By Reyna of Bexar H.B. No. 695
77R3942 JMM-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the requirements for a license to sell real estate.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Sections 7(a), (b), and (e), The Real Estate
1-5 License Act (Article 6573a, Vernon's Texas Civil Statutes), are
1-6 amended to read as follows:
1-7 (a) Competency as referred to in Section 6 of this Act shall
1-8 be established by an examination prepared by or contracted for by
1-9 the commission. The examination shall be given at such times and
1-10 at such places within the state as the commission shall prescribe.
1-11 The examination shall be of scope sufficient in the judgment of the
1-12 commission to determine that a person is competent to act as a real
1-13 estate broker or salesperson in a manner to protect the interest of
1-14 the public. The examination for a salesperson license shall be
1-15 less exacting and less stringent than the examination for a broker
1-16 license. The commission shall furnish each applicant with study
1-17 material and references on which the examination shall be based.
1-18 When an applicant for a real estate license fails a qualifying
1-19 examination, the applicant may apply for reexamination by filing a
1-20 request therefor together with the proper fee. The examination
1-21 requirement must be satisfied not later than six months after the
1-22 date on which the application for a license is filed. The
1-23 commission by rule may limit the number of times an applicant may
1-24 take all or part of the examination and may set a reasonable
2-1 waiting period before a person who fails an examination may file
2-2 another application. The rules adopted by the commission may
2-3 permit a person to file another application without regard to the
2-4 waiting period if the person has completed additional courses of
2-5 study specified by the commission. Courses of study required for a
2-6 license may include but are not limited to the following, which
2-7 shall be considered core real estate courses for all purposes of
2-8 this Act:
2-9 (1) Principles of Real Estate (or equivalent) shall
2-10 include but not be limited to an overview of licensing as a real
2-11 estate broker and salesperson, ethics of practice, titles to and
2-12 conveyancing of real estate, legal descriptions, deeds,
2-13 encumbrances and liens, distinctions between personal and real
2-14 property, appraisal, finance and regulations, closing procedures,
2-15 real estate mathematics, and at least three classroom hours of
2-16 instruction on federal, state, and local laws relating to housing
2-17 discrimination, housing credit discrimination, and community
2-18 reinvestment.
2-19 (2) Real Estate Appraisal (or equivalent) shall
2-20 include but not be limited to the central purposes and functions of
2-21 an appraisal, social and economic determinant of value, appraisal
2-22 case studies, cost, market data and income approaches to value
2-23 estimates, final correlations, and reporting.
2-24 (3) Real Estate Law (or equivalent) shall include but
2-25 not be limited to legal concepts of real estate, land description,
2-26 real property rights and estates in land, contracts, conveyances,
2-27 encumbrances, foreclosures, recording procedures, and evidence of
3-1 titles.
3-2 (4) Real Estate Finance (or equivalent) shall include
3-3 but not be limited to monetary systems, primary and secondary money
3-4 markets, sources of mortgage loans, federal government programs,
3-5 loan applications, processes and procedures, closing costs,
3-6 alternative financial instruments, equal credit opportunity acts,
3-7 community reinvestment act, and state housing agency.
3-8 (5) Real Estate Marketing (or equivalent) shall
3-9 include but not be limited to real estate professionalism and
3-10 ethics, characteristics of successful salespersons, time
3-11 management, psychology of marketing, listing procedures,
3-12 advertising, negotiating and closing, financing, and the Deceptive
3-13 Trade Practices-Consumer Protection Act, as amended, Section 17.01
3-14 et seq., Business & Commerce Code.
3-15 (6) Real Estate Mathematics (or equivalent) shall
3-16 include but not be limited to basic arithmetic skills and review of
3-17 mathematical logic, percentages, interest, time-valued money,
3-18 depreciation, amortization, proration, and estimation of closing
3-19 statements.
3-20 (7) Real Estate Brokerage (or equivalent) shall
3-21 include but not be limited to law of agency, planning and
3-22 organization, operational policies and procedures, recruiting,
3-23 selection and training of personnel, records and control, and real
3-24 estate firm analysis and expansion criteria.
3-25 (8) Property Management (or equivalent) shall include
3-26 but not be limited to role of property manager, landlord policies,
3-27 operational guidelines, leases, lease negotiations, tenant
4-1 relations, maintenance, reports, habitability laws, and the Fair
4-2 Housing Act.
4-3 (9) Real Estate Investments (or equivalent) shall
4-4 include but not be limited to real estate investment
4-5 characteristics, techniques of investment analysis, time-valued
4-6 money, discounted and nondiscounted investment criteria, leverage,
4-7 tax shelters depreciation, and applications to property tax.
4-8 (10) Law of Agency (or equivalent) shall include but
4-9 not be limited to the principal-agent and master-servant
4-10 relationships, the authority of an agent, the termination of an
4-11 agent's authority, the fiduciary and other duties of an agent,
4-12 employment law, deceptive trade practices, listing or buying
4-13 representation procedures, and the disclosure of agency.
4-14 (11) Law of Contracts (or equivalent) shall include
4-15 the elements of a contract, offer and acceptance, the statute of
4-16 frauds, specific performance and remedies for breach, unauthorized
4-17 practice of law, commission rules relating to use of adopted forms,
4-18 and owner disclosure requirements.
4-19 (b) The commission by rule may:
4-20 (1) prescribe the content of core real estate courses
4-21 listed in Subsection (a) of this section; and
4-22 (2) establish the title and content of additional core
4-23 real estate courses.
4-24 (e) Each applicant for a salesperson license shall furnish
4-25 the commission satisfactory evidence of having completed 12
4-26 semester hours, or equivalent classroom hours, of postsecondary
4-27 education, eight [six] hours of which must be completed in core
5-1 real estate courses, of which a minimum of four [two] hours must be
5-2 completed in Principles of Real Estate as described in Subsection
5-3 (a)(1) of this section, a minimum of two hours must be completed in
5-4 Law of Agency as described in Subsection (a)(10) of this section,
5-5 and a minimum of two hours must be completed in Law of Contracts as
5-6 described in Subsection (a)(11) of this section. The remaining
5-7 four [six] hours must [shall] be completed in core real estate
5-8 courses or related courses. As a condition for the first renewal
5-9 of a salesperson license, the applicant shall furnish the
5-10 commission satisfactory evidence of having completed a minimum of
5-11 14 semester hours, or equivalent classroom hours, 10 [eight] hours
5-12 of which must be completed in core real estate courses. As a
5-13 condition for the second renewal of a salesperson license, the
5-14 applicant shall furnish the commission satisfactory evidence of
5-15 having completed a minimum of 16 semester hours, or equivalent
5-16 classroom hours, 12 [10] hours of which must be completed in core
5-17 real estate courses. As a condition for the third renewal of a
5-18 salesperson license, the applicant shall furnish the commission
5-19 satisfactory evidence of having completed a minimum of 18 semester
5-20 hours, or equivalent classroom hours, 14 [12] hours of which must
5-21 be completed in core real estate courses.
5-22 SECTION 2. (a) Except as provided by Subsection (b) of this
5-23 section, this Act takes effect September 1, 2001.
5-24 (b) The change in law made by this Act to Section 7(e), The
5-25 Real Estate License Act (Article 6573a, Vernon's Texas Civil
5-26 Statutes), takes effect January 1, 2002, and applies only to an
5-27 application for a real estate salesperson license filed on or after
6-1 that date. An application filed before January 1, 2002, is
6-2 governed by the law in effect on the date the application was
6-3 filed, and the former law is continued in effect for that purpose.