By Wentworth S.B. No. 362
77R2367 SMH-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the regulation of certain occupations by the Texas Real
1-3 Estate Commission; providing penalties.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 6(a), The Real Estate License Act (Article
1-6 6573a, Vernon's Texas Civil Statutes), is amended to read as
1-7 follows:
1-8 (a) A person desiring to act as a real estate broker in this
1-9 state shall file an application for a license with the commission
1-10 on a form prescribed by the commission. [A broker desiring to
1-11 engage a person to participate in real estate brokerage activity
1-12 shall join the person in filing an application for a salesperson
1-13 license on a form prescribed by the commission.] A person
1-14 previously licensed as a broker may apply for inactive status. A
1-15 person desiring to act as a real estate salesperson in this state
1-16 must [previously licensed as a salesperson may] apply for a
1-17 salesperson license on a form prescribed by the commission. If the
1-18 person satisfies all requirements for a salesperson license, the
1-19 commission may issue an inactive salesperson license to the person.
1-20 The person may not act as a salesperson unless the person is
1-21 sponsored by a licensed broker who has notified the commission and
1-22 paid the fee for issuance of an active license to the salesperson
1-23 as required by Section 13(b) of this Act [inactive status without
1-24 the participation of a broker. The person must apply for inactive
2-1 status on a form prescribed by the commission not later than the
2-2 first anniversary of the date of the expiration of the broker or
2-3 salesperson license].
2-4 SECTION 2. Sections 7(a), (b), (d), and (e), The Real Estate
2-5 License Act (Article 6573a, Vernon's Texas Civil Statutes), are
2-6 amended to read as follows:
2-7 (a) Competency as referred to in Section 6 of this Act shall
2-8 be established by an examination prepared by or contracted for by
2-9 the commission. The examination shall be given at such times and
2-10 at such places within the state as the commission shall prescribe.
2-11 The examination shall be of scope sufficient in the judgment of the
2-12 commission to determine that a person is competent to act as a real
2-13 estate broker or salesperson in a manner to protect the interest of
2-14 the public. The examination for a salesperson license shall be
2-15 less exacting and less stringent than the examination for a broker
2-16 license. The commission shall furnish each applicant with study
2-17 material and references on which the examination shall be based.
2-18 When an applicant for a real estate license fails a qualifying
2-19 examination, the applicant may apply for reexamination by filing a
2-20 request therefor together with the proper fee. The examination
2-21 requirement must be satisfied not later than six months after the
2-22 date on which the application for a license is filed. The
2-23 commission by rule may limit the number of times an applicant may
2-24 take all or part of the examination and may prescribe a reasonable
2-25 waiting period before a person who fails an examination may file
2-26 another application. The rules adopted by the commission may
2-27 permit a person to file another application without regard to the
3-1 waiting period if the person has completed additional courses of
3-2 study specified by the commission. Courses of study required for a
3-3 license may include but are not limited to the following, which
3-4 shall be considered core real estate courses for all purposes of
3-5 this Act:
3-6 (1) Principles of Real Estate (or equivalent) shall
3-7 include but not be limited to an overview of licensing as a real
3-8 estate broker and salesperson, ethics of practice, titles to and
3-9 conveyancing of real estate, legal descriptions, deeds,
3-10 encumbrances and liens, distinctions between personal and real
3-11 property, appraisal, finance and regulations, closing procedures,
3-12 real estate mathematics, and at least three classroom hours of
3-13 instruction on federal, state, and local laws relating to housing
3-14 discrimination, housing credit discrimination, and community
3-15 reinvestment.
3-16 (2) Real Estate Appraisal (or equivalent) shall
3-17 include but not be limited to the central purposes and functions of
3-18 an appraisal, social and economic determinant of value, appraisal
3-19 case studies, cost, market data and income approaches to value
3-20 estimates, final correlations, and reporting.
3-21 (3) Real Estate Law (or equivalent) shall include but
3-22 not be limited to legal concepts of real estate, land description,
3-23 real property rights and estates in land, contracts, conveyances,
3-24 encumbrances, foreclosures, recording procedures, and evidence of
3-25 titles.
3-26 (4) Real Estate Finance (or equivalent) shall include
3-27 but not be limited to monetary systems, primary and secondary money
4-1 markets, sources of mortgage loans, federal government programs,
4-2 loan applications, processes and procedures, closing costs,
4-3 alternative financial instruments, equal credit opportunity acts,
4-4 community reinvestment act, and state housing agency.
4-5 (5) Real Estate Marketing (or equivalent) shall
4-6 include but not be limited to real estate professionalism and
4-7 ethics, characteristics of successful salespersons, time
4-8 management, psychology of marketing, listing procedures,
4-9 advertising, negotiating and closing, financing, and the Deceptive
4-10 Trade Practices-Consumer Protection Act, as amended, Section 17.01
4-11 et seq., Business & Commerce Code.
