By: Wentworth S.B. No. 1636
A BILL TO BE ENTITLED
AN ACT
1-1 relating to the regulation of the practice of selling real estate.
1-2 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-3 SECTION 1. Subsections (b), (c), (d), and (e), Section 1,
1-4 The Real Estate License Act (Article 6573a, Vernon's Texas Civil
1-5 Statutes), are amended to read as follows:
1-6 (b) It is unlawful for a person to act in the capacity of,
1-7 engage in the business of, or advertise or hold that person
1-8 <himself> out as engaging in or conducting the business of a real
1-9 estate broker or a real estate salesperson <salesman> within this
1-10 state without first obtaining a real estate license from the Texas
1-11 Real Estate Commission. It is unlawful for a person licensed as a
1-12 real estate salesperson <salesman> to act or attempt to act as a
1-13 real estate broker or salesperson <salesman> unless that person
1-14 <he> is, at such time, associated with a licensed Texas real estate
1-15 broker and acting for the licensed real estate broker.
1-16 (c) Each real estate broker licensed pursuant to this Act is
1-17 responsible to the commission, members of the public, and the
1-18 broker's <his> clients for all acts and conduct performed under
1-19 this Act by the broker <himself> or by a real estate salesperson
1-20 <salesman> associated with or acting for the broker.
1-21 (d) No real estate salesperson <salesman> shall accept
1-22 compensation for real estate sales and transactions from any person
1-23 other than the broker under whom the salesperson <he> is at the
1-24 time licensed or under whom the salesperson <he> was licensed when
2-1 the salesperson <he> earned the right to compensation.
2-2 (e) No real estate salesperson <salesman> shall pay a
2-3 commission to any person except through the broker under whom the
2-4 salesperson <he> is at the time licensed.
2-5 SECTION 2. Subdivision (4), Section 2, The Real Estate
2-6 License Act (Article 6573a, Vernon's Texas Civil Statutes), is
2-7 amended to read as follows:
2-8 (4) "Real estate salesperson <salesman>" means a
2-9 person associated with a Texas licensed real estate broker for the
2-10 purposes of performing acts or transactions comprehended by the
2-11 definition of "real estate broker" as defined in this Act.
2-12 SECTION 3. Section 3, The Real Estate License Act (Article
2-13 6573a, Vernon's Texas Civil Statutes), is amended to read as
2-14 follows:
2-15 Sec. 3. The provisions of this Act shall not apply to any of
2-16 the following persons and transactions, and each and all of the
2-17 following persons and transactions are hereby exempted from the
2-18 provisions of this Act:
2-19 (1) an attorney at law licensed in this state or in
2-20 any other state;
2-21 (2) an attorney in fact under a duly executed power of
2-22 attorney authorizing the consummation of a real estate transaction;
2-23 (3) a public official in the conduct of that person's
2-24 <his> official duties;
2-25 (4) a person calling the sale of real estate by
2-26 auction under the authority of a license issued by this state
2-27 provided the person does not perform any other act of a real estate
3-1 broker or salesperson <salesman> as defined by this Act;
3-2 (5) a person acting under a court order or under the
3-3 authority of a will or a written trust instrument;
3-4 (6) a salesperson employed by an owner in the sale of
3-5 structures and land on which said structures are situated, provided
3-6 such structures are erected by the owner in the due course of the
3-7 owner's <his> business;
3-8 (7) an on-site manager of an apartment complex;
3-9 (8) transactions involving the sale, lease, or
3-10 transfer of any mineral or mining interest in real property;
3-11 (9) an owner or the owner's <his> employees in renting
3-12 or leasing the owner's <his> own real estate whether improved or
3-13 unimproved;
3-14 (10) transactions involving the sale, lease, or
3-15 transfer of cemetery lots; <or>
3-16 (11) transactions involving the renting, leasing, or
3-17 management of hotels or motels; or
3-18 (12) a person performing an appraisal of real estate
3-19 or providing real estate services, regardless of whether in a
3-20 federally related transaction, who is registered, licensed, or
3-21 certified by the Texas Appraiser Licensing and Certification Board.
3-22 SECTION 4. Section 4, The Real Estate License Act (Article
3-23 6573a, Vernon's Texas Civil Statutes), is amended to read as
3-24 follows:
3-25 Sec. 4. A person who, directly or indirectly for another,
3-26 with the intention or on the promise of receiving any valuable
3-27 consideration, offers, attempts, or agrees to perform, or performs,
4-1 a single act defined in Subdivisions 2 and 3, Section 2 of this
4-2 Act, whether as a part of a transaction, or as an entire
4-3 transaction, is deemed to be acting as a real estate broker or
4-4 salesperson <salesman> within the meaning of this Act. The
4-5 commission of a single such act by a person required to be licensed
4-6 under this Act and not so licensed shall constitute a violation of
4-7 this Act.
4-8 SECTION 5. Subsections (a), (f), (g), (i), and (m), Section
4-9 5, The Real Estate License Act (Article 6573a, Vernon's Texas Civil
4-10 Statutes), are amended to read as follows:
4-11 (a) The administration of the provisions of this Act is
4-12 vested in a commission, to be known as the "Texas Real Estate
4-13 Commission," consisting of nine members to be appointed by the
4-14 governor with the advice and consent of two-thirds of the senate
4-15 present. The commissioners hold office for staggered terms of six
4-16 years with the terms of three members expiring January 31 of each
4-17 odd-numbered year. Each member holds office until the member's
4-18 <his> successor is appointed and has qualified. Within 15 days
4-19 after <his> appointment, each member shall qualify by taking the
4-20 constitutional oath of office and furnishing a bond payable to the
4-21 Governor of Texas in the penal sum of $10,000, conditional on the
4-22 faithful performance of the member's <his> duties as prescribed by
4-23 law. A vacancy for any cause shall be filled by the governor for
4-24 the unexpired term. The governor shall designate as chairperson
4-25 <chairman> of the commission one member of the commission who is a
4-26 licensed real estate broker. The chairperson <chairman> serves in
4-27 that capacity at the pleasure of the governor. At a regular
5-1 meeting in February of each year, the commission shall elect from
5-2 its own membership a vice chairperson <vice-chairman> and
5-3 secretary. A quorum of the commission consists of five members.
5-4 (f) If the administrator has knowledge that a potential
5-5 ground for removal exists, the administrator shall notify the
5-6 chairperson <chairman> of the commission of the ground. The
5-7 chairperson <chairman> shall then notify the governor that a
5-8 potential ground for removal exists.
5-9 (g) Each member of the commission shall receive as
5-10 compensation for each day actually spent on the member's <his>
5-11 official duties the sum of $75 and the <his> actual and necessary
5-12 expenses incurred in the performance of the member's <his> official
5-13 duties.
5-14 (i) The commission is empowered to select and name an
5-15 administrator and to select and employ such other subordinate
5-16 officers and employees as are necessary to administer this Act.
5-17 The salaries of the administrator and the officers and employees
5-18 shall be fixed by the commission not to exceed such amounts as are
5-19 fixed by the applicable general appropriations bill. The
5-20 commission may designate a subordinate officer as assistant
5-21 administrator who shall be authorized to act for the administrator
5-22 in the administrator's <his> absence. The administrator or the
5-23 administrator's designee shall develop a system of annual
5-24 performance evaluations. All merit pay for commission employees
5-25 must be based on the system established under this subsection. The
5-26 administrator or the administrator's designee shall develop an
5-27 intraagency career ladder program. The program shall require
6-1 intraagency postings of all nonentry level positions concurrently
6-2 with any public posting.
6-3 (m) Fifteen dollars received by the commission for a renewal
6-4 of a broker license before the expiration of the license or before
6-5 the first anniversary of the date the license expired and $7.50
6-6 received by the commission for a renewal of a salesperson
6-7 <salesman> license before the expiration of the license or before
6-8 the first anniversary of the date the license expired shall be
6-9 transmitted annually to Texas A&M University for deposit in a
6-10 separate banking account. The money in the separate account shall
6-11 be expended for the support and maintenance of the Texas Real
6-12 Estate Research Center and for carrying out the purposes,
6-13 objectives, and duties of the center. However, all money expended
6-14 from the separate account shall be as determined by legislative
6-15 appropriation.
6-16 SECTION 6. Subsections (a) and (b), Section 6, The Real
6-17 Estate License Act (Article 6573a, Vernon's Texas Civil Statutes),
6-18 are amended to read as follows:
6-19 (a) A person desiring to act as a real estate broker in this
6-20 state shall file an application for a license with the commission
6-21 on a form prescribed by the commission. A broker desiring to
6-22 engage a person to participate in real estate brokerage activity
6-23 shall join the person in filing an application for a salesperson
6-24 <salesman> license on a form prescribed by the commission. A
6-25 person previously licensed as a broker may apply for inactive
6-26 status. A person previously licensed as a salesperson <salesman>
6-27 may apply for inactive status without the participation of a
7-1 broker. The person must apply for inactive status on a form
7-2 prescribed by the commission not later than the fifth <first>
7-3 anniversary of the date of the expiration of the broker or
7-4 salesperson <salesman> license.
