By Danburg H.B. No. 814
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the title of certain persons licensed to sell real
1-3 estate.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Sections 1(b)-(e), The Real Estate License Act
1-6 (Article 6573a, Vernon's Texas Civil Statutes), are amended to read
1-7 as follows:
1-8 (b) It is unlawful for a person to act in the capacity of,
1-9 engage in the business of, or advertise or hold that person
1-10 [himself] out as engaging in or conducting the business of a real
1-11 estate broker or a real estate salesperson [salesman] within this
1-12 state without first obtaining a real estate license from the Texas
1-13 Real Estate Commission. It is unlawful for a person licensed as a
1-14 real estate salesperson [salesman] to act or attempt to act as a
1-15 real estate broker or salesperson [salesman] unless that person
1-16 [he] is, at such time, associated with a licensed Texas real estate
1-17 broker and acting for the licensed real estate broker.
1-18 (c) Each real estate broker licensed pursuant to this Act is
1-19 responsible to the commission, members of the public, and the
1-20 broker's [his] clients for all acts and conduct performed under
1-21 this Act by the broker [himself] or by a real estate salesperson
1-22 [salesman] associated with or acting for the broker.
1-23 (d) No real estate salesperson [salesman] shall accept
1-24 compensation for real estate sales and transactions from any person
2-1 other than the broker under whom the salesperson [he] is at the
2-2 time licensed or under whom the salesperson [he] was licensed when
2-3 the salesperson [he] earned the right to compensation.
2-4 (e) No real estate salesperson [salesman] shall pay a
2-5 commission to any person except through the broker under whom the
2-6 salesperson [he] is at the time licensed.
2-7 SECTION 2. Section 2(4), The Real Estate License Act
2-8 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
2-9 as follows:
2-10 (4) "Real estate salesperson or salesman" means a
2-11 person associated with a Texas licensed real estate broker for the
2-12 purposes of performing acts or transactions comprehended by the
2-13 definition of "real estate broker" as defined in this Act.
2-14 SECTION 3. Section 3, The Real Estate License Act (Article
2-15 6573a, Vernon's Texas Civil Statutes), is amended to read as
2-16 follows:
2-17 Sec. 3. The provisions of this Act shall not apply to any of
2-18 the following persons and transactions, and each and all of the
2-19 following persons and transactions are hereby exempted from the
2-20 provisions of this Act:
2-21 (1) an attorney at law licensed in this state or in
2-22 any other state;
2-23 (2) an attorney in fact under a duly executed power of
2-24 attorney authorizing the consummation of a real estate transaction;
2-25 (3) a public official in the conduct of that person's
2-26 [his] official duties;
2-27 (4) a person calling the sale of real estate by
3-1 auction under the authority of a license issued by this state
3-2 provided the person does not perform any other act of a real estate
3-3 broker or salesperson [salesman] as defined by this Act;
3-4 (5) a person acting under a court order or under the
3-5 authority of a will or a written trust instrument;
3-6 (6) a salesperson employed by an owner in the sale of
3-7 structures and land on which said structures are situated, provided
3-8 such structures are erected by the owner in the due course of the
3-9 owner's [his] business;
3-10 (7) an on-site manager of an apartment complex;
3-11 (8) transactions involving the sale, lease, or
3-12 transfer of any mineral or mining interest in real property;
3-13 (9) an owner or the owner's [his] employees in renting
3-14 or leasing the owner's [his] own real estate whether improved or
3-15 unimproved;
3-16 (10) transactions involving the sale, lease, or
3-17 transfer of cemetery lots; or
3-18 (11) transactions involving the renting, leasing, or
3-19 management of hotels or motels.
3-20 SECTION 4. Section 4, The Real Estate License Act (Article
3-21 6573a, Vernon's Texas Civil Statutes), is amended to read as
3-22 follows:
3-23 Sec. 4. A person who, directly or indirectly for another,
3-24 with the intention or on the promise of receiving any valuable
3-25 consideration, offers, attempts, or agrees to perform, or performs,
3-26 a single act defined in Subdivisions 2 and 3, Section 2 of this
3-27 Act, whether as a part of a transaction, or as an entire
4-1 transaction, is deemed to be acting as a real estate broker or
4-2 salesperson [salesman] within the meaning of this Act. The
4-3 commission of a single such act by a person required to be licensed
4-4 under this Act and not so licensed shall constitute a violation of
4-5 this Act.
4-6 SECTION 5. Sections 5(a), (f), (g), (i), and (m), The Real
4-7 Estate License Act (Article 6573a, Vernon's Texas Civil Statutes),
4-8 are amended to read as follows:
4-9 (a) The administration of the provisions of this Act is
4-10 vested in a commission, to be known as the "Texas Real Estate
4-11 Commission," consisting of nine members to be appointed by the
4-12 governor with the advice and consent of two-thirds of the senate
4-13 present. The commissioners hold office for staggered terms of six
4-14 years with the terms of three members expiring January 31 of each
4-15 odd-numbered year. Each member holds office until the member's
4-16 [his] successor is appointed and has qualified. Within 15 days
4-17 after [his] appointment, each member shall qualify by taking the
4-18 constitutional oath of office and furnishing a bond payable to the
4-19 Governor of Texas in the penal sum of $10,000, conditional on the
4-20 faithful performance of the member's [his] duties as prescribed by
4-21 law. A vacancy for any cause shall be filled by the governor for
4-22 the unexpired term. The governor shall designate as chairperson
4-23 [chairman] of the commission one member of the commission who is a
4-24 licensed real estate broker. The chairperson [chairman] serves in
4-25 that capacity at the pleasure of the governor. At a regular
4-26 meeting in February of each year, the commission shall elect from
4-27 its own membership a vice-chairperson [vice-chairman] and
5-1 secretary. A quorum of the commission consists of five members.
5-2 (f) If the administrator has knowledge that a potential
5-3 ground for removal exists, the administrator shall notify the
5-4 chairperson [chairman] of the commission of the ground. The
5-5 chairperson [chairman] shall then notify the governor that a
5-6 potential ground for removal exists.
5-7 (g) Each member of the commission shall receive as
5-8 compensation for each day actually spent on the member's [his]
5-9 official duties the sum of $75 and the [his] actual and necessary
5-10 expenses incurred in the performance of the member's [his] official
5-11 duties.
5-12 (i) The commission is empowered to select and name an
5-13 administrator and to select and employ such other subordinate
5-14 officers and employees as are necessary to administer this Act.
5-15 The salaries of the administrator and the officers and employees
5-16 shall be fixed by the commission not to exceed such amounts as are
5-17 fixed by the applicable general appropriations bill. The
5-18 commission may designate a subordinate officer as assistant
5-19 administrator who shall be authorized to act for the administrator
5-20 in the administrator's [his] absence. The administrator or the
5-21 administrator's designee shall develop a system of annual
5-22 performance evaluations. All merit pay for commission employees
5-23 must be based on the system established under this subsection. The
5-24 administrator or the administrator's designee shall develop an
5-25 intraagency career ladder program. The program shall require
5-26 intraagency postings of all nonentry level positions concurrently
5-27 with any public posting.
6-1 (m) The commission shall charge and collect as a condition
6-2 for issuance and for renewal of a real estate broker license the
6-3 fee under Section 11(a)(14) of this Act. The commission shall
6-4 charge and collect as a condition for issuance and for renewal of a
6-5 real estate salesperson [salesman] license the fee under Section
6-6 11(a)(15) of this Act. The commission shall transmit the fees
6-7 under this subsection quarterly to Texas A&M University for deposit
6-8 in a separate banking account. The money in the separate account
6-9 shall be expended for the support and maintenance of the Texas Real
6-10 Estate Research Center and for carrying out the purposes,
6-11 objectives, and duties of the center. However, all money expended
6-12 from the separate account shall be as determined by legislative
6-13 appropriation.