4-12 (6) Real Estate Mathematics (or equivalent) shall
4-13 include but not be limited to basic arithmetic skills and review of
4-14 mathematical logic, percentages, interest, time-valued money,
4-15 depreciation, amortization, proration, and estimation of closing
4-16 statements.
4-17 (7) Real Estate Brokerage (or equivalent) shall
4-18 include but not be limited to law of agency, planning and
4-19 organization, operational policies and procedures, recruiting,
4-20 selection and training of personnel, records and control, and real
4-21 estate firm analysis and expansion criteria.
4-22 (8) Property Management (or equivalent) shall include
4-23 but not be limited to role of property manager, landlord policies,
4-24 operational guidelines, leases, lease negotiations, tenant
4-25 relations, maintenance, reports, habitability laws, and the Fair
4-26 Housing Act.
4-27 (9) Real Estate Investments (or equivalent) shall
5-1 include but not be limited to real estate investment
5-2 characteristics, techniques of investment analysis, time-valued
5-3 money, discounted and nondiscounted investment criteria, leverage,
5-4 tax shelters depreciation, and applications to property tax.
5-5 (10) Law of Agency (or equivalent) shall include but
5-6 not be limited to the principal-agent and master-servant
5-7 relationships, the authority of an agent, the termination of an
5-8 agent's authority, the fiduciary and other duties of an agent,
5-9 employment law, deceptive trade practices, listing or buying
5-10 representation procedures, and the disclosure of agency.
5-11 (11) Law of Contracts (or equivalent) shall include
5-12 the elements of a contract, offer and acceptance, the statute of
5-13 frauds, specific performance and remedies for breach, unauthorized
5-14 practice of law, commission rules relating to use of adopted forms,
5-15 and owner disclosure requirements.
5-16 (b) The commission by rule may:
5-17 (1) prescribe the content of the core real estate
5-18 courses listed in Subsection (a) of this section; and
5-19 (2) establish the title and content of additional core
5-20 real estate courses.
5-21 (d) Each applicant for a broker license shall furnish the
5-22 commission satisfactory evidence that the applicant has had not
5-23 less than two years active experience in this state as a licensed
5-24 real estate salesperson or broker during the 36-month period
5-25 immediately preceding the filing of the application; and, in
5-26 addition, shall furnish the commission satisfactory evidence of
5-27 having completed successfully 60 semester hours, or equivalent
6-1 classroom hours, of postsecondary education, of which a minimum of
6-2 18 semester hours or equivalent classroom hours must be completed
6-3 in core real estate courses. The remaining 42 hours must be
6-4 completed in core real estate courses or related [postsecondary
6-5 education] courses accepted by the commission. These
6-6 qualifications for a broker license may not be required of an
6-7 applicant who, at the time of making the application, is duly
6-8 licensed as a real estate broker by any other state in the United
6-9 States if that state's requirements for licensure are comparable to
6-10 those of Texas. As a prerequisite for applying for a broker
6-11 license, those persons licensed as salespersons subject to the
6-12 annual education requirements provided by Subsection (e) of this
6-13 section shall, as part of the hours required by this subsection,
6-14 furnish the commission satisfactory evidence of having completed
6-15 all the requirements of Subsection (e) of this section.
6-16 (e) Each applicant for a salesperson license shall furnish
6-17 the commission satisfactory evidence of having completed 12
6-18 semester hours, or equivalent classroom hours, of postsecondary
6-19 education, eight [six] hours of which must be completed in core
6-20 real estate courses, of which a minimum of four [two] hours must be
6-21 completed in Principles of Real Estate as described in Subsection
6-22 (a)(1) of this section, a minimum of two hours must be completed in
6-23 Law of Agency as described in Subsection (a)(10) of this section,
6-24 and a minimum of two hours must be completed in Law of Contracts as
6-25 described in Subsection (a)(11) of this section. The remaining
6-26 four [six] hours must [shall] be completed in core real estate
6-27 courses or related courses. As a condition for the first renewal
7-1 of a salesperson license, the applicant shall furnish the
7-2 commission satisfactory evidence of having completed a minimum of
7-3 14 semester hours, or equivalent classroom hours, 10 [eight] hours
7-4 of which must be completed in core real estate courses. As a
7-5 condition for the second renewal of a salesperson license, the
7-6 applicant shall furnish the commission satisfactory evidence of
7-7 having completed a minimum of 16 semester hours, or equivalent
7-8 classroom hours, 12 [10] hours of which must be completed in core
7-9 real estate courses. As a condition for the third renewal of a
7-10 salesperson license, the applicant shall furnish the commission
7-11 satisfactory evidence of having completed a minimum of 18 semester
7-12 hours, or equivalent classroom hours, 14 [12] hours of which must
7-13 be completed in core real estate courses.
