1-1 By: Danburg (Senate Sponsor - Ellis) H.B. No. 814
1-2 (In the Senate - Received from the House April 27, 1997;
1-3 April 29, 1997, read first time and referred to Committee on State
1-4 Affairs; May 16, 1997, reported favorably by the following vote:
1-5 Yeas 13, Nays 0; May 16, 1997, sent to printer.)
1-6 A BILL TO BE ENTITLED
1-7 AN ACT
1-8 relating to the title of certain persons licensed to sell real
1-9 estate.
1-10 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-11 SECTION 1. Sections 1(b)-(e), The Real Estate License Act
1-12 (Article 6573a, Vernon's Texas Civil Statutes), are amended to read
1-13 as follows:
1-14 (b) It is unlawful for a person to act in the capacity of,
1-15 engage in the business of, or advertise or hold that person
1-16 [himself] out as engaging in or conducting the business of a real
1-17 estate broker or a real estate salesperson [salesman] within this
1-18 state without first obtaining a real estate license from the Texas
1-19 Real Estate Commission. It is unlawful for a person licensed as a
1-20 real estate salesperson [salesman] to act or attempt to act as a
1-21 real estate broker or salesperson [salesman] unless that person
1-22 [he] is, at such time, associated with a licensed Texas real estate
1-23 broker and acting for the licensed real estate broker.
1-24 (c) Each real estate broker licensed pursuant to this Act is
1-25 responsible to the commission, members of the public, and the
1-26 broker's [his] clients for all acts and conduct performed under
1-27 this Act by the broker [himself] or by a real estate salesperson
1-28 [salesman] associated with or acting for the broker.
1-29 (d) No real estate salesperson [salesman] shall accept
1-30 compensation for real estate sales and transactions from any person
1-31 other than the broker under whom the salesperson [he] is at the
1-32 time licensed or under whom the salesperson [he] was licensed when
1-33 the salesperson [he] earned the right to compensation.
1-34 (e) No real estate salesperson [salesman] shall pay a
1-35 commission to any person except through the broker under whom the
1-36 salesperson [he] is at the time licensed.
1-37 SECTION 2. Section 2(4), The Real Estate License Act
1-38 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
1-39 as follows:
1-40 (4) "Real estate salesperson or salesman" means a
1-41 person associated with a Texas licensed real estate broker for the
1-42 purposes of performing acts or transactions comprehended by the
1-43 definition of "real estate broker" as defined in this Act.
1-44 SECTION 3. Section 3, The Real Estate License Act (Article
1-45 6573a, Vernon's Texas Civil Statutes), is amended to read as
1-46 follows:
1-47 Sec. 3. The provisions of this Act shall not apply to any of
1-48 the following persons and transactions, and each and all of the
1-49 following persons and transactions are hereby exempted from the
1-50 provisions of this Act:
1-51 (1) an attorney at law licensed in this state or in
1-52 any other state;
1-53 (2) an attorney in fact under a duly executed power of
1-54 attorney authorizing the consummation of a real estate transaction;
1-55 (3) a public official in the conduct of that person's
1-56 [his] official duties;
1-57 (4) a person calling the sale of real estate by
1-58 auction under the authority of a license issued by this state
1-59 provided the person does not perform any other act of a real estate
1-60 broker or salesperson [salesman] as defined by this Act;
1-61 (5) a person acting under a court order or under the
1-62 authority of a will or a written trust instrument;
1-63 (6) a salesperson employed by an owner in the sale of
1-64 structures and land on which said structures are situated, provided
2-1 such structures are erected by the owner in the due course of the
2-2 owner's [his] business;
2-3 (7) an on-site manager of an apartment complex;
2-4 (8) transactions involving the sale, lease, or
2-5 transfer of any mineral or mining interest in real property;
2-6 (9) an owner or the owner's [his] employees in renting
2-7 or leasing the owner's [his] own real estate whether improved or
2-8 unimproved;
2-9 (10) transactions involving the sale, lease, or
2-10 transfer of cemetery lots; or
2-11 (11) transactions involving the renting, leasing, or
2-12 management of hotels or motels.
2-13 SECTION 4. Section 4, The Real Estate License Act (Article
2-14 6573a, Vernon's Texas Civil Statutes), is amended to read as
2-15 follows:
2-16 Sec. 4. A person who, directly or indirectly for another,
2-17 with the intention or on the promise of receiving any valuable
2-18 consideration, offers, attempts, or agrees to perform, or performs,
2-19 a single act defined in Subdivisions 2 and 3, Section 2 of this
2-20 Act, whether as a part of a transaction, or as an entire
2-21 transaction, is deemed to be acting as a real estate broker or
2-22 salesperson [salesman] within the meaning of this Act. The
2-23 commission of a single such act by a person required to be licensed
2-24 under this Act and not so licensed shall constitute a violation of
2-25 this Act.
2-26 SECTION 5. Sections 5(a), (f), (g), (i), and (m), The Real
2-27 Estate License Act (Article 6573a, Vernon's Texas Civil Statutes),
2-28 are amended to read as follows:
2-29 (a) The administration of the provisions of this Act is
2-30 vested in a commission, to be known as the "Texas Real Estate
2-31 Commission," consisting of nine members to be appointed by the
2-32 governor with the advice and consent of two-thirds of the senate
2-33 present. The commissioners hold office for staggered terms of six
2-34 years with the terms of three members expiring January 31 of each
2-35 odd-numbered year. Each member holds office until the member's
2-36 [his] successor is appointed and has qualified. Within 15 days
2-37 after [his] appointment, each member shall qualify by taking the
2-38 constitutional oath of office and furnishing a bond payable to the
2-39 Governor of Texas in the penal sum of $10,000, conditional on the
2-40 faithful performance of the member's [his] duties as prescribed by
2-41 law. A vacancy for any cause shall be filled by the governor for
2-42 the unexpired term. The governor shall designate as chairperson
2-43 [chairman] of the commission one member of the commission who is a
2-44 licensed real estate broker. The chairperson [chairman] serves in
2-45 that capacity at the pleasure of the governor. At a regular
2-46 meeting in February of each year, the commission shall elect from
2-47 its own membership a vice-chairperson [vice-chairman] and
2-48 secretary. A quorum of the commission consists of five members.
2-49 (f) If the administrator has knowledge that a potential
2-50 ground for removal exists, the administrator shall notify the
2-51 chairperson [chairman] of the commission of the ground. The
2-52 chairperson [chairman] shall then notify the governor that a
2-53 potential ground for removal exists.
2-54 (g) Each member of the commission shall receive as
2-55 compensation for each day actually spent on the member's [his]
2-56 official duties the sum of $75 and the [his] actual and necessary
2-57 expenses incurred in the performance of the member's [his] official
2-58 duties.
2-59 (i) The commission is empowered to select and name an
2-60 administrator and to select and employ such other subordinate
2-61 officers and employees as are necessary to administer this Act.
2-62 The salaries of the administrator and the officers and employees
2-63 shall be fixed by the commission not to exceed such amounts as are
2-64 fixed by the applicable general appropriations bill. The
2-65 commission may designate a subordinate officer as assistant
2-66 administrator who shall be authorized to act for the administrator
2-67 in the administrator's [his] absence. The administrator or the
2-68 administrator's designee shall develop a system of annual
2-69 performance evaluations. All merit pay for commission employees
3-1 must be based on the system established under this subsection. The
3-2 administrator or the administrator's designee shall develop an
3-3 intraagency career ladder program. The program shall require
3-4 intraagency postings of all nonentry level positions concurrently
3-5 with any public posting.
3-6 (m) The commission shall charge and collect as a condition
3-7 for issuance and for renewal of a real estate broker license the
3-8 fee under Section 11(a)(14) of this Act. The commission shall
3-9 charge and collect as a condition for issuance and for renewal of a
3-10 real estate salesperson [salesman] license the fee under Section
3-11 11(a)(15) of this Act. The commission shall transmit the fees
3-12 under this subsection quarterly to Texas A&M University for deposit
3-13 in a separate banking account. The money in the separate account
3-14 shall be expended for the support and maintenance of the Texas Real
3-15 Estate Research Center and for carrying out the purposes,
3-16 objectives, and duties of the center. However, all money expended
3-17 from the separate account shall be as determined by legislative
3-18 appropriation.
