1-1 By: Sibley S.B. No. 221
1-2 (In the Senate - Filed January 16, 1997; January 21, 1997,
1-3 read first time and referred to Committee on State Affairs;
1-4 January 29, 1997, reported favorably by the following vote: Yeas
1-5 13, Nays 0; January 29, 1997, sent to printer.)
1-6 A BILL TO BE ENTITLED
1-7 AN ACT
1-8 relating to the suspension or revocation of a real estate license
1-9 for failure to include a termination date in certain real estate
1-10 contracts.
1-11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-12 SECTION 1. Subsection (a), Section 15, The Real Estate
1-13 License Act (Article 6573a, Vernon's Texas Civil Statutes), is
1-14 amended to read as follows:
1-15 (a) The commission may, on its own motion, and shall, on the
1-16 signed complaint in writing of a consumer or service recipient,
1-17 provided the complaint, or the complaint together with evidence,
1-18 documentary or otherwise, presented in connection with the
1-19 complaint, provides reasonable cause, investigate the actions and
1-20 records of a real estate broker or real estate salesman. The
1-21 commission may suspend or revoke a license issued under the
1-22 provisions of this Act at any time when it has been determined
1-23 that:
1-24 (1) the licensee has entered a plea of guilty or nolo
1-25 contendere to, or been found guilty of, or been convicted of, a
1-26 felony, in which fraud is an essential element, and the time for
1-27 appeal has elapsed or the judgment or conviction has been affirmed
1-28 on appeal, irrespective of an order granting probation following
1-29 such conviction, suspending the imposition of sentence;
1-30 (2) the licensee has procured, or attempted to
1-31 procure, a real estate license, for himself or a salesman, by
1-32 fraud, misrepresentation or deceit, or by making a material
1-33 misstatement of fact in an application for a real estate license;
1-34 (3) the licensee, when selling, buying, trading, or
1-35 renting real property in his own name, engaged in misrepresentation
1-36 or dishonest or fraudulent action;
1-37 (4) the licensee has failed within a reasonable time
1-38 to make good a check issued to the commission after the commission
1-39 has mailed a request for payment by certified mail to the
1-40 licensee's last known business address as reflected by the
1-41 commission's records;
1-42 (5) the licensee has disregarded or violated a
1-43 provision of this Act;
1-44 (6) the licensee, while performing an act constituting
1-45 an act of a broker or salesman, as defined by this Act, has been
1-46 guilty of:
1-47 (A) making a material misrepresentation, or
1-48 failing to disclose to a potential purchaser any latent structural
1-49 defect or any other defect known to the broker or salesman. Latent
1-50 structural defects and other defects do not refer to trivial or
1-51 insignificant defects but refer to those defects that would be a
1-52 significant factor to a reasonable and prudent purchaser in making
1-53 a decision to purchase;
1-54 (B) making a false promise of a character likely
1-55 to influence, persuade, or induce any person to enter into a
1-56 contract or agreement when the licensee could not or did not intend
1-57 to keep such promise;
1-58 (C) pursuing a continued and flagrant course of
1-59 misrepresentation or making of false promises through agents,
1-60 salesmen, advertising, or otherwise;
1-61 (D) failing to make clear, to all parties to a
1-62 transaction, which party he is acting for, or receiving
1-63 compensation from more than one party except with the full
1-64 knowledge and consent of all parties;
2-1 (E) failing within a reasonable time properly to
2-2 account for or remit money coming into his possession which belongs
2-3 to others, or commingling money belonging to others with his own
2-4 funds;
2-5 (F) paying a commission or fees to or dividing a
2-6 commission or fees with anyone not licensed as a real estate broker
2-7 or salesman in this state or in any other state for compensation
2-8 for services as a real estate agent;
2-9 (G) failing to specify a definite termination
2-10 date that is not subject to prior notice in a [listing contract or
2-11 in another] contract, other than a contract to perform property
2-12 management services, in which the licensee agrees to perform
2-13 services for which a license is required under this Act [a definite
2-14 termination date which is not subject to prior notice];
2-15 (H) accepting, receiving, or charging an
2-16 undisclosed commission, rebate, or direct profit on expenditures
2-17 made for a principal;
2-18 (I) soliciting, selling, or offering for sale
2-19 real property under a scheme or program that constitutes a lottery
2-20 or deceptive practice;
2-21 (J) acting in the dual capacity of broker and
2-22 undisclosed principal in a transaction;
2-23 (K) guaranteeing, authorizing, or permitting a
2-24 person to guarantee that future profits will result from a resale
2-25 of real property;
2-26 (L) placing a sign on real property offering it
2-27 for sale, lease, or rent without the written consent of the owner