7-14 SECTION 3. Section 7A(a), The Real Estate License Act
7-15 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
7-16 as follows:
7-17 (a) To renew an active real estate broker license or an
7-18 active real estate salesperson license that is not subject to the
7-19 annual education requirements of this Act, the licensee must
7-20 provide the commission proof of attendance at at least 15 classroom
7-21 hours of continuing education courses approved by the commission
7-22 during the term of the current license. The commission by rule may
7-23 prescribe the title, content, and duration of continuing education
7-24 courses that a licensee must attend to renew a license and may
7-25 provide for the substitution of relevant educational experience or
7-26 correspondence courses approved by the commission instead of
7-27 classroom attendance. In addition, supervised video instruction
8-1 may be approved by the commission as a course counting as classroom
8-2 hours of mandatory continuing education. At least six hours of
8-3 instruction must be devoted to the rules of the commission, fair
8-4 housing laws, landlord-tenant law and other Property Code issues,
8-5 agency laws, antitrust laws, the Deceptive Trade Practices-Consumer
8-6 Protection Act (Subchapter E, Chapter 17, Business & Commerce
8-7 Code), disclosures to buyers, landlords, tenants, and sellers,
8-8 current contract and addendum forms, the unauthorized practice of
8-9 law, case studies involving violations of laws and regulations,
8-10 current Federal Housing Administration and Department of Veterans
8-11 Affairs regulations, tax laws, property tax consulting laws and
8-12 legal issues, or other legal topics approved by the commission.
8-13 The remaining hours may be devoted to other real estate-related
8-14 topics approved by the commission. The commission may consider
8-15 equivalent courses for continuing education credit. Property tax
8-16 consulting laws and legal issues include but are not limited to the
8-17 Tax Code, preparation of property tax reports, the unauthorized
8-18 practice of law, agency laws, tax laws, laws concerning property
8-19 taxes or assessments, deceptive trade practices, contract forms and
8-20 addendum, and other legal topics approved by the commission. Real
8-21 estate related courses approved by the State Bar of Texas for
8-22 minimum continuing legal education participatory credit and core
8-23 real estate courses under Section 7(a) of this Act shall
8-24 automatically be approved as mandatory continuing education courses
8-25 under this Act. The commission may not require examinations except
8-26 for correspondence courses or courses offered by alternative
8-27 delivery systems such as computers. Daily classroom course
9-1 segments must be at least one hour long but not more than 10 hours
9-2 long.
9-3 SECTION 4. Sections 8(c) and (f), The Real Estate License Act
9-4 (Article 6573a, Vernon's Texas Civil Statutes), are amended to read
9-5 as follows:
9-6 (c) On determination by the commission at any time that [If
9-7 on December 31 of any year] the balance remaining in the real
9-8 estate recovery fund is less than $1 million, each real estate
9-9 broker and each real estate salesperson, on the next renewal of the
9-10 license, shall pay, in addition to the license renewal fee, a fee
9-11 of $10, which shall be deposited in the real estate recovery fund,
9-12 or a pro rata share of the amount necessary to bring the fund to
9-13 $1.7 million, whichever is less. If on December 31 of any year the
9-14 balance remaining in the real estate recovery fund is more than
9-15 $3.5 million or more than the total amount of claims paid from the
9-16 fund during the previous four fiscal years, whichever is greater,
9-17 the amount of money in excess of the greater amount shall be
9-18 transferred to the general revenue fund. To ensure the
9-19 availability of a sufficient amount to pay anticipated claims on
9-20 the fund, the commission by rule may provide for the collection of
9-21 assessments at different times and under conditions other than
9-22 those specified by this Act.
9-23 (f) The court shall proceed on the application forthwith.
9-24 On the hearing on the application, the aggrieved person is required
9-25 to show that:
9-26 (1) the judgment is based on facts allowing recovery
9-27 under Subsection (a) of this section;
10-1 (2) the person is not a spouse of the debtor, or the
10-2 personal representative of the spouse; and the person is not a
10-3 registrant under Section 9A of this Act or a real estate broker or
10-4 salesperson, as defined by this Act, who is seeking to recover a
10-5 real estate commission or any compensation in the transaction or
10-6 transactions for which the application for payment is made;
10-7 (3) [the person has obtained a judgment under
10-8 Subsection (e) of this section that is not subject to a stay or
10-9 discharge in bankruptcy, stating the amount of the judgment and the
10-10 amount owing on the judgment at the date of the application;]
10-11 [(4)] based on the best available information, the
10-12 judgment debtor lacks sufficient attachable assets in this state or
10-13 any other state to satisfy the judgment; and
10-14 (4) [(5)] the amount that may be realized from the
10-15 sale of real or personal property or other assets liable to be sold
10-16 or applied in satisfaction of the judgment and the balance
10-17 remaining due on the judgment after application of the amount that
10-18 may be realized.