6-14 SECTION 6. Sections 6(a) and (b), The Real Estate License
6-15 Act (Article 6573a, Vernon's Texas Civil Statutes), are amended to
6-16 read as follows:
6-17 (a) A person desiring to act as a real estate broker in this
6-18 state shall file an application for a license with the commission
6-19 on a form prescribed by the commission. A broker desiring to
6-20 engage a person to participate in real estate brokerage activity
6-21 shall join the person in filing an application for a salesperson
6-22 [salesman] license on a form prescribed by the commission. A
6-23 person previously licensed as a broker may apply for inactive
6-24 status. A person previously licensed as a salesperson [salesman]
6-25 may apply for inactive status without the participation of a
6-26 broker. The person must apply for inactive status on a form
6-27 prescribed by the commission not later than the first anniversary
7-1 of the date of the expiration of the broker or salesperson
7-2 [salesman] license.
7-3 (b) To be eligible for a license, an individual must be a
7-4 citizen of the United States or a lawfully admitted alien, be at
7-5 least 18 years of age, and be a legal resident of Texas at the time
7-6 of the filing of an application, and must satisfy the commission as
7-7 to the individual's [his] honesty, trustworthiness, integrity, and
7-8 competency. However, the competency of the individual, for the
7-9 purpose of qualifying for the granting of a license, shall be
7-10 judged solely on the basis of the examination referred to in
7-11 Section 7 of this Act.
7-12 SECTION 7. Section 6A(a), The Real Estate License Act
7-13 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
7-14 as follows:
7-15 (a) If, at any time before a person applies for a license
7-16 under this Act, the person requests the commission to determine
7-17 whether the person's [his] moral character complies with the
7-18 commission's moral character requirements for licensing under this
7-19 Act and the person pays a fee set by the commission for the moral
7-20 character determination, the commission shall make its
7-21 determination of the person's moral character.
7-22 SECTION 8. Sections 7(a), (c)-(e), (g), and (h), The Real
7-23 Estate License Act (Article 6573a, Vernon's Texas Civil Statutes),
7-24 are amended to read as follows:
7-25 (a) Competency as referred to in Section 6 of this Act shall
7-26 be established by an examination prepared by or contracted for by
7-27 the commission. The examination shall be given at such times and
8-1 at such places within the state as the commission shall prescribe.
8-2 The examination shall be of scope sufficient in the judgment of the
8-3 commission to determine that a person is competent to act as a real
8-4 estate broker or salesperson [salesman] in a manner to protect the
8-5 interest of the public. The examination for a salesperson
8-6 [salesman] license shall be less exacting and less stringent than
8-7 the examination for a broker license. The commission shall furnish
8-8 each applicant with study material and references on which the
8-9 [his] examination shall be based. When an applicant for a real
8-10 estate license fails a qualifying examination, the applicant [he]
8-11 may apply for reexamination by filing a request therefor together
8-12 with the proper fee. The examination requirement must be satisfied
8-13 not later than six months after the date on which the application
8-14 for a license is filed. Courses of study required for a license
8-15 may include but are not limited to the following, which shall be
8-16 considered core real estate courses for all purposes of this Act:
8-17 (1) Principles of Real Estate (or equivalent) shall
8-18 include but not be limited to an overview of licensing as a real
8-19 estate broker and salesperson [salesman], ethics of practice,
8-20 titles to and conveyancing of real estate, legal descriptions, law
8-21 of agency, deeds, encumbrances and liens, distinctions between
8-22 personal and real property, contracts, appraisal, finance and
8-23 regulations, closing procedures, real estate mathematics, and at
8-24 least three classroom hours of instruction on federal, state, and
8-25 local laws relating to housing discrimination, housing credit
8-26 discrimination, and community reinvestment.
8-27 (2) Real Estate Appraisal (or equivalent) shall
9-1 include but not be limited to the central purposes and functions of
9-2 an appraisal, social and economic determinant of value, appraisal
9-3 case studies, cost, market data and income approaches to value
9-4 estimates, final correlations, and reporting.
9-5 (3) Real Estate Law (or equivalent) shall include but
9-6 not be limited to legal concepts of real estate, land description,
9-7 real property rights and estates in land, contracts, conveyances,
9-8 encumbrances, foreclosures, recording procedures, and evidence of
9-9 titles.
9-10 (4) Real Estate Finance (or equivalent) shall include
9-11 but not be limited to monetary systems, primary and secondary money
9-12 markets, sources of mortgage loans, federal government programs,
9-13 loan applications, processes and procedures, closing costs,
9-14 alternative financial instruments, equal credit opportunity acts,
9-15 community reinvestment act, and state housing agency.
9-16 (5) Real Estate Marketing (or equivalent) shall
9-17 include but not be limited to real estate professionalism and
9-18 ethics, characteristics of successful salespersons [salesmen], time
9-19 management, psychology of marketing, listing procedures,
9-20 advertising, negotiating and closing, financing, and the Deceptive
9-21 Trade Practices-Consumer Protection Act, as amended, Section 17.01
9-22 et seq., Business & Commerce Code.
9-23 (6) Real Estate Mathematics (or equivalent) shall
9-24 include but not be limited to basic arithmetic skills and review of
9-25 mathematical logic, percentages, interest, time-valued money,
9-26 depreciation, amortization, proration, and estimation of closing
9-27 statements.
10-1 (7) Real Estate Brokerage (or equivalent) shall
10-2 include but not be limited to law of agency, planning and
10-3 organization, operational policies and procedures, recruiting,
10-4 selection and training of personnel, records and control, and real
10-5 estate firm analysis and expansion criteria.
10-6 (8) Property Management (or equivalent) shall include
10-7 but not be limited to role of property manager, landlord policies,
10-8 operational guidelines, leases, lease negotiations, tenant
10-9 relations, maintenance, reports, habitability laws, and the Fair
10-10 Housing Act.
10-11 (9) Real Estate Investments (or equivalent) shall
10-12 include but not be limited to real estate investment
10-13 characteristics, techniques of investment analysis, time-valued
10-14 money, discounted and nondiscounted investment criteria, leverage,
10-15 tax shelters depreciation, and applications to property tax.
10-16 (10) Law of Agency (or equivalent) shall include but
10-17 not be limited to the principal-agent and master-servant
10-18 relationships, the authority of an agent, the termination of an
10-19 agent's authority, the fiduciary and other duties of an agent,
10-20 employment law, deceptive trade practices, listing or buying
10-21 representation procedures, and the disclosure of agency.
10-22 (c) The commission shall waive the examination of an
10-23 applicant for a broker license who has, within one year previous to
10-24 the filing of the [his] application, been licensed in this state as
10-25 a broker, and shall waive the examination of an applicant for a
10-26 salesperson [salesman] license who has, within one year previous to
10-27 the filing of the [his] application, been licensed in this state as
11-1 either a broker or salesperson [salesman].
11-2 (d) Each applicant for a broker license shall furnish the
11-3 commission satisfactory evidence that the applicant [he] has had
11-4 not less than two years active experience in this state as a
11-5 licensed real estate salesperson [salesman] or broker during the
11-6 36-month period immediately preceding the filing of the
11-7 application; and, in addition, shall furnish the commission
11-8 satisfactory evidence of having completed successfully 60 semester
11-9 hours, or equivalent classroom hours, of core real estate courses
11-10 or related postsecondary education courses accepted by the
11-11 commission. These qualifications for a broker license may not be
11-12 required of an applicant who, at the time of making the
11-13 application, is duly licensed as a real estate broker by any other
11-14 state in the United States if that state's requirements for
11-15 licensure are comparable to those of Texas. As a prerequisite for
11-16 applying for a broker license, those persons licensed as
11-17 salespersons [salesmen] subject to the annual education
11-18 requirements provided by Subsection (e) of this section shall, as
11-19 part of the hours required by this subsection, furnish the
11-20 commission satisfactory evidence of having completed all the
11-21 requirements of Subsection (e) of this section.