3-19 SECTION 6. Sections 6(a) and (b), The Real Estate License
3-20 Act (Article 6573a, Vernon's Texas Civil Statutes), are amended to
3-21 read as follows:
3-22 (a) A person desiring to act as a real estate broker in this
3-23 state shall file an application for a license with the commission
3-24 on a form prescribed by the commission. A broker desiring to
3-25 engage a person to participate in real estate brokerage activity
3-26 shall join the person in filing an application for a salesperson
3-27 [salesman] license on a form prescribed by the commission. A
3-28 person previously licensed as a broker may apply for inactive
3-29 status. A person previously licensed as a salesperson [salesman]
3-30 may apply for inactive status without the participation of a
3-31 broker. The person must apply for inactive status on a form
3-32 prescribed by the commission not later than the first anniversary
3-33 of the date of the expiration of the broker or salesperson
3-34 [salesman] license.
3-35 (b) To be eligible for a license, an individual must be a
3-36 citizen of the United States or a lawfully admitted alien, be at
3-37 least 18 years of age, and be a legal resident of Texas at the time
3-38 of the filing of an application, and must satisfy the commission as
3-39 to the individual's [his] honesty, trustworthiness, integrity, and
3-40 competency. However, the competency of the individual, for the
3-41 purpose of qualifying for the granting of a license, shall be
3-42 judged solely on the basis of the examination referred to in
3-43 Section 7 of this Act.
3-44 SECTION 7. Section 6A(a), The Real Estate License Act
3-45 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
3-46 as follows:
3-47 (a) If, at any time before a person applies for a license
3-48 under this Act, the person requests the commission to determine
3-49 whether the person's [his] moral character complies with the
3-50 commission's moral character requirements for licensing under this
3-51 Act and the person pays a fee set by the commission for the moral
3-52 character determination, the commission shall make its
3-53 determination of the person's moral character.
3-54 SECTION 8. Sections 7(a), (c)-(e), (g), and (h), The Real
3-55 Estate License Act (Article 6573a, Vernon's Texas Civil Statutes),
3-56 are amended to read as follows:
3-57 (a) Competency as referred to in Section 6 of this Act shall
3-58 be established by an examination prepared by or contracted for by
3-59 the commission. The examination shall be given at such times and
3-60 at such places within the state as the commission shall prescribe.
3-61 The examination shall be of scope sufficient in the judgment of the
3-62 commission to determine that a person is competent to act as a real
3-63 estate broker or salesperson [salesman] in a manner to protect the
3-64 interest of the public. The examination for a salesperson
3-65 [salesman] license shall be less exacting and less stringent than
3-66 the examination for a broker license. The commission shall furnish
3-67 each applicant with study material and references on which the
3-68 [his] examination shall be based. When an applicant for a real
3-69 estate license fails a qualifying examination, the applicant [he]
4-1 may apply for reexamination by filing a request therefor together
4-2 with the proper fee. The examination requirement must be satisfied
4-3 not later than six months after the date on which the application
4-4 for a license is filed. Courses of study required for a license
4-5 may include but are not limited to the following, which shall be
4-6 considered core real estate courses for all purposes of this Act:
4-7 (1) Principles of Real Estate (or equivalent) shall
4-8 include but not be limited to an overview of licensing as a real
4-9 estate broker and salesperson [salesman], ethics of practice,
4-10 titles to and conveyancing of real estate, legal descriptions, law
4-11 of agency, deeds, encumbrances and liens, distinctions between
4-12 personal and real property, contracts, appraisal, finance and
4-13 regulations, closing procedures, real estate mathematics, and at
4-14 least three classroom hours of instruction on federal, state, and
4-15 local laws relating to housing discrimination, housing credit
4-16 discrimination, and community reinvestment.
4-17 (2) Real Estate Appraisal (or equivalent) shall
4-18 include but not be limited to the central purposes and functions of
4-19 an appraisal, social and economic determinant of value, appraisal
4-20 case studies, cost, market data and income approaches to value
4-21 estimates, final correlations, and reporting.
4-22 (3) Real Estate Law (or equivalent) shall include but
4-23 not be limited to legal concepts of real estate, land description,
4-24 real property rights and estates in land, contracts, conveyances,
4-25 encumbrances, foreclosures, recording procedures, and evidence of
4-26 titles.
4-27 (4) Real Estate Finance (or equivalent) shall include
4-28 but not be limited to monetary systems, primary and secondary money
4-29 markets, sources of mortgage loans, federal government programs,
4-30 loan applications, processes and procedures, closing costs,
4-31 alternative financial instruments, equal credit opportunity acts,
4-32 community reinvestment act, and state housing agency.
4-33 (5) Real Estate Marketing (or equivalent) shall
4-34 include but not be limited to real estate professionalism and
4-35 ethics, characteristics of successful salespersons [salesmen], time
4-36 management, psychology of marketing, listing procedures,
4-37 advertising, negotiating and closing, financing, and the Deceptive
4-38 Trade Practices-Consumer Protection Act, as amended, Section 17.01
4-39 et seq., Business & Commerce Code.
4-40 (6) Real Estate Mathematics (or equivalent) shall
4-41 include but not be limited to basic arithmetic skills and review of
4-42 mathematical logic, percentages, interest, time-valued money,
4-43 depreciation, amortization, proration, and estimation of closing
4-44 statements.
4-45 (7) Real Estate Brokerage (or equivalent) shall
4-46 include but not be limited to law of agency, planning and
4-47 organization, operational policies and procedures, recruiting,
4-48 selection and training of personnel, records and control, and real
4-49 estate firm analysis and expansion criteria.
4-50 (8) Property Management (or equivalent) shall include
4-51 but not be limited to role of property manager, landlord policies,
4-52 operational guidelines, leases, lease negotiations, tenant
4-53 relations, maintenance, reports, habitability laws, and the Fair
4-54 Housing Act.
4-55 (9) Real Estate Investments (or equivalent) shall
4-56 include but not be limited to real estate investment
4-57 characteristics, techniques of investment analysis, time-valued
4-58 money, discounted and nondiscounted investment criteria, leverage,
4-59 tax shelters depreciation, and applications to property tax.
4-60 (10) Law of Agency (or equivalent) shall include but
4-61 not be limited to the principal-agent and master-servant
4-62 relationships, the authority of an agent, the termination of an
4-63 agent's authority, the fiduciary and other duties of an agent,
4-64 employment law, deceptive trade practices, listing or buying
4-65 representation procedures, and the disclosure of agency.
4-66 (c) The commission shall waive the examination of an
4-67 applicant for a broker license who has, within one year previous to
4-68 the filing of the [his] application, been licensed in this state as
4-69 a broker, and shall waive the examination of an applicant for a
5-1 salesperson [salesman] license who has, within one year previous to
5-2 the filing of the [his] application, been licensed in this state as
5-3 either a broker or salesperson [salesman].
5-4 (d) Each applicant for a broker license shall furnish the
5-5 commission satisfactory evidence that the applicant [he] has had
5-6 not less than two years active experience in this state as a
5-7 licensed real estate salesperson [salesman] or broker during the
5-8 36-month period immediately preceding the filing of the
5-9 application; and, in addition, shall furnish the commission
5-10 satisfactory evidence of having completed successfully 60 semester
5-11 hours, or equivalent classroom hours, of core real estate courses
5-12 or related postsecondary education courses accepted by the
5-13 commission. These qualifications for a broker license may not be
5-14 required of an applicant who, at the time of making the
5-15 application, is duly licensed as a real estate broker by any other
5-16 state in the United States if that state's requirements for
5-17 licensure are comparable to those of Texas. As a prerequisite for
5-18 applying for a broker license, those persons licensed as
5-19 salespersons [salesmen] subject to the annual education
5-20 requirements provided by Subsection (e) of this section shall, as
5-21 part of the hours required by this subsection, furnish the
5-22 commission satisfactory evidence of having completed all the
5-23 requirements of Subsection (e) of this section.