10-19 SECTION 5. Section 11, The Real Estate License Act (Article
10-20 6573a, Vernon's Texas Civil Statutes), is amended to read as
10-21 follows:
10-22 Sec. 11. The commission shall charge and collect the
10-23 following fees:
10-24 (1) a fee not to exceed $100 for the filing of an
10-25 original application for a real estate broker license;
10-26 (2) a fee not to exceed $100 for annual renewal of a
10-27 real estate broker license;
11-1 (3) a fee not to exceed $50 for the filing of an
11-2 original application for a real estate salesperson license;
11-3 (4) a fee not to exceed $50 for annual renewal of a
11-4 real estate salesperson license;
11-5 (5) a fee not to exceed $100 [$50] for an application
11-6 for a license examination;
11-7 (6) a fee not to exceed $20 for filing a request for a
11-8 license for each additional office or place of business;
11-9 (7) a fee not to exceed $20 for filing a request for a
11-10 license or certificate of registration for a change of place of
11-11 business, change of name, return to active status, or change of
11-12 sponsoring broker;
11-13 (8) a fee not to exceed $20 for filing a request to
11-14 replace a license or certificate of registration lost or destroyed;
11-15 (9) a fee not to exceed $400 for filing an application
11-16 for approval of an education program under Section 7(f) of this
11-17 Act;
11-18 (10) a fee not to exceed $200 a year for operation of
11-19 an education program under Section 7(f) of this Act;
11-20 (11) a fee of $20 [$15] for transcript evaluation;
11-21 (12) a fee not to exceed $10 for preparing a license
11-22 or registration history;
11-23 (13) a fee not to exceed $50 for the filing of an
11-24 application for a moral character determination;
11-25 (14) an annual fee of $20 from each real estate broker
11-26 and each registrant under Section 9A of this Act to be transmitted
11-27 to Texas A&M University for the Texas Real Estate Research Center
12-1 as provided by Section 5(m) of this Act;
12-2 (15) an annual fee of $17.50 from each real estate
12-3 salesperson to be transmitted to Texas A&M University for the Texas
12-4 Real Estate Research Center as provided by Section 5(m) of this
12-5 Act;
12-6 (16) an annual fee of $80 from each registrant under
12-7 Section 9A of this Act; and
12-8 (17) any fee authorized under Section 8 of this Act
12-9 for the real estate recovery fund.
12-10 SECTION 6. Section 15(a), The Real Estate License Act
12-11 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
12-12 as follows:
12-13 (a) The commission may, on its own motion, and shall, on the
12-14 signed complaint in writing of any person [a consumer or service
12-15 recipient], provided the complaint, or the complaint together with
12-16 evidence, documentary or otherwise, presented in connection with
12-17 the complaint, provides reasonable cause, investigate the actions
12-18 and records of a real estate broker or real estate salesperson. The
12-19 commission may suspend or revoke a license issued under the
12-20 provisions of this Act or take other disciplinary action authorized
12-21 by this Act at any time when it has been determined that:
12-22 (1) the licensee has entered a plea of guilty or nolo
12-23 contendere to, or been found guilty of, or been convicted of, a
12-24 felony, in which fraud is an essential element, and the time for
12-25 appeal has elapsed or the judgment or conviction has been affirmed
12-26 on appeal, irrespective of an order granting probation following
12-27 such conviction, suspending the imposition of sentence;
13-1 (2) the licensee has procured, or attempted to
13-2 procure, a real estate license, for the licensee or a salesperson,
13-3 by fraud, misrepresentation or deceit, or by making a material
13-4 misstatement of fact in an application for a real estate license;
13-5 (3) the licensee, when selling, buying, trading, or
13-6 renting real property in the licensee's own name, engaged in
13-7 misrepresentation or dishonest or fraudulent action;
13-8 (4) the licensee has failed within a reasonable time
13-9 to make good a check issued to the commission after the commission
13-10 has mailed a request for payment by certified mail to the
13-11 licensee's last known business address as reflected by the
13-12 commission's records;
13-13 (5) the licensee has disregarded or violated a
13-14 provision of this Act;
13-15 (6) the licensee, while performing an act constituting
13-16 an act of a broker or salesperson, as defined by this Act, has been
13-17 guilty of:
13-18 (A) making a material misrepresentation, or
13-19 failing to disclose to a potential purchaser any latent structural
13-20 defect or any other defect known to the broker or salesperson.
