75R14085 BEM-F
By Wentworth S.B. No. 1100
Substitute the following for S.B. No. 1100:
By Jones of Lubbock C.S.S.B. No. 1100
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the regulation of real estate brokers, salespersons,
1-3 and inspectors.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 2(5), The Real Estate License Act
1-6 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
1-7 as follows:
1-8 (5) "Person" means an individual or any other entity
1-9 including a government or governmental subdivision or agency, a
1-10 limited liability company, a limited liability partnership, a
1-11 partnership, or a corporation, foreign or domestic.
1-12 SECTION 2. Section 3, The Real Estate License Act (Article
1-13 6573a, Vernon's Texas Civil Statutes), is amended to read as
1-14 follows:
1-15 Sec. 3. EXEMPTIONS. The provisions of this Act shall not
1-16 apply to any of the following persons and transactions, and each
1-17 and all of the following persons and transactions are hereby
1-18 exempted from the provisions of this Act:
1-19 (1) an attorney at law licensed in this state or in
1-20 any other state;
1-21 (2) an attorney in fact under a duly executed power of
1-22 attorney authorizing the consummation of a real estate transaction;
1-23 (3) a public official in the conduct of his official
1-24 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
2-22 is a licensed real estate broker.
2-23 SECTION 3. Sections 7(a), (c), and (e), The Real Estate
2-24 License Act (Article 6573a, Vernon's Texas Civil Statutes), are
2-25 amended to 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 purposes
3-17 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) Law of Contracts (or equivalent) shall include
5-24 the elements of a contract, offer and acceptance, the statute of
5-25 frauds, specific performance and remedies for breach, unauthorized
5-26 practice of law, commission rules relating to use of adopted forms,
5-27 and owner disclosure requirements.
6-1 (c) The commission shall waive the examination of an
6-2 applicant for a broker license who has, within one year previous to
6-3 the filing of his application, been licensed in this state as a
6-4 broker, and shall waive the examination of an applicant for a
6-5 salesman license who has, within one year previous to the filing of
6-6 his application, been licensed in this state as either a broker or
6-7 salesman. The commission by rule may provide for the waiver of
6-8 some or all of the requirements for a license under this Act for an
6-9 applicant who was licensed under this Act within the six years
6-10 preceding the date of filing the application.
6-11 (e) Each applicant for a salesman license shall furnish the
6-12 commission satisfactory evidence of having completed 12 semester
6-13 hours, or equivalent classroom hours, of postsecondary education,
6-14 six hours of which must be completed in core real estate courses,
6-15 of which a minimum of two hours must be completed in Principles of
6-16 Real Estate as described in Subsection (a)(1) of this section,
6-17 [and] a minimum of two hours must be completed in Law of Agency as
6-18 described in Subsection (a)(10) of this section, and a minimum of
6-19 two hours must be completed in Law of Contracts as described in
6-20 Subsection (a)(11) of this section. The remaining six hours shall
6-21 be completed in core real estate courses or related courses. As a
6-22 condition for the first renewal of a salesman license, the
6-23 applicant shall furnish the commission satisfactory evidence of
6-24 having completed a minimum of 14 semester hours, or equivalent
6-25 classroom hours, eight hours of which must be completed in core
6-26 real estate courses. As a condition for the second renewal of a
6-27 salesman license, the applicant shall furnish the commission
7-1 satisfactory evidence of having completed a minimum of 16 semester
7-2 hours, or equivalent classroom hours, 10 hours of which must be
7-3 completed in core real estate courses. As a condition for the
7-4 third renewal of a salesman license, the applicant shall furnish
7-5 the commission satisfactory evidence of having completed a minimum
7-6 of 18 semester hours, or equivalent classroom hours, 12 hours of
7-7 which must be completed in core real estate courses.
7-8 SECTION 4. Section 7A, The Real Estate License Act (Article
7-9 6573a, Vernon's Texas Civil Statutes), is amended by adding
7-10 Subsection (g) to read as follows:
7-11 (g) The commission may adopt rules that establish procedures
7-12 under which a license may be issued, renewed, or returned to active
7-13 status before the applicant completes the continuing education
7-14 requirements of this section. The commission may prescribe an
7-15 additional fee, not to exceed $200, for the issuance, renewal, or
7-16 return to active status of a license before the applicant completes
7-17 the continuing education requirements of this section and may
7-18 require the applicant to complete the required continuing education
7-19 not later than the 60th day after the date the license is issued,
7-20 renewed, or returned to active status.
7-21 SECTION 5. Section 11(a), The Real Estate License Act
7-22 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
7-23 as follows:
7-24 (a) The commission shall charge and collect the following
7-25 fees:
7-26 (1) a fee not to exceed $100 for the filing of an
7-27 original application for a real estate broker license;
8-1 (2) a fee not to exceed $100 for annual renewal of a
8-2 real estate broker license;
8-3 (3) a fee not to exceed $50 for the filing of an
8-4 original application for a real estate salesman license;
8-5 (4) a fee not to exceed $50 for annual renewal of a
8-6 real estate salesman license;
8-7 (5) a fee not to exceed $50 [$25] for an application
8-8 for a license examination;
8-9 (6) a fee not to exceed $20 for filing a request for a
8-10 license for each additional office or place of business;
8-11 (7) a fee not to exceed $20 for filing a request for a
8-12 license for a change of place of business, change of name, return
8-13 to active status, or change of sponsoring broker;
8-14 (8) a fee not to exceed $20 for filing a request to
8-15 replace a license lost or destroyed;
8-16 (9) a fee not to exceed $400 for filing an application
8-17 for approval of an education program under Section 7(f) of this
8-18 Act;
8-19 (10) a fee not to exceed $200 a year for operation of
8-20 an education program under Section 7(f) of this Act;
8-21 (11) a fee of $15 for transcript evaluation;
8-22 (12) a fee not to exceed $10 for preparing a license
8-23 history;
8-24 (13) a fee not to exceed $50 for the filing of an
8-25 application for a moral character determination;
8-26 (14) an annual fee of $20 from each real estate broker
8-27 to be transmitted to Texas A&M University for the Texas Real Estate
9-1 Research Center as provided by Section 5(m) of this Act; and
9-2 (15) an annual fee of $17.50 from each real estate
9-3 salesman to be transmitted to Texas A&M University for the Texas
9-4 Real Estate Research Center as provided by Section 5(m) of this
9-5 Act.
