AN ACT
1-1 relating to the regulation of real estate brokers, salespersons,
1-2 and inspectors.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Subdivision (5), Section 2, The Real Estate
1-5 License Act (Article 6573a, Vernon's Texas Civil Statutes), is
1-6 amended to read as follows:
1-7 (5) "Person" means an individual or any other entity
1-8 including a government or governmental subdivision or agency, a
1-9 limited liability company, a limited liability partnership, a
1-10 partnership, or 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. EXEMPTIONS. The provisions of this Act shall not
1-15 apply to any of the following persons and transactions, and each
1-16 and all of the following persons and transactions are hereby
1-17 exempted from the 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;
2-1 (4) a person calling the sale of real estate by
2-2 auction under the authority of a license issued by this state
2-3 provided the person does not perform any other act of a real estate
2-4 broker or salesman as defined by this Act;
2-5 (5) a person acting under a court order or under the
2-6 authority of a will or a written trust instrument;
2-7 (6) a salesperson employed by an owner in the sale of
2-8 structures and land on which said structures are situated, provided
2-9 such structures are erected by the owner in the due course of his
2-10 business;
2-11 (7) an on-site manager of an apartment complex;
2-12 (8) transactions involving the sale, lease, or
2-13 transfer of any mineral or mining interest in real property;
2-14 (9) an owner or his employees in renting or leasing
2-15 his own real estate whether improved or unimproved;
2-16 (10) transactions involving the sale, lease, or
2-17 transfer of cemetery lots; [or]
2-18 (11) transactions involving the renting, leasing, or
2-19 management of hotels or motels; or
2-20 (12) a partnership or limited liability partnership
2-21 acting as a broker or real estate salesman through a partner who is
2-22 a licensed real estate broker.
2-23 SECTION 3. Subsections (a), (c), and (e), Section 7, The
2-24 Real Estate License Act (Article 6573a, Vernon's Texas Civil
2-25 Statutes), are amended to read as follows:
3-1 (a) Competency as referred to in Section 6 of this Act shall
3-2 be established by an examination prepared by or contracted for by
3-3 the commission. The examination shall be given at such times and
3-4 at such places within the state as the commission shall prescribe.
3-5 The examination shall be of scope sufficient in the judgment of the
3-6 commission to determine that a person is competent to act as a real
3-7 estate broker or salesman in a manner to protect the interest of
3-8 the public. The examination for a salesman license shall be less
3-9 exacting and less stringent than the examination for a broker
3-10 license. The commission shall furnish each applicant with study
3-11 material and references on which his examination shall be based.
3-12 When an applicant for a real estate license fails a qualifying
3-13 examination, he may apply for reexamination by filing a request
3-14 therefor together with the proper fee. The examination requirement
3-15 must be satisfied not later than six months after the date on which
3-16 the application for a license is filed. Courses of study required
3-17 for a license may include but are not limited to the following,
3-18 which shall be considered core real estate courses for all purposes
3-19 of this Act:
3-20 (1) Principles of Real Estate (or equivalent) shall
3-21 include but not be limited to an overview of licensing as a real
3-22 estate broker and salesman, ethics of practice, titles to and
3-23 conveyancing of real estate, legal descriptions, [law of agency,]
3-24 deeds, encumbrances and liens, distinctions between personal and
3-25 real property, [contracts,] appraisal, finance and regulations,
4-1 closing procedures, real estate mathematics, and at least three
4-2 classroom hours of instruction on federal, state, and local laws
4-3 relating to housing discrimination, housing credit discrimination,
4-4 and community reinvestment.
4-5 (2) Real Estate Appraisal (or equivalent) shall
4-6 include but not be limited to the central purposes and functions of
4-7 an appraisal, social and economic determinant of value, appraisal
4-8 case studies, cost, market data and income approaches to value
4-9 estimates, final correlations, and reporting.
4-10 (3) Real Estate Law (or equivalent) shall include but
4-11 not be limited to legal concepts of real estate, land description,
4-12 real property rights and estates in land, contracts, conveyances,
4-13 encumbrances, foreclosures, recording procedures, and evidence of
4-14 titles.
