By Pickett H.B. No. 1621
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to certain licensing in the real estate industry.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 2(5), The Real Estate License Act
1-5 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
1-6 as follows:
1-7 (5) "Person" means an individual or any other entity,
1-8 including but not limited to [,] a governmental body, limited
1-9 liability company, limited liability partnership, partnership, or
1-10 [a] corporation, foreign or domestic.
1-11 SECTION 2. Section 3, The Real Estate License Act (Article
1-12 6573a, Vernon's Texas Civil Statutes), is amended to read as
1-13 follows:
1-14 Sec. 3. The provisions of this Act shall not apply to any of
1-15 the following persons and transactions, and each and all of the
1-16 following persons and transactions are hereby exempted from the
1-17 provisions of this Act:
1-18 (1) an attorney at law licensed in this state or in
1-19 any other state;
1-20 (2) an attorney in fact under a duly executed power of
1-21 attorney authorizing the consummation of a real estate transaction;
1-22 (3) a public official in the conduct of his official
1-23 duties;
1-24 (4) a person calling the sale of real estate by
2-1 auction under the authority of a license issued by this state
2-2 provided the person does not perform any other act of a real estate
2-3 broker or salesman as defined by this Act;
2-4 (5) a person acting under a court order or under the
2-5 authority of a will or a written trust instrument;
2-6 (6) a salesperson employed by an owner in the sale of
2-7 structures and land on which said structures are situated, provided
2-8 such structures are erected by the owner in the due course of his
2-9 business;
2-10 (7) an on-site manager of an apartment complex;
2-11 (8) transactions involving the sale, lease, or
2-12 transfer of any mineral or mining interest in real property;
2-13 (9) an owner or his employees in renting or leasing
2-14 his own real estate whether improved or unimproved;
2-15 (10) transactions involving the sale, lease, or
2-16 transfer of cemetery lots; [or]
2-17 (11) transactions involving the renting, leasing, or
2-18 management of hotels or motels; or
2-19 (12) a partnership or limited liability partnership
2-20 performing an act constituting an act of a broker or salesman, as
2-21 defined by this Act, through a partner who is duly licensed as a
2-22 real estate broker.
2-23 SECTION 3. Sections 7(a) and (e), The Real Estate License
2-24 Act (Article 6573a, Vernon's Texas Civil Statutes), are amended to
2-25 read as follows:
2-26 (a) Competency as referred to in Section 6 of this Act shall
2-27 be established by an examination prepared by or contracted for by
3-1 the commission. The examination shall be given at such times and
3-2 at such places within the state as the commission shall prescribe.
3-3 The examination shall be of scope sufficient in the judgment of the
3-4 commission to determine that a person is competent to act as a real
3-5 estate broker or salesman in a manner to protect the interest of
3-6 the public. The examination for a salesman license shall be less
3-7 exacting and less stringent than the examination for a broker
3-8 license. The commission shall furnish each applicant with study
3-9 material and references on which his examination shall be based.
3-10 When an applicant for a real estate license fails a qualifying
3-11 examination, he may apply for reexamination by filing a request
3-12 therefor together with the proper fee. The examination requirement
3-13 must be satisfied not later than six months after the date on which
3-14 the application for a license is filed. Courses of study required
3-15 for a license may include but are not limited to the following,
3-16 which shall be considered core real estate courses for all
3-17 purposes of this Act:
3-18 (1) Principles of Real Estate (or equivalent) shall
3-19 include but not be limited to an overview of licensing as a real
3-20 estate broker and salesman, ethics of practice, titles to and
3-21 conveyancing of real estate, legal descriptions, [law of agency,]
3-22 deeds, encumbrances and liens, distinctions between personal and
3-23 real property, [contracts,] appraisal, finance and regulations,
3-24 closing procedures, real estate mathematics, and at least three
3-25 classroom hours of instruction on federal, state, and local laws
3-26 relating to housing discrimination, housing credit discrimination,
3-27 and community reinvestment.
4-1 (2) Real Estate Appraisal (or equivalent) shall
4-2 include but not be limited to the central purposes and functions of
4-3 an appraisal, social and economic determinant of value, appraisal
4-4 case studies, cost, market data and income approaches to value
4-5 estimates, final correlations, and reporting.
4-6 (3) Real Estate Law (or equivalent) shall include but
4-7 not be limited to legal concepts of real estate, land description,
4-8 real property rights and estates in land, contracts, conveyances,
4-9 encumbrances, foreclosures, recording procedures, and evidence of
4-10 titles.
4-11 (4) Real Estate Finance (or equivalent) shall include
4-12 but not be limited to monetary systems, primary and secondary money
4-13 markets, sources of mortgage loans, federal government programs,
4-14 loan applications, processes and procedures, closing costs,
4-15 alternative financial instruments, equal credit opportunity acts,
4-16 community reinvestment act, and state housing agency.