7-5 (b) To be eligible for a license, an individual must be a
7-6 citizen of the United States or a lawfully admitted alien, be at
7-7 least 18 years of age, and be a legal resident of Texas at the time
7-8 of the filing of an application, and must satisfy the commission as
7-9 to the individual's <his> honesty, trustworthiness, integrity, and
7-10 competency. However, the competency of the individual, for the
7-11 purpose of qualifying for the granting of a license, shall be
7-12 judged solely on the basis of the examination referred to in
7-13 Section 7 of this Act.
7-14 SECTION 7. Subsection (a), Section 6A, The Real Estate
7-15 License Act (Article 6573a, Vernon's Texas Civil Statutes), is
7-16 amended to read as follows:
7-17 (a) If, at any time before a person applies for a license
7-18 under this Act, the person requests the commission to determine
7-19 whether the person's <his> moral character complies with the
7-20 commission's moral character requirements for licensing under this
7-21 Act and the person pays a fee set by the commission for the moral
7-22 character determination, the commission shall make its
7-23 determination of the person's moral character.
7-24 SECTION 8. Subsections (a), (c), (d), (e), (f), (g), (h),
7-25 and (k), Section 7, The Real Estate License Act (Article 6573a,
7-26 Vernon's Texas Civil Statutes), are amended to read as follows:
7-27 (a) Competency as referred to in Section 6 of this Act shall
8-1 be established by an examination prepared by or contracted for by
8-2 the commission. The examination shall be given at such times and
8-3 at such places within the state as the commission shall prescribe.
8-4 The examination shall be of scope sufficient in the judgment of the
8-5 commission to determine that a person is competent to act as a real
8-6 estate broker or salesperson <salesman> in a manner to protect the
8-7 interest of the public. The examination for a salesperson
8-8 <salesman> license shall be less exacting and less stringent than
8-9 the examination for a broker license. The commission shall furnish
8-10 each applicant with study material and references on which the
8-11 <his> examination shall be based. When an applicant for a real
8-12 estate license fails a qualifying examination, the applicant <he>
8-13 may apply for reexamination by filing a request therefor together
8-14 with the proper fee. The examination requirement must be satisfied
8-15 not later than six months after the date on which the application
8-16 for a license is filed. Courses of study required for a license
8-17 may include but are not limited to the following, which shall be
8-18 considered core real estate courses for all purposes of this Act:
8-19 (1) Principles of Real Estate (or equivalent) shall
8-20 include but not be limited to an overview of licensing as a real
8-21 estate broker and salesperson <salesman>, ethics of practice,
8-22 titles to and conveyancing of real estate, legal descriptions, law
8-23 of agency, deeds, encumbrances and liens, distinctions between
8-24 personal and real property, contracts, appraisal, finance and
8-25 regulations, closing procedures, real estate mathematics, and at
8-26 least three classroom hours of instruction on federal, state, and
8-27 local laws relating to housing discrimination, housing credit
9-1 discrimination, and community reinvestment.
9-2 (2) Real Estate Appraisal (or equivalent) shall
9-3 include but not be limited to the central purposes and functions of
9-4 an appraisal, social and economic determinant of value, appraisal
9-5 case studies, cost, market data and income approaches to value
9-6 estimates, final correlations, and reporting.
9-7 (3) Real Estate Law (or equivalent) shall include but
9-8 not be limited to legal concepts of real estate, land description,
9-9 real property rights and estates in land, contracts, conveyances,
9-10 encumbrances, foreclosures, recording procedures, and evidence of
9-11 titles.
9-12 (4) Real Estate Finance (or equivalent) shall include
9-13 but not be limited to monetary systems, primary and secondary money
9-14 markets, sources of mortgage loans, federal government programs,
9-15 loan applications, processes and procedures, closing costs,
9-16 alternative financial instruments, equal credit opportunity acts,
9-17 community reinvestment act, and state housing agency.
9-18 (5) Real Estate Marketing (or equivalent) shall
9-19 include but not be limited to real estate professionalism and
9-20 ethics, characteristics of successful salespersons <salesmen>, time
9-21 management, psychology of marketing, listing procedures,
9-22 advertising, negotiating and closing, financing, and the Deceptive
9-23 Trade Practices-Consumer Protection Act, as amended, Section 17.01
9-24 et seq., Business & Commerce Code.
9-25 (6) Real Estate Mathematics (or equivalent) shall
9-26 include but not be limited to basic arithmetic skills and review of
9-27 mathematical logic, percentages, interest, time-valued money,
10-1 depreciation, amortization, proration, and estimation of closing
10-2 statements.
10-3 (7) Real Estate Brokerage (or equivalent) shall
10-4 include but not be limited to law of agency, planning and
10-5 organization, operational policies and procedures, recruiting,
10-6 selection and training of personnel, records and control, and real
10-7 estate firm analysis and expansion criteria.
10-8 (8) Property Management (or equivalent) shall include
10-9 but not be limited to role of property manager, landlord policies,
10-10 operational guidelines, leases, lease negotiations, tenant
10-11 relations, maintenance, reports, habitability laws, and the Fair
10-12 Housing Act.
10-13 (9) Real Estate Investments (or equivalent) shall
10-14 include but not be limited to real estate investment
10-15 characteristics, techniques of investment analysis, time-valued
10-16 money, discounted and nondiscounted investment criteria, leverage,
10-17 tax shelters depreciation, and applications to property tax.
10-18 (10) Law of Agency (or equivalent) shall include but
10-19 not be limited to the principal-agent and master-servant
10-20 relationships, the authority of an agent, the termination of an
10-21 agent's authority, the fiduciary and other duties of an agent,
10-22 employment law, deceptive trade practices, listing or buying
10-23 representation procedures, and the disclosure of agency.
10-24 (c) The commission shall waive the examination of an
10-25 applicant for a broker license who has, within two years <one year>
10-26 previous to the filing of the <his> application, been licensed in
10-27 this state as a broker, and shall waive the examination of an
11-1 applicant for a salesperson <salesman> license who has, within two
11-2 years <one year> previous to the filing of the <his> application,
11-3 been licensed in this state as either a broker or salesperson
11-4 <salesman>. If an application is filed after the second
11-5 anniversary of the expiration date of the applicant's previous
11-6 license, the applicant must satisfy the examination requirement and
11-7 any continuing education required under Section 7A(b) of this Act.
11-8 If an application is filed after the fifth anniversary of the
11-9 expiration date of the applicant's previous license, the applicant
11-10 must satisfy the experience, examination, and education
11-11 requirements for an original license under this Act.
11-12 (d) Each applicant for a broker license shall furnish the
11-13 commission satisfactory evidence that the applicant <he> has had
11-14 not less than two years active experience in this state as a
11-15 licensed real estate salesperson <salesman> or broker during the
11-16 seven-year <36-month> period immediately preceding the filing of
11-17 the application; and, in addition, shall furnish the commission
11-18 satisfactory evidence of having completed successfully 60 semester
11-19 hours, or equivalent classroom hours, of core real estate courses
11-20 or related postsecondary education courses accepted by the
11-21 commission. These qualifications for a broker license may not be
11-22 required of an applicant who, at the time of making the
11-23 application, is duly licensed as a real estate broker by any other
11-24 state in the United States if that state's requirements for
11-25 licensure are comparable to those of Texas. As a prerequisite for
11-26 applying for a broker license, those persons licensed as
11-27 salespersons <salesmen> subject to the annual education
12-1 requirements provided by Subsection (e) of this section shall, as
12-2 part of the hours required by this subsection, furnish the
12-3 commission satisfactory evidence of having completed all the
12-4 requirements of Subsection (e) of this section.
12-5 (e) Each applicant for a salesperson <salesman> license
12-6 shall furnish the commission satisfactory evidence of having
12-7 completed 12 semester hours, or equivalent classroom hours, of
12-8 postsecondary education, six hours of which must be completed in
12-9 core real estate courses, of which a minimum of two hours must be
12-10 completed in Principles of Real Estate as described in Subsection
12-11 (a)(1) of this section and a minimum of two hours must be completed
12-12 in Law of Agency as described in Subsection (a)(10) of this
12-13 section. The remaining six hours shall be completed in core real
12-14 estate courses or related courses. As a condition for the first
12-15 renewal of a salesperson <salesman> license, the applicant shall
12-16 furnish the commission satisfactory evidence of having completed a
12-17 minimum of 14 semester hours, or equivalent classroom hours, eight
12-18 hours of which must be completed in core real estate courses. As a
12-19 condition for the second renewal of a salesperson <salesman>
12-20 license, the applicant shall furnish the commission satisfactory
12-21 evidence of having completed a minimum of 16 semester hours, or
12-22 equivalent classroom hours, 10 hours of which must be completed in
12-23 core real estate courses. As a condition for the third renewal of
12-24 a salesperson <salesman> license, the applicant shall furnish the
12-25 commission satisfactory evidence of having completed a minimum of
12-26 18 semester hours, or equivalent classroom hours, 12 hours of which
12-27 must be completed in core real estate courses.