4-15 (4) Real Estate Finance (or equivalent) shall include
4-16 but not be limited to monetary systems, primary and secondary money
4-17 markets, sources of mortgage loans, federal government programs,
4-18 loan applications, processes and procedures, closing costs,
4-19 alternative financial instruments, equal credit opportunity acts,
4-20 community reinvestment act, and state housing agency.
4-21 (5) Real Estate Marketing (or equivalent) shall
4-22 include but not be limited to real estate professionalism and
4-23 ethics, characteristics of successful salesmen, time management,
4-24 psychology of marketing, listing procedures, advertising,
4-25 negotiating and closing, financing, and the Deceptive Trade
5-1 Practices-Consumer Protection Act, as amended, Section 17.01 et
5-2 seq., Business & Commerce Code.
5-3 (6) Real Estate Mathematics (or equivalent) shall
5-4 include but not be limited to basic arithmetic skills and review of
5-5 mathematical logic, percentages, interest, time-valued money,
5-6 depreciation, amortization, proration, and estimation of closing
5-7 statements.
5-8 (7) Real Estate Brokerage (or equivalent) shall
5-9 include but not be limited to law of agency, planning and
5-10 organization, operational policies and procedures, recruiting,
5-11 selection and training of personnel, records and control, and real
5-12 estate firm analysis and expansion criteria.
5-13 (8) Property Management (or equivalent) shall include
5-14 but not be limited to role of property manager, landlord policies,
5-15 operational guidelines, leases, lease negotiations, tenant
5-16 relations, maintenance, reports, habitability laws, and the Fair
5-17 Housing Act.
5-18 (9) Real Estate Investments (or equivalent) shall
5-19 include but not be limited to real estate investment
5-20 characteristics, techniques of investment analysis, time-valued
5-21 money, discounted and nondiscounted investment criteria, leverage,
5-22 tax shelters depreciation, and applications to property tax.
5-23 (10) Law of Agency (or equivalent) shall include but
5-24 not be limited to the principal-agent and master-servant
5-25 relationships, the authority of an agent, the termination of an
6-1 agent's authority, the fiduciary and other duties of an agent,
6-2 employment law, deceptive trade practices, listing or buying
6-3 representation procedures, and the disclosure of agency.
6-4 (11) Law of Contracts (or equivalent) shall include
6-5 the elements of a contract, offer and acceptance, the statute of
6-6 frauds, specific performance and remedies for breach, unauthorized
6-7 practice of law, commission rules relating to use of adopted forms,
6-8 and owner disclosure requirements.
6-9 (c) The commission shall waive the examination of an
6-10 applicant for a broker license who has, within one year previous to
6-11 the filing of his application, been licensed in this state as a
6-12 broker, and shall waive the examination of an applicant for a
6-13 salesman license who has, within one year previous to the filing of
6-14 his application, been licensed in this state as either a broker or
6-15 salesman. The commission by rule may provide for the waiver of
6-16 some or all of the requirements for a license under this Act for an
6-17 applicant who was licensed under this Act within the six years
6-18 preceding the date of filing the application.
6-19 (e) Each applicant for a salesman license shall furnish the
6-20 commission satisfactory evidence of having completed 12 semester
6-21 hours, or equivalent classroom hours, of postsecondary education,
6-22 six hours of which must be completed in core real estate courses,
6-23 of which a minimum of two hours must be completed in Principles of
6-24 Real Estate as described in Subsection (a)(1) of this section,
6-25 [and] a minimum of two hours must be completed in Law of Agency as
7-1 described in Subsection (a)(10) of this section, and a minimum of
7-2 two hours must be completed in Law of Contracts as described in
7-3 Subsection (a)(11) of this section. The remaining six hours shall
7-4 be completed in core real estate courses or related courses. As a
7-5 condition for the first renewal of a salesman license, the
7-6 applicant shall furnish the commission satisfactory evidence of
7-7 having completed a minimum of 14 semester hours, or equivalent
7-8 classroom hours, eight hours of which must be completed in core
7-9 real estate courses. As a condition for the second renewal of a
7-10 salesman license, the applicant shall furnish the commission
7-11 satisfactory evidence of having completed a minimum of 16 semester
7-12 hours, or equivalent classroom hours, 10 hours of which must be
7-13 completed in core real estate courses. As a condition for the
7-14 third renewal of a salesman license, the applicant shall furnish
7-15 the commission satisfactory evidence of having completed a minimum
7-16 of 18 semester hours, or equivalent classroom hours, 12 hours of
7-17 which must be completed in core real estate courses.