5-24 (e) Each applicant for a salesperson [salesman] license
5-25 shall furnish the commission satisfactory evidence of having
5-26 completed 12 semester hours, or equivalent classroom hours, of
5-27 postsecondary education, six hours of which must be completed in
5-28 core real estate courses, of which a minimum of two hours must be
5-29 completed in Principles of Real Estate as described in Subsection
5-30 (a)(1) of this section and a minimum of two hours must be completed
5-31 in Law of Agency as described in Subsection (a)(10) of this
5-32 section. The remaining six hours shall be completed in core real
5-33 estate courses or related courses. As a condition for the first
5-34 renewal of a salesperson [salesman] license, the applicant shall
5-35 furnish the commission satisfactory evidence of having completed a
5-36 minimum of 14 semester hours, or equivalent classroom hours, eight
5-37 hours of which must be completed in core real estate courses. As a
5-38 condition for the second renewal of a salesperson [salesman]
5-39 license, the applicant shall furnish the commission satisfactory
5-40 evidence of having completed a minimum of 16 semester hours, or
5-41 equivalent classroom hours, 10 hours of which must be completed in
5-42 core real estate courses. As a condition for the third renewal of
5-43 a salesperson [salesman] license, the applicant shall furnish the
5-44 commission satisfactory evidence of having completed a minimum of
5-45 18 semester hours, or equivalent classroom hours, 12 hours of which
5-46 must be completed in core real estate courses.
5-47 (g) Notwithstanding any other provision of this Act, each
5-48 applicant for a broker license shall furnish the commission with
5-49 satisfactory evidence:
5-50 (1) that the applicant [he] has satisfied the
5-51 requirements of Subsection (d) of this section;
5-52 (2) that the applicant [he] is a licensed real estate
5-53 broker in another state, [that he] has had not less than two years'
5-54 active experience in the other state as a licensed real estate
5-55 salesperson [salesman] or broker during the 36-month period
5-56 immediately preceding the filing of the application, and [that he]
5-57 has satisfied the educational requirements for a broker license as
5-58 provided by Subsection (d) of this section; or
5-59 (3) that the applicant [he] has, within one year
5-60 previous to the filing of the [his] application, been licensed in
5-61 this state as a broker.
5-62 (h) Notwithstanding any other provision of this Act, the
5-63 commission shall waive the requirements of Subsection (e) of this
5-64 section for an applicant for a salesperson [salesman] license who
5-65 has, within one year previous to the filing of the [his]
5-66 application, been licensed in this state as a broker or salesperson
5-67 [salesman]. However, with respect to an applicant for a
5-68 salesperson [salesman] license who was licensed as a salesperson
5-69 [salesman] within one year previous to the filing of the
6-1 application but whose original license was issued under the
6-2 provisions that the first, second, and third renewal of the license
6-3 would be conditioned upon furnishing satisfactory evidence of
6-4 successful completion of additional education, the commission shall
6-5 require the applicant to furnish satisfactory evidence of
6-6 successful completion of any additional education that would have
6-7 been required if the license had been maintained without
6-8 interruption during the previous year.
6-9 SECTION 9. Sections 7A(a)-(c), The Real Estate License Act
6-10 (Article 6573a, Vernon's Texas Civil Statutes), are amended to read
6-11 as follows:
6-12 (a) To renew an active real estate broker license or an
6-13 active real estate salesperson [salesman] license that is not
6-14 subject to the annual education requirements of this Act, the
6-15 licensee must provide the commission proof of attendance at at
6-16 least 15 classroom hours of continuing education courses approved
6-17 by the commission during the term of the current license. The
6-18 commission by rule may provide for the substitution of relevant
6-19 educational experience or correspondence courses approved by the
6-20 commission instead of classroom attendance. In addition,
6-21 supervised video instruction may be approved by the commission as a
6-22 course counting as classroom hours of mandatory continuing
6-23 education. At least six hours of instruction must be devoted to
6-24 the rules of the commission, fair housing laws, landlord-tenant law
6-25 and other Property Code issues, agency laws, antitrust laws, the
6-26 Deceptive Trade Practices-Consumer Protection Act (Subchapter E,
6-27 Chapter 17, Business & Commerce Code), disclosures to buyers,
6-28 landlords, tenants, and sellers, current contract and addendum
6-29 forms, the unauthorized practice of law, case studies involving
6-30 violations of laws and regulations, current Federal Housing
6-31 Administration and Department of Veterans Affairs regulations, tax
6-32 laws, property tax consulting laws and legal issues, or other legal
6-33 topics approved by the commission. The remaining hours may be
6-34 devoted to other real estate-related topics approved by the
6-35 commission. The commission may consider equivalent courses for
6-36 continuing education credit. Property tax consulting laws and
6-37 legal issues include but are not limited to the Tax Code,
6-38 preparation of property tax reports, the unauthorized practice of
6-39 law, agency laws, tax laws, laws concerning property taxes or
6-40 assessments, deceptive trade practices, contract forms and
6-41 addendum, and other legal topics approved by the commission. Real
6-42 estate related courses approved by the State Bar of Texas for
6-43 minimum continuing legal education participatory credit and core
6-44 real estate courses under Section 7(a) of this Act shall
6-45 automatically be approved as mandatory continuing education courses
6-46 under this Act. The commission may not require examinations except
6-47 for correspondence courses or courses offered by alternative
6-48 delivery systems such as computers. Daily classroom course
6-49 segments must be at least three hours long but not more than 10
6-50 hours long.
6-51 (b) An applicant for an active real estate broker license or
6-52 an active real estate salesperson [salesman] license who is not
6-53 subject to the education requirements of Section 7 of this Act must
6-54 provide the commission with proof of attendance of the number of
6-55 classroom hours of continuing education that would have been
6-56 required for a timely renewal as specified in Subsection (a) of
6-57 this section during the two-year period preceding the filing of the
6-58 application.
6-59 (c) As a condition of returning to active status, an
6-60 inactive salesperson [salesman] whose license is not subject to the
6-61 annual education requirements of this Act must provide the
6-62 commission with proof of attendance at at least 15 hours of
6-63 continuing education as specified in Subsection (a) of this section
6-64 during the two-year period preceding the filing of the application.
6-65 SECTION 10. Sections 8(a)-(f), (h), (i), (l), (n), and (q),
6-66 The Real Estate License Act (Article 6573a, Vernon's Texas Civil
6-67 Statutes), are amended to read as follows:
6-68 (a) The commission shall establish a real estate recovery
6-69 fund which shall be set apart and maintained by the commission as
7-1 provided in this section. The fund shall be used in the manner
7-2 provided in this section for reimbursing aggrieved persons who
7-3 suffer actual damages by reason of certain acts committed by a duly
7-4 licensed real estate broker or salesperson [salesman], or by an
7-5 unlicensed employee or agent of a broker or salesperson [salesman],
7-6 provided the broker or salesperson [salesman] was licensed by the
7-7 State of Texas at the time the act was committed and provided
7-8 recovery is ordered by a court of competent jurisdiction against
7-9 the broker or salesperson [salesman]. The use of the fund is
7-10 limited to an act that constitutes a violation of Section 15(a)(3)
7-11 or (6) of this Act.
7-12 (b) On application for an original license pursuant to this
7-13 Act, the applicant shall pay, in addition to the [his] original
7-14 license application fee, a fee of $10 which shall be deposited in
7-15 the real estate recovery fund.
7-16 (c) If on December 31 of any year the balance remaining in
7-17 the real estate recovery fund is less than $1 million, each real
7-18 estate broker and each real estate salesperson [salesman], on the
7-19 next renewal of the [his] license, shall pay, in addition to the
7-20 [his] license renewal fee, a fee of $10, which shall be deposited
7-21 in the real estate recovery fund, or a pro rata share of the amount
7-22 necessary to bring the fund to $1.7 million, whichever is less. If
7-23 on December 31 of any year the balance remaining in the real estate
7-24 recovery fund is more than $3.5 million or more than the total
7-25 amount of claims paid from the fund during the previous four fiscal
7-26 years, whichever is greater, the amount of money in excess of the
7-27 greater amount shall be transferred to the general revenue fund.