9-6 SECTION 6. Section 15B, The Real Estate License Act (Article
9-7 6573a, Vernon's Texas Civil Statutes), is amended by amending
9-8 Subsection (a) and adding Subsection (e) to read as follows:
9-9 (a) Notwithstanding any other provision of the Act, there
9-10 shall be no undercover or covert investigations conducted by
9-11 authority of this Act unless expressly authorized by the commission
9-12 after due consideration of the circumstances and determination by
9-13 the commission that such measures are necessary to carry out the
9-14 purposes of this Act. No investigations of licensees or any other
9-15 actions against licensees shall be initiated on the basis of
9-16 anonymous complaints whether in writing or otherwise but shall be
9-17 initiated only upon the commission's own motion or a signed written
9-18 complaint from a person [consumer or service recipient]. Upon the
9-19 adoption of such motion by the commission or upon receipt of such
9-20 complaint, the licensee shall be notified promptly and in writing
9-21 unless the commission itself, after due consideration, determines
9-22 otherwise.
9-23 (e) The commission may authorize a commission employee to
9-24 file a signed written complaint against a licensee and to conduct
9-25 an investigation if:
9-26 (1) a judgment against the licensee has been paid from
9-27 a recovery fund established under this Act;
10-1 (2) the licensee is convicted of a criminal offense
10-2 that may constitute grounds for the suspension or revocation of the
10-3 licensee's license; or
10-4 (3) the licensee fails to make good a check issued to
10-5 the commission.
10-6 SECTION 7. Section 23(b)(2), The Real Estate License Act
10-7 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
10-8 as follows:
10-9 (2) The committee is composed of nine members
10-10 appointed by the commission. The members of the committee hold
10-11 office for staggered terms of six years, with the terms of three
10-12 members expiring February 1 of each odd-numbered year. Each member
10-13 holds office until the member's successor is appointed.
10-14 Appointments to the committee shall be made without regard to the
10-15 sex, race, color, age, handicap, religion, or national origin of
10-16 the appointees. In the event of a vacancy during a term, the
10-17 commission shall appoint a replacement who meets the qualifications
10-18 for appointment under this subdivision to fill the unexpired part
10-19 of the term. A member of the committee must be a professional
10-20 inspector actively engaged in the practice of real estate
10-21 inspecting at the time of appointment and must have been primarily
10-22 engaged in the practice of real estate inspecting for at least five
10-23 years before the member's appointment. No more than three members
10-24 [A member] of the committee may [not] hold a real estate broker or
10-25 salesman license. Each member of the committee is entitled to a
10-26 per diem allowance and to reimbursement of travel expenses
10-27 necessarily incurred in performing functions as a member of the
11-1 committee, subject to any applicable limitation in the General
11-2 Appropriations Act. The committee shall annually elect from its
11-3 members a chairman, a vice-chairman, and secretary. A quorum of
11-4 the committee consists of five members.
11-5 SECTION 8. Section 23(d), The Real Estate License Act
11-6 (Article 6573a, Vernon's Texas Civil Statutes), is amended by
11-7 amending Subdivision (4) and adding Subdivision (6) to read as
11-8 follows:
11-9 (4) The commission by rule shall [may] provide for the
11-10 substitution of relevant experience or additional education in lieu
11-11 of the number of real estate inspections required by this section
11-12 and in lieu of the requirement that the applicant be licensed as an
11-13 apprentice inspector or a real estate inspector before issuance of
11-14 a license as a real estate inspector or professional inspector.
11-15 The rules adopted by the commission under this subdivision may not
11-16 require an applicant to complete more than 60 additional classroom
11-17 hours of core real estate inspection courses.
11-18 (6) Before a licensed professional inspector may
11-19 sponsor an apprentice inspector or a real estate inspector, the
11-20 professional inspector must provide sufficient proof to the
11-21 commission that the professional inspector has completed not less
11-22 than 200 real estate inspections while licensed as a professional
11-23 inspector under this Act.
11-24 SECTION 9. Section 24(g), The Real Estate License Act
11-25 (Article 6573a, Vernon's Texas Civil Statutes), is repealed.
11-26 SECTION 10. (a) Except as provided by Subsection (b) of
11-27 this section, this Act takes effect September 1, 1997.
12-1 (b) The change in law made by this Act to Section 7(e), The
12-2 Real Estate License Act (Article 6573a, Vernon's Texas Civil
12-3 Statutes), as amended by this Act, takes effect January 1, 1998.
12-4 SECTION 11. The importance of this legislation and the
12-5 crowded condition of the calendars in both houses create an
12-6 emergency and an imperative public necessity that the
12-7 constitutional rule requiring bills to be read on three several
12-8 days in each house be suspended, and this rule is hereby suspended.