7-18 SECTION 4. Section 7A, The Real Estate License Act (Article
7-19 6573a, Vernon's Texas Civil Statutes), is amended by amending
7-20 Subsection (a) and adding Subsection (g) to read as follows:
7-21 (a) To renew an active real estate broker license or an
7-22 active real estate salesman license that is not subject to the
7-23 annual education requirements of this Act, the licensee must
7-24 provide the commission proof of attendance at at least 15 classroom
7-25 hours of continuing education courses approved by the commission
8-1 during the term of the current license. The commission by rule may
8-2 provide for the substitution of relevant educational experience or
8-3 correspondence courses approved by the commission instead of
8-4 classroom attendance. In addition, supervised video instruction
8-5 may be approved by the commission as a course counting as classroom
8-6 hours of mandatory continuing education. At least six hours of
8-7 instruction must be devoted to the rules of the commission, fair
8-8 housing laws, landlord-tenant law and other Property Code issues,
8-9 agency laws, antitrust laws, the Deceptive Trade Practices-Consumer
8-10 Protection Act (Subchapter E, Chapter 17, Business & Commerce
8-11 Code), disclosures to buyers, landlords, tenants, and sellers,
8-12 current contract and addendum forms, the unauthorized practice of
8-13 law, case studies involving violations of laws and regulations,
8-14 current Federal Housing Administration and Department of Veterans
8-15 Affairs regulations, tax laws, property tax consulting laws and
8-16 legal issues, or other legal topics approved by the commission.
8-17 The remaining hours may be devoted to other real estate-related
8-18 topics approved by the commission. The commission may consider
8-19 equivalent courses for continuing education credit. Property tax
8-20 consulting laws and legal issues include but are not limited to the
8-21 Tax Code, preparation of property tax reports, the unauthorized
8-22 practice of law, agency laws, tax laws, laws concerning property
8-23 taxes or assessments, deceptive trade practices, contract forms and
8-24 addendum, and other legal topics approved by the commission. Real
8-25 estate related courses approved by the State Bar of Texas for
9-1 minimum continuing legal education participatory credit and core
9-2 real estate courses under Section 7(a) of this Act shall
9-3 automatically be approved as mandatory continuing education courses
9-4 under this Act. The commission may not require examinations except
9-5 for correspondence courses or courses offered by alternative
9-6 delivery systems such as computers. Daily classroom course
9-7 segments must be at least one hour [three hours] long but not more
9-8 than 10 hours long.
9-9 (g) The commission may adopt rules that establish procedures
9-10 under which a license may be issued, renewed, or returned to active
9-11 status before the applicant completes the continuing education
9-12 requirements of this section. The commission may prescribe an
9-13 additional fee, not to exceed $200, for the issuance, renewal, or
9-14 return to active status of a license before the applicant completes
9-15 the continuing education requirements of this section and may
9-16 require the applicant to complete the required continuing education
9-17 not later than the 60th day after the date the license is issued,
9-18 renewed, or returned to active status.