7-28 (d) No action for a judgment which subsequently results in
7-29 an order for collection from the real estate recovery fund shall be
7-30 started later than two years from the accrual of the cause of
7-31 action. When an aggrieved person commences action for a judgment
7-32 which may result in collection from the real estate recovery fund,
7-33 the real estate broker or real estate salesperson [salesman] shall
7-34 notify the commission in writing to this effect at the time of the
7-35 commencement of the action.
7-36 (e) When an aggrieved person recovers a valid judgment in a
7-37 court of competent jurisdiction against a real estate broker or
7-38 real estate salesperson [salesman], on the grounds described in
7-39 Subsection (a) of this section that occurred on or after May 19,
7-40 1975, the aggrieved person may, after final judgment has been
7-41 entered, execution returned nulla bona, and a judgment lien
7-42 perfected, file a verified claim in the court in which the judgment
7-43 was entered and, on 20 days' written notice to the commission, and
7-44 to the judgment debtor, may apply to the court for an order
7-45 directing payment out of the real estate recovery fund of the
7-46 amount unpaid on the judgment, subject to the limitations stated in
7-47 Subsection (n) of this section.
7-48 (f) The court shall proceed on the application forthwith.
7-49 On the hearing on the application, the aggrieved person is required
7-50 to show that:
7-51 (1) the judgment is based on facts allowing recovery
7-52 under Subsection (a) of this section;
7-53 (2) the person [he] is not a spouse of the debtor, or
7-54 the personal representative of the spouse; and the person [he] is
7-55 not a real estate broker or salesperson [salesman], as defined by
7-56 this Act, who is seeking to recover a real estate commission in the
7-57 transaction or transactions for which the application for payment
7-58 is made;
7-59 (3) the person [he] has obtained a judgment under
7-60 Subsection (e) of this section that is not subject to a stay or
7-61 discharge in bankruptcy, stating the amount of the judgment and the
7-62 amount owing on the judgment at the date of the application;
7-63 (4) based on the best available information, the
7-64 judgment debtor lacks sufficient attachable assets in this state or
7-65 any other state to satisfy the judgment; and
7-66 (5) the amount that may be realized from the sale of
7-67 real or personal property or other assets liable to be sold or
7-68 applied in satisfaction of the judgment and the balance remaining
7-69 due on the judgment after application of the amount that may be
8-1 realized.
8-2 (h) The court shall make an order directed to the commission
8-3 requiring payment from the real estate recovery fund of whatever
8-4 sum it finds to be payable on the claim, pursuant to and in
8-5 accordance with the limitations contained in this section, if the
8-6 court is satisfied, on the hearing, of the truth of all matters
8-7 required to be shown by the aggrieved person by Subsection (f) of
8-8 this section and that the aggrieved person has satisfied all of the
8-9 requirements of Subsections (e) and (f) of this section. The
8-10 commission may relitigate any issue material and relevant in the
8-11 hearing on the application that was determined in the underlying
8-12 action on which the judgment in favor of the applicant was based.
8-13 If the court finds that the aggregate amount of claims against a
8-14 real estate broker or salesperson [salesman] exceeds the
8-15 limitations contained in this section, the court shall reduce
8-16 proportionately the amount it finds payable on the claim.
8-17 (i) A license granted under the provisions of this Act may
8-18 be revoked by the commission on proof that the commission has made
8-19 a payment from the real estate recovery fund of any amount toward
8-20 satisfaction of a judgment against a licensed real estate broker or
8-21 salesperson [salesman]. The commission may probate an order
8-22 revoking a license. No broker or salesperson [salesman] is
8-23 eligible to receive a new license until the broker or salesperson
8-24 [he] has repaid in full, plus interest at the current legal rate,
8-25 the amount paid from the real estate recovery fund on the broker's
8-26 or salesperson's [his] account.
8-27 (l) When, on the order of the court, the commission has paid
8-28 from the real estate recovery fund any sum to the judgment
8-29 creditor, the commission shall be subrogated to all of the rights
8-30 of the judgment creditor to the extent of the amount paid. The
8-31 judgment creditor shall assign all of the creditor's [his] right,
8-32 title, and interest in the judgment up to the amount paid by the
8-33 commission which amount shall have priority for repayment in the
8-34 event of any subsequent recovery on the judgment. Any amount and
8-35 interest recovered by the commission on the judgment shall be
8-36 deposited to the fund.
8-37 (n) Notwithstanding any other provision, payments from the
8-38 real estate recovery fund are subject to the following conditions
8-39 and limitations:
8-40 (1) payments may be made only pursuant to an order of
8-41 a court of competent jurisdiction, as provided in Subsection (e) of
8-42 this section, and in the manner prescribed by this section;
8-43 (2) payments for claims, including attorneys' fees,
8-44 interest, and court costs, arising out of the same transaction
8-45 shall be limited in the aggregate to $50,000 regardless of the
8-46 number of claimants; and
8-47 (3) payments for claims based on judgments against any
8-48 one licensed real estate broker or salesperson [salesman] may not
8-49 exceed in the aggregate $100,000 until the fund has been reimbursed
8-50 by the licensee for all amounts paid.
8-51 (q) A broker or salesperson [salesman] licensed under this
8-52 Act shall notify consumers and service recipients of the
8-53 availability of the real estate recovery fund established under
8-54 this section for reimbursing certain aggrieved persons. The notice
8-55 must include the name, mailing address, and telephone number of the
8-56 commission and any other information required by commission rule.
8-57 The notification may be provided with the notice required by
8-58 Section 5(q) of this Act or:
8-59 (1) on a written contract for the services of a broker
8-60 or salesperson [salesman];
8-61 (2) on a brochure distributed by a broker or
8-62 salesperson [salesman];
8-63 (3) on a sign prominently displayed in the place of
8-64 business of a salesperson [salesman] or broker; or
8-65 (4) in a bill or receipt for service provided by a
8-66 broker or salesperson [salesman].
8-67 SECTION 11. Sections 9(a), (b), and (e), The Real Estate
8-68 License Act (Article 6573a, Vernon's Texas Civil Statutes), are
8-69 amended to read as follows:
9-1 (a) When an applicant has satisfactorily met all
9-2 requirements and conditions of this Act, a license shall be issued
9-3 which may remain in force and effect so long as the holder of the
9-4 license remains in compliance with the obligations of this Act,
9-5 which include payment of the renewal fee as provided in Section 11
9-6 of this Act. Each active salesperson [salesman] license issued
9-7 shall be delivered or mailed to the broker with whom the
9-8 salesperson [salesman] is associated and shall be kept under the
9-9 broker's [his] custody and control.
9-10 (b) An applicant is not permitted to engage in the real
9-11 estate business either as a broker or salesperson [salesman] until
9-12 a license evidencing the applicant's [his] authority to engage in
9-13 the real estate business has been received.
9-14 (e) The commission shall require in any application for a
9-15 broker or salesperson [salesman] license or a renewal of a broker
9-16 or salesperson [salesman] license the applicant to disclose whether
9-17 the applicant has entered a plea of guilty or nolo contendere to,
9-18 been found guilty of, or been convicted of a felony and the time
9-19 for appeal has elapsed or the judgment or conviction has been
9-20 affirmed on appeal, irrespective of an order granting probation
9-21 following the conviction or suspending the imposition of sentence.
9-22 SECTION 12. Section 10(a), The Real Estate License Act
9-23 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
9-24 as follows:
9-25 (a) If the commission declines or fails to license an
9-26 applicant, it shall immediately give written notice of the refusal
9-27 to the applicant. Before the applicant may appeal to a district
9-28 court as provided in Section 18 of this Act, the applicant [he]
9-29 must file within 10 days after the receipt of the notice an appeal
9-30 from the ruling, requesting a time and place for a hearing before
9-31 the commission. The commission shall set a time and place for the
9-32 hearing within 30 days from the receipt of the appeal, giving 10
9-33 days' notice of the hearing to the applicant. The time of the
9-34 hearing may be continued from time to time with the consent of the
9-35 applicant. Following the hearing, the commission shall enter an
9-36 order which is, in its opinion, appropriate in the matter
9-37 concerned.