4-17 (5) Real Estate Marketing (or equivalent) shall
4-18 include but not be limited to real estate professionalism and
4-19 ethics, characteristics of successful salesmen, time management,
4-20 psychology of marketing, listing procedures, advertising,
4-21 negotiating and closing, financing, and the Deceptive Trade
4-22 Practices-Consumer Protection Act, as amended, Section 17.01 et
4-23 seq., Business & Commerce Code.
4-24 (6) Real Estate Mathematics (or equivalent) shall
4-25 include but not be limited to basic arithmetic skills and review of
4-26 mathematical logic, percentages, interest, time-valued money,
4-27 depreciation, amortization, proration, and estimation of closing
5-1 statements.
5-2 (7) Real Estate Brokerage (or equivalent) shall
5-3 include but not be limited to law of agency, planning and
5-4 organization, operational policies and procedures, recruiting,
5-5 selection and training of personnel, records and control, and real
5-6 estate firm analysis and expansion criteria.
5-7 (8) Property Management (or equivalent) shall include
5-8 but not be limited to role of property manager, landlord policies,
5-9 operational guidelines, leases, lease negotiations, tenant
5-10 relations, maintenance, reports, habitability laws, and the Fair
5-11 Housing Act.
5-12 (9) Real Estate Investments (or equivalent) shall
5-13 include but not be limited to real estate investment
5-14 characteristics, techniques of investment analysis, time-valued
5-15 money, discounted and nondiscounted investment criteria, leverage,
5-16 tax shelters depreciation, and applications to property tax.
5-17 (10) Law of Agency (or equivalent) shall include but
5-18 not be limited to the principal-agent and master-servant
5-19 relationships, the authority of an agent, the termination of an
5-20 agent's authority, the fiduciary and other duties of an agent,
5-21 employment law, deceptive trade practices, listing or buying
5-22 representation procedures, and the disclosure of agency.
5-23 (11) Contract Law (or equivalent) shall include but
5-24 not be limited to the elements of a contract, offer and acceptance,
5-25 the statute of frauds, specific performance, remedies for breach,
5-26 the unauthorized practice of law, commission rules regarding the
5-27 use of adopted forms, and owner disclosure requirements.
6-1 (e) Each applicant for a salesman license shall furnish the
6-2 commission satisfactory evidence of having completed 12 semester
6-3 hours, or equivalent classroom hours, of postsecondary education,
6-4 six hours of which must be completed in core real estate courses,
6-5 of which a minimum of two hours must be completed in Principles of
6-6 Real Estate as described in Subsection (a)(1) of this section,
6-7 [and] a minimum of two hours must be completed in Law of Agency as
6-8 described in Subsection (a)(10) of this section, and a minimum of
6-9 two hours must be completed in Contract Law as described in
6-10 Subsection (a)(11) of this section. The remaining six hours shall
6-11 be completed in core real estate courses or related courses. As a
6-12 condition for the first renewal of a salesman license, the
6-13 applicant shall furnish the commission satisfactory evidence of
6-14 having completed a minimum of 14 semester hours, or equivalent
6-15 classroom hours, eight hours of which must be completed in core
6-16 real estate courses. As a condition for the second renewal of a
6-17 salesman license, the applicant shall furnish the commission
6-18 satisfactory evidence of having completed a minimum of 16 semester
6-19 hours, or equivalent classroom hours, 10 hours of which must be
6-20 completed in core real estate courses. As a condition for the
6-21 third renewal of a salesman license, the applicant shall furnish
6-22 the commission satisfactory evidence of having completed a minimum
6-23 of 18 semester hours, or equivalent classroom hours, 12 hours of
6-24 which must be completed in core real estate courses.
6-25 SECTION 4. Section 7A, The Real Estate License Act (Article
6-26 6573a, Vernon's Texas Civil Statutes), is amended by adding
6-27 Subsection (g) to read as follows:
7-1 (g) Notwithstanding any other provision of this Act to the
7-2 contrary, the commission may by rule establish procedures under
7-3 which licenses are issued, renewed, or returned to active status
7-4 before the completion of the continuing education required by this
7-5 Act. These procedures may require an applicant to pay an
7-6 additional fee not to exceed $200 and to complete the required
7-7 continuing education within 60 days after the date on which the
7-8 license is issued, renewed, or returned to active status.
7-9 SECTION 5. The Real Estate License Act (Article 6573a,
7-10 Vernon's Texas Civil Statutes) is amended by adding Section 7B to
7-11 read as follows:
7-12 Sec. 7B. Notwithstanding any other provision of this Act to
7-13 the contrary, the commission by rule may provide for a waiver of
7-14 one or all of the requirements for a license under this Act if the
7-15 applicant was licensed under this Act within the five years
7-16 preceding the date the applicant files an application.
