AN ACT
1-1 relating to the suspension or revocation of a real estate license
1-2 for failure to include a termination date in certain real estate
1-3 contracts.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Subsection (a), Section 15, The Real Estate
1-6 License Act (Article 6573a, Vernon's Texas Civil Statutes), is
1-7 amended to read as follows:
1-8 (a) The commission may, on its own motion, and shall, on the
1-9 signed complaint in writing of a consumer or service recipient,
1-10 provided the complaint, or the complaint together with evidence,
1-11 documentary or otherwise, presented in connection with the
1-12 complaint, provides reasonable cause, investigate the actions and
1-13 records of a real estate broker or real estate salesman. The
1-14 commission may suspend or revoke a license issued under the
1-15 provisions of this Act at any time when it has been determined
1-16 that:
1-17 (1) the licensee has entered a plea of guilty or nolo
1-18 contendere to, or been found guilty of, or been convicted of, a
1-19 felony, in which fraud is an essential element, and the time for
1-20 appeal has elapsed or the judgment or conviction has been affirmed
1-21 on appeal, irrespective of an order granting probation following
1-22 such conviction, suspending the imposition of sentence;
1-23 (2) the licensee has procured, or attempted to
2-1 procure, a real estate license, for himself or a salesman, by
2-2 fraud, misrepresentation or deceit, or by making a material
2-3 misstatement of fact in an application for a real estate license;
2-4 (3) the licensee, when selling, buying, trading, or
2-5 renting real property in his own name, engaged in misrepresentation
2-6 or dishonest or fraudulent action;
2-7 (4) the licensee has failed within a reasonable time
2-8 to make good a check issued to the commission after the commission
2-9 has mailed a request for payment by certified mail to the
2-10 licensee's last known business address as reflected by the
2-11 commission's records;
2-12 (5) the licensee has disregarded or violated a
2-13 provision of this Act;
2-14 (6) the licensee, while performing an act constituting
2-15 an act of a broker or salesman, as defined by this Act, has been
2-16 guilty of:
2-17 (A) making a material misrepresentation, or
2-18 failing to disclose to a potential purchaser any latent structural
2-19 defect or any other defect known to the broker or salesman. Latent
2-20 structural defects and other defects do not refer to trivial or
2-21 insignificant defects but refer to those defects that would be a
2-22 significant factor to a reasonable and prudent purchaser in making
2-23 a decision to purchase;
2-24 (B) making a false promise of a character likely
2-25 to influence, persuade, or induce any person to enter into a
3-1 contract or agreement when the licensee could not or did not intend
3-2 to keep such promise;
3-3 (C) pursuing a continued and flagrant course of
3-4 misrepresentation or making of false promises through agents,
3-5 salesmen, advertising, or otherwise;
3-6 (D) failing to make clear, to all parties to a
3-7 transaction, which party he is acting for, or receiving
3-8 compensation from more than one party except with the full
3-9 knowledge and consent of all parties;
3-10 (E) failing within a reasonable time properly to
3-11 account for or remit money coming into his possession which belongs
3-12 to others, or commingling money belonging to others with his own
3-13 funds;
3-14 (F) paying a commission or fees to or dividing a
3-15 commission or fees with anyone not licensed as a real estate broker
3-16 or salesman in this state or in any other state for compensation
3-17 for services as a real estate agent;
3-18 (G) failing to specify a definite termination
3-19 date that is not subject to prior notice in a [listing contract or
3-20 in another] contract, other than a contract to perform property
3-21 management services, in which the licensee agrees to perform
3-22 services for which a license is required under this Act [a definite
3-23 termination date which is not subject to prior notice];
3-24 (H) accepting, receiving, or charging an
3-25 undisclosed commission, rebate, or direct profit on expenditures
4-1 made for a principal;
4-2 (I) soliciting, selling, or offering for sale
4-3 real property under a scheme or program that constitutes a lottery
4-4 or deceptive practice;
4-5 (J) acting in the dual capacity of broker and
4-6 undisclosed principal in a transaction;
4-7 (K) guaranteeing, authorizing, or permitting a
4-8 person to guarantee that future profits will result from a resale
4-9 of real property;
4-10 (L) placing a sign on real property offering it
4-11 for sale, lease, or rent without the written consent of the owner
4-12 or his authorized agent;
4-13 (M) inducing or attempting to induce a party to
4-14 a contract of sale or lease to break the contract for the purpose
4-15 of substituting in lieu thereof a new contract;
4-16 (N) negotiating or attempting to negotiate the
4-17 sale, exchange, lease, or rental of real property with an owner,
4-18 lessor, buyer, or tenant, knowing that the owner, lessor, buyer, or