9-38 SECTION 13. Section 11, The Real Estate License Act (Article
9-39 6573a, Vernon's Texas Civil Statutes), is amended to read as
9-40 follows:
9-41 Sec. 11. [(a)] The commission shall charge and collect the
9-42 following fees:
9-43 (1) a fee not to exceed $100 for the filing of an
9-44 original application for a real estate broker license;
9-45 (2) a fee not to exceed $100 for annual renewal of a
9-46 real estate broker license;
9-47 (3) a fee not to exceed $50 for the filing of an
9-48 original application for a real estate salesperson [salesman]
9-49 license;
9-50 (4) a fee not to exceed $50 for annual renewal of a
9-51 real estate salesperson [salesman] license;
9-52 (5) a fee not to exceed $25 for an application for a
9-53 license examination;
9-54 (6) a fee not to exceed $20 for filing a request for a
9-55 license for each additional office or place of business;
9-56 (7) a fee not to exceed $20 for filing a request for a
9-57 license for a change of place of business, change of name, return
9-58 to active status, or change of sponsoring broker;
9-59 (8) a fee not to exceed $20 for filing a request to
9-60 replace a license lost or destroyed;
9-61 (9) a fee not to exceed $400 for filing an application
9-62 for approval of an education program under Section 7(f) of this
9-63 Act;
9-64 (10) a fee not to exceed $200 a year for operation of
9-65 an education program under Section 7(f) of this Act;
9-66 (11) a fee of $15 for transcript evaluation;
9-67 (12) a fee not to exceed $10 for preparing a license
9-68 history;
9-69 (13) a fee not to exceed $50 for the filing of an
10-1 application for a moral character determination;
10-2 (14) an annual fee of $20 from each real estate broker
10-3 to be transmitted to Texas A&M University for the Texas Real Estate
10-4 Research Center as provided by Section 5(m) of this Act; and
10-5 (15) an annual fee of $17.50 from each real estate
10-6 salesperson [salesman] to be transmitted to Texas A&M University
10-7 for the Texas Real Estate Research Center as provided by Section
10-8 5(m) of this Act.
10-9 SECTION 14. Sections 12(a), (b), and (d), The Real Estate
10-10 License Act (Article 6573a, Vernon's Texas Civil Statutes), are
10-11 amended to read as follows:
10-12 (a) Each resident broker shall maintain a fixed office
10-13 within this state. The address of the office shall be designated
10-14 on the broker's license. Within 10 days after a move from a
10-15 previously designated address, the broker shall submit an
10-16 application for a new license, designating the new location of the
10-17 broker's [his] office, together with the required fee, whereupon
10-18 the commission shall issue a license, reflecting the new location,
10-19 provided the new location complies with the terms of this section.
10-20 (b) If a broker maintains more than one place of business
10-21 within this state, the broker [he] shall apply for, pay the
10-22 required fee for, and obtain an additional license to be known as a
10-23 branch office license for each additional office the broker [he]
10-24 maintains.
10-25 (d) Each broker shall also prominently display in the
10-26 broker's [his] place or in one of the broker's [his] places of
10-27 business the license of each real estate salesperson [salesman]
10-28 associated with the broker [him].
10-29 SECTION 15. Section 13, The Real Estate License Act (Article
10-30 6573a, Vernon's Texas Civil Statutes), is amended to read as
10-31 follows:
10-32 Sec. 13. (a) When the association of a salesperson
10-33 [salesman] with the salesperson's [his] sponsoring broker is
10-34 terminated, the broker shall immediately return the salesperson
10-35 [salesman] license to the commission. The salesperson [salesman]
10-36 license then becomes inactive.
10-37 (b) The salesperson [salesman] license may be activated if,
10-38 before the license expires, a request, accompanied by the required
10-39 fee, is filed with the commission by a licensed broker advising
10-40 that the broker [he] assumes sponsorship of the salesperson
10-41 [salesman].
10-42 SECTION 16. Section 13A(a), The Real Estate License Act
10-43 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
10-44 as follows:
10-45 (a) A real estate broker who holds a license issued under
10-46 this Act and who is not acting as a broker or sponsoring a
10-47 salesperson [salesman] may apply to the commission in writing to be
10-48 placed on the inactive status list maintained by the commission.
10-49 The broker must apply for inactive status before the expiration of
10-50 the broker's license. The broker shall terminate the broker's
10-51 association with any salesperson [salesmen] sponsored by the broker
10-52 by giving written notice to the salesperson [salesmen] before the
10-53 30th day before the date the broker applies for inactive status. A
10-54 person on inactive status under this section is required to pay the
10-55 annual renewal fees.
10-56 SECTION 17. Section 14, The Real Estate License Act (Article
10-57 6573a, Vernon's Texas Civil Statutes), is amended to read as
10-58 follows:
10-59 Sec. 14. (a) It is unlawful for a licensed broker to employ
10-60 or compensate directly or indirectly a person for performing an act
10-61 enumerated in the definition of real estate broker in Section 2 of
10-62 this Act if the person is not a licensed broker or licensed
10-63 salesperson [salesman] in this state. However, a licensed broker
10-64 may pay a commission to a licensed broker of another state if the
10-65 foreign broker does not conduct in this state any of the
10-66 negotiations for which the fee, compensation, or commission is
10-67 paid.
10-68 (b) A resident broker of another state who furnishes the
10-69 evidence required under Section 7(g) of this Act may apply for a
11-1 license as a broker in this state. A resident of another state who
11-2 is not licensed as a broker but who was formerly licensed as a
11-3 salesperson [salesman] or broker in this state may apply for a
11-4 license in this state not later than the first anniversary of the
11-5 date of the expiration of the previous license. An application by
11-6 a nonresident is subject to the requirements under this Act for the
11-7 type of license applied for. A nonresident licensee need not
11-8 maintain a place of business in this state. The commission may in
11-9 its discretion refuse to issue a license to an applicant who is not
11-10 a resident of this state for the same reasons that it may refuse to
11-11 license a resident of this state. The commission shall judge the
11-12 competency of a nonresident applicant solely on the basis of the
11-13 examination conducted under Section 7 of this Act.
11-14 (c) Each nonresident applicant shall file an irrevocable
11-15 consent that legal actions may be commenced against the applicant
11-16 [him] in the proper court of any county of this state in which a
11-17 cause of action may arise, or in which the plaintiff may reside, by
11-18 service of process or pleading authorized by the laws of this
11-19 state, or by serving the administrator or assistant administrator
11-20 of the commission. The consent shall stipulate that the service of
11-21 process or pleading shall be valid and binding in all courts as if
11-22 personal service had been made on the nonresident in this state.
11-23 The consent shall be duly acknowledged, and if made by a
11-24 corporation, shall be authenticated by its seal. A service of
11-25 process or pleading served on the commission shall be by duplicate
11-26 copies, one of which shall be filed in the office of the commission
11-27 and the other forwarded by registered mail to the last known
11-28 principal address which the commission has for the nonresident
11-29 against whom the process or pleading is directed. No default in an
11-30 action may be taken except on certification by the commission that
11-31 a copy of the process or pleading was mailed to the defendant as
11-32 provided in this section, and no default judgment may be taken in
11-33 an action or proceeding until 20 days after the day of mailing of
11-34 the process or pleading to the defendant.