11-22 (e) Each applicant for a salesperson [salesman] license
11-23 shall furnish the commission satisfactory evidence of having
11-24 completed 12 semester hours, or equivalent classroom hours, of
11-25 postsecondary education, six hours of which must be completed in
11-26 core real estate courses, of which a minimum of two hours must be
11-27 completed in Principles of Real Estate as described in Subsection
12-1 (a)(1) of this section and a minimum of two hours must be completed
12-2 in Law of Agency as described in Subsection (a)(10) of this
12-3 section. The remaining six hours shall be completed in core real
12-4 estate courses or related courses. As a condition for the first
12-5 renewal of a salesperson [salesman] license, the applicant shall
12-6 furnish the commission satisfactory evidence of having completed a
12-7 minimum of 14 semester hours, or equivalent classroom hours, eight
12-8 hours of which must be completed in core real estate courses. As a
12-9 condition for the second renewal of a salesperson [salesman]
12-10 license, the applicant shall furnish the commission satisfactory
12-11 evidence of having completed a minimum of 16 semester hours, or
12-12 equivalent classroom hours, 10 hours of which must be completed in
12-13 core real estate courses. As a condition for the third renewal of
12-14 a salesperson [salesman] license, the applicant shall furnish the
12-15 commission satisfactory evidence of having completed a minimum of
12-16 18 semester hours, or equivalent classroom hours, 12 hours of which
12-17 must be completed in core real estate courses.
12-18 (g) Notwithstanding any other provision of this Act, each
12-19 applicant for a broker license shall furnish the commission with
12-20 satisfactory evidence:
12-21 (1) that the applicant [he] has satisfied the
12-22 requirements of Subsection (d) of this section;
12-23 (2) that the applicant [he] is a licensed real estate
12-24 broker in another state, [that he] has had not less than two years'
12-25 active experience in the other state as a licensed real estate
12-26 salesperson [salesman] or broker during the 36-month period
12-27 immediately preceding the filing of the application, and [that he]
13-1 has satisfied the educational requirements for a broker license as
13-2 provided by Subsection (d) of this section; or
13-3 (3) that the applicant [he] has, within one year
13-4 previous to the filing of the [his] application, been licensed in
13-5 this state as a broker.
13-6 (h) Notwithstanding any other provision of this Act, the
13-7 commission shall waive the requirements of Subsection (e) of this
13-8 section for an applicant for a salesperson [salesman] license who
13-9 has, within one year previous to the filing of the [his]
13-10 application, been licensed in this state as a broker or salesperson
13-11 [salesman]. However, with respect to an applicant for a
13-12 salesperson [salesman] license who was licensed as a salesperson
13-13 [salesman] within one year previous to the filing of the
13-14 application but whose original license was issued under the
13-15 provisions that the first, second, and third renewal of the license
13-16 would be conditioned upon furnishing satisfactory evidence of
13-17 successful completion of additional education, the commission shall
13-18 require the applicant to furnish satisfactory evidence of
13-19 successful completion of any additional education that would have
13-20 been required if the license had been maintained without
13-21 interruption during the previous year.
13-22 SECTION 9. Sections 7A(a)-(c), The Real Estate License Act
13-23 (Article 6573a, Vernon's Texas Civil Statutes), are amended to read
13-24 as follows:
13-25 (a) To renew an active real estate broker license or an
13-26 active real estate salesperson [salesman] license that is not
13-27 subject to the annual education requirements of this Act, the
14-1 licensee must provide the commission proof of attendance at at
14-2 least 15 classroom hours of continuing education courses approved
14-3 by the commission during the term of the current license. The
14-4 commission by rule may provide for the substitution of relevant
14-5 educational experience or correspondence courses approved by the
14-6 commission instead of classroom attendance. In addition,
14-7 supervised video instruction may be approved by the commission as a
14-8 course counting as classroom hours of mandatory continuing
14-9 education. At least six hours of instruction must be devoted to
14-10 the rules of the commission, fair housing laws, landlord-tenant law
14-11 and other Property Code issues, agency laws, antitrust laws, the
14-12 Deceptive Trade Practices-Consumer Protection Act (Subchapter E,
14-13 Chapter 17, Business & Commerce Code), disclosures to buyers,
14-14 landlords, tenants, and sellers, current contract and addendum
14-15 forms, the unauthorized practice of law, case studies involving
14-16 violations of laws and regulations, current Federal Housing
14-17 Administration and Department of Veterans Affairs regulations, tax
14-18 laws, property tax consulting laws and legal issues, or other legal
14-19 topics approved by the commission. The remaining hours may be
14-20 devoted to other real estate-related topics approved by the
14-21 commission. The commission may consider equivalent courses for
14-22 continuing education credit. Property tax consulting laws and
14-23 legal issues include but are not limited to the Tax Code,
14-24 preparation of property tax reports, the unauthorized practice of
14-25 law, agency laws, tax laws, laws concerning property taxes or
14-26 assessments, deceptive trade practices, contract forms and
14-27 addendum, and other legal topics approved by the commission. Real
15-1 estate related courses approved by the State Bar of Texas for
15-2 minimum continuing legal education participatory credit and core
15-3 real estate courses under Section 7(a) of this Act shall
15-4 automatically be approved as mandatory continuing education courses
15-5 under this Act. The commission may not require examinations except
15-6 for correspondence courses or courses offered by alternative
15-7 delivery systems such as computers. Daily classroom course
15-8 segments must be at least three hours long but not more than 10
15-9 hours long.
15-10 (b) An applicant for an active real estate broker license or
15-11 an active real estate salesperson [salesman] license who is not
15-12 subject to the education requirements of Section 7 of this Act must
15-13 provide the commission with proof of attendance of the number of
15-14 classroom hours of continuing education that would have been
15-15 required for a timely renewal as specified in Subsection (a) of
15-16 this section during the two-year period preceding the filing of the
15-17 application.
15-18 (c) As a condition of returning to active status, an
15-19 inactive salesperson [salesman] whose license is not subject to the
15-20 annual education requirements of this Act must provide the
15-21 commission with proof of attendance at at least 15 hours of
15-22 continuing education as specified in Subsection (a) of this section
15-23 during the two-year period preceding the filing of the application.
15-24 SECTION 10. Sections 8(a)-(f), (h), (i), (l), (n), and (q),
15-25 The Real Estate License Act (Article 6573a, Vernon's Texas Civil
15-26 Statutes), are amended to read as follows:
15-27 (a) The commission shall establish a real estate recovery
16-1 fund which shall be set apart and maintained by the commission as
16-2 provided in this section. The fund shall be used in the manner
16-3 provided in this section for reimbursing aggrieved persons who
16-4 suffer actual damages by reason of certain acts committed by a duly
16-5 licensed real estate broker or salesperson [salesman], or by an
16-6 unlicensed employee or agent of a broker or salesperson [salesman],
16-7 provided the broker or salesperson [salesman] was licensed by the
16-8 State of Texas at the time the act was committed and provided
16-9 recovery is ordered by a court of competent jurisdiction against
16-10 the broker or salesperson [salesman]. The use of the fund is
16-11 limited to an act that constitutes a violation of Section 15(a)(3)
16-12 or (6) of this Act.
16-13 (b) On application for an original license pursuant to this
16-14 Act, the applicant shall pay, in addition to the [his] original
16-15 license application fee, a fee of $10 which shall be deposited in
16-16 the real estate recovery fund.
16-17 (c) If on December 31 of any year the balance remaining in
16-18 the real estate recovery fund is less than $1 million, each real
16-19 estate broker and each real estate salesperson [salesman], on the
16-20 next renewal of the [his] license, shall pay, in addition to the
16-21 [his] license renewal fee, a fee of $10, which shall be deposited
16-22 in the real estate recovery fund, or a pro rata share of the amount
16-23 necessary to bring the fund to $1.7 million, whichever is less. If
16-24 on December 31 of any year the balance remaining in the real estate
16-25 recovery fund is more than $3.5 million or more than the total
16-26 amount of claims paid from the fund during the previous four fiscal
16-27 years, whichever is greater, the amount of money in excess of the
17-1 greater amount shall be transferred to the general revenue fund.