9-19 SECTION 5. Subsection (a), Section 11, The Real Estate
9-20 License Act (Article 6573a, Vernon's Texas Civil Statutes), is
9-21 amended to read as follows:
9-22 (a) The commission shall charge and collect the following
9-23 fees:
9-24 (1) a fee not to exceed $100 for the filing of an
9-25 original application for a real estate broker license;
10-1 (2) a fee not to exceed $100 for annual renewal of a
10-2 real estate broker license;
10-3 (3) a fee not to exceed $50 for the filing of an
10-4 original application for a real estate salesman license;
10-5 (4) a fee not to exceed $50 for annual renewal of a
10-6 real estate salesman license;
10-7 (5) a fee not to exceed $50 [$25] for an application
10-8 for a license examination;
10-9 (6) a fee not to exceed $20 for filing a request for a
10-10 license for each additional office or place of business;
10-11 (7) a fee not to exceed $20 for filing a request for a
10-12 license for a change of place of business, change of name, return
10-13 to active status, or change of sponsoring broker;
10-14 (8) a fee not to exceed $20 for filing a request to
10-15 replace a license lost or destroyed;
10-16 (9) a fee not to exceed $400 for filing an application
10-17 for approval of an education program under Section 7(f) of this
10-18 Act;
10-19 (10) a fee not to exceed $200 a year for operation of
10-20 an education program under Section 7(f) of this Act;
10-21 (11) a fee of $15 for transcript evaluation;
10-22 (12) a fee not to exceed $10 for preparing a license
10-23 history;
10-24 (13) a fee not to exceed $50 for the filing of an
10-25 application for a moral character determination;
11-1 (14) an annual fee of $20 from each real estate broker
11-2 to be transmitted to Texas A&M University for the Texas Real Estate
11-3 Research Center as provided by Section 5(m) of this Act; and
11-4 (15) an annual fee of $17.50 from each real estate
11-5 salesman to be transmitted to Texas A&M University for the Texas
11-6 Real Estate Research Center as provided by Section 5(m) of this
11-7 Act.
11-8 SECTION 6. Section 15B, The Real Estate License Act (Article
11-9 6573a, Vernon's Texas Civil Statutes), is amended by amending
11-10 Subsection (a) and adding Subsection (e) to read as follows:
11-11 (a) Notwithstanding any other provision of the Act, there
11-12 shall be no undercover or covert investigations conducted by
11-13 authority of this Act unless expressly authorized by the commission
11-14 after due consideration of the circumstances and determination by
11-15 the commission that such measures are necessary to carry out the
11-16 purposes of this Act. No investigations of licensees or any other
11-17 actions against licensees shall be initiated on the basis of
11-18 anonymous complaints whether in writing or otherwise but shall be
11-19 initiated only upon the commission's own motion or a signed written
11-20 complaint from a person [consumer or service recipient]. Upon the
11-21 adoption of such motion by the commission or upon receipt of such
11-22 complaint, the licensee shall be notified promptly and in writing
11-23 unless the commission itself, after due consideration, determines
11-24 otherwise.
11-25 (e) The commission may authorize a commission employee to
12-1 file a signed written complaint against a licensee and to conduct
12-2 an investigation if:
12-3 (1) a judgment against the licensee has been paid from
12-4 a recovery fund established under this Act;
12-5 (2) the licensee is convicted of a criminal offense
12-6 that may constitute grounds for the suspension or revocation of the
12-7 licensee's license; or
12-8 (3) the licensee fails to make good a check issued to
12-9 the commission.
12-10 SECTION 7. Section 20, The Real Estate License Act (Article
12-11 6573a, Vernon's Texas Civil Statutes), is amended by adding
12-12 Subsection (d) to read as follows:
12-13 (d) This section does not apply to an agreement to share
12-14 compensation between persons licensed under this Act. This section
12-15 does not limit a cause of action between brokers for interference
12-16 with business relationships.
12-17 SECTION 8. Subdivision (2), Subsection (b), Section 23, The
12-18 Real Estate License Act (Article 6573a, Vernon's Texas Civil
12-19 Statutes), is amended to read as follows:
12-20 (2) The committee is composed of nine members
12-21 appointed by the commission. The members of the committee hold
12-22 office for staggered terms of six years, with the terms of three
12-23 members expiring February 1 of each odd-numbered year. Each member
12-24 holds office until the member's successor is appointed.