11-35 Notwithstanding any other provision of this subsection, a
11-36 nonresident of this state who resides in a city whose boundaries
11-37 are contiguous at any point to the boundaries of a city of this
11-38 state, and who has been an actual bona fide resident of that city
11-39 for at least 60 days immediately preceding the filing of his
11-40 application, is eligible to be licensed as a real estate broker or
11-41 salesperson [salesman] under this Act in the same manner as a
11-42 resident of this state. If a person [he] is licensed in this
11-43 manner, the person [he] shall at all times maintain a place of
11-44 business either in the city in which the person [he] resides or in
11-45 the city in this state which is contiguous to the city in which the
11-46 person [he] resides, and the person [he] may not maintain a place
11-47 of business at another location in this state unless the person
11-48 [he] also complies with the requirements of Section 14(b) of this
11-49 Act. The place of business must satisfy the requirements of
11-50 Subsection (a) of Section 12 of this Act, but the place of business
11-51 shall be deemed a definite place of business in this state within
11-52 the meaning of Subsection (a) of Section 12.
11-53 SECTION 18. Sections 15(a) and (d), The Real Estate License
11-54 Act (Article 6573a, Vernon's Texas Civil Statutes), are amended to
11-55 read as follows:
11-56 (a) The commission may, on its own motion, and shall, on the
11-57 signed complaint in writing of a consumer or service recipient,
11-58 provided the complaint, or the complaint together with evidence,
11-59 documentary or otherwise, presented in connection with the
11-60 complaint, provides reasonable cause, investigate the actions and
11-61 records of a real estate broker or real estate salesperson
11-62 [salesman]. The commission may suspend or revoke a license issued
11-63 under the provisions of this Act at any time when it has been
11-64 determined that:
11-65 (1) the licensee has entered a plea of guilty or nolo
11-66 contendere to, or been found guilty of, or been convicted of, a
11-67 felony, in which fraud is an essential element, and the time for
11-68 appeal has elapsed or the judgment or conviction has been affirmed
11-69 on appeal, irrespective of an order granting probation following
12-1 such conviction, suspending the imposition of sentence;
12-2 (2) the licensee has procured, or attempted to
12-3 procure, a real estate license, for the licensee [himself] or a
12-4 salesperson [salesman], by fraud, misrepresentation or deceit, or
12-5 by making a material misstatement of fact in an application for a
12-6 real estate license;
12-7 (3) the licensee, when selling, buying, trading, or
12-8 renting real property in the licensee's [his] own name, engaged in
12-9 misrepresentation or dishonest or fraudulent action;
12-10 (4) the licensee has failed within a reasonable time
12-11 to make good a check issued to the commission after the commission
12-12 has mailed a request for payment by certified mail to the
12-13 licensee's last known business address as reflected by the
12-14 commission's records;
12-15 (5) the licensee has disregarded or violated a
12-16 provision of this Act;
12-17 (6) the licensee, while performing an act constituting
12-18 an act of a broker or salesperson [salesman], as defined by this
12-19 Act, has been guilty of:
12-20 (A) making a material misrepresentation, or
12-21 failing to disclose to a potential purchaser any latent structural
12-22 defect or any other defect known to the broker or salesperson
12-23 [salesman]. Latent structural defects and other defects do not
12-24 refer to trivial or insignificant defects but refer to those
12-25 defects that would be a significant factor to a reasonable and
12-26 prudent purchaser in making a decision to purchase;
12-27 (B) making a false promise of a character likely
12-28 to influence, persuade, or induce any person to enter into a
12-29 contract or agreement when the licensee could not or did not intend
12-30 to keep such promise;
12-31 (C) pursuing a continued and flagrant course of
12-32 misrepresentation or making of false promises through agents,
12-33 salespersons [salesmen], advertising, or otherwise;
12-34 (D) failing to make clear, to all parties to a
12-35 transaction, which party the licensee [he] is acting for, or
12-36 receiving compensation from more than one party except with the
12-37 full knowledge and consent of all parties;
12-38 (E) failing within a reasonable time properly to
12-39 account for or remit money coming into the licensee's [his]
12-40 possession which belongs to others, or commingling money belonging
12-41 to others with the licensee's [his] own funds;
12-42 (F) paying a commission or fees to or dividing a
12-43 commission or fees with anyone not licensed as a real estate broker
12-44 or salesperson [salesman] in this state or in any other state for
12-45 compensation for services as a real estate agent;
12-46 (G) failing to specify in a listing contract or
12-47 in another contract in which the licensee agrees to perform
12-48 services for which a license is required under this Act a definite
12-49 termination date which is not subject to prior notice;
12-50 (H) accepting, receiving, or charging an
12-51 undisclosed commission, rebate, or direct profit on expenditures
12-52 made for a principal;
12-53 (I) soliciting, selling, or offering for sale
12-54 real property under a scheme or program that constitutes a lottery
12-55 or deceptive practice;
12-56 (J) acting in the dual capacity of broker and
12-57 undisclosed principal in a transaction;
12-58 (K) guaranteeing, authorizing, or permitting a
12-59 person to guarantee that future profits will result from a resale
12-60 of real property;
12-61 (L) placing a sign on real property offering it
12-62 for sale, lease, or rent without the written consent of the owner
12-63 or the owner's [his] authorized agent;
12-64 (M) inducing or attempting to induce a party to
12-65 a contract of sale or lease to break the contract for the purpose
12-66 of substituting in lieu thereof a new contract;
12-67 (N) negotiating or attempting to negotiate the
12-68 sale, exchange, lease, or rental of real property with an owner,
12-69 lessor, buyer, or tenant, knowing that the owner, lessor, buyer, or
13-1 tenant had a written outstanding contract, granting exclusive
13-2 agency in connection with the transaction to another real estate
13-3 broker;
13-4 (O) offering real property for sale or for lease
13-5 without the knowledge and consent of the owner or the owner's [his]
13-6 authorized agent, or on terms other than those authorized by the
13-7 owner or the owner's [his] authorized agent;
13-8 (P) publishing, or causing to be published, an
13-9 advertisement including, but not limited to, advertising by
13-10 newspaper, radio, television, or display which is misleading, or
13-11 which is likely to deceive the public, or which in any manner tends
13-12 to create a misleading impression, or which fails to identify the
13-13 person causing the advertisement to be published as a licensed real
13-14 estate broker or agent;
13-15 (Q) having knowingly withheld from or inserted
13-16 in a statement of account or invoice, a statement that made it
13-17 inaccurate in a material particular;
13-18 (R) publishing or circulating an unjustified or
13-19 unwarranted threat of legal proceedings, or other action;
13-20 (S) establishing an association, by employment
13-21 or otherwise, with an unlicensed person who is expected or required
13-22 to act as a real estate licensee, or aiding or abetting or
13-23 conspiring with a person to circumvent the requirements of this
13-24 Act;
13-25 (T) failing or refusing on demand to furnish
13-26 copies of a document pertaining to a transaction dealing with real
13-27 estate to a person whose signature is affixed to the document;
13-28 (U) failing to advise a purchaser in writing
13-29 before the closing of a transaction that the purchaser should
13-30 either have the abstract covering the real estate which is the
13-31 subject of the contract examined by an attorney of the purchaser's
13-32 own selection, or be furnished with or obtain a policy of title
13-33 insurance;
13-34 (V) conduct which constitutes dishonest
13-35 dealings, bad faith, or untrustworthiness;
13-36 (W) acting negligently or incompetently in
13-37 performing an act for which a person is required to hold a real
13-38 estate license;
13-39 (X) disregarding or violating a provision of
13-40 this Act;
13-41 (Y) failing within a reasonable time to deposit
13-42 money received as escrow agent in a real estate transaction, either
13-43 in trust with a title company authorized to do business in this
13-44 state, or in a custodial, trust, or escrow account maintained for
13-45 that purpose in a banking institution authorized to do business in
13-46 this state;
13-47 (Z) disbursing money deposited in a custodial,
13-48 trust, or escrow account, as provided in Subsection (Y) before the
13-49 transaction concerned has been consummated or finally otherwise
13-50 terminated; or
13-51 (AA) discriminating against an owner, potential
13-52 purchaser, lessor, or potential lessee on the basis of race, color,
13-53 religion, sex, national origin, or ancestry, including directing
13-54 prospective home buyers or lessees interested in equivalent
13-55 properties to different areas according to the race, color,
13-56 religion, sex, national origin, or ancestry of the potential owner
13-57 or lessee;
13-58 (7) the licensee has failed or refused on demand to
13-59 produce a document, book, or record in the licensee's [his]
13-60 possession concerning a real estate transaction conducted by the
13-61 licensee [him] for inspection by the commission or its authorized
13-62 personnel or representative;
13-63 (8) the licensee has failed within a reasonable time
13-64 to provide information requested by the commission as a result of a
13-65 formal or informal complaint to the commission which would indicate
13-66 a violation of this Act; or
13-67 (9) the licensee has failed without just cause to
13-68 surrender to the rightful owner, on demand, a document or
13-69 instrument coming into the licensee's [his] possession.
