1-1 By: Wentworth S.B. No. 1100
1-2 (In the Senate - Filed March 10, 1997; March 13, 1997, read
1-3 first time and referred to Committee on State Affairs;
1-4 April 11, 1997, reported favorably by the following vote: Yeas 13,
1-5 Nays 0; April 11, 1997, sent to printer.)
1-6 A BILL TO BE ENTITLED
1-7 AN ACT
1-8 relating to the regulation of real estate brokers, real estate
1-9 salesmen, and inspectors.
1-10 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-11 SECTION 1. Subsection (a), Section 7, The Real Estate
1-12 License Act (Article 6573a, Vernon's Texas Civil Statutes), is
1-13 amended to read as follows:
1-14 (a) Competency as referred to in Section 6 of this Act shall
1-15 be established by an examination prepared by or contracted for by
1-16 the commission. The examination shall be given at such times and
1-17 at such places within the state as the commission shall prescribe.
1-18 The examination shall be of scope sufficient in the judgment of the
1-19 commission to determine that a person is competent to act as a real
1-20 estate broker or salesman in a manner to protect the interest of
1-21 the public. The examination for a salesman license shall be less
1-22 exacting and less stringent than the examination for a broker
1-23 license. The commission shall furnish each applicant with study
1-24 material and references on which his examination shall be based.
1-25 When an applicant for a real estate license fails a qualifying
1-26 examination, he may apply for reexamination by filing a request
1-27 therefor together with the proper fee. The examination requirement
1-28 must be satisfied not later than six months after the date on which
1-29 the application for a license is filed. Courses of study required
1-30 for a license may include but are not limited to the following,
1-31 which shall be considered core real estate courses for all purposes
1-32 of this Act:
1-33 (1) Principles of Real Estate (or equivalent) shall
1-34 include but not be limited to an overview of licensing as a real
1-35 estate broker and salesman, ethics of practice, titles to and
1-36 conveyancing of real estate, legal descriptions, [law of agency,]
1-37 deeds, encumbrances and liens, distinctions between personal and
1-38 real property, [contracts,] appraisal, finance and regulations,
1-39 closing procedures, real estate mathematics, and at least three
1-40 classroom hours of instruction on federal, state, and local laws
1-41 relating to housing discrimination, housing credit discrimination,
1-42 and community reinvestment.
1-43 (2) Real Estate Appraisal (or equivalent) shall
1-44 include but not be limited to the central purposes and functions of
1-45 an appraisal, social and economic determinant of value, appraisal
1-46 case studies, cost, market data and income approaches to value
1-47 estimates, final correlations, and reporting.
1-48 (3) Real Estate Law (or equivalent) shall include but
1-49 not be limited to legal concepts of real estate, land description,
1-50 real property rights and estates in land, contracts, conveyances,
1-51 encumbrances, foreclosures, recording procedures, and evidence of
1-52 titles.
1-53 (4) Real Estate Finance (or equivalent) shall include
1-54 but not be limited to monetary systems, primary and secondary money
1-55 markets, sources of mortgage loans, federal government programs,
1-56 loan applications, processes and procedures, closing costs,
1-57 alternative financial instruments, equal credit opportunity acts,
1-58 community reinvestment act, and state housing agency.
1-59 (5) Real Estate Marketing (or equivalent) shall
1-60 include but not be limited to real estate professionalism and
1-61 ethics, characteristics of successful salesmen, time management,
1-62 psychology of marketing, listing procedures, advertising,
1-63 negotiating and closing, financing, and the Deceptive Trade
1-64 Practices-Consumer Protection Act, as amended, Section 17.01 et
2-1 seq., Business & Commerce Code.
2-2 (6) Real Estate Mathematics (or equivalent) shall
2-3 include but not be limited to basic arithmetic skills and review of
2-4 mathematical logic, percentages, interest, time-valued money,
2-5 depreciation, amortization, proration, and estimation of closing
2-6 statements.
2-7 (7) Real Estate Brokerage (or equivalent) shall
2-8 include but not be limited to law of agency, planning and
2-9 organization, operational policies and procedures, recruiting,
2-10 selection and training of personnel, records and control, and real
2-11 estate firm analysis and expansion criteria.
2-12 (8) Property Management (or equivalent) shall include
2-13 but not be limited to role of property manager, landlord policies,
2-14 operational guidelines, leases, lease negotiations, tenant
2-15 relations, maintenance, reports, habitability laws, and the Fair
2-16 Housing Act.
2-17 (9) Real Estate Investments (or equivalent) shall
2-18 include but not be limited to real estate investment
2-19 characteristics, techniques of investment analysis, time-valued
2-20 money, discounted and nondiscounted investment criteria, leverage,
2-21 tax shelters depreciation, and applications to property tax.