17-2 (d) No action for a judgment which subsequently results in
17-3 an order for collection from the real estate recovery fund shall be
17-4 started later than two years from the accrual of the cause of
17-5 action. When an aggrieved person commences action for a judgment
17-6 which may result in collection from the real estate recovery fund,
17-7 the real estate broker or real estate salesperson [salesman] shall
17-8 notify the commission in writing to this effect at the time of the
17-9 commencement of the action.
17-10 (e) When an aggrieved person recovers a valid judgment in a
17-11 court of competent jurisdiction against a real estate broker or
17-12 real estate salesperson [salesman], on the grounds described in
17-13 Subsection (a) of this section that occurred on or after May 19,
17-14 1975, the aggrieved person may, after final judgment has been
17-15 entered, execution returned nulla bona, and a judgment lien
17-16 perfected, file a verified claim in the court in which the judgment
17-17 was entered and, on 20 days' written notice to the commission, and
17-18 to the judgment debtor, may apply to the court for an order
17-19 directing payment out of the real estate recovery fund of the
17-20 amount unpaid on the judgment, subject to the limitations stated in
17-21 Subsection (n) of this section.
17-22 (f) The court shall proceed on the application forthwith.
17-23 On the hearing on the application, the aggrieved person is required
17-24 to show that:
17-25 (1) the judgment is based on facts allowing recovery
17-26 under Subsection (a) of this section;
17-27 (2) the person [he] is not a spouse of the debtor, or
18-1 the personal representative of the spouse; and the person [he] is
18-2 not a real estate broker or salesperson [salesman], as defined by
18-3 this Act, who is seeking to recover a real estate commission in the
18-4 transaction or transactions for which the application for payment
18-5 is made;
18-6 (3) the person [he] has obtained a judgment under
18-7 Subsection (e) of this section that is not subject to a stay or
18-8 discharge in bankruptcy, stating the amount of the judgment and the
18-9 amount owing on the judgment at the date of the application;
18-10 (4) based on the best available information, the
18-11 judgment debtor lacks sufficient attachable assets in this state or
18-12 any other state to satisfy the judgment; and
18-13 (5) the amount that may be realized from the sale of
18-14 real or personal property or other assets liable to be sold or
18-15 applied in satisfaction of the judgment and the balance remaining
18-16 due on the judgment after application of the amount that may be
18-17 realized.
18-18 (h) The court shall make an order directed to the commission
18-19 requiring payment from the real estate recovery fund of whatever
18-20 sum it finds to be payable on the claim, pursuant to and in
18-21 accordance with the limitations contained in this section, if the
18-22 court is satisfied, on the hearing, of the truth of all matters
18-23 required to be shown by the aggrieved person by Subsection (f) of
18-24 this section and that the aggrieved person has satisfied all of the
18-25 requirements of Subsections (e) and (f) of this section. The
18-26 commission may relitigate any issue material and relevant in the
18-27 hearing on the application that was determined in the underlying
19-1 action on which the judgment in favor of the applicant was based.
19-2 If the court finds that the aggregate amount of claims against a
19-3 real estate broker or salesperson [salesman] exceeds the
19-4 limitations contained in this section, the court shall reduce
19-5 proportionately the amount it finds payable on the claim.
19-6 (i) A license granted under the provisions of this Act may
19-7 be revoked by the commission on proof that the commission has made
19-8 a payment from the real estate recovery fund of any amount toward
19-9 satisfaction of a judgment against a licensed real estate broker or
19-10 salesperson [salesman]. The commission may probate an order
19-11 revoking a license. No broker or salesperson [salesman] is
19-12 eligible to receive a new license until the broker or salesperson
19-13 [he] has repaid in full, plus interest at the current legal rate,
19-14 the amount paid from the real estate recovery fund on the broker's
19-15 or salesperson's [his] account.
19-16 (l) When, on the order of the court, the commission has paid
19-17 from the real estate recovery fund any sum to the judgment
19-18 creditor, the commission shall be subrogated to all of the rights
19-19 of the judgment creditor to the extent of the amount paid. The
19-20 judgment creditor shall assign all of the creditor's [his] right,
19-21 title, and interest in the judgment up to the amount paid by the
19-22 commission which amount shall have priority for repayment in the
19-23 event of any subsequent recovery on the judgment. Any amount and
19-24 interest recovered by the commission on the judgment shall be
19-25 deposited to the fund.
19-26 (n) Notwithstanding any other provision, payments from the
19-27 real estate recovery fund are subject to the following conditions
20-1 and limitations:
20-2 (1) payments may be made only pursuant to an order of
20-3 a court of competent jurisdiction, as provided in Subsection (e) of
20-4 this section, and in the manner prescribed by this section;
20-5 (2) payments for claims, including attorneys' fees,
20-6 interest, and court costs, arising out of the same transaction
20-7 shall be limited in the aggregate to $50,000 regardless of the
20-8 number of claimants; and
20-9 (3) payments for claims based on judgments against any
20-10 one licensed real estate broker or salesperson [salesman] may not
20-11 exceed in the aggregate $100,000 until the fund has been reimbursed
20-12 by the licensee for all amounts paid.
20-13 (q) A broker or salesperson [salesman] licensed under this
20-14 Act shall notify consumers and service recipients of the
20-15 availability of the real estate recovery fund established under
20-16 this section for reimbursing certain aggrieved persons. The notice
20-17 must include the name, mailing address, and telephone number of the
20-18 commission and any other information required by commission rule.
20-19 The notification may be provided with the notice required by
20-20 Section 5(q) of this Act or:
20-21 (1) on a written contract for the services of a broker
20-22 or salesperson [salesman];
20-23 (2) on a brochure distributed by a broker or
20-24 salesperson [salesman];
20-25 (3) on a sign prominently displayed in the place of
20-26 business of a salesperson [salesman] or broker; or
20-27 (4) in a bill or receipt for service provided by a
21-1 broker or salesperson [salesman].
21-2 SECTION 11. Sections 9(a), (b), and (e), The Real Estate
21-3 License Act (Article 6573a, Vernon's Texas Civil Statutes), are
21-4 amended to read as follows:
21-5 (a) When an applicant has satisfactorily met all
21-6 requirements and conditions of this Act, a license shall be issued
21-7 which may remain in force and effect so long as the holder of the
21-8 license remains in compliance with the obligations of this Act,
21-9 which include payment of the renewal fee as provided in Section 11
21-10 of this Act. Each active salesperson [salesman] license issued
21-11 shall be delivered or mailed to the broker with whom the
21-12 salesperson [salesman] is associated and shall be kept under the
21-13 broker's [his] custody and control.
21-14 (b) An applicant is not permitted to engage in the real
21-15 estate business either as a broker or salesperson [salesman] until
21-16 a license evidencing the applicant's [his] authority to engage in
21-17 the real estate business has been received.
21-18 (e) The commission shall require in any application for a
21-19 broker or salesperson [salesman] license or a renewal of a broker
21-20 or salesperson [salesman] license the applicant to disclose whether
21-21 the applicant has entered a plea of guilty or nolo contendere to,
21-22 been found guilty of, or been convicted of a felony and the time
21-23 for appeal has elapsed or the judgment or conviction has been
21-24 affirmed on appeal, irrespective of an order granting probation
21-25 following the conviction or suspending the imposition of sentence.
21-26 SECTION 12. Section 10(a), The Real Estate License Act
21-27 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
22-1 as follows:
22-2 (a) If the commission declines or fails to license an
22-3 applicant, it shall immediately give written notice of the refusal
22-4 to the applicant. Before the applicant may appeal to a district
22-5 court as provided in Section 18 of this Act, the applicant [he]
22-6 must file within 10 days after the receipt of the notice an appeal
22-7 from the ruling, requesting a time and place for a hearing before
22-8 the commission. The commission shall set a time and place for the
22-9 hearing within 30 days from the receipt of the appeal, giving 10
22-10 days' notice of the hearing to the applicant. The time of the
22-11 hearing may be continued from time to time with the consent of the
22-12 applicant. Following the hearing, the commission shall enter an
22-13 order which is, in its opinion, appropriate in the matter
22-14 concerned.