4-19 tenant had a written outstanding contract, granting exclusive
4-20 agency in connection with the transaction to another real estate
4-21 broker;
4-22 (O) offering real property for sale or for lease
4-23 without the knowledge and consent of the owner or his authorized
4-24 agent, or on terms other than those authorized by the owner or his
4-25 authorized agent;
5-1 (P) publishing, or causing to be published, an
5-2 advertisement including, but not limited to, advertising by
5-3 newspaper, radio, television, or display which is misleading, or
5-4 which is likely to deceive the public, or which in any manner tends
5-5 to create a misleading impression, or which fails to identify the
5-6 person causing the advertisement to be published as a licensed real
5-7 estate broker or agent;
5-8 (Q) having knowingly withheld from or inserted
5-9 in a statement of account or invoice, a statement that made it
5-10 inaccurate in a material particular;
5-11 (R) publishing or circulating an unjustified or
5-12 unwarranted threat of legal proceedings, or other action;
5-13 (S) establishing an association, by employment
5-14 or otherwise, with an unlicensed person who is expected or required
5-15 to act as a real estate licensee, or aiding or abetting or
5-16 conspiring with a person to circumvent the requirements of this
5-17 Act;
5-18 (T) failing or refusing on demand to furnish
5-19 copies of a document pertaining to a transaction dealing with real
5-20 estate to a person whose signature is affixed to the document;
5-21 (U) failing to advise a purchaser in writing
5-22 before the closing of a transaction that the purchaser should
5-23 either have the abstract covering the real estate which is the
5-24 subject of the contract examined by an attorney of the purchaser's
5-25 own selection, or be furnished with or obtain a policy of title
6-1 insurance;
6-2 (V) conduct which constitutes dishonest
6-3 dealings, bad faith, or untrustworthiness;
6-4 (W) acting negligently or incompetently in
6-5 performing an act for which a person is required to hold a real
6-6 estate license;
6-7 (X) disregarding or violating a provision of
6-8 this Act;
6-9 (Y) failing within a reasonable time to deposit
6-10 money received as escrow agent in a real estate transaction, either
6-11 in trust with a title company authorized to do business in this
6-12 state, or in a custodial, trust, or escrow account maintained for
6-13 that purpose in a banking institution authorized to do business in
6-14 this state;
6-15 (Z) disbursing money deposited in a custodial,
6-16 trust, or escrow account, as provided in Subsection (Y) before the
6-17 transaction concerned has been consummated or finally otherwise
6-18 terminated; or
6-19 (AA) discriminating against an owner, potential
6-20 purchaser, lessor, or potential lessee on the basis of race, color,
6-21 religion, sex, national origin, or ancestry, including directing
6-22 prospective home buyers or lessees interested in equivalent
6-23 properties to different areas according to the race, color,
6-24 religion, sex, national origin, or ancestry of the potential owner
6-25 or lessee;
7-1 (7) the licensee has failed or refused on demand to
7-2 produce a document, book, or record in his possession concerning a
7-3 real estate transaction conducted by him for inspection by the
7-4 commission or its authorized personnel or representative;
7-5 (8) the licensee has failed within a reasonable time
7-6 to provide information requested by the commission as a result of a
7-7 formal or informal complaint to the commission which would indicate
7-8 a violation of this Act; or
7-9 (9) the licensee has failed without just cause to
7-10 surrender to the rightful owner, on demand, a document or
7-11 instrument coming into his possession.
7-12 SECTION 2. This Act takes effect September 1, 1997, and
7-13 applies only to a contract subject to The Real Estate License Act
7-14 (Article 6573a, Vernon's Texas Civil Statutes) that is executed on
7-15 or after that date. A contract subject to The Real Estate License
7-16 Act (Article 6573a, Vernon's Texas Civil Statutes) that is executed
7-17 before the effective date of this Act is governed by the law in
7-18 effect on the day that the contract was executed, and the former
7-19 law is continued in effect for that purpose.
7-20 SECTION 3. The importance of this legislation and the
7-21 crowded condition of the calendars in both houses create an
7-22 emergency and an imperative public necessity that the
7-23 constitutional rule requiring bills to be read on three several
7-24 days in each house be suspended, and this rule is hereby suspended.
_______________________________ _______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 221 passed the Senate on
February 3, 1997, by a viva-voce vote.
_______________________________
Secretary of the Senate
I hereby certify that S.B. No. 221 passed the House on
April 11, 1997, by a non-record vote.
_______________________________
Chief Clerk of the House
Approved:
_______________________________
Date
_______________________________
Governor