2-22 (10) Law of Agency (or equivalent) shall include but
2-23 not be limited to the principal-agent and master-servant
2-24 relationships, the authority of an agent, the termination of an
2-25 agent's authority, the fiduciary and other duties of an agent,
2-26 employment law, deceptive trade practices, listing or buying
2-27 representation procedures, and the disclosure of agency.
2-28 (11) Law of Contracts (or equivalent) shall include
2-29 but not be limited to the elements of a contract, offer and
2-30 acceptance, statute of frauds, specific performance and remedies
2-31 for breach, unauthorized practice of law, commission rules relating
2-32 to use of promulgated forms, and owner disclosure requirements.
2-33 SECTION 2. Subsection (c), Section 7, The Real Estate
2-34 License Act (Article 6573a, Vernon's Texas Civil Statutes), is
2-35 amended to read as follows:
2-36 (c) The commission by rule may provide for a waiver of some
2-37 or all of the requirements for a license under this Act,
2-38 notwithstanding any other provision of this Act, if the applicant
2-39 was previously licensed in this state within the five-year period
2-40 prior to the filing of the application. The commission shall waive
2-41 the examination of an applicant for a broker license who has,
2-42 within one year previous to the filing of his application, been
2-43 licensed in this state as a broker, and shall waive the examination
2-44 of an applicant for a salesman license who has, within one year
2-45 previous to the filing of his application, been licensed in this
2-46 state as either a broker or salesman.
2-47 SECTION 3. Subsection (e), Section 7, The Real Estate
2-48 License Act (Article 6573a, Vernon's Texas Civil Statutes), is
2-49 amended to read as follows:
2-50 (e) Each applicant for a salesman license shall furnish the
2-51 commission satisfactory evidence of having completed 12 semester
2-52 hours, or equivalent classroom hours, of postsecondary education,
2-53 six hours of which must be completed in core real estate courses,
2-54 of which a minimum of two hours must be completed in Principles of
2-55 Real Estate as described in Subsection (a)(1) of this section,
2-56 [and] a minimum of two hours must be completed in Law of Agency as
2-57 described in Subsection (a)(10) of this section, and a minimum of
2-58 two hours must be completed in Law of Contracts as described in
2-59 Subsection a(11) of this section. The remaining six hours shall be
2-60 completed in core real estate courses or related courses. As a
2-61 condition for the first renewal of a salesman license, the
2-62 applicant shall furnish the commission satisfactory evidence of
2-63 having completed a minimum of 14 semester hours, or equivalent
2-64 classroom hours, eight hours of which must be completed in core
2-65 real estate courses. As a condition for the second renewal of a
2-66 salesman license, the applicant shall furnish the commission
2-67 satisfactory evidence of having completed a minimum of 16 semester
2-68 hours, or equivalent classroom hours, 10 hours of which must be
2-69 completed in core real estate courses. As a condition for the
3-1 third renewal of a salesman license, the applicant shall furnish
3-2 the commission satisfactory evidence of having completed a minimum
3-3 of 18 semester hours, or equivalent classroom hours, 12 hours of
3-4 which must be completed in core real estate courses.
3-5 SECTION 4. Subsection (d), Section 7A, The Real Estate
3-6 License Act (Article 6573a, Vernon's Texas Civil Statutes), is
3-7 amended to read as follows:
3-8 (d) The commission may adopt rules and set and collect
3-9 reasonable fees to implement this section, including a fee not to
3-10 exceed $400 for an application for approval of a provider of
3-11 continuing education and a fee not to exceed $100 for an
3-12 application for a course of study to be offered for continuing
3-13 education. If the commission determines that an applicant
3-14 satisfies the requirements of this section and any rules adopted by
3-15 the commission under this section, the commission may authorize a
3-16 provider to offer continuing education for a period of two years or
3-17 authorize the offering of a course of study for a period of two
3-18 years. The commission may by rule establish procedures under which
3-19 licenses are issued or renewed, or licensees are returned to active
3-20 status, prior to the completion of the continuing education
3-21 required by this section. The commission may require a licensee to
3-22 pay an additional fee not to exceed $200 and to complete the
3-23 required continuing education within 60 days after the license was
3-24 issued or renewed or the licensee was returned to active status.