14-1 (d) The commission may not investigate under this section a
14-2 complaint submitted more than four years after the date of the
14-3 incident involving a real estate broker or salesperson [salesman]
14-4 that is the subject of the complaint.
14-5 SECTION 19. Section 15C(m)(3), The Real Estate License Act
14-6 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
14-7 as follows:
14-8 (3) "Licensee" means a real estate broker or real
14-9 estate salesperson [salesman] and includes a licensed associate of
14-10 a licensee.
14-11 SECTION 20. Section 15D, The Real Estate License Act
14-12 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
14-13 as follows:
14-14 Sec. 15D. No licensed real estate broker, licensed real
14-15 estate salesperson [salesman], or not for profit real estate board
14-16 or association which provides information about real property sales
14-17 prices or terms of sale for the purpose of facilitating the
14-18 listing, selling, leasing, financing, or appraisal of real property
14-19 shall be liable to any other person as a result of so providing
14-20 such information unless the disclosure of same is otherwise
14-21 specifically prohibited by statute.
14-22 SECTION 21. Sections 16(a), (b), (d), and (e), The Real
14-23 Estate License Act (Article 6573a, Vernon's Texas Civil Statutes),
14-24 are amended to read as follows:
14-25 (a) A license granted under the provisions of this Act shall
14-26 be suspended or revoked by the commission on proof that the
14-27 licensee, not being licensed and authorized to practice law in this
14-28 state, for a consideration, reward, pecuniary benefit, present or
14-29 anticipated, direct or indirect, or in connection with or as a part
14-30 of the licensee's [his] employment, agency, or fiduciary
14-31 relationship as a licensee, drew a deed, note, deed of trust, will,
14-32 or other written instrument that may transfer or anywise affect the
14-33 title to or an interest in land, except as provided in the
14-34 subsections below, or advised or counseled a person as to the
14-35 validity or legal sufficiency of an instrument or as to the
14-36 validity of title to real estate.
14-37 (b) Notwithstanding the provisions of this Act or any other
14-38 law, the completion of contract forms which bind the sale,
14-39 exchange, option, lease, or rental of any interest in real property
14-40 by a real estate broker or salesperson [salesman] incident to the
14-41 performance of the acts of a broker as defined by this article does
14-42 not constitute the unauthorized or illegal practice of law in this
14-43 state, provided the forms have been promulgated for use by the
14-44 commission for the particular kind of transaction involved, or the
14-45 forms have been prepared by an attorney at law licensed by this
14-46 state and approved by said attorney for the particular kind of
14-47 transaction involved, or the forms have been prepared by the
14-48 property owner or prepared by an attorney and required by the
14-49 property owner.
14-50 (d) The Texas Real Estate Broker-Lawyer Committee shall have
14-51 12 members including six members appointed by the commission and
14-52 six members of the State Bar of Texas appointed by the President of
14-53 the State Bar of Texas. The members of the committee shall hold
14-54 office for staggered terms of six years with the terms of two
14-55 commission appointees and two State Bar appointees expiring every
14-56 two years. Each member shall hold office until the member's [his]
14-57 successor is appointed. A vacancy for any cause shall be filled
14-58 for the expired term by the agency making the original appointment.
14-59 Appointments to the committee shall be made without regard to race,
14-60 creed, sex, religion, or national origin.
14-61 (e) In the best interest of the public the commission may
14-62 adopt rules and regulations requiring real estate brokers and
14-63 salespersons [salesmen] to use contract forms which have been
14-64 prepared by the Texas Real Estate Broker-Lawyer Committee and
14-65 promulgated by the commission; provided, however, that the
14-66 commission shall not prohibit a real estate broker or salesperson
14-67 [salesman] from using a contract form or forms binding the sale,
14-68 exchange, option, lease, or rental of any interest in real property
14-69 which have been prepared by the property owner or prepared by an
15-1 attorney and required by the property owner. For the purpose of
15-2 this section, contract forms prepared by the Texas Real Estate
15-3 Broker-Lawyer Committee appointed by the commission and the State
15-4 Bar of Texas and promulgated by the commission prior to the
15-5 effective date of this Act shall be deemed to have been prepared by
15-6 the Texas Real Estate Broker-Lawyer Committee. The commission may
15-7 suspend or revoke a license issued under the provisions of this
15-8 article when it has determined that the licensee failed to use a
15-9 contract form as required by the commission pursuant to this
15-10 section.
15-11 SECTION 22. Section 17(a), The Real Estate License Act
15-12 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
15-13 as follows:
15-14 (a) If the commission proposes to suspend or revoke a
15-15 person's license or registration, the person is entitled to a
15-16 hearing before the commission or a hearings officer appointed by
15-17 the commission. The commission shall prescribe procedures by which
15-18 all decisions to suspend or revoke are made by or are appealable to
15-19 the commission. The commission shall prescribe the time and place
15-20 of the hearing. However, the hearing shall be held, if the
15-21 licensee so desires, within the county where the licensee has the
15-22 licensee's [his] principal place of business, or if the licensee is
15-23 a nonresident, the hearing may be called for and held in any county
15-24 within this state. The hearing is governed by the procedures for a
15-25 contested case under Chapter 2001, Government Code [the
15-26 Administrative Procedure and Texas Register Act (Article 6252-13a,
15-27 Vernon's Texas Civil Statutes)].
15-28 SECTION 23. Section 18A(a), The Real Estate License Act
15-29 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
15-30 as follows:
15-31 (a) Any listing contract form adopted by the commission
15-32 relating to the contractual obligations between a seller of real
15-33 estate and a real estate broker or salesperson [salesman] acting as
15-34 an agent for the seller shall include a section that informs the
15-35 parties to the contract that real estate commissions are
15-36 negotiable.
15-37 SECTION 24. Section 18B(a), The Real Estate License Act
15-38 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
15-39 as follows:
15-40 (a) If a person files a complaint with the commission
15-41 relating to a real estate broker or salesperson [salesman], the
15-42 commission shall furnish to the person an explanation of the
15-43 remedies that are available to the person under this Act and
15-44 information about appropriate state or local agencies or officials
15-45 with which the person may file a complaint. The commission shall
15-46 furnish the same explanation and information to the person against
15-47 whom the complaint is filed.
15-48 SECTION 25. Sections 19(a) and (b), The Real Estate License
15-49 Act (Article 6573a, Vernon's Texas Civil Statutes), are amended to
15-50 read as follows:
15-51 (a) A person acting as a real estate broker or real estate
15-52 salesperson [salesman] without first obtaining a license is guilty
15-53 of a misdemeanor and on conviction shall be punishable by a fine of
15-54 not less than $100 nor more than $500, or by imprisonment in the
15-55 county jail for a term not to exceed one year, or both; and if a
15-56 corporation or a limited liability company, shall be punishable by
15-57 a fine of not less than $1,000 nor more than $2,000. A person, on
15-58 conviction of a second or subsequent offense, shall be punishable
15-59 by a fine of not less than $500 nor more than $1,000, or by
15-60 imprisonment for a term not to exceed two years, or both; and if a
15-61 corporation or a limited liability company, shall be punishable by
15-62 a fine of not less than $2,000 nor more than $5,000.