13-1 (f) Insofar as is necessary for the administration of this
13-2 Act, the commission is authorized to inspect and accredit
13-3 educational programs or courses of study in real estate and real
13-4 estate inspection and to establish standards of accreditation for
13-5 such programs conducted in the State of Texas, other than
13-6 accredited colleges and universities. The commission shall
13-7 determine the acceptability of real estate courses and real estate
13-8 inspection courses offered to satisfy the requirements of this Act,
13-9 and by rule may provide reasonable criteria for the approval of
13-10 those courses. Schools, other than accredited colleges and
13-11 universities, which are authorized to offer real estate educational
13-12 courses pursuant to provisions of this section, shall be required
13-13 to maintain a corporate surety bond, or other security acceptable
13-14 to the commission, in the sum of $10,000, payable to the
13-15 commission, for the benefit of a party who may suffer damages
13-16 resulting from failure of a commission approved school or course to
13-17 fulfill obligations attendant to the approval. The commission by
13-18 rule may provide for the reapplication by and reaccreditation of a
13-19 school accredited by the commission before September 1, 1995, and
13-20 may collect a reasonable filing fee to implement this section. A
13-21 fee collected under this subsection may not exceed $400 for an
13-22 application for the reaccreditation of a school and $100 for an
13-23 application for the approval of a course of study.
13-24 (g) Notwithstanding any other provision of this Act, each
13-25 applicant for a broker license shall furnish the commission with
13-26 satisfactory evidence:
13-27 (1) that the applicant <he> has satisfied the
14-1 requirements of Subsection (d) of this section;
14-2 (2) that the applicant <he> is a licensed real estate
14-3 broker in another state, <that he> has had not less than two years'
14-4 active experience in the other state as a licensed real estate
14-5 salesperson <salesman> or broker during the seven-year <36-month>
14-6 period immediately preceding the filing of the application, and
14-7 <that he> has satisfied the educational requirements for a broker
14-8 license as provided by Subsection (d) of this section; or
14-9 (3) that the applicant <he> has, within five years
14-10 <one year> previous to the filing of the <his> application, been
14-11 licensed in this state as a broker.
14-12 (h) Notwithstanding any other provision of this Act, the
14-13 commission shall waive the requirements of Subsection (e) of this
14-14 section for an applicant for a salesperson <salesman> license who
14-15 has, within five years <one year> previous to the filing of the
14-16 <his> application, been licensed in this state as a broker or
14-17 salesperson <salesman>. However, with respect to an applicant for
14-18 a salesperson <salesman> license who was licensed as a salesperson
14-19 <salesman> within five years <one year> previous to the filing of
14-20 the application but whose original license was issued under the
14-21 provisions that the first, second, and third renewal of the license
14-22 would be conditioned upon furnishing satisfactory evidence of
14-23 successful completion of additional education, the commission shall
14-24 require the applicant to furnish satisfactory evidence of
14-25 successful completion of any additional education that would have
14-26 been required if the license had been maintained without
14-27 interruption <during the previous year>.
15-1 (k) The commission may accept examinations administered by a
15-2 testing service as satisfying the examination requirements imposed
15-3 under this Act. The commission may negotiate agreements with those
15-4 testing services relating to examination development, preparation
15-5 of study materials, collection of filing fees, acceptance and
15-6 processing of license applications, test scheduling, examination
15-7 site arrangements, and test administration, grading, reporting, and
15-8 analysis. The commission may require a testing service to
15-9 correspond directly with the license applicants regarding the
15-10 administration of the examinations and may require that a testing
15-11 service collect fees for providing an applicant with study
15-12 materials, filing an application for a license, processing license
15-13 applications, or administering the examinations directly from the
15-14 applicants. The commission also may require a testing service to
15-15 administer examinations at specific locations and specified
15-16 frequencies. The commission shall retain the authority to
15-17 establish the scope and type of all examinations. The commission
15-18 shall adopt rules and standards as necessary to implement this
15-19 section. In the absence of an agreement with a testing service,
15-20 the commission shall administer any required qualifying examination
15-21 in accordance with this Act.
15-22 SECTION 9. Subsections (a), (b), (c), and (d), Section 7A,
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) To renew an active real estate broker license or an
15-26 active real estate salesperson <salesman> license that is not
15-27 subject to the annual education requirements of this Act, the
16-1 licensee must provide the commission proof of attendance at at
16-2 least 15 classroom hours of continuing education courses approved
16-3 by the commission during the term of the current license. The
16-4 commission by rule may provide for the substitution of relevant
16-5 educational experience or correspondence courses approved by the
16-6 commission instead of classroom attendance. In addition,
16-7 supervised video instruction may be approved by the commission as a
16-8 course counting as classroom hours of mandatory continuing
16-9 education. At least six hours of instruction must be devoted to
16-10 the rules of the commission, fair housing laws, agency laws,
16-11 antitrust laws, the Deceptive Trade Practices-Consumer Protection
16-12 Act (Subchapter E, Chapter 17, Business & Commerce Code),
16-13 disclosures to buyers and sellers, current contract and addendum
16-14 forms, the unauthorized practice of law, case studies involving
16-15 violations of laws and regulations, current Federal Housing
16-16 Administration and Veterans Administration regulations, tax laws,
16-17 and other legal topics approved by the commission. The remaining
16-18 hours may be devoted to other real estate-related topics approved
16-19 by the commission. The commission may consider equivalent courses
16-20 for continuing education credit. The commission, on the request of
16-21 a provider of education, shall review a core real estate course
16-22 authorized under Section 7 of this Act and may approve it as a
16-23 mandatory continuing education course. Real estate related courses
16-24 approved by the State Bar of Texas for minimum continuing legal
16-25 education participatory credit and core real estate courses under
16-26 Section 7(a) of this Act shall automatically be approved as
16-27 mandatory continuing education courses under this Act. The
17-1 commission may not require examinations except for correspondence
17-2 courses. Daily course segments must be at least three hours long
17-3 but not more than 10 hours long. <If the license being renewed
17-4 under this section was issued for less than two years, the licensee
17-5 must provide the commission proof of attendance at at least eight
17-6 classroom hours of continuing education within the term of the
17-7 current license, three classroom hours of which must have been
17-8 devoted to the legal topics specified in this section.>
17-9 (b) An applicant for an active real estate broker license or
17-10 an active real estate salesperson <salesman> license who is not
17-11 subject to the education requirements of Section 7 of this Act must
17-12 provide the commission with proof of attendance of the number of
17-13 classroom hours of continuing education that would have been
17-14 required for a timely renewal as specified in Subsection (a) of
17-15 this section during the two-year period preceding the filing of the
17-16 application.
17-17 (c) As a condition of returning to active status, an
17-18 inactive salesperson <salesman> whose license is not subject to the
17-19 annual education requirements of this Act must provide the
17-20 commission with proof of attendance at at least 15 hours of
17-21 continuing education as specified in Subsection (a) of this section
17-22 during the two-year period preceding the filing of the application.
17-23 (d) The commission may adopt rules and set and collect
17-24 reasonable fees to implement this section, including a fee not to
17-25 exceed $400 for an application for approval of a provider of
17-26 continuing education and a fee not to exceed $100 for an
17-27 application for a course of study to be offered for continuing
18-1 education. If the commission determines that an applicant
18-2 satisfies the requirements of this section and any rules adopted by
18-3 the commission under this section, the commission may authorize a
18-4 provider to offer continuing education for a period of four <two>
18-5 years or authorize the offering of a course of study for a period
18-6 of two years.
18-7 SECTION 10. Section 8, The Real Estate License Act (Article
18-8 6573a, Vernon's Texas Civil Statutes), is amended by amending
18-9 Subsections (a), (b), (c), (d), (e), (f), (h), (i), (j), (l), (n),
18-10 and (q) to read as follows:
18-11 (a) The commission shall establish a real estate recovery
18-12 fund which shall be set apart and maintained by the commission as
18-13 provided in this section. The fund shall be used in the manner
18-14 provided in this section for reimbursing aggrieved persons who
18-15 suffer actual damages by reason of certain acts committed by a duly
18-16 licensed real estate broker or salesperson <salesman>, or by an
18-17 unlicensed employee or agent of a broker or salesperson <salesman>,
18-18 provided the broker or salesperson <salesman> was licensed by the
18-19 State of Texas at the time the act was committed and provided
18-20 recovery is ordered by a court of competent jurisdiction against
18-21 the broker or salesperson <salesman>. The use of the fund is
18-22 limited to an act that constitutes a violation of Section 15(a)(3)
18-23 or (6) of this Act.