22-15 SECTION 13. Section 11, The Real Estate License Act (Article
22-16 6573a, Vernon's Texas Civil Statutes), is amended to read as
22-17 follows:
22-18 Sec. 11. [(a)] The commission shall charge and collect the
22-19 following fees:
22-20 (1) a fee not to exceed $100 for the filing of an
22-21 original application for a real estate broker license;
22-22 (2) a fee not to exceed $100 for annual renewal of a
22-23 real estate broker license;
22-24 (3) a fee not to exceed $50 for the filing of an
22-25 original application for a real estate salesperson [salesman]
22-26 license;
22-27 (4) a fee not to exceed $50 for annual renewal of a
23-1 real estate salesperson [salesman] license;
23-2 (5) a fee not to exceed $25 for an application for a
23-3 license examination;
23-4 (6) a fee not to exceed $20 for filing a request for a
23-5 license for each additional office or place of business;
23-6 (7) a fee not to exceed $20 for filing a request for a
23-7 license for a change of place of business, change of name, return
23-8 to active status, or change of sponsoring broker;
23-9 (8) a fee not to exceed $20 for filing a request to
23-10 replace a license lost or destroyed;
23-11 (9) a fee not to exceed $400 for filing an application
23-12 for approval of an education program under Section 7(f) of this
23-13 Act;
23-14 (10) a fee not to exceed $200 a year for operation of
23-15 an education program under Section 7(f) of this Act;
23-16 (11) a fee of $15 for transcript evaluation;
23-17 (12) a fee not to exceed $10 for preparing a license
23-18 history;
23-19 (13) a fee not to exceed $50 for the filing of an
23-20 application for a moral character determination;
23-21 (14) an annual fee of $20 from each real estate broker
23-22 to be transmitted to Texas A&M University for the Texas Real Estate
23-23 Research Center as provided by Section 5(m) of this Act; and
23-24 (15) an annual fee of $17.50 from each real estate
23-25 salesperson [salesman] to be transmitted to Texas A&M University
23-26 for the Texas Real Estate Research Center as provided by Section
23-27 5(m) of this Act.
24-1 SECTION 14. Sections 12(a), (b), and (d), The Real Estate
24-2 License Act (Article 6573a, Vernon's Texas Civil Statutes), are
24-3 amended to read as follows:
24-4 (a) Each resident broker shall maintain a fixed office
24-5 within this state. The address of the office shall be designated
24-6 on the broker's license. Within 10 days after a move from a
24-7 previously designated address, the broker shall submit an
24-8 application for a new license, designating the new location of the
24-9 broker's [his] office, together with the required fee, whereupon
24-10 the commission shall issue a license, reflecting the new location,
24-11 provided the new location complies with the terms of this section.
24-12 (b) If a broker maintains more than one place of business
24-13 within this state, the broker [he] shall apply for, pay the
24-14 required fee for, and obtain an additional license to be known as a
24-15 branch office license for each additional office the broker [he]
24-16 maintains.
24-17 (d) Each broker shall also prominently display in the
24-18 broker's [his] place or in one of the broker's [his] places of
24-19 business the license of each real estate salesperson [salesman]
24-20 associated with the broker [him].
24-21 SECTION 15. Section 13, The Real Estate License Act (Article
24-22 6573a, Vernon's Texas Civil Statutes), is amended to read as
24-23 follows:
24-24 Sec. 13. (a) When the association of a salesperson
24-25 [salesman] with the salesperson's [his] sponsoring broker is
24-26 terminated, the broker shall immediately return the salesperson
24-27 [salesman] license to the commission. The salesperson [salesman]
25-1 license then becomes inactive.
25-2 (b) The salesperson [salesman] license may be activated if,
25-3 before the license expires, a request, accompanied by the required
25-4 fee, is filed with the commission by a licensed broker advising
25-5 that the broker [he] assumes sponsorship of the salesperson
25-6 [salesman].
25-7 SECTION 16. Section 13A(a), The Real Estate License Act
25-8 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
25-9 as follows:
25-10 (a) A real estate broker who holds a license issued under
25-11 this Act and who is not acting as a broker or sponsoring a
25-12 salesperson [salesman] may apply to the commission in writing to be
25-13 placed on the inactive status list maintained by the commission.
25-14 The broker must apply for inactive status before the expiration of
25-15 the broker's license. The broker shall terminate the broker's
25-16 association with any salesperson [salesmen] sponsored by the broker
25-17 by giving written notice to the salesperson [salesmen] before the
25-18 30th day before the date the broker applies for inactive status. A
25-19 person on inactive status under this section is required to pay the
25-20 annual renewal fees.
25-21 SECTION 17. Section 14, The Real Estate License Act (Article
25-22 6573a, Vernon's Texas Civil Statutes), is amended to read as
25-23 follows:
25-24 Sec. 14. (a) It is unlawful for a licensed broker to employ
25-25 or compensate directly or indirectly a person for performing an act
25-26 enumerated in the definition of real estate broker in Section 2 of
25-27 this Act if the person is not a licensed broker or licensed
26-1 salesperson [salesman] in this state. However, a licensed broker
26-2 may pay a commission to a licensed broker of another state if the
26-3 foreign broker does not conduct in this state any of the
26-4 negotiations for which the fee, compensation, or commission is
26-5 paid.
26-6 (b) A resident broker of another state who furnishes the
26-7 evidence required under Section 7(g) of this Act may apply for a
26-8 license as a broker in this state. A resident of another state who
26-9 is not licensed as a broker but who was formerly licensed as a
26-10 salesperson [salesman] or broker in this state may apply for a
26-11 license in this state not later than the first anniversary of the
26-12 date of the expiration of the previous license. An application by
26-13 a nonresident is subject to the requirements under this Act for the
26-14 type of license applied for. A nonresident licensee need not
26-15 maintain a place of business in this state. The commission may in
26-16 its discretion refuse to issue a license to an applicant who is not
26-17 a resident of this state for the same reasons that it may refuse to
26-18 license a resident of this state. The commission shall judge the
26-19 competency of a nonresident applicant solely on the basis of the
26-20 examination conducted under Section 7 of this Act.
26-21 (c) Each nonresident applicant shall file an irrevocable
26-22 consent that legal actions may be commenced against the applicant
26-23 [him] in the proper court of any county of this state in which a
26-24 cause of action may arise, or in which the plaintiff may reside, by
26-25 service of process or pleading authorized by the laws of this
26-26 state, or by serving the administrator or assistant administrator
26-27 of the commission. The consent shall stipulate that the service of
27-1 process or pleading shall be valid and binding in all courts as if
27-2 personal service had been made on the nonresident in this state.
27-3 The consent shall be duly acknowledged, and if made by a
27-4 corporation, shall be authenticated by its seal. A service of
27-5 process or pleading served on the commission shall be by duplicate
27-6 copies, one of which shall be filed in the office of the commission
27-7 and the other forwarded by registered mail to the last known
27-8 principal address which the commission has for the nonresident
27-9 against whom the process or pleading is directed. No default in an
27-10 action may be taken except on certification by the commission that
27-11 a copy of the process or pleading was mailed to the defendant as
27-12 provided in this section, and no default judgment may be taken in
27-13 an action or proceeding until 20 days after the day of mailing of
27-14 the process or pleading to the defendant.
27-15 Notwithstanding any other provision of this subsection, a
27-16 nonresident of this state who resides in a city whose boundaries
27-17 are contiguous at any point to the boundaries of a city of this
27-18 state, and who has been an actual bona fide resident of that city
27-19 for at least 60 days immediately preceding the filing of his
27-20 application, is eligible to be licensed as a real estate broker or
27-21 salesperson [salesman] under this Act in the same manner as a
27-22 resident of this state. If a person [he] is licensed in this
27-23 manner, the person [he] shall at all times maintain a place of
27-24 business either in the city in which the person [he] resides or in
27-25 the city in this state which is contiguous to the city in which the
27-26 person [he] resides, and the person [he] may not maintain a place
27-27 of business at another location in this state unless the person
28-1 [he] also complies with the requirements of Section 14(b) of this
28-2 Act. The place of business must satisfy the requirements of
28-3 Subsection (a) of Section 12 of this Act, but the place of business
28-4 shall be deemed a definite place of business in this state within
28-5 the meaning of Subsection (a) of Section 12.