13-21 Latent structural defects and other defects do not refer to trivial
13-22 or insignificant defects but refer to those defects that would be a
13-23 significant factor to a reasonable and prudent purchaser in making
13-24 a decision to purchase;
13-25 (B) making a false promise of a character likely
13-26 to influence, persuade, or induce any person to enter into a
13-27 contract or agreement when the licensee could not or did not intend
14-1 to keep such promise;
14-2 (C) pursuing a continued and flagrant course of
14-3 misrepresentation or making of false promises through agents,
14-4 salespersons, advertising, or otherwise;
14-5 (D) failing to make clear, to all parties to a
14-6 transaction, which party the licensee is acting for, or receiving
14-7 compensation from more than one party except with the full
14-8 knowledge and consent of all parties;
14-9 (E) failing within a reasonable time properly to
14-10 account for or remit money coming into the licensee's possession
14-11 which belongs to others, or commingling money belonging to others
14-12 with the licensee's own funds;
14-13 (F) paying a commission or fees to or dividing a
14-14 commission or fees with anyone not licensed as a real estate broker
14-15 or salesperson in this state or in any other state for compensation
14-16 for services as a real estate agent;
14-17 (G) failing to specify a definite termination
14-18 date that is not subject to prior notice in a contract, other than
14-19 a contract to perform property management services, in which the
14-20 licensee agrees to perform services for which a license is required
14-21 under this Act;
14-22 (H) accepting, receiving, or charging an
14-23 undisclosed commission, rebate, or direct profit on expenditures
14-24 made for a principal;
14-25 (I) soliciting, selling, or offering for sale
14-26 real property under a scheme or program that constitutes a lottery
14-27 or deceptive practice;
15-1 (J) acting in the dual capacity of broker and
15-2 undisclosed principal in a transaction;
15-3 (K) guaranteeing, authorizing, or permitting a
15-4 person to guarantee that future profits will result from a resale
15-5 of real property;
15-6 (L) placing a sign on real property offering it
15-7 for sale, lease, or rent without the written consent of the owner
15-8 or the owner's authorized agent;
15-9 (M) inducing or attempting to induce a party to
15-10 a contract of sale or lease to break the contract for the purpose
15-11 of substituting in lieu thereof a new contract;
15-12 (N) negotiating or attempting to negotiate the
15-13 sale, exchange, lease, or rental of real property with an owner,
15-14 lessor, buyer, or tenant, knowing that the owner, lessor, buyer, or
15-15 tenant had a written outstanding contract, granting exclusive
15-16 agency in connection with the transaction to another real estate
15-17 broker;
15-18 (O) offering real property for sale or for lease
15-19 without the knowledge and consent of the owner or the owner's
15-20 authorized agent, or on terms other than those authorized by the
15-21 owner or the owner's authorized agent;
15-22 (P) publishing, or causing to be published, an
15-23 advertisement including, but not limited to, advertising by
15-24 newspaper, radio, television, the Internet, or display which is
15-25 misleading, or which is likely to deceive the public, or which in
15-26 any manner tends to create a misleading impression, or which fails
15-27 to identify the person causing the advertisement to be published as
16-1 a licensed real estate broker or agent;
16-2 (Q) having knowingly withheld from or inserted
16-3 in a statement of account or invoice, a statement that made it
16-4 inaccurate in a material particular;
16-5 (R) publishing or circulating an unjustified or
16-6 unwarranted threat of legal proceedings, or other action;
16-7 (S) establishing an association, by employment
16-8 or otherwise, with an unlicensed person who is expected or required
16-9 to act as a real estate licensee, or aiding or abetting or
16-10 conspiring with a person to circumvent the requirements of this
16-11 Act;
16-12 (T) failing or refusing on demand to furnish
16-13 copies of a document pertaining to a transaction dealing with real
16-14 estate to a person whose signature is affixed to the document;
16-15 (U) failing to advise a purchaser in writing
16-16 before the closing of a transaction that the purchaser should
16-17 either have the abstract covering the real estate which is the
16-18 subject of the contract examined by an attorney of the purchaser's
16-19 own selection, or be furnished with or obtain a policy of title
16-20 insurance;
16-21 (V) conduct which constitutes dishonest
16-22 dealings, bad faith, or untrustworthiness;
16-23 (W) acting negligently or incompetently in
16-24 performing an act for which a person is required to hold a real
16-25 estate license;
16-26 (X) disregarding or violating a provision of
16-27 this Act;
17-1 (Y) failing within a reasonable time to deposit
17-2 money received as escrow agent in a real estate transaction, either
17-3 in trust with a title company authorized to do business in this
17-4 state, or in a custodial, trust, or escrow account maintained for
17-5 that purpose in a banking institution authorized to do business in
17-6 this state;
17-7 (Z) disbursing money deposited in a custodial,
17-8 trust, or escrow account, as provided in Subsection (Y) before the
17-9 transaction concerned has been consummated or finally otherwise
17-10 terminated; or
17-11 (AA) discriminating against an owner, potential
17-12 purchaser, lessor, or potential lessee on the basis of race, color,
17-13 religion, sex, national origin, or ancestry, including directing
17-14 prospective home buyers or lessees interested in equivalent
17-15 properties to different areas according to the race, color,
17-16 religion, sex, national origin, or ancestry of the potential owner
17-17 or lessee;
17-18 (7) the licensee has failed or refused on demand to
17-19 produce a document, book, or record in the licensee's possession
17-20 concerning a real estate transaction conducted by the licensee for
17-21 inspection by the commission or its authorized personnel or
17-22 representative;
17-23 (8) the licensee has failed within a reasonable time
17-24 to provide information requested by the commission as a result of a
17-25 formal or informal complaint to the commission which would indicate
17-26 a violation of this Act; or
17-27 (9) the licensee has failed without just cause to
18-1 surrender to the rightful owner, on demand, a document or
18-2 instrument coming into the licensee's possession.