18-24 (b) On application for an original license pursuant to this
18-25 Act, the applicant shall pay, in addition to the <his> original
18-26 license application fee, a fee of $10 which shall be deposited in
18-27 the real estate recovery fund.
19-1 (c) If on December 31 of any year the balance remaining in
19-2 the real estate recovery fund is less than $1 million, each real
19-3 estate broker and each real estate salesperson <salesman>, on the
19-4 next renewal of the <his> license, shall pay, in addition to the
19-5 <his> license renewal fee, a fee of $10, which shall be deposited
19-6 in the real estate recovery fund, or a pro rata share of the amount
19-7 necessary to bring the fund to $1.7 million, whichever is less. If
19-8 on December 31 of any year the balance remaining in the real estate
19-9 recovery fund is more than $3.5 million or more than the total
19-10 amount of claims paid from the fund during the previous four fiscal
19-11 years, whichever is greater, the amount of money in excess of the
19-12 greater amount shall be transferred to the general revenue fund.
19-13 (d) No action for a judgment which subsequently results in
19-14 an order for collection from the real estate recovery fund shall be
19-15 started later than two years from the accrual of the cause of
19-16 action. When an aggrieved person commences action for a judgment
19-17 which may result in collection from the real estate recovery fund,
19-18 the real estate broker or real estate salesperson <salesman> shall
19-19 notify the commission in writing to this effect at the time of the
19-20 commencement of the action.
19-21 (e) When an aggrieved person recovers a valid judgment in a
19-22 court of competent jurisdiction against a real estate broker or
19-23 real estate salesperson <salesman>, on the grounds described in
19-24 Subsection (a) of this section that occurred on or after May 19,
19-25 1975, the aggrieved person may, after final judgment has been
19-26 entered, execution returned nulla bona, and a judgment lien
19-27 perfected, file a verified claim in the court in which the judgment
20-1 was entered and, on 20 days' written notice to the commission, and
20-2 to the judgment debtor, may apply to the court for an order
20-3 directing payment out of the real estate recovery fund of the
20-4 amount unpaid on the judgment, subject to the limitations stated in
20-5 Subsection (n) of this section.
20-6 (f) The court shall proceed on the application forthwith.
20-7 On the hearing on the application, the aggrieved person is required
20-8 to show that:
20-9 (1) the judgment is based on facts allowing recovery
20-10 under Subsection (a) of this section;
20-11 (2) the person <he> is not a spouse of the debtor, or
20-12 the personal representative of the spouse; and the person <he> is
20-13 not a real estate broker or salesperson <salesman>, as defined by
20-14 this Act, who is seeking to recover a real estate commission in the
20-15 transaction or transactions for which the application for payment
20-16 is made;
20-17 (3) the person <he> has obtained a judgment under
20-18 Subsection (e) of this section that is not subject to a stay or
20-19 discharge in bankruptcy and has been judicially determined to be
20-20 nondischargeable in a pending bankruptcy, stating the amount of the
20-21 judgment and the amount owing on the judgment at the date of the
20-22 application;
20-23 (4) based on the best available information, the
20-24 judgment debtor lacks sufficient attachable assets in this state or
20-25 any other state to satisfy the judgment; and
20-26 (5) the amount that may be realized from the sale of
20-27 real or personal property or other assets liable to be sold or
21-1 applied in satisfaction of the judgment and the balance remaining
21-2 due on the judgment after application of the amount that may be
21-3 realized.
21-4 (h) The court shall make an order directed to the commission
21-5 requiring payment from the real estate recovery fund of whatever
21-6 sum it finds to be payable on the claim, pursuant to and in
21-7 accordance with the limitations contained in this section, if the
21-8 court is satisfied, on the hearing, of the truth of all matters
21-9 required to be shown by the aggrieved person by Subsection (f) of
21-10 this section and that the aggrieved person has satisfied all of the
21-11 requirements of Subsections (e) and (f) of this section. The
21-12 commission may relitigate any issue material and relevant in the
21-13 hearing on the application that was determined in the underlying
21-14 action on which the judgment in favor of the applicant was based.
21-15 If the court finds that the aggregate amount of claims against a
21-16 real estate broker or salesperson <salesman> exceeds the
21-17 limitations contained in this section, the court shall reduce
21-18 proportionately the amount it finds payable on the claim.
21-19 (i) A license granted under the provisions of this Act may
21-20 be revoked by the commission on proof that the commission has made
21-21 a payment from the real estate recovery fund of any amount toward
21-22 satisfaction of a judgment against a licensed real estate broker or
21-23 salesperson <salesman>. The commission may probate an order
21-24 revoking a license. No broker or salesperson <salesman> is
21-25 eligible to receive a new license until the broker or salesperson
21-26 <he> has repaid in full, plus interest at the current legal rate,
21-27 the amount paid from the real estate recovery fund on the broker's
22-1 or salesperson's <his> account.
22-2 (j) The sums received by the real estate commission for
22-3 deposit in the real estate recovery fund shall be held by the
22-4 commission in trust for carrying out the purposes of the real
22-5 estate recovery fund. Subject to legislative appropriation, money
22-6 in the fund may be used by the commission to pay the expenses
22-7 involved in collecting judgments assigned to the commission. These
22-8 funds may be invested and reinvested in the same manner as funds of
22-9 the Texas State Employees Retirement System, and the interest from
22-10 these investments shall be deposited to the credit of the real
22-11 estate recovery fund, provided, however, that no investments shall
22-12 be made which will impair the necessary liquidity required to
22-13 satisfy judgment payments awarded pursuant to this section.
22-14 (l) When, on the order of the court, the commission has paid
22-15 from the real estate recovery fund any sum to the judgment
22-16 creditor, the commission shall be subrogated to all of the rights
22-17 of the judgment creditor to the extent of the amount paid. The
22-18 judgment creditor shall assign all of the creditor's <his> right,
22-19 title, and interest in the judgment up to the amount paid by the
22-20 commission which amount shall have priority for repayment in the
22-21 event of any subsequent recovery on the judgment. Any amount and
22-22 interest recovered by the commission on the judgment shall be
22-23 deposited to the fund.
22-24 (n) Notwithstanding any other provision, payments from the
22-25 real estate recovery fund are subject to the following conditions
22-26 and limitations:
22-27 (1) payments may be made only pursuant to an order of
23-1 a court of competent jurisdiction, as provided in Subsection (e) of
23-2 this section, and in the manner prescribed by this section;
23-3 (2) payments for claims, including attorneys' fees,
23-4 interest, and court costs, arising out of the same transaction
23-5 shall be limited in the aggregate to $50,000 regardless of the
23-6 number of claimants; and
23-7 (3) payments for claims based on judgments against any
23-8 one licensed real estate broker or salesperson <salesman> may not
23-9 exceed in the aggregate $100,000 until the fund has been reimbursed
23-10 by the licensee for all amounts paid.
23-11 (q) A broker or salesperson <salesman> licensed under this
23-12 Act shall notify consumers and service recipients of the
23-13 availability of the real estate recovery fund established under
23-14 this section for reimbursing certain aggrieved persons. The notice
23-15 must include the name, mailing address, and telephone number of the
23-16 commission and any other information required by commission rule.
23-17 The notification may be provided with the notice required by
23-18 Section 5(q) of this Act or:
23-19 (1) on a written contract for the services of a broker
23-20 or salesperson <salesman>;
23-21 (2) on a brochure distributed by a broker or
23-22 salesperson <salesman>;
23-23 (3) on a sign prominently displayed in the place of
23-24 business of a salesperson <salesman> or broker; or
23-25 (4) in a bill or receipt for service provided by a
23-26 broker or salesperson <salesman>.
23-27 SECTION 11. Subsections (a), (b), and (e), Section 9, The
24-1 Real Estate License Act (Article 6573a, Vernon's Texas Civil
24-2 Statutes), are amended to read as follows:
24-3 (a) When an applicant has satisfactorily met all
24-4 requirements and conditions of this Act, a license shall be issued
24-5 which may remain in force and effect so long as the holder of the
24-6 license remains in compliance with the obligations of this Act,
24-7 which include payment of the renewal fee as provided in Section 11
24-8 of this Act. Each active salesperson <salesman> license issued
24-9 shall be delivered or mailed to the broker with whom the
24-10 salesperson <salesman> is associated and shall be kept under the
24-11 broker's <his> custody and control.
24-12 (b) An applicant is not permitted to engage in the real
24-13 estate business either as a broker or salesperson <salesman> until
24-14 a license evidencing the applicant's <his> authority to engage in
24-15 the real estate business has been received.
24-16 (e) The commission shall require in any application for a
24-17 broker or salesperson <salesman> license or a renewal of a broker
24-18 or salesperson <salesman> license the applicant to disclose whether
24-19 the applicant has entered a plea of guilty or nolo contendere to,
24-20 been found guilty of, or been convicted of a felony and the time
24-21 for appeal has elapsed or the judgment or conviction has been
24-22 affirmed on appeal, irrespective of an order granting probation
24-23 following the conviction or suspending the imposition of sentence.