28-6 SECTION 18. Sections 15(a) and (d), The Real Estate License
28-7 Act (Article 6573a, Vernon's Texas Civil Statutes), are amended to
28-8 read as follows:
28-9 (a) The commission may, on its own motion, and shall, on the
28-10 signed complaint in writing of a consumer or service recipient,
28-11 provided the complaint, or the complaint together with evidence,
28-12 documentary or otherwise, presented in connection with the
28-13 complaint, provides reasonable cause, investigate the actions and
28-14 records of a real estate broker or real estate salesperson
28-15 [salesman]. The commission may suspend or revoke a license issued
28-16 under the provisions of this Act at any time when it has been
28-17 determined that:
28-18 (1) the licensee has entered a plea of guilty or nolo
28-19 contendere to, or been found guilty of, or been convicted of, a
28-20 felony, in which fraud is an essential element, and the time for
28-21 appeal has elapsed or the judgment or conviction has been affirmed
28-22 on appeal, irrespective of an order granting probation following
28-23 such conviction, suspending the imposition of sentence;
28-24 (2) the licensee has procured, or attempted to
28-25 procure, a real estate license, for the licensee [himself] or a
28-26 salesperson [salesman], by fraud, misrepresentation or deceit, or
28-27 by making a material misstatement of fact in an application for a
29-1 real estate license;
29-2 (3) the licensee, when selling, buying, trading, or
29-3 renting real property in the licensee's [his] own name, engaged in
29-4 misrepresentation or dishonest or fraudulent action;
29-5 (4) the licensee has failed within a reasonable time
29-6 to make good a check issued to the commission after the commission
29-7 has mailed a request for payment by certified mail to the
29-8 licensee's last known business address as reflected by the
29-9 commission's records;
29-10 (5) the licensee has disregarded or violated a
29-11 provision of this Act;
29-12 (6) the licensee, while performing an act constituting
29-13 an act of a broker or salesperson [salesman], as defined by this
29-14 Act, has been guilty of:
29-15 (A) making a material misrepresentation, or
29-16 failing to disclose to a potential purchaser any latent structural
29-17 defect or any other defect known to the broker or salesperson
29-18 [salesman]. Latent structural defects and other defects do not
29-19 refer to trivial or insignificant defects but refer to those
29-20 defects that would be a significant factor to a reasonable and
29-21 prudent purchaser in making a decision to purchase;
29-22 (B) making a false promise of a character likely
29-23 to influence, persuade, or induce any person to enter into a
29-24 contract or agreement when the licensee could not or did not intend
29-25 to keep such promise;
29-26 (C) pursuing a continued and flagrant course of
29-27 misrepresentation or making of false promises through agents,
30-1 salespersons [salesmen], advertising, or otherwise;
30-2 (D) failing to make clear, to all parties to a
30-3 transaction, which party the licensee [he] is acting for, or
30-4 receiving compensation from more than one party except with the
30-5 full knowledge and consent of all parties;
30-6 (E) failing within a reasonable time properly to
30-7 account for or remit money coming into the licensee's [his]
30-8 possession which belongs to others, or commingling money belonging
30-9 to others with the licensee's [his] own funds;
30-10 (F) paying a commission or fees to or dividing a
30-11 commission or fees with anyone not licensed as a real estate broker
30-12 or salesperson [salesman] in this state or in any other state for
30-13 compensation for services as a real estate agent;
30-14 (G) failing to specify in a listing contract or
30-15 in another contract in which the licensee agrees to perform
30-16 services for which a license is required under this Act a definite
30-17 termination date which is not subject to prior notice;
30-18 (H) accepting, receiving, or charging an
30-19 undisclosed commission, rebate, or direct profit on expenditures
30-20 made for a principal;
30-21 (I) soliciting, selling, or offering for sale
30-22 real property under a scheme or program that constitutes a lottery
30-23 or deceptive practice;
30-24 (J) acting in the dual capacity of broker and
30-25 undisclosed principal in a transaction;
30-26 (K) guaranteeing, authorizing, or permitting a
30-27 person to guarantee that future profits will result from a resale
31-1 of real property;
31-2 (L) placing a sign on real property offering it
31-3 for sale, lease, or rent without the written consent of the owner
31-4 or the owner's [his] authorized agent;
31-5 (M) inducing or attempting to induce a party to
31-6 a contract of sale or lease to break the contract for the purpose
31-7 of substituting in lieu thereof a new contract;
31-8 (N) negotiating or attempting to negotiate the
31-9 sale, exchange, lease, or rental of real property with an owner,
31-10 lessor, buyer, or tenant, knowing that the owner, lessor, buyer, or
31-11 tenant had a written outstanding contract, granting exclusive
31-12 agency in connection with the transaction to another real estate
31-13 broker;
31-14 (O) offering real property for sale or for lease
31-15 without the knowledge and consent of the owner or the owner's [his]
31-16 authorized agent, or on terms other than those authorized by the
31-17 owner or the owner's [his] authorized agent;
31-18 (P) publishing, or causing to be published, an
31-19 advertisement including, but not limited to, advertising by
31-20 newspaper, radio, television, or display which is misleading, or
31-21 which is likely to deceive the public, or which in any manner tends
31-22 to create a misleading impression, or which fails to identify the
31-23 person causing the advertisement to be published as a licensed real
31-24 estate broker or agent;
31-25 (Q) having knowingly withheld from or inserted
31-26 in a statement of account or invoice, a statement that made it
31-27 inaccurate in a material particular;
32-1 (R) publishing or circulating an unjustified or
32-2 unwarranted threat of legal proceedings, or other action;
32-3 (S) establishing an association, by employment
32-4 or otherwise, with an unlicensed person who is expected or required
32-5 to act as a real estate licensee, or aiding or abetting or
32-6 conspiring with a person to circumvent the requirements of this
32-7 Act;
32-8 (T) failing or refusing on demand to furnish
32-9 copies of a document pertaining to a transaction dealing with real
32-10 estate to a person whose signature is affixed to the document;
32-11 (U) failing to advise a purchaser in writing
32-12 before the closing of a transaction that the purchaser should
32-13 either have the abstract covering the real estate which is the
32-14 subject of the contract examined by an attorney of the purchaser's
32-15 own selection, or be furnished with or obtain a policy of title
32-16 insurance;
32-17 (V) conduct which constitutes dishonest
32-18 dealings, bad faith, or untrustworthiness;
32-19 (W) acting negligently or incompetently in
32-20 performing an act for which a person is required to hold a real
32-21 estate license;
32-22 (X) disregarding or violating a provision of
32-23 this Act;
32-24 (Y) failing within a reasonable time to deposit
32-25 money received as escrow agent in a real estate transaction, either
32-26 in trust with a title company authorized to do business in this
32-27 state, or in a custodial, trust, or escrow account maintained for
33-1 that purpose in a banking institution authorized to do business in
33-2 this state;
33-3 (Z) disbursing money deposited in a custodial,
33-4 trust, or escrow account, as provided in Subsection (Y) before the
33-5 transaction concerned has been consummated or finally otherwise
33-6 terminated; or
33-7 (AA) discriminating against an owner, potential
33-8 purchaser, lessor, or potential lessee on the basis of race, color,
33-9 religion, sex, national origin, or ancestry, including directing
33-10 prospective home buyers or lessees interested in equivalent
33-11 properties to different areas according to the race, color,
33-12 religion, sex, national origin, or ancestry of the potential owner
33-13 or lessee;
33-14 (7) the licensee has failed or refused on demand to
33-15 produce a document, book, or record in the licensee's [his]
33-16 possession concerning a real estate transaction conducted by the
33-17 licensee [him] for inspection by the commission or its authorized
33-18 personnel or representative;
33-19 (8) the licensee has failed within a reasonable time
33-20 to provide information requested by the commission as a result of a
33-21 formal or informal complaint to the commission which would indicate
33-22 a violation of this Act; or
33-23 (9) the licensee has failed without just cause to
33-24 surrender to the rightful owner, on demand, a document or
33-25 instrument coming into the licensee's [his] possession.
