committed before
28-27 the effective date of this Act if any element of the offense occurs
29-1 before that date.
29-2 (b) An offense committed before the effective date of this
29-3 Act is covered by the law in effect when the offense was committed,
29-4 and the former law is continued in effect for that purpose.
29-5 SECTION 6. (a) An investigation or disciplinary action by
29-6 the Texas Real Estate Inspector Committee pending on the effective
29-7 date of this Act shall be continued under this Act by the Texas
29-8 Real Estate Inspector Board.
29-9 (b) A claim against the real estate inspection recovery fund
29-10 pending on the effective date of this Act is governed by the law in
29-11 effect on the date the claim arose, and the former law is continued
29-12 in effect for that purpose.
29-13 SECTION 7. This Act takes effect July 1, 1995.
29-14 SECTION 8. The importance of this legislation and the
29-15 crowded condition of the calendars in both houses create an
29-16 emergency and an imperative public necessity that the
29-17 constitutional rule requiring bills to be read on three several
29-18 days in each house be suspended, and this rule is hereby suspended,
29-19 and that this Act take effect and be in force according to its
29-20 terms, and it is so enacted.