24-24 SECTION 12. Subsection (a), Section 10, The Real Estate
24-25 License Act (Article 6573a, Vernon's Texas Civil Statutes), is
24-26 amended to read as follows:
24-27 (a) If the commission declines or fails to license an
25-1 applicant, it shall immediately give written notice of the refusal
25-2 to the applicant. Before the applicant may appeal to a district
25-3 court as provided in Section 18 of this Act, the applicant <he>
25-4 must file within 10 days after the receipt of the notice an appeal
25-5 from the ruling, requesting a time and place for a hearing before
25-6 the commission. The commission shall set a time and place for the
25-7 hearing within 30 days from the receipt of the appeal, giving 10
25-8 days' notice of the hearing to the applicant. The time of the
25-9 hearing may be continued from time to time with the consent of the
25-10 applicant. Following the hearing, the commission shall enter an
25-11 order which is, in its opinion, appropriate in the matter
25-12 concerned.
25-13 SECTION 13. Section 11, The Real Estate License Act (Article
25-14 6573a, Vernon's Texas Civil Statutes), is amended to read as
25-15 follows:
25-16 Sec. 11. <(a)> The commission shall charge and collect the
25-17 following fees:
25-18 (1) a fee not to exceed $100 for the filing of an
25-19 original application for a real estate broker license;
25-20 (2) a fee not to exceed $100 for annual renewal of a
25-21 real estate broker license;
25-22 (3) a fee not to exceed $50 for the filing of an
25-23 original application for a real estate salesperson <salesman>
25-24 license;
25-25 (4) a fee not to exceed $50 for annual renewal of a
25-26 real estate salesperson <salesman> license;
25-27 (5) a fee not to exceed $25 for an application for a
26-1 license examination;
26-2 (6) a fee not to exceed $20 for filing a request for a
26-3 license for each additional office or place of business;
26-4 (7) a fee not to exceed $20 for filing a request for a
26-5 license for a change of place of business, change of name, return
26-6 to active status, or change of sponsoring broker;
26-7 (8) a fee not to exceed $20 for filing a request to
26-8 replace a license lost or destroyed;
26-9 (9) a fee not to exceed $400 for filing an application
26-10 for approval of an education program under Section 7(f) of this
26-11 Act;
26-12 (10) a fee not to exceed $200 a year for operation of
26-13 an education program under Section 7(f) of this Act;
26-14 (11) a fee of $15 for transcript evaluation;
26-15 (12) a fee not to exceed $10 for preparing a license
26-16 history; and
26-17 (13) a fee not to exceed $50 for the filing of an
26-18 application for a moral character determination.
26-19 SECTION 14. Subsections (a), (b), and (d), Section 12, The
26-20 Real Estate License Act (Article 6573a, Vernon's Texas Civil
26-21 Statutes), are amended to read as follows:
26-22 (a) Each resident broker shall maintain a fixed office
26-23 within this state. The address of the office shall be designated
26-24 on the broker's license. Within 10 days after a move from a
26-25 previously designated address, the broker shall submit an
26-26 application for a new license, designating the new location of the
26-27 broker's <his> office, together with the required fee, whereupon
27-1 the commission shall issue a license, reflecting the new location,
27-2 provided the new location complies with the terms of this section.
27-3 (b) If a broker maintains more than one place of business
27-4 within this state, the broker <he> shall apply for, pay the
27-5 required fee for, and obtain an additional license to be known as a
27-6 branch office license for each additional office the broker <he>
27-7 maintains.
27-8 (d) Each broker shall also prominently display in the
27-9 broker's <his> place or in one of the broker's <his> places of
27-10 business the license of each real estate salesperson <salesman>
27-11 associated with the broker <him>.
27-12 SECTION 15. Section 13, The Real Estate License Act (Article
27-13 6573a, Vernon's Texas Civil Statutes), is amended to read as
27-14 follows:
27-15 Sec. 13. (a) When the association of a salesperson
27-16 <salesman> with the salesperson's <his> sponsoring broker is
27-17 terminated, the broker shall immediately return the salesperson
27-18 <salesman> license to the commission. The salesperson <salesman>
27-19 license then becomes inactive.
27-20 (b) The salesperson <salesman> license may be activated if,
27-21 before the license expires, a request, accompanied by the required
27-22 fee, is filed with the commission by a licensed broker advising
27-23 that the broker <he> assumes sponsorship of the salesperson
27-24 <salesman>.
27-25 SECTION 16. Subsection (a), Section 13A, The Real Estate
27-26 License Act (Article 6573a, Vernon's Texas Civil Statutes), is
27-27 amended to read as follows:
28-1 (a) A real estate broker who holds a license issued under
28-2 this Act and who is not acting as a broker or sponsoring a
28-3 salesperson <salesman> may apply to the commission in writing to be
28-4 placed on the inactive status list maintained by the commission.
28-5 The broker must apply for inactive status before the expiration of
28-6 the broker's license. The broker shall terminate the broker's
28-7 association with any salesperson <salesmen> sponsored by the broker
28-8 by giving written notice to the salesperson <salesmen> before the
28-9 30th day before the date the broker applies for inactive status. A
28-10 person on inactive status under this section is required to pay the
28-11 annual renewal fees.
28-12 SECTION 17. Section 14, The Real Estate License Act (Article
28-13 6573a, Vernon's Texas Civil Statutes), is amended to read as
28-14 follows:
28-15 Sec. 14. (a) It is unlawful for a licensed broker to employ
28-16 or compensate directly or indirectly a person for performing an act
28-17 enumerated in the definition of real estate broker in Section 2 of
28-18 this Act if the person is not a licensed broker or licensed
28-19 salesperson <salesman> in this state. However, a licensed broker
28-20 may pay a commission to a licensed broker of another state if the
28-21 foreign broker does not conduct in this state any of the
28-22 negotiations for which the fee, compensation, or commission is
28-23 paid.
28-24 (b) A resident broker of another state who furnishes the
28-25 evidence required under Section 7(g) of this Act may apply for a
28-26 license as a broker in this state. A resident of another state who
28-27 is not licensed as a broker but who was formerly licensed as a
29-1 salesperson <salesman> or broker in this state may apply for a
29-2 license in this state not later than the fifth <first> anniversary
29-3 of the date of the expiration of the previous license. An
29-4 application by a nonresident is subject to the requirements under
29-5 this Act for the type of license applied for. A nonresident
29-6 licensee need not maintain a place of business in this state. The
29-7 commission may in its discretion refuse to issue a license to an
29-8 applicant who is not a resident of this state for the same reasons
29-9 that it may refuse to license a resident of this state. The
29-10 commission shall judge the competency of a nonresident applicant
29-11 solely on the basis of the examination conducted under Section 7 of
29-12 this Act.
29-13 (c) Each nonresident applicant shall file an irrevocable
29-14 consent that legal actions may be commenced against the applicant
29-15 <him> in the proper court of any county of this state in which a
29-16 cause of action may arise, or in which the plaintiff may reside, by
29-17 service of process or pleading authorized by the laws of this
29-18 state, or by serving the administrator or assistant administrator
29-19 of the commission. The consent shall stipulate that the service of
29-20 process or pleading shall be valid and binding in all courts as if
29-21 personal service had been made on the nonresident in this state.
29-22 The consent shall be duly acknowledged, and if made by a
29-23 corporation, shall be authenticated by its seal. A service of
29-24 process or pleading served on the commission shall be by duplicate
29-25 copies, one of which shall be filed in the office of the commission
29-26 and the other forwarded by registered mail to the last known
29-27 principal address which the commission has for the nonresident
30-1 against whom the process or pleading is directed. No default in an
30-2 action may be taken except on certification by the commission that
30-3 a copy of the process or pleading was mailed to the defendant as
30-4 provided in this section, and no default judgment may be taken in
30-5 an action or proceeding until 20 days after the day of mailing of
30-6 the process or pleading to the defendant.
30-7 Notwithstanding any other provision of this subsection, a
30-8 nonresident of this state who resides in a city whose boundaries
30-9 are contiguous at any point to the boundaries of a city of this
30-10 state, and who has been an actual bona fide resident of that city
30-11 for at least 60 days immediately preceding the filing of the
30-12 person's <his> application, is eligible to be licensed as a real
30-13 estate broker or salesperson <salesman> under this Act in the same
30-14 manner as a resident of this state. If a person <he> is licensed
30-15 in this manner, the person <he> shall at all times maintain a place
30-16 of business either in the city in which the person <he> resides or
30-17 in the city in this state which is contiguous to the city in which
30-18 the person <he> resides, and the person <he> may not maintain a
30-19 place of business at another location in this state unless the
30-20 person <he> also complies with the requirements of Section 14(b) of
30-21 this Act. The place of business must satisfy the requirements of
30-22 Subsection (a) of Section 12 of this Act, but the place of business
30-23 shall be deemed a definite place of business in this state within
30-24 the meaning of Subsection (a) of Section 12.