15-63 (b) In case a person received money, or the equivalent
15-64 thereof, as a fee, commission, compensation, or profit by or in
15-65 consequence of a violation of Subsection (a) of this section, the
15-66 person [he] shall, in addition, be liable to a penalty of not less
15-67 than the amount of the sum of money so received and not more than
15-68 three times the sum so received, as may be determined by the court,
15-69 which penalty may be recovered in a court of competent jurisdiction
16-1 by an aggrieved person.
16-2 SECTION 26. Section 19A(o), The Real Estate License Act
16-3 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
16-4 as follows:
16-5 (o) A penalty collected under this section for a violation
16-6 by a person licensed as a real estate broker or salesperson
16-7 [salesman] shall be deposited in the real estate recovery fund. A
16-8 penalty collected under this section for a violation by a person
16-9 licensed or registered as a real estate inspector shall be
16-10 deposited in the real estate inspection recovery fund.
16-11 SECTION 27. Section 20, The Real Estate License Act (Article
16-12 6573a, Vernon's Texas Civil Statutes), is amended to read as
16-13 follows:
16-14 Sec. 20. (a) A person may not bring or maintain an action
16-15 for the collection of compensation for the performance in this
16-16 state of an act set forth in Section 2 of this Act without alleging
16-17 and proving that the person performing the brokerage services was a
16-18 duly licensed real estate broker or salesperson [salesman] at the
16-19 time the alleged services were commenced, or was a duly licensed
16-20 attorney at law in this state or in any other state.
16-21 (b) An action may not be brought in a court in this state
16-22 for the recovery of a commission for the sale or purchase of real
16-23 estate unless the promise or agreement on which the action is
16-24 brought, or some memorandum thereof, is in writing and signed by
16-25 the party to be charged or signed by a person lawfully authorized
16-26 by the party [him] to sign it.
16-27 (c) When an offer to purchase real estate in this state is
16-28 signed, the real estate broker or salesperson [salesman] shall
16-29 advise the purchaser or purchasers, in writing, that the purchaser
16-30 or purchasers should have the abstract covering the real estate
16-31 which is the subject of the contract examined by an attorney of the
16-32 purchaser's own selection, or that the purchaser or purchasers
16-33 should be furnished with or obtain a policy of title insurance.
16-34 Failure to advise the purchaser as provided in this subsection
16-35 precludes the payment of or recovery of any commission agreed to be
16-36 paid on the sale.
16-37 SECTION 28. Sections 23(b)(2), (5), and (9), The Real Estate
16-38 License Act (Article 6573a, Vernon's Texas Civil Statutes), are
16-39 amended to read as follows:
16-40 (2) The committee is composed of nine members
16-41 appointed by the commission. The members of the committee hold
16-42 office for staggered terms of six years, with the terms of three
16-43 members expiring February 1 of each odd-numbered year. Each member
16-44 holds office until the member's successor is appointed.
16-45 Appointments to the committee shall be made without regard to the
16-46 sex, race, color, age, handicap, religion, or national origin of
16-47 the appointees. In the event of a vacancy during a term, the
16-48 commission shall appoint a replacement who meets the qualifications
16-49 for appointment under this subdivision to fill the unexpired part
16-50 of the term. A member of the committee must be a professional
16-51 inspector actively engaged in the practice of real estate
16-52 inspecting at the time of appointment and must have been primarily
16-53 engaged in the practice of real estate inspecting for at least five
16-54 years before the member's appointment. A member of the committee
16-55 may not hold a real estate broker or salesperson [salesman]
16-56 license. Each member of the committee is entitled to a per diem
16-57 allowance and to reimbursement of travel expenses necessarily
16-58 incurred in performing functions as a member of the committee,
16-59 subject to any applicable limitation in the General Appropriations
16-60 Act. The committee shall annually elect from its members a
16-61 chairperson [chairman], a vice-chairperson [vice-chairman], and
16-62 secretary. A quorum of the committee consists of five members.
16-63 (5) If the administrator of the commission has
16-64 knowledge that a potential ground for removal exists, the
16-65 administrator shall notify the chairperson [chairman] of the
16-66 commission that a potential ground exists.
16-67 (9) The committee shall act in an advisory capacity to
16-68 develop and recommend to the commission rules under this section.
16-69 The committee shall review commission rules relating to this
17-1 section and recommend changes in the rules to the commission. The
17-2 commission shall submit all proposed rules, all proposed rule
17-3 changes and all requests for proposed rules or rule changes that
17-4 relate to the regulation and licensing of inspectors under this
17-5 section to the committee for development or recommendation. The
17-6 commission may modify the rules developed by the committee if the
17-7 commission finds such modifications are in the public interest.
17-8 This section does not prohibit the commission from developing and
17-9 adopting rules relating to the regulation and licensing of
17-10 inspectors under this section if the committee fails to develop or
17-11 recommend rules under this section within a reasonable period of
17-12 time after the commission submits the proposed rules, rule changes
17-13 or requests for proposed rules or rule changes to the committee.
17-14 If the committee determines that a rule requested by the commission
17-15 should not be developed or recommended for adoption by the
17-16 commission, the committee shall submit a report on the matter to
17-17 the commission. The chairperson [chairman] of the commission and
17-18 the chairperson [chairman] of the committee shall then appoint
17-19 three members each from their respective bodies to meet as an ad
17-20 hoc committee to consider the report and recommend possible action
17-21 by the commission. The chairperson [chairman] of the commission or
17-22 a member of the commission designated by the chairperson [chairman]
17-23 shall serve as the seventh member of the ad hoc committee. At
17-24 least one member of the ad hoc committee must be a public member of
17-25 the commission.
17-26 SECTION 29. Section 23(l), The Real Estate License Act
17-27 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
17-28 as follows:
17-29 (l) Prohibited acts. A professional inspector, real estate
17-30 inspector or an apprentice inspector licensed under this section
17-31 may not:
17-32 (1) accept an assignment for real estate inspection if
17-33 the employment or fee is contingent on the reporting of a specific,
17-34 predetermined condition of the improvements to real property or is
17-35 contingent on the reporting of specific findings other than those
17-36 known by the inspector to be facts at the time of accepting the
17-37 assignment;
17-38 (2) act in a manner or engage in a practice that is
17-39 dishonest or fraudulent or that involves deceit or
17-40 misrepresentation;
17-41 (3) perform a real estate inspection in a negligent or
17-42 incompetent manner;
17-43 (4) act in the dual capacity of inspector and
17-44 undisclosed principal in a transaction;
17-45 (5) act in the dual capacity of inspector and real
17-46 estate broker or salesperson [salesman] in a transaction;
17-47 (6) perform or agree to perform any repairs or
17-48 maintenance in connection with a real estate inspection pursuant to
17-49 the provisions of any earnest money contract, lease agreement, or
17-50 exchange of real estate; or
17-51 (7) violate the rules adopted by the commission or any
17-52 provisions of this section.
17-53 SECTION 30. Section 24(b), The Real Estate License Act
17-54 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
17-55 as follows:
17-56 (b) A person may not engage in business as a residential
17-57 rental locator in this state unless the person holds a license
17-58 issued under this Act to operate as a real estate broker or real
17-59 estate salesperson [salesman] and complies with the continuing
17-60 education requirements under Section 7A of this Act.
17-61 SECTION 31. (a) This Act takes effect September 1, 1997.
17-62 (b) The change made by this Act in the title of a person
17-63 licensed to sell real estate does not affect the validity of a
17-64 license issued or an act performed before the effective date of
17-65 this Act.
17-66 (c) The terms "real estate salesperson" and "real estate
17-67 salesman" have the same meaning and may both be used under The Real
17-68 Estate License Act (Article 6573a, Vernon's Texas Civil Statutes)
17-69 until January 1, 1999. Not later than January 1, 1999, the Texas
18-1 Real Estate Commission shall adopt new forms, licenses, rules, and
18-2 other documents that only use the term "real estate salesperson."
18-3 SECTION 32. The importance of this legislation and the
18-4 crowded condition of the calendars in both houses create an
18-5 emergency and an imperative public necessity that the
18-6 constitutional rule requiring bills to be read on three several
18-7 days in each house be suspended, and this rule is hereby suspended.
18-8 * * * * *