18-3 SECTION 7. Section 15B(e), The Real Estate License Act
18-4 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
18-5 as follows:
18-6 (e) The commission may authorize a commission employee to
18-7 file a signed written complaint against a licensee and to conduct
18-8 an investigation if:
18-9 (1) a judgment against the licensee has been paid from
18-10 a recovery fund established under this Act;
18-11 (2) the licensee is convicted of a criminal offense
18-12 that may constitute grounds for the suspension or revocation of the
18-13 licensee's license; [or]
18-14 (3) the licensee fails to make good a check issued to
18-15 the commission;
18-16 (4) the licensee fails to complete required continuing
18-17 education within the period prescribed by commission rules adopted
18-18 under Section 7A(g) of this Act; or
18-19 (5) the licensee fails to provide, within a reasonable
18-20 time, information requested by the commission in connection with an
18-21 application to renew a license.
18-22 SECTION 8. Section 19(a), The Real Estate License Act
18-23 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
18-24 as follows:
18-25 (a) A person acting as a real estate broker or real estate
18-26 salesperson without first obtaining a license or a person required
18-27 to register under Section 9A of this Act who sells, purchases,
19-1 leases, or transfers a right-of-way or easement without first
19-2 obtaining a certificate of registration under Section 9A of this
19-3 Act commits an offense. An offense under this subsection is a
19-4 Class A misdemeanor [is guilty of a misdemeanor and on conviction
19-5 shall be punishable by a fine of not less than $100 nor more than
19-6 $500, or by imprisonment in the county jail for a term not to
19-7 exceed one year, or both; and if a person other than an individual,
19-8 shall be punishable by a fine of not less than $1,000 nor more than
19-9 $2,000. A person, on conviction of a second or subsequent offense,
19-10 shall be punishable by a fine of not less than $500 nor more than
19-11 $1,000, or by imprisonment for a term not to exceed two years, or
19-12 both; and if a person other than an individual, shall be punishable
19-13 by a fine of not less than $2,000 nor more than $5,000].
19-14 SECTION 9. Sections 19A(a), (b), (d), (h), (m), and (o), The
19-15 Real Estate License Act (Article 6573a, Vernon's Texas Civil
19-16 Statutes), are amended to read as follows:
19-17 (a) If a person [licensed under this Act] violates this Act
19-18 or a rule or order adopted by the commission under this Act, the
19-19 commission may assess an administrative penalty against the person
19-20 as provided by this section.
19-21 (b) The penalty for each violation shall be set in an amount
19-22 not to exceed $1,000. Each day a violation continues or occurs may
19-23 be considered a separate violation for purposes of penalty
19-24 assessment if the commission finds that the person charged:
19-25 (1) engaged in an activity for which a real estate
19-26 broker or real estate salesperson license is required without
19-27 holding a license; and
20-1 (2) was not licensed by the commission as a real
20-2 estate broker or real estate salesperson at any time in the four
20-3 years preceding the date of the violation.
20-4 (d) If, after investigation of a possible violation and the
20-5 facts surrounding that possible violation, the administrator
20-6 determines that a violation has occurred, the administrator may
20-7 issue a violation report stating the facts on which the conclusion
20-8 that a violation occurred is based, recommending that an
20-9 administrative penalty under this section be imposed on the person
20-10 charged, and recommending the amount of that proposed penalty. The
20-11 administrator shall base the recommended amount of the proposed
20-12 penalty on the seriousness of the violation determined by the
20-13 consideration of the factors set forth in Subsection (c) of this
20-14 section. The commission may authorize the administrator to
20-15 delegate to another commission employee the administrator's
20-16 authority to act under this section.
20-17 (h) If the person charged requests a hearing or fails to
20-18 timely respond to the notice, the administrator shall set a hearing
20-19 and give notice of the hearing. The hearing shall be held by a
20-20 hearing examiner designated by the administrator. The hearing
20-21 examiner shall make findings of fact and conclusions of law and
20-22 promptly issue to the commission a proposal for decision as to the
20-23 occurrence of the violation, including a recommendation as to the
20-24 amount of the proposed penalty if a penalty is warranted. Based on
20-25 the findings of fact, conclusions of law, and recommendations of
20-26 the hearing examiner, the commission by order may find a violation
20-27 has occurred and may assess a penalty or may find that no violation
21-1 has occurred. All proceedings under this subsection are subject to
21-2 Chapter 2001, Government Code. The commission may authorize the
21-3 hearing examiner to conduct the hearing and enter a final decision
21-4 [the Administrative Procedure and Texas Register Act (Article
21-5 6252-13a, Vernon's Texas Civil Statutes)].
21-6 (m) Judicial review of the order or decision of the
21-7 commission assessing the penalty shall be under the substantial
21-8 evidence rule and shall be instituted by filing a petition with a
21-9 district court in Travis County, as provided by Chapter 2001,
21-10 Government Code [Section 19, Administrative Procedure and Texas
21-11 Register Act (Article 6252-13a, Vernon's Texas Civil Statutes)].