12-25 Appointments to the committee shall be made without regard to the
13-1 sex, race, color, age, handicap, religion, or national origin of
13-2 the appointees. In the event of a vacancy during a term, the
13-3 commission shall appoint a replacement who meets the qualifications
13-4 for appointment under this subdivision to fill the unexpired part
13-5 of the term. A member of the committee must be a professional
13-6 inspector actively engaged in the practice of real estate
13-7 inspecting at the time of appointment and must have been primarily
13-8 engaged in the practice of real estate inspecting for at least five
13-9 years before the member's appointment. No more than three members
13-10 [A member] of the committee may [not] hold a real estate broker [or
13-11 salesman] license. Each member of the committee is entitled to a
13-12 per diem allowance and to reimbursement of travel expenses
13-13 necessarily incurred in performing functions as a member of the
13-14 committee, subject to any applicable limitation in the General
13-15 Appropriations Act. The committee shall annually elect from its
13-16 members a chairman, a vice-chairman, and secretary. A quorum of
13-17 the committee consists of five members.
13-18 SECTION 9. Subsection (d), Section 23, The Real Estate
13-19 License Act (Article 6573a, Vernon's Texas Civil Statutes), is
13-20 amended by amending Subdivision (4) and adding Subdivision (6) to
13-21 read as follows:
13-22 (4) The commission by rule shall [may] provide for the
13-23 substitution of relevant experience or additional education in lieu
13-24 of the number of real estate inspections required by this section
13-25 and in lieu of the requirement that the applicant be licensed as an
14-1 apprentice inspector or a real estate inspector before issuance of
14-2 a license as a real estate inspector or professional inspector.
14-3 The rules adopted by the commission under this subdivision may not
14-4 require an applicant to complete more than 60 additional classroom
14-5 hours of core real estate inspection courses.
14-6 (6) Before a licensed professional inspector may
14-7 sponsor an apprentice inspector or a real estate inspector, the
14-8 professional inspector must provide sufficient proof to the
14-9 commission that the professional inspector has completed not less
14-10 than 200 real estate inspections while licensed as a professional
14-11 inspector under this Act.
14-12 SECTION 10. Section 23, The Real Estate License Act (Article
14-13 6573a, Vernon's Texas Civil Statutes), is amended by adding
14-14 Subsection (r) to read as follows:
14-15 (r) The commission by rule shall prescribe standard forms
14-16 and adopt rules that require inspectors to use the forms to reduce
14-17 discrepancies and create consistency in preparing reports of real
14-18 estate inspections.
14-19 SECTION 11. Subsection (g), Section 24, The Real Estate
14-20 License Act (Article 6573a, Vernon's Texas Civil Statutes), is
14-21 repealed.
14-22 SECTION 12. (a) Except as provided by Subsection (b) of
14-23 this section, this Act takes effect September 1, 1997.
14-24 (b) The change in law made by this Act to Subsection (e),
14-25 Section 7, The Real Estate License Act (Article 6573a, Vernon's
15-1 Texas Civil Statutes), takes effect January 1, 1998.
15-2 (c) The Texas Real Estate Commission shall adopt rules
15-3 prescribing standard real estate inspection forms required by
15-4 Subsection (r), Section 23, The Real Estate License Act (Article
15-5 6573a, Vernon's Texas Civil Statutes), as added by this Act, not
15-6 later than October 1, 1997.
15-7 SECTION 13. The importance of this legislation and the
15-8 crowded condition of the calendars in both houses create an
15-9 emergency and an imperative public necessity that the
15-10 constitutional rule requiring bills to be read on three several
15-11 days in each house be suspended, and this rule is hereby suspended.
S.B. No. 1100
________________________________ ________________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 1100 passed the Senate on
April 24, 1997, by the following vote: Yeas 29, Nays 0;
May 30, 1997, Senate refused to concur in House amendments and
requested appointment of Conference Committee; May 30, 1997, House
granted request of the Senate; June 1, 1997, Senate adopted
Conference Committee Report by a viva-voce vote.
_______________________________
Secretary of the Senate
I hereby certify that S.B. No. 1100 passed the House, with
amendments, on May 28, 1997, by a non-record vote; May 30, 1997,
House granted request of the Senate for appointment of Conference
Committee; June 1, 1997, House adopted Conference Committee Report
by a non-record vote.
_______________________________
Chief Clerk of the House
Approved:
________________________________
Date
________________________________
Governor