30-25 SECTION 18. Subsections (a) and (d), Section 15, The Real
30-26 Estate License Act (Article 6573a, Vernon's Texas Civil Statutes),
30-27 are amended to read as follows:
31-1 (a) The commission may, on its own motion, and shall, on the
31-2 signed complaint in writing of any person <a consumer or service
31-3 recipient>, provided the complaint, or the complaint together with
31-4 evidence, documentary or otherwise, presented in connection with
31-5 the complaint, provides reasonable cause, investigate the actions
31-6 and records of a real estate broker or real estate salesperson
31-7 <salesman>. The commission may suspend or revoke a license issued
31-8 under the provisions of this Act at any time when it has been
31-9 determined that:
31-10 (1) the licensee has entered a plea of guilty or nolo
31-11 contendere to, or been found guilty of, or been convicted of, a
31-12 felony, in which fraud is an essential element, and the time for
31-13 appeal has elapsed or the judgment or conviction has been affirmed
31-14 on appeal, irrespective of an order granting probation following
31-15 such conviction, suspending the imposition of sentence;
31-16 (2) the licensee has procured, or attempted to
31-17 procure, a real estate license, for the licensee <himself> or
31-18 another person <a salesman>, by fraud, misrepresentation or deceit,
31-19 or by making a material misstatement of fact in an application for
31-20 a real estate license;
31-21 (3) the licensee, when selling, buying, trading, or
31-22 renting real property on the licensee's <in his> own account
31-23 <name>, engaged in misrepresentation or dishonest or fraudulent
31-24 action;
31-25 (4) the licensee has failed within a reasonable time
31-26 to make good a check issued to the commission after the commission
31-27 has mailed a request for payment by certified mail to the
32-1 licensee's last known business address as reflected by the
32-2 commission's records;
32-3 (5) the licensee has disregarded or violated a
32-4 provision of this Act;
32-5 (6) the licensee, while performing an act constituting
32-6 an act of a broker or salesperson <salesman>, as defined by this
32-7 Act, has been guilty of:
32-8 (A) making a material misrepresentation, or
32-9 failing to disclose to a potential purchaser any latent structural
32-10 defect or any other defect known to the broker or salesperson
32-11 <salesman>. Latent structural defects and other defects do not
32-12 refer to trivial or insignificant defects but refer to those
32-13 defects that would be a significant factor to a reasonable and
32-14 prudent purchaser in making a decision to purchase;
32-15 (B) making a false promise of a character likely
32-16 to influence, persuade, or induce any person to enter into a
32-17 contract or agreement when the licensee could not or did not intend
32-18 to keep such promise;
32-19 (C) pursuing a continued and flagrant course of
32-20 misrepresentation or making of false promises through agents,
32-21 salespersons <salesmen>, advertising, or otherwise;
32-22 (D) failing to make clear, to all parties to a
32-23 transaction, which party the licensee <he> is acting for, or
32-24 receiving compensation from more than one party except with the
32-25 full knowledge and consent of all parties;
32-26 (E) failing within a reasonable time properly to
32-27 account for or remit money coming into the licensee's <his>
33-1 possession which belongs to others, or commingling money belonging
33-2 to others with the licensee's <his> own funds;
33-3 (F) paying a commission or fees to or dividing a
33-4 commission or fees with anyone not licensed as a real estate broker
33-5 or salesperson <salesman> in this state or in any other state for
33-6 compensation for services for which <as> a real estate license is
33-7 required by this Act <agent>;
33-8 (G) failing to specify in a listing contract or
33-9 in another contract in which the licensee agrees to perform
33-10 services for which a license is required under this Act a definite
33-11 termination date which is not subject to prior notice;
33-12 (H) accepting, receiving, or charging an
33-13 undisclosed commission, rebate, or direct profit on expenditures
33-14 made for a principal;
33-15 (I) soliciting, selling, or offering for sale
33-16 real property under a scheme or program that constitutes a lottery
33-17 or deceptive practice;
33-18 (J) acting in the dual capacity of broker and
33-19 undisclosed principal in a transaction;
33-20 (K) guaranteeing, authorizing, or permitting a
33-21 person to guarantee that future profits will result from a resale
33-22 of real property;
33-23 (L) placing a sign on real property offering it
33-24 for sale, lease, or rent without the written consent of the owner
33-25 or the owner's <his> authorized agent;
33-26 (M) inducing or attempting to induce a party to
33-27 a contract of sale or lease to break the contract for the purpose
34-1 of substituting in lieu thereof a new contract;
34-2 (N) negotiating or attempting to negotiate the
34-3 sale, exchange, lease, or rental of real property with an owner,
34-4 <or> lessor, buyer, or tenant, knowing that the owner, <or> lessor,
34-5 buyer, or tenant had a written outstanding contract, granting
34-6 exclusive agency in connection with the transaction <property> to
34-7 another real estate broker;
34-8 (O) offering real property for sale or for lease
34-9 without the knowledge and consent of the owner or the owner's <his>
34-10 authorized agent, or on terms other than those authorized by the
34-11 owner or the owner's <his> authorized agent;
34-12 (P) publishing, or causing to be published, an
34-13 advertisement including, but not limited to, advertising by
34-14 newspaper, radio, television, or display which is misleading, or
34-15 which is likely to deceive the public, or which in any manner tends
34-16 to create a misleading impression, or which fails to identify the
34-17 person causing the advertisement to be published as a licensed real
34-18 estate broker or salesperson <agent>;
34-19 (Q) having knowingly withheld from or inserted
34-20 in a statement of account or invoice, a statement that made it
34-21 inaccurate in a material particular;
34-22 (R) publishing or circulating an unjustified or
34-23 unwarranted threat of legal proceedings, or other action;
34-24 (S) establishing an association, by employment
34-25 or otherwise, with an unlicensed person who is expected or required
34-26 to perform an act for which <as> a real estate license is required
34-27 by this Act <licensee>, or aiding or abetting or conspiring with a
35-1 person to circumvent the requirements of this Act;
35-2 (T) failing or refusing on demand to furnish
35-3 copies of a document pertaining to a transaction dealing with real
35-4 estate to a person whose signature is affixed to the document;
35-5 (U) failing to advise a purchaser in writing
35-6 before the closing of a transaction that the purchaser should
35-7 either have the abstract covering the real estate which is the
35-8 subject of the contract examined by an attorney of the purchaser's
35-9 own selection, or be furnished with or obtain a policy of title
35-10 insurance;
35-11 (V) conduct which constitutes dishonest
35-12 dealings, bad faith, or untrustworthiness;
35-13 (W) acting negligently or incompetently in
35-14 performing an act for which a person is required to hold a real
35-15 estate license;
35-16 (X) disregarding or violating a provision of
35-17 this Act;
35-18 (Y) failing within a reasonable time to deposit
35-19 money received as escrow agent in a real estate transaction, either
35-20 in trust with a title company authorized to do business in this
35-21 state, or in a custodial, trust, or escrow account maintained for
35-22 that purpose in a banking institution authorized to do business in
35-23 this state;
35-24 (Z) disbursing money deposited in a custodial,
35-25 trust, or escrow account, as provided in Subsection (Y) before the
35-26 transaction concerned has been consummated or finally otherwise
35-27 terminated; or
36-1 (AA) discriminating against an owner, potential
36-2 purchaser, lessor, or potential lessee on the basis of race, color,
36-3 religion, sex, national origin, <or> ancestry, familial status, or
36-4 disability, including directing prospective home buyers or lessees
36-5 interested in equivalent properties to different areas according to
36-6 the race, color, religion, sex, national origin, <or> ancestry,
36-7 familial status, or disability of the potential owner or lessee;
36-8 (7) the licensee has failed or refused on demand to
36-9 produce a document, book, or record in the licensee's <his>
36-10 possession concerning a real estate transaction conducted by the
36-11 licensee <him> for inspection by the commission or its authorized
36-12 personnel or representative;
36-13 (8) the licensee has failed within a reasonable time
36-14 to provide information requested by the commission in connection
36-15 with an investigation to determine whether the licensee has
36-16 violated a provision of this Act or a rule of the commission <as a
36-17 result of a formal or informal complaint to the commission which
36-18 would indicate a violation of this Act>; or
36-19 (9) the licensee has failed without just cause to
36-20 surrender to the rightful owner, on demand, a document or
36-21 instrument coming into the licensee's <his> possession.
36-22 (d) The commission may not investigate under this section a
36-23 complaint submitted more than four years after the date of the
36-24 incident involving a real estate broker or salesperson <salesman>
36-25 that is the subject of the complaint.