2-28 or his authorized agent;
2-29 (M) inducing or attempting to induce a party to
2-30 a contract of sale or lease to break the contract for the purpose
2-31 of substituting in lieu thereof a new contract;
2-32 (N) negotiating or attempting to negotiate the
2-33 sale, exchange, lease, or rental of real property with an owner,
2-34 lessor, buyer, or tenant, knowing that the owner, lessor, buyer, or
2-35 tenant had a written outstanding contract, granting exclusive
2-36 agency in connection with the transaction to another real estate
2-37 broker;
2-38 (O) offering real property for sale or for lease
2-39 without the knowledge and consent of the owner or his authorized
2-40 agent, or on terms other than those authorized by the owner or his
2-41 authorized agent;
2-42 (P) publishing, or causing to be published, an
2-43 advertisement including, but not limited to, advertising by
2-44 newspaper, radio, television, or display which is misleading, or
2-45 which is likely to deceive the public, or which in any manner tends
2-46 to create a misleading impression, or which fails to identify the
2-47 person causing the advertisement to be published as a licensed real
2-48 estate broker or agent;
2-49 (Q) having knowingly withheld from or inserted
2-50 in a statement of account or invoice, a statement that made it
2-51 inaccurate in a material particular;
2-52 (R) publishing or circulating an unjustified or
2-53 unwarranted threat of legal proceedings, or other action;
2-54 (S) establishing an association, by employment
2-55 or otherwise, with an unlicensed person who is expected or required
2-56 to act as a real estate licensee, or aiding or abetting or
2-57 conspiring with a person to circumvent the requirements of this
2-58 Act;
2-59 (T) failing or refusing on demand to furnish
2-60 copies of a document pertaining to a transaction dealing with real
2-61 estate to a person whose signature is affixed to the document;
2-62 (U) failing to advise a purchaser in writing
2-63 before the closing of a transaction that the purchaser should
2-64 either have the abstract covering the real estate which is the
2-65 subject of the contract examined by an attorney of the purchaser's
2-66 own selection, or be furnished with or obtain a policy of title
2-67 insurance;
2-68 (V) conduct which constitutes dishonest
2-69 dealings, bad faith, or untrustworthiness;
3-1 (W) acting negligently or incompetently in
3-2 performing an act for which a person is required to hold a real
3-3 estate license;
3-4 (X) disregarding or violating a provision of
3-5 this Act;
3-6 (Y) failing within a reasonable time to deposit
3-7 money received as escrow agent in a real estate transaction, either
3-8 in trust with a title company authorized to do business in this
3-9 state, or in a custodial, trust, or escrow account maintained for
3-10 that purpose in a banking institution authorized to do business in
3-11 this state;
3-12 (Z) disbursing money deposited in a custodial,
3-13 trust, or escrow account, as provided in Subsection (Y) before the
3-14 transaction concerned has been consummated or finally otherwise
3-15 terminated; or
3-16 (AA) discriminating against an owner, potential
3-17 purchaser, lessor, or potential lessee on the basis of race, color,
3-18 religion, sex, national origin, or ancestry, including directing
3-19 prospective home buyers or lessees interested in equivalent
3-20 properties to different areas according to the race, color,
3-21 religion, sex, national origin, or ancestry of the potential owner
3-22 or lessee;
3-23 (7) the licensee has failed or refused on demand to
3-24 produce a document, book, or record in his possession concerning a
3-25 real estate transaction conducted by him for inspection by the
3-26 commission or its authorized personnel or representative;
3-27 (8) the licensee has failed within a reasonable time
3-28 to provide information requested by the commission as a result of a
3-29 formal or informal complaint to the commission which would indicate
3-30 a violation of this Act; or
3-31 (9) the licensee has failed without just cause to
3-32 surrender to the rightful owner, on demand, a document or
3-33 instrument coming into his possession.
3-34 SECTION 2. This Act takes effect September 1, 1997, and
3-35 applies only to a contract subject to The Real Estate License Act
3-36 (Article 6573a, Vernon's Texas Civil Statutes) that is executed on
3-37 or after that date. A contract subject to The Real Estate License
3-38 Act (Article 6573a, Vernon's Texas Civil Statutes) that is executed
3-39 before the effective date of this Act is governed by the law in
3-40 effect on the day that the contract was executed, and the former
3-41 law is continued in effect for that purpose.
3-42 SECTION 3. The importance of this legislation and the
3-43 crowded condition of the calendars in both houses create an
3-44 emergency and an imperative public necessity that the
3-45 constitutional rule requiring bills to be read on three several
3-46 days in each house be suspended, and this rule is hereby suspended.
3-47 * * * * *