21-12 (o) A penalty collected under this section for a violation
21-13 by a person licensed as a real estate broker or salesperson shall
21-14 be deposited in the real estate recovery fund. A penalty collected
21-15 under this section for a violation by a person licensed or
21-16 registered as a real estate inspector shall be deposited in the
21-17 real estate inspection recovery fund. A penalty collected under
21-18 this section for a violation by a person who is not licensed under
21-19 this Act shall be deposited in the real estate recovery fund or the
21-20 real estate inspection recovery fund, as determined by the
21-21 commission.
21-22 SECTION 10. Sections 23(f)(3)-(6), The Real Estate License
21-23 Act (Article 6573a, Vernon's Texas Civil Statutes), are amended to
21-24 read as follows:
21-25 (3) [If a person's license has been expired for 90
21-26 days or less, the person may renew the license by paying to the
21-27 commission the required renewal fee and a fee that is one-half of
22-1 the examination fee, if any, for the registration or license.]
22-2 [(4) If a person's license has been expired for longer
22-3 than 90 days but less than one year, the person may renew the
22-4 license by paying to the commission all unpaid renewal fees and a
22-5 fee that is equal to the examination fee, if any, for the license.]
22-6 [(5)] If a person's license expires [has been expired
22-7 for one year or longer], the person may not renew the license. The
22-8 person may obtain a new license by submitting to reexamination, if
22-9 required, and complying with the requirements and procedures for
22-10 obtaining an original license. [However, the commission may renew
22-11 without reexamination an expired license of a person who was
22-12 licensed in this state, moved to another state, and is currently
22-13 licensed and has been in practice in the other state for the one
22-14 year preceding application. The person must pay to the commission
22-15 a fee that is equal to the examination fee for the license.]
22-16 (4) [(6)] At least 30 days before the expiration of a
22-17 person's license, the commission shall send written notice of the
22-18 impending license expiration to the person at the person's last
22-19 known address according to the records of the commission.
22-20 SECTION 11. Section 23(h)(1), The Real Estate License Act
22-21 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
22-22 as follows:
22-23 (1) The commission shall charge and collect reasonable
22-24 and necessary fees to recover the cost of administering this
22-25 section as follows:
22-26 (A) a fee not to exceed $75 for the filing of an
22-27 original application for a license as an apprentice inspector;
23-1 (B) a fee not to exceed $125 for the filing of
23-2 an original application for a license as a real estate inspector;
23-3 (C) a fee not to exceed $150 for the filing of
23-4 an original application for a license as a professional inspector;
23-5 (D) a fee not to exceed $125 for the annual
23-6 license renewal of an apprentice inspector;
23-7 (E) a fee not to exceed $175 for the annual
23-8 license renewal of a real estate inspector;
23-9 (F) a fee not to exceed $200 for the annual
23-10 license renewal of a professional inspector;
23-11 (G) a fee not to exceed $100 for taking a
23-12 license examination; [and]
23-13 (H) a fee not to exceed $20 for a request for a
23-14 change of place of business or to replace a lost or destroyed
23-15 license; and
23-16 (I) a fee not to exceed $20 for filing a request
23-17 for issuance of a license because of a change of name, return to
23-18 active status, or change in sponsoring professional inspector.
23-19 SECTION 12. Section 23(i)(1), The Real Estate License Act
23-20 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
23-21 as follows:
23-22 (1) The commission shall prescribe the licensing
23-23 examinations, which shall be prepared by or contracted for by the
23-24 commission. A licensing examination shall evaluate competency in
23-25 the subject matter of all required core real estate inspection
23-26 courses. The licensing examination shall be offered not less often
23-27 than once every two months in Austin. If a license applicant fails
24-1 the examination, the applicant may apply for reexamination by
24-2 filing a request with the commission and paying the examination
24-3 fee. Each license applicant must satisfy the examination
24-4 requirement not later than six months after the date on which the
24-5 license application is filed. A license applicant who fails to
24-6 satisfy the examination requirement within six months after the
24-7 date on which the license application is filed must submit a new
24-8 license application with the commission and pay the examination fee
24-9 to be eligible for examination. The commission by rule may limit
24-10 the number of times an applicant may take all or part of the
24-11 examination and may prescribe a reasonable waiting period before a
24-12 person who fails an examination may file another application. The
24-13 rules adopted by the commission may permit a person to file another
24-14 application without regard to the waiting period if the person has
24-15 completed additional courses of study specified by the commission.
24-16 [If a license applicant fails the examination three consecutive
24-17 times in connection with the same application, the applicant may
24-18 not apply for reexamination or submit a new license application
24-19 with the commission for six months from the date he failed the last
24-20 examination.]