36-26 SECTION 19. Subsection (a), Section 15B, The Real Estate
36-27 License Act (Article 6573a, Vernon's Texas Civil Statutes), is
37-1 amended to read as follows:
37-2 (a) Notwithstanding any other provision of the Act, there
37-3 shall be no undercover or covert investigations of a person
37-4 licensed under this Act conducted by authority of this Act unless
37-5 expressly authorized by the commission after due consideration of
37-6 the circumstances and determination by the commission that such
37-7 measures are necessary to carry out the purposes of this Act. No
37-8 investigations of licensees or any other actions against licensees
37-9 shall be initiated on the basis of anonymous complaints whether in
37-10 writing or otherwise but shall be initiated only upon the
37-11 commission's own motion or a signed written complaint <from a
37-12 consumer or service recipient>. The commission may authorize an
37-13 employee of the commission to file a signed written complaint
37-14 against a licensee relating to a payment from a recovery fund
37-15 established under this Act, a criminal conviction, or an act of the
37-16 licensee that involves obtaining or attempting to obtain a license
37-17 by fraud, engaging in misrepresentation or deceit, or failing to
37-18 make good a check issued to the commission. Upon the adoption of
37-19 such motion by the commission or upon receipt of such complaint,
37-20 the licensee shall be notified promptly and in writing <unless the
37-21 commission itself, after due consideration, determines otherwise>.
37-22 SECTION 20. Section 15D, The Real Estate License Act
37-23 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
37-24 as follows:
37-25 Sec. 15D. No licensed real estate broker, licensed real
37-26 estate salesperson <salesman>, or not for profit real estate board
37-27 or association which provides information about real property sales
38-1 prices or terms of sale for the purpose of facilitating the
38-2 listing, selling, leasing, financing, or appraisal of real property
38-3 shall be liable to any other person as a result of so providing
38-4 such information unless the disclosure of same is otherwise
38-5 specifically prohibited by statute.
38-6 SECTION 21. Subsections (a), (b), (d), and (e), Section 16,
38-7 The Real Estate License Act (Article 6573a, Vernon's Texas Civil
38-8 Statutes), are amended to read as follows:
38-9 (a) A license granted under the provisions of this Act shall
38-10 be suspended or revoked by the commission on proof that the
38-11 licensee, not being licensed and authorized to practice law in this
38-12 state, for a consideration, reward, pecuniary benefit, present or
38-13 anticipated, direct or indirect, or in connection with or as a part
38-14 of the licensee's <his> employment, agency, or fiduciary
38-15 relationship as a licensee, drew a deed, note, deed of trust, will,
38-16 or other written instrument that may transfer or anywise affect the
38-17 title to or an interest in land, except as provided in the
38-18 subsections below, or advised or counseled a person as to the
38-19 validity or legal sufficiency of an instrument or as to the
38-20 validity of title to real estate.
38-21 (b) Notwithstanding the provisions of this Act or any other
38-22 law, the completion of contract forms which bind the sale,
38-23 exchange, option, lease, or rental of any interest in real property
38-24 by a real estate broker or salesperson <salesman> incident to the
38-25 performance of the acts of a broker as defined by this article does
38-26 not constitute the unauthorized or illegal practice of law in this
38-27 state, provided the forms have been promulgated for use by the
39-1 commission for the particular kind of transaction involved, or the
39-2 forms have been prepared by an attorney at law licensed by this
39-3 state and approved by said attorney for the particular kind of
39-4 transaction involved, or the forms have been prepared by the
39-5 property owner or prepared by an attorney and required by the
39-6 property owner.
39-7 (d) The Texas Real Estate Broker-Lawyer Committee shall have
39-8 12 members including six members appointed by the commission and
39-9 six members of the State Bar of Texas appointed by the President of
39-10 the State Bar of Texas. The members of the committee shall hold
39-11 office for staggered terms of six years with the terms of two
39-12 commission appointees and two State Bar appointees expiring every
39-13 two years. Each member shall hold office until the member's <his>
39-14 successor is appointed. A vacancy for any cause shall be filled
39-15 for the expired term by the agency making the original appointment.
39-16 Appointments to the committee shall be made without regard to race,
39-17 creed, sex, religion, or national origin.
39-18 (e) In the best interest of the public the commission may
39-19 adopt rules and regulations requiring real estate brokers and
39-20 salespersons <salesmen> to use contract forms which have been
39-21 prepared by the Texas Real Estate Broker-Lawyer Committee and
39-22 promulgated by the commission; provided, however, that the
39-23 commission shall not prohibit a real estate broker or salesperson
39-24 <salesman> from using a contract form or forms binding the sale,
39-25 exchange, option, lease, or rental of any interest in real property
39-26 which have been prepared by the property owner or prepared by an
39-27 attorney and required by the property owner. For the purpose of
40-1 this section, contract forms prepared by the Texas Real Estate
40-2 Broker-Lawyer Committee appointed by the commission and the State
40-3 Bar of Texas and promulgated by the commission prior to the
40-4 effective date of this Act shall be deemed to have been prepared by
40-5 the Texas Real Estate Broker-Lawyer Committee. The commission may
40-6 suspend or revoke a license issued under the provisions of this
40-7 article when it has determined that the licensee failed to use a
40-8 contract form as required by the commission pursuant to this
40-9 section.
40-10 SECTION 22. Subsection (a), Section 17, The Real Estate
40-11 License Act (Article 6573a, Vernon's Texas Civil Statutes), is
40-12 amended to read as follows:
40-13 (a) If the commission proposes to suspend or revoke a
40-14 person's license or registration, the person is entitled to a
40-15 hearing before the commission or a hearings officer appointed by
40-16 the commission. The commission shall prescribe procedures by which
40-17 all decisions to suspend or revoke are made by or are appealable to
40-18 the commission. The commission shall prescribe the time and place
40-19 of the hearing. However, the hearing shall be held, if the
40-20 licensee so desires, within the county where the licensee has the
40-21 licensee's <his> principal place of business, or if the licensee is
40-22 a nonresident, the hearing may be called for and held in any county
40-23 within this state. The hearing is governed by the procedures for a
40-24 contested case under Chapter 2001, Government Code <the
40-25 Administrative Procedure and Texas Register Act (Article 6252-13a,
40-26 Vernon's Texas Civil Statutes)>.
40-27 SECTION 23. Subsection (a), Section 18A, The Real Estate
41-1 License Act (Article 6573a, Vernon's Texas Civil Statutes), is
41-2 amended to read as follows:
41-3 (a) Any listing contract form adopted by the commission
41-4 relating to the contractual obligations between a seller of real
41-5 estate and a real estate broker or salesperson <salesman> acting as
41-6 an agent for the seller shall include a section that informs the
41-7 parties to the contract that real estate commissions are
41-8 negotiable.
41-9 SECTION 24. Subsection (a), Section 18B, The Real Estate
41-10 License Act (Article 6573a, Vernon's Texas Civil Statutes), is
41-11 amended to read as follows:
41-12 (a) If a person files a complaint with the commission
41-13 relating to a real estate broker or salesperson <salesman>, the
41-14 commission shall furnish to the person an explanation of the
41-15 remedies that are available to the person under this Act and
41-16 information about appropriate state or local agencies or officials
41-17 with which the person may file a complaint. The commission shall
41-18 furnish the same explanation and information to the person against
41-19 whom the complaint is filed.
41-20 SECTION 25. Subsections (a) and (b), Section 19, The Real
41-21 Estate License Act (Article 6573a, Vernon's Texas Civil Statutes),
41-22 are amended to read as follows:
41-23 (a) A person acting as a real estate broker or real estate
41-24 salesperson <salesman> without first obtaining a license is guilty
41-25 of a misdemeanor and on conviction shall be punishable by a fine of
41-26 not less than $100 nor more than $500, or by imprisonment in the
41-27 county jail for a term not to exceed one year, or both; and if a
42-1 corporation or a limited liability company, shall be punishable by
42-2 a fine of not less than $1,000 nor more than $2,000. A person, on
42-3 conviction of a second or subsequent offense, shall be punishable
42-4 by a fine of not less than $500 nor more than $1,000, or by
42-5 imprisonment for a term not to exceed two years, or both; and if a
42-6 corporation or a limited liability company, shall be punishable by
42-7 a fine of not less than $2,000 nor more than $5,000.
42-8 (b) In case a person received money, or the equivalent
42-9 thereof, as a fee, commission, compensation, or profit by or in
42-10 consequence of a violation of Subsection (a) of this section, the
42-11 person <he> shall, in addition, be liable to a penalty of not less
42-12 than the amount of the sum of money so received and not more than
42-13 three times the sum so received, as may be determined by the court,
42-14 which penalty may be recovered in a court of competent jurisdiction
42-15 by an aggrieved person.
42-16 SECTION 26. Subsection (o), Section 19A, The Real Estate
42-17 License Act (Article 6573a, Vernon's Texas Civil Statutes), is
42-18 amended to read as follows:
42-19 (o) A penalty collected under this section for a violation
42-20 by a person licensed as a real estate broker or salesperson
42-21 <salesman> shall be deposited in the real estate recovery fund. A
42-22 penalty collected under this section for a violation by a person
42-23 licensed or registered as a real estate inspector shall be
42-24 deposited in the real estate inspection recovery fund.