3-25 SECTION 5. Subsection (a), Section 11, The Real Estate
3-26 License Act (Article 6573a, Vernon's Texas Civil Statutes), is
3-27 amended to read as follows:
3-28 (a) The commission shall charge and collect the following
3-29 fees:
3-30 (1) a fee not to exceed $100 for the filing of an
3-31 original application for a real estate broker license;
3-32 (2) a fee not to exceed $100 for annual renewal of a
3-33 real estate broker license;
3-34 (3) a fee not to exceed $50 for the filing of an
3-35 original application for a real estate salesman license;
3-36 (4) a fee not to exceed $50 for annual renewal of a
3-37 real estate salesman license;
3-38 (5) a fee not to exceed $50 [$25] for an application
3-39 for a license examination;
3-40 (6) a fee not to exceed $20 for filing a request for a
3-41 license for each additional office or place of business;
3-42 (7) a fee not to exceed $20 for filing a request for a
3-43 license for a change of place of business, change of name, return
3-44 to active status, or change of sponsoring broker;
3-45 (8) a fee not to exceed $20 for filing a request to
3-46 replace a license lost or destroyed;
3-47 (9) a fee not to exceed $400 for filing an application
3-48 for approval of an education program under Section 7(f) of this
3-49 Act;
3-50 (10) a fee not to exceed $200 a year for operation of
3-51 an education program under Section 7(f) of this Act;
3-52 (11) a fee of $15 for transcript evaluation;
3-53 (12) a fee not to exceed $10 for preparing a license
3-54 history;
3-55 (13) a fee not to exceed $50 for the filing of an
3-56 application for a moral character determination;
3-57 (14) an annual fee of $20 from each real estate broker
3-58 to be transmitted to Texas A&M University for the Texas Real Estate
3-59 Research Center as provided by Section 5(m) of this Act; and
3-60 (15) an annual fee of $17.50 from each real estate
3-61 salesman to be transmitted to Texas A&M University for the Texas
3-62 Real Estate Research Center as provided by Section 5(m) of this
3-63 Act.
3-64 SECTION 6. Subsection (a), Section 15B, The Real Estate
3-65 License Act (Article 6573a, Vernon's Texas Civil Statutes), is
3-66 amended to read as follows:
3-67 (a) Notwithstanding any other provision of the Act, there
3-68 shall be no undercover or covert investigations conducted by
3-69 authority of this Act unless expressly authorized by the commission
4-1 after due consideration of the circumstances and determination by
4-2 the commission that such measures are necessary to carry out the
4-3 purposes of this Act. No investigations of licensees or any other
4-4 actions against licensees shall be initiated on the basis of
4-5 anonymous complaints whether in writing or otherwise but shall be
4-6 initiated only upon the commission's own motion or a signed written
4-7 complaint from a consumer or service recipient. Upon the adoption
4-8 of such motion by the commission or upon receipt of such complaint,
4-9 the licensee shall be notified promptly and in writing unless the
4-10 commission itself, after due consideration, determines otherwise.
4-11 The commission may authorize its employees to file signed written
4-12 complaints against a licensee and to conduct an investigation when:
4-13 (1) a judgment against the licensee has been paid from
4-14 a recovery fund established under this Act;
4-15 (2) the licensee has been convicted of a criminal
4-16 offense which may constitute grounds for the suspension or
4-17 revocation of a license; or
4-18 (3) the licensee has failed to make good a check
4-19 issued to the commission.
4-20 SECTION 7. Subdivision (4), Subsection (d), Section 23, The
4-21 Real Estate License Act (Article 6573a, Vernon's Texas Civil
4-22 Statutes), is amended to read as follows:
4-23 (4) The commission by rule shall [may] provide for the
4-24 substitution of relevant experience or additional education in lieu
4-25 of the number of real estate inspections and prior licensing as an
4-26 apprentice inspector or real estate inspector required by this
4-27 section. The rule adopted by the commission may not require an
4-28 applicant to complete more than 60 additional classroom hours of
4-29 core real estate inspection courses. Before a person licensed as a
4-30 professional inspector under the rule may sponsor an apprentice
4-31 inspector or a real estate inspector, the person must provide
4-32 certification acceptable to the commission that the person has
4-33 completed at least 200 real estate inspections while licensed under
4-34 this section.
4-35 SECTION 8. Subsection (g), Section 24, The Real Estate
4-36 License Act (Article 6573a, Vernon's Texas Civil Statutes), is
4-37 repealed.
4-38 SECTION 9. (a) Except as provided by Subsection (b) of this
4-39 section, this Act takes effect September 1, 1997.
4-40 (b) Section 3 of this Act takes effect January 1, 1998.
4-41 SECTION 10. The importance of this legislation and the
4-42 crowded condition of the calendars in both houses create an
4-43 emergency and an imperative public necessity that the
4-44 constitutional rule requiring bills to be read on three several
4-45 days in each house be suspended, and this rule is hereby suspended.
4-46 * * * * *