33-26 (d) The commission may not investigate under this section a
33-27 complaint submitted more than four years after the date of the
34-1 incident involving a real estate broker or salesperson [salesman]
34-2 that is the subject of the complaint.
34-3 SECTION 19. Section 15C(m)(3), The Real Estate License Act
34-4 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
34-5 as follows:
34-6 (3) "Licensee" means a real estate broker or real
34-7 estate salesperson [salesman] and includes a licensed associate of
34-8 a licensee.
34-9 SECTION 20. Section 15D, The Real Estate License Act
34-10 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
34-11 as follows:
34-12 Sec. 15D. No licensed real estate broker, licensed real
34-13 estate salesperson [salesman], or not for profit real estate board
34-14 or association which provides information about real property sales
34-15 prices or terms of sale for the purpose of facilitating the
34-16 listing, selling, leasing, financing, or appraisal of real property
34-17 shall be liable to any other person as a result of so providing
34-18 such information unless the disclosure of same is otherwise
34-19 specifically prohibited by statute.
34-20 SECTION 21. Sections 16(a), (b), (d), and (e), The Real
34-21 Estate License Act (Article 6573a, Vernon's Texas Civil Statutes),
34-22 are amended to read as follows:
34-23 (a) A license granted under the provisions of this Act shall
34-24 be suspended or revoked by the commission on proof that the
34-25 licensee, not being licensed and authorized to practice law in this
34-26 state, for a consideration, reward, pecuniary benefit, present or
34-27 anticipated, direct or indirect, or in connection with or as a part
35-1 of the licensee's [his] employment, agency, or fiduciary
35-2 relationship as a licensee, drew a deed, note, deed of trust, will,
35-3 or other written instrument that may transfer or anywise affect the
35-4 title to or an interest in land, except as provided in the
35-5 subsections below, or advised or counseled a person as to the
35-6 validity or legal sufficiency of an instrument or as to the
35-7 validity of title to real estate.
35-8 (b) Notwithstanding the provisions of this Act or any other
35-9 law, the completion of contract forms which bind the sale,
35-10 exchange, option, lease, or rental of any interest in real property
35-11 by a real estate broker or salesperson [salesman] incident to the
35-12 performance of the acts of a broker as defined by this article does
35-13 not constitute the unauthorized or illegal practice of law in this
35-14 state, provided the forms have been promulgated for use by the
35-15 commission for the particular kind of transaction involved, or the
35-16 forms have been prepared by an attorney at law licensed by this
35-17 state and approved by said attorney for the particular kind of
35-18 transaction involved, or the forms have been prepared by the
35-19 property owner or prepared by an attorney and required by the
35-20 property owner.
35-21 (d) The Texas Real Estate Broker-Lawyer Committee shall have
35-22 12 members including six members appointed by the commission and
35-23 six members of the State Bar of Texas appointed by the President of
35-24 the State Bar of Texas. The members of the committee shall hold
35-25 office for staggered terms of six years with the terms of two
35-26 commission appointees and two State Bar appointees expiring every
35-27 two years. Each member shall hold office until the member's [his]
36-1 successor is appointed. A vacancy for any cause shall be filled
36-2 for the expired term by the agency making the original appointment.
36-3 Appointments to the committee shall be made without regard to race,
36-4 creed, sex, religion, or national origin.
36-5 (e) In the best interest of the public the commission may
36-6 adopt rules and regulations requiring real estate brokers and
36-7 salespersons [salesmen] to use contract forms which have been
36-8 prepared by the Texas Real Estate Broker-Lawyer Committee and
36-9 promulgated by the commission; provided, however, that the
36-10 commission shall not prohibit a real estate broker or salesperson
36-11 [salesman] from using a contract form or forms binding the sale,
36-12 exchange, option, lease, or rental of any interest in real property
36-13 which have been prepared by the property owner or prepared by an
36-14 attorney and required by the property owner. For the purpose of
36-15 this section, contract forms prepared by the Texas Real Estate
36-16 Broker-Lawyer Committee appointed by the commission and the State
36-17 Bar of Texas and promulgated by the commission prior to the
36-18 effective date of this Act shall be deemed to have been prepared by
36-19 the Texas Real Estate Broker-Lawyer Committee. The commission may
36-20 suspend or revoke a license issued under the provisions of this
36-21 article when it has determined that the licensee failed to use a
36-22 contract form as required by the commission pursuant to this
36-23 section.
36-24 SECTION 22. Section 17(a), The Real Estate License Act
36-25 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
36-26 as follows:
36-27 (a) If the commission proposes to suspend or revoke a
37-1 person's license or registration, the person is entitled to a
37-2 hearing before the commission or a hearings officer appointed by
37-3 the commission. The commission shall prescribe procedures by which
37-4 all decisions to suspend or revoke are made by or are appealable to
37-5 the commission. The commission shall prescribe the time and place
37-6 of the hearing. However, the hearing shall be held, if the
37-7 licensee so desires, within the county where the licensee has the
37-8 licensee's [his] principal place of business, or if the licensee is
37-9 a nonresident, the hearing may be called for and held in any county
37-10 within this state. The hearing is governed by the procedures for a
37-11 contested case under Chapter 2001, Government Code [the
37-12 Administrative Procedure and Texas Register Act (Article 6252-13a,
37-13 Vernon's Texas Civil Statutes)].
37-14 SECTION 23. Section 18A(a), The Real Estate License Act
37-15 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
37-16 as follows:
37-17 (a) Any listing contract form adopted by the commission
37-18 relating to the contractual obligations between a seller of real
37-19 estate and a real estate broker or salesperson [salesman] acting as
37-20 an agent for the seller shall include a section that informs the
37-21 parties to the contract that real estate commissions are
37-22 negotiable.
37-23 SECTION 24. Section 18B(a), The Real Estate License Act
37-24 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
37-25 as follows:
37-26 (a) If a person files a complaint with the commission
37-27 relating to a real estate broker or salesperson [salesman], the
38-1 commission shall furnish to the person an explanation of the
38-2 remedies that are available to the person under this Act and
38-3 information about appropriate state or local agencies or officials
38-4 with which the person may file a complaint. The commission shall
38-5 furnish the same explanation and information to the person against
38-6 whom the complaint is filed.
38-7 SECTION 25. Sections 19(a) and (b), The Real Estate License
38-8 Act (Article 6573a, Vernon's Texas Civil Statutes), are amended to
38-9 read as follows:
38-10 (a) A person acting as a real estate broker or real estate
38-11 salesperson [salesman] without first obtaining a license is guilty
38-12 of a misdemeanor and on conviction shall be punishable by a fine of
38-13 not less than $100 nor more than $500, or by imprisonment in the
38-14 county jail for a term not to exceed one year, or both; and if a
38-15 corporation or a limited liability company, shall be punishable by
38-16 a fine of not less than $1,000 nor more than $2,000. A person, on
38-17 conviction of a second or subsequent offense, shall be punishable
38-18 by a fine of not less than $500 nor more than $1,000, or by
38-19 imprisonment for a term not to exceed two years, or both; and if a
38-20 corporation or a limited liability company, shall be punishable by
38-21 a fine of not less than $2,000 nor more than $5,000.
38-22 (b) In case a person received money, or the equivalent
38-23 thereof, as a fee, commission, compensation, or profit by or in
38-24 consequence of a violation of Subsection (a) of this section, the
38-25 person [he] shall, in addition, be liable to a penalty of not less
38-26 than the amount of the sum of money so received and not more than
38-27 three times the sum so received, as may be determined by the court,
39-1 which penalty may be recovered in a court of competent jurisdiction
39-2 by an aggrieved person.