24-21 SECTION 13. Section 23(k), The Real Estate License Act
24-22 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
24-23 as follows:
24-24 (k) Continuing education programs. The commission shall
24-25 recognize, prepare, or administer continuing education programs for
24-26 inspectors. Participation in the programs is mandatory. A real
24-27 estate inspector must submit satisfactory evidence to the
25-1 commission of successful completion of at least eight [four]
25-2 classroom hours of core real estate inspection courses annually
25-3 before a license [licensed] renewal is issued. A professional
25-4 inspector must submit satisfactory evidence to the commission of
25-5 successful completion of at least 16 [eight] classroom hours of
25-6 core [related] real estate inspection courses annually before a
25-7 license renewal is issued.
25-8 SECTION 14. Section 23(m)(2), The Real Estate License Act
25-9 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
25-10 as follows:
25-11 (2) An offense under this subsection is a Class A [B]
25-12 misdemeanor.
25-13 SECTION 15. Sections 23(o)(3), (7), and (15), The Real Estate
25-14 License Act (Article 6573a, Vernon's Texas Civil Statutes), are
25-15 amended to read as follows:
25-16 (3) If at [on December 31 of] any time [year] the
25-17 balance remaining in the real estate inspection recovery fund is
25-18 less than $300,000, each inspector, on the next renewal of the
25-19 person's license, shall pay, in addition to the license renewal
25-20 fee, a fee of $75, or a pro rata share of the amount necessary to
25-21 bring the fund to $450,000, whichever is less, which shall be
25-22 deposited in the real estate inspection recovery fund. To ensure
25-23 the availability of a sufficient amount to pay anticipated claims
25-24 on the fund, the commission by rule may provide for the collection
25-25 of assessments at different times and under conditions other than
25-26 those specified by this Act.
25-27 (7) The court shall proceed on the application
26-1 forthwith. On the hearing on the application, the aggrieved person
26-2 is required to show:
26-3 (A) that the judgment is based on facts allowing
26-4 recovery under Subdivision (1) of this subsection;
26-5 (B) that the person is not a spouse of the
26-6 debtor or the personal representative of the spouse and the person
26-7 is not an inspector, as defined by this section;
26-8 (C) [that the person has obtained a judgment
26-9 under Subdivision (6) of this subsection that is not subject to a
26-10 stay or discharge in bankruptcy, stating the amount of the judgment
26-11 and the amount owing on the judgment at the date of the
26-12 application;]
26-13 [(D)] that based on the best information
26-14 available, the judgment debtor lacks sufficient attachable assets
26-15 in this state or any other state to satisfy the judgment; and
26-16 (D) [(E)] the amount that may be realized from
26-17 the sale of real or personal property or other assets liable to be
26-18 sold or applied in satisfaction of the judgment and the balance
26-19 remaining due on the judgment after application of the amount that
26-20 may be realized.
26-21 (15) Notwithstanding any other provision, payments
26-22 from the real estate inspection recovery fund are subject to the
26-23 following conditions and limitations:
26-24 (A) payments may be made only pursuant to an
26-25 order of a court of competent jurisdiction, as provided by
26-26 Subdivision (6) of this subsection, and in the manner prescribed by
26-27 this subsection;
27-1 (B) payments for claims, including attorney
27-2 fees, interest, and court costs, arising out of the same
27-3 transaction shall be limited in the aggregate to $12,500 [$7,500]
27-4 regardless of the number of claimants; and
27-5 (C) payments for claims based on judgments
27-6 against a licensed inspector may not exceed in the aggregate
27-7 $30,000 [$15,000] until the fund has been reimbursed by the
27-8 licensee for all amounts paid.
27-9 SECTION 16. Section 24(f), The Real Estate License Act
27-10 (Article 6573a, Vernon's Texas Civil Statutes), is amended to read
27-11 as follows:
27-12 (f) A person commits an offense if the person engages in
27-13 business as a residential rental locator in this state without a
27-14 license issued under this Act. An offense under this subsection is
27-15 a Class A [B] misdemeanor.
27-16 SECTION 17. Section 18, Residential Service Company Act
27-17 (Article 6573b, Revised Statutes), is amended by adding Subsection
27-18 (c) to read as follows:
27-19 (c) The commission may authorize a hearing examiner to
27-20 conduct a hearing and enter a final decision in a proceeding under
27-21 this section.
27-22 SECTION 18. The Residential Service Company Act (Article
27-23 6573b, Revised Statutes) is amended by adding Section 23B to read
27-24 as follows:
27-25 Sec. 23B. ADMINISTRATIVE PENALTY. (a) The commission may
27-26 assess an administrative penalty on a person who violates this Act
27-27 or a rule or order adopted by the commission under this Act in the
28-1 same manner as the commission may assess an administrative penalty
28-2 under Section 19A, The Real Estate License Act (Article 6573a,
28-3 Vernon's Texas Civil Statutes), on a person who violates that Act
28-4 or a rule or order adopted by the commission under that Act. The
28-5 provisions of that section governing the procedure for assessing a
28-6 penalty and judicial review of a penalty apply to a penalty
28-7 assessed under this section.
28-8 (b) The penalty for each violation may not exceed $1,000.
28-9 Each day a violation continues or occurs may be considered a
28-10 separate violation for purposes of penalty assessment.