7-17 SECTION 6. Section 11, The Real Estate License Act (Article
7-18 6573a, Vernon's Texas Civil Statutes), is amended to read as
7-19 follows:
7-20 Sec. 11. [(a)] The commission shall charge and collect the
7-21 following fees:
7-22 (1) a fee not to exceed $100 for the filing of an
7-23 original application for a real estate broker license;
7-24 (2) a fee not to exceed $100 for annual renewal of a
7-25 real estate broker license;
7-26 (3) a fee not to exceed $50 for the filing of an
7-27 original application for a real estate salesman license;
8-1 (4) a fee not to exceed $50 for annual renewal of a
8-2 real estate salesman license;
8-3 (5) a fee not to exceed $50 [$25] for an application
8-4 for a license examination;
8-5 (6) a fee not to exceed $20 for filing a request for a
8-6 license for each additional office or place of business;
8-7 (7) a fee not to exceed $20 for filing a request for a
8-8 license for a change of place of business, change of name, return
8-9 to active status, or change of sponsoring broker;
8-10 (8) a fee not to exceed $20 for filing a request to
8-11 replace a license lost or destroyed;
8-12 (9) a fee not to exceed $400 for filing an application
8-13 for approval of an education program under Section 7(f) of this
8-14 Act;
8-15 (10) a fee not to exceed $200 a year for operation of
8-16 an education program under Section 7(f) of this Act;
8-17 (11) a fee of $15 for transcript evaluation;
8-18 (12) a fee not to exceed $10 for preparing a license
8-19 history;
8-20 (13) a fee not to exceed $50 for the filing of an
8-21 application for a moral character determination;
8-22 (14) an annual fee of $20 from each real estate broker
8-23 to be transmitted to Texas A&M University for the Texas Real Estate
8-24 Research Center as provided by Section 5(m) of this Act; and
8-25 (15) an annual fee of $17.50 from each real estate
8-26 salesman to be transmitted to Texas A&M University for the Texas
8-27 Real Estate Research Center as provided by Section 5(m) of this
9-1 Act.
9-2 SECTION 7. Section 11A, The Real Estate License Act (Article
9-3 6573a, Vernon's Texas Civil Statutes), is amended to read as
9-4 follows:
9-5 Sec. 11A. INCREASE IN FEES. (a) Each of the following fees
9-6 imposed by or under another section of this Act is increased by
9-7 $200:
9-8 (1) fee for filing an original application for an
9-9 individual real estate broker license; and
9-10 (2) fee for annual renewal of an individual real
9-11 estate broker license.
9-12 (b) Subsection (a) does not apply to a real estate broker
9-13 who is on inactive status under Section 13A of this Act.
9-14 (c) Of each fee increase collected, $50 shall be deposited
9-15 to the credit of the foundation school fund and $150 shall be
9-16 deposited to the credit of the general revenue fund. This
9-17 subsection applies to the disposition of each fee increase
9-18 regardless of any other provision of law providing for a different
9-19 disposition of funds.
9-20 SECTION 8. Section 15B(a), The Real Estate License Act
9-21 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
9-22 as follows:
9-23 (a) Notwithstanding any other provision of the Act, there
9-24 shall be no undercover or covert investigations conducted by
9-25 authority of this Act unless expressly authorized by the commission
9-26 after due consideration of the circumstances and determination by
9-27 the commission that such measures are necessary to carry out the
10-1 purposes of this Act. No investigations of licensees or any other
10-2 actions against licensees shall be initiated on the basis of
10-3 anonymous complaints whether in writing or otherwise but shall be
10-4 initiated only upon the commission's own motion or a signed written
10-5 complaint from a person [consumer or service recipient]. Upon the
10-6 adoption of such motion by the commission or upon receipt of such
10-7 complaint, the licensee shall be notified promptly and in writing
10-8 unless the commission itself, after due consideration, determines
10-9 otherwise. The commission may authorize an employee to file a
10-10 signed, written complaint against a licensee and to conduct an
10-11 investigation when:
10-12 (1) a judgment against the licensee has been paid from
10-13 a recovery fund established under this Act;
10-14 (2) the licensee has been convicted of a criminal
10-15 offense that may constitute a ground for the suspension or
10-16 revocation of a license; or
10-17 (3) the licensee has failed within a reasonable time
10-18 to make good a check issued to the commission after the commission
10-19 has mailed a request for payment by certified mail to the
10-20 licensee's last known business address as reflected by the
10-21 commission's records.
10-22 SECTION 9. Section 24(g), The Real Estate License Act
10-23 (Article 6573a, Vernon's Texas Civil Statutes), is repealed.
10-24 SECTION 10. (a) Except as provided by Subsection (b) of
10-25 this section, this Act takes effect September 1, 1997.
10-26 (b) Section 2 of this Act takes effect January 1, 1998.
10-27 (c) The change in the law made by this Act to Section 11A,
11-1 The Real Estate License Act (Article 6573a, Vernon's Texas Civil
11-2 Statutes), applies only to a real estate broker renewal fee that
11-3 becomes due on or after the effective date of this Act. A real
11-4 estate broker fee renewal that becomes due before the effective
11-5 date of this Act is subject to the law in effect on the date the
11-6 fee became due, and the former law is continued in effect for that
11-7 purpose.
11-8 SECTION 11. The importance of this legislation and the
11-9 crowded condition of the calendars in both houses create an
11-10 emergency and an imperative public necessity that the
11-11 constitutional rule requiring bills to be read on three several
11-12 days in each house be suspended, and this rule is hereby suspended.