42-25 SECTION 27. Section 20, The Real Estate License Act (Article
42-26 6573a, Vernon's Texas Civil Statutes), is amended to read as
42-27 follows:
43-1 Sec. 20. (a) A person may not bring or maintain an action
43-2 for the collection of compensation for the performance in this
43-3 state of an act set forth in Section 2 of this Act without alleging
43-4 and proving that the person performing the brokerage services was a
43-5 duly licensed real estate broker or salesperson <salesman> at the
43-6 time the alleged services were commenced, or was a duly licensed
43-7 attorney at law in this state or in any other state.
43-8 (b) An action may not be brought in a court in this state
43-9 for the recovery of a commission for the sale or purchase of real
43-10 estate unless the promise or agreement on which the action is
43-11 brought, or some memorandum thereof, is in writing and signed by
43-12 the party to be charged or signed by a person lawfully authorized
43-13 by the party <him> to sign it.
43-14 (c) When an offer to purchase real estate in this state is
43-15 signed, the real estate broker or salesperson <salesman> shall
43-16 advise the purchaser or purchasers, in writing, that the purchaser
43-17 or purchasers should have the abstract covering the real estate
43-18 which is the subject of the contract examined by an attorney of the
43-19 purchaser's own selection, or that the purchaser or purchasers
43-20 should be furnished with or obtain a policy of title insurance.
43-21 Failure to advise the purchaser as provided in this subsection
43-22 precludes the payment of or recovery of any commission agreed to be
43-23 paid on the sale.
43-24 SECTION 28. Subdivisions (2), (5), and (9), Subsection (b),
43-25 Section 23, The Real Estate License Act (Article 6573a, Vernon's
43-26 Texas Civil Statutes), are amended to read as follows:
43-27 (2) The committee is composed of nine members
44-1 appointed by the commission. The members of the committee hold
44-2 office for staggered terms of six years, with the terms of three
44-3 members expiring February 1 of each odd-numbered year. Each member
44-4 holds office until the member's successor is appointed.
44-5 Appointments to the committee shall be made without regard to the
44-6 sex, race, color, age, handicap, religion, or national origin of
44-7 the appointees. In the event of a vacancy during a term, the
44-8 commission shall appoint a replacement who meets the qualifications
44-9 for appointment under this subdivision to fill the unexpired part
44-10 of the term. A member of the committee must be a professional
44-11 inspector actively engaged in the practice of real estate
44-12 inspecting at the time of appointment and must have been primarily
44-13 engaged in the practice of real estate inspecting for at least five
44-14 years before the member's appointment. A member of the committee
44-15 may not hold a real estate broker or salesperson <salesman>
44-16 license. Each member of the committee is entitled to a per diem
44-17 allowance and to reimbursement of travel expenses necessarily
44-18 incurred in performing functions as a member of the committee,
44-19 subject to any applicable limitation in the General Appropriations
44-20 Act. The committee shall annually elect from its members a
44-21 chairperson <chairman>, a vice chairperson <vice-chairman>, and
44-22 secretary. A quorum of the committee consists of five members.
44-23 (5) If the administrator of the commission has
44-24 knowledge that a potential ground for removal exists, the
44-25 administrator shall notify the chairperson <chairman> of the
44-26 commission that a potential ground exists.
44-27 (9) The committee shall act in an advisory capacity to
45-1 develop and recommend to the commission rules under this section.
45-2 The committee shall review commission rules relating to this
45-3 section and recommend changes in the rules to the commission. The
45-4 commission shall submit all proposed rules, all proposed rule
45-5 changes and all requests for proposed rules or rule changes that
45-6 relate to the regulation and licensing of inspectors under this
45-7 section to the committee for development or recommendation. The
45-8 commission may modify the rules developed by the committee if the
45-9 commission finds such modifications are in the public interest.
45-10 This section does not prohibit the commission from developing and
45-11 adopting rules relating to the regulation and licensing of
45-12 inspectors under this section if the committee fails to develop or
45-13 recommend rules under this section within a reasonable period of
45-14 time after the commission submits the proposed rules, rule changes
45-15 or requests for proposed rules or rule changes to the committee.
45-16 If the committee determines that a rule requested by the commission
45-17 should not be developed or recommended for adoption by the
45-18 commission, the committee shall submit a report on the matter to
45-19 the commission. The chairperson <chairman> of the commission and
45-20 the chairperson <chairman> of the committee shall then appoint
45-21 three members each from their respective bodies to meet as an ad
45-22 hoc committee to consider the report and recommend possible action
45-23 by the commission. The chairperson <chairman> of the commission or
45-24 a member of the commission designated by the chairperson <chairman>
45-25 shall serve as the seventh member of the ad hoc committee. At
45-26 least one member of the ad hoc committee must be a public member of
45-27 the commission.
46-1 SECTION 29. Subsection (l), Section 23, The Real Estate
46-2 License Act (Article 6573a, Vernon's Texas Civil Statutes), is
46-3 amended to read as follows:
46-4 (l) Prohibited acts. A professional inspector, real estate
46-5 inspector or an apprentice inspector licensed under this section
46-6 may not:
46-7 (1) accept an assignment for real estate inspection if
46-8 the employment or fee is contingent on the reporting of a specific,
46-9 predetermined condition of the improvements to real property or is
46-10 contingent on the reporting of specific findings other than those
46-11 known by the inspector to be facts at the time of accepting the
46-12 assignment;
46-13 (2) act in a manner or engage in a practice that is
46-14 dishonest or fraudulent or that involves deceit or
46-15 misrepresentation;
46-16 (3) perform a real estate inspection in a negligent or
46-17 incompetent manner;
46-18 (4) act in the dual capacity of inspector and
46-19 undisclosed principal in a transaction;
46-20 (5) act in the dual capacity of inspector and real
46-21 estate broker or salesperson <salesman> in a transaction;
46-22 (6) perform or agree to perform any repairs or
46-23 maintenance in connection with a real estate inspection pursuant to
46-24 the provisions of any earnest money contract, lease agreement, or
46-25 exchange of real estate; or
46-26 (7) violate the rules adopted by the commission or any
46-27 provisions of this section.
47-1 SECTION 30. Subsection (o), Section 23, The Real Estate
47-2 License Act (Article 6573a, Vernon's Texas Civil Statutes), is
47-3 amended by amending Subdivisions (7) and (11) to read as follows:
47-4 (7) The court shall proceed on the application
47-5 forthwith. On the hearing on the application, the aggrieved person
47-6 is required to show:
47-7 (A) that the judgment is based on facts allowing
47-8 recovery under Subdivision (1) of this subsection;
47-9 (B) that the person is not a spouse of the
47-10 debtor or the personal representative of the spouse and the person
47-11 is not a licensed <an> inspector, as defined by this section;
47-12 (C) that the person has obtained a judgment
47-13 under Subdivision (6) of this subsection that is not subject to a
47-14 stay or discharge in bankruptcy and has been judicially determined
47-15 to be nondischargeable in a pending bankruptcy, stating the amount
47-16 of the judgment and the amount owing on the judgment at the date of
47-17 the application;
47-18 (D) that based on the best information
47-19 available, the judgment debtor lacks sufficient attachable assets
47-20 in this state or any other state to satisfy the judgment; and
47-21 (E) the amount that may be realized from the
47-22 sale of real or personal property or other assets liable to be sold
47-23 or applied in satisfaction of the judgment and the balance
47-24 remaining due on the judgment after application of the amount that
47-25 may be realized.
47-26 (11) The sums received by the commission for deposit
47-27 in the real estate inspection recovery fund shall be held by the
48-1 commission in trust for carrying out the purpose of the real estate
48-2 inspection recovery fund. Subject to legislative appropriation,
48-3 money in the fund may be used by the commission to pay the expenses
48-4 involved in collecting a judgment assigned to the commission.
48-5 These funds may be invested and reinvested in the same manner as
48-6 funds of the Employees Retirement System of Texas, and the interest
48-7 from these investments shall be deposited to the credit of the real
48-8 estate inspection recovery fund. However, investments may not be
48-9 made that will impair the necessary liquidity required to satisfy
48-10 judgment payments awarded pursuant to this subsection.
48-11 SECTION 31. (a) This Act takes effect September 1, 1995.
48-12 (b) The change made by this Act in the title of a person
48-13 licensed to sell real estate does not affect the validity of a
48-14 license issued or an act performed before the effective date of
48-15 this Act.
48-16 SECTION 32. The importance of this legislation and the
48-17 crowded condition of the calendars in both houses create an
48-18 emergency and an imperative public necessity that the
48-19 constitutional rule requiring bills to be read on three several
48-20 days in each house be suspended, and this rule is hereby suspended.