39-3 SECTION 26. Section 19A(o), The Real Estate License Act
39-4 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
39-5 as follows:
39-6 (o) A penalty collected under this section for a violation
39-7 by a person licensed as a real estate broker or salesperson
39-8 [salesman] shall be deposited in the real estate recovery fund. A
39-9 penalty collected under this section for a violation by a person
39-10 licensed or registered as a real estate inspector shall be
39-11 deposited in the real estate inspection recovery fund.
39-12 SECTION 27. Section 20, The Real Estate License Act (Article
39-13 6573a, Vernon's Texas Civil Statutes), is amended to read as
39-14 follows:
39-15 Sec. 20. (a) A person may not bring or maintain an action
39-16 for the collection of compensation for the performance in this
39-17 state of an act set forth in Section 2 of this Act without alleging
39-18 and proving that the person performing the brokerage services was a
39-19 duly licensed real estate broker or salesperson [salesman] at the
39-20 time the alleged services were commenced, or was a duly licensed
39-21 attorney at law in this state or in any other state.
39-22 (b) An action may not be brought in a court in this state
39-23 for the recovery of a commission for the sale or purchase of real
39-24 estate unless the promise or agreement on which the action is
39-25 brought, or some memorandum thereof, is in writing and signed by
39-26 the party to be charged or signed by a person lawfully authorized
39-27 by the party [him] to sign it.
40-1 (c) When an offer to purchase real estate in this state is
40-2 signed, the real estate broker or salesperson [salesman] shall
40-3 advise the purchaser or purchasers, in writing, that the purchaser
40-4 or purchasers should have the abstract covering the real estate
40-5 which is the subject of the contract examined by an attorney of the
40-6 purchaser's own selection, or that the purchaser or purchasers
40-7 should be furnished with or obtain a policy of title insurance.
40-8 Failure to advise the purchaser as provided in this subsection
40-9 precludes the payment of or recovery of any commission agreed to be
40-10 paid on the sale.
40-11 SECTION 28. Sections 23(b)(2), (5), and (9), The Real Estate
40-12 License Act (Article 6573a, Vernon's Texas Civil Statutes), are
40-13 amended to read as follows:
40-14 (2) The committee is composed of nine members
40-15 appointed by the commission. The members of the committee hold
40-16 office for staggered terms of six years, with the terms of three
40-17 members expiring February 1 of each odd-numbered year. Each member
40-18 holds office until the member's successor is appointed.
40-19 Appointments to the committee shall be made without regard to the
40-20 sex, race, color, age, handicap, religion, or national origin of
40-21 the appointees. In the event of a vacancy during a term, the
40-22 commission shall appoint a replacement who meets the qualifications
40-23 for appointment under this subdivision to fill the unexpired part
40-24 of the term. A member of the committee must be a professional
40-25 inspector actively engaged in the practice of real estate
40-26 inspecting at the time of appointment and must have been primarily
40-27 engaged in the practice of real estate inspecting for at least five
41-1 years before the member's appointment. A member of the committee
41-2 may not hold a real estate broker or salesperson [salesman]
41-3 license. Each member of the committee is entitled to a per diem
41-4 allowance and to reimbursement of travel expenses necessarily
41-5 incurred in performing functions as a member of the committee,
41-6 subject to any applicable limitation in the General Appropriations
41-7 Act. The committee shall annually elect from its members a
41-8 chairperson [chairman], a vice-chairperson [vice-chairman], and
41-9 secretary. A quorum of the committee consists of five members.
41-10 (5) If the administrator of the commission has
41-11 knowledge that a potential ground for removal exists, the
41-12 administrator shall notify the chairperson [chairman] of the
41-13 commission that a potential ground exists.
41-14 (9) The committee shall act in an advisory capacity to
41-15 develop and recommend to the commission rules under this section.
41-16 The committee shall review commission rules relating to this
41-17 section and recommend changes in the rules to the commission. The
41-18 commission shall submit all proposed rules, all proposed rule
41-19 changes and all requests for proposed rules or rule changes that
41-20 relate to the regulation and licensing of inspectors under this
41-21 section to the committee for development or recommendation. The
41-22 commission may modify the rules developed by the committee if the
41-23 commission finds such modifications are in the public interest.
41-24 This section does not prohibit the commission from developing and
41-25 adopting rules relating to the regulation and licensing of
41-26 inspectors under this section if the committee fails to develop or
41-27 recommend rules under this section within a reasonable period of
42-1 time after the commission submits the proposed rules, rule changes
42-2 or requests for proposed rules or rule changes to the committee.
42-3 If the committee determines that a rule requested by the commission
42-4 should not be developed or recommended for adoption by the
42-5 commission, the committee shall submit a report on the matter to
42-6 the commission. The chairperson [chairman] of the commission and
42-7 the chairperson [chairman] of the committee shall then appoint
42-8 three members each from their respective bodies to meet as an ad
42-9 hoc committee to consider the report and recommend possible action
42-10 by the commission. The chairperson [chairman] of the commission or
42-11 a member of the commission designated by the chairperson [chairman]
42-12 shall serve as the seventh member of the ad hoc committee. At
42-13 least one member of the ad hoc committee must be a public member of
42-14 the commission.
42-15 SECTION 29. Section 23(l), The Real Estate License Act
42-16 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
42-17 as follows:
42-18 (l) Prohibited acts. A professional inspector, real estate
42-19 inspector or an apprentice inspector licensed under this section
42-20 may not:
42-21 (1) accept an assignment for real estate inspection if
42-22 the employment or fee is contingent on the reporting of a specific,
42-23 predetermined condition of the improvements to real property or is
42-24 contingent on the reporting of specific findings other than those
42-25 known by the inspector to be facts at the time of accepting the
42-26 assignment;
42-27 (2) act in a manner or engage in a practice that is
43-1 dishonest or fraudulent or that involves deceit or
43-2 misrepresentation;
43-3 (3) perform a real estate inspection in a negligent or
43-4 incompetent manner;
43-5 (4) act in the dual capacity of inspector and
43-6 undisclosed principal in a transaction;
43-7 (5) act in the dual capacity of inspector and real
43-8 estate broker or salesperson [salesman] in a transaction;
43-9 (6) perform or agree to perform any repairs or
43-10 maintenance in connection with a real estate inspection pursuant to
43-11 the provisions of any earnest money contract, lease agreement, or
43-12 exchange of real estate; or
43-13 (7) violate the rules adopted by the commission or any
43-14 provisions of this section.
43-15 SECTION 30. Section 24(b), The Real Estate License Act
43-16 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
43-17 as follows:
43-18 (b) A person may not engage in business as a residential
43-19 rental locator in this state unless the person holds a license
43-20 issued under this Act to operate as a real estate broker or real
43-21 estate salesperson [salesman] and complies with the continuing
43-22 education requirements under Section 7A of this Act.
43-23 SECTION 31. (a) This Act takes effect September 1, 1997.
43-24 (b) The change made by this Act in the title of a person
43-25 licensed to sell real estate does not affect the validity of a
43-26 license issued or an act performed before the effective date of
43-27 this Act.
44-1 (c) The terms "real estate salesperson" and "real estate
44-2 salesman" have the same meaning and may both be used under The Real
44-3 Estate License Act (Article 6573a, Vernon's Texas Civil Statutes)
44-4 until January 1, 1999. Not later than January 1, 1999, the Texas
44-5 Real Estate Commission shall adopt new forms, licenses, rules, and
44-6 other documents that only use the term "real estate salesperson."
44-7 SECTION 32. The importance of this legislation and the
44-8 crowded condition of the calendars in both houses create an
44-9 emergency and an imperative public necessity that the
44-10 constitutional rule requiring bills to be read on three several
44-11 days in each house be suspended, and this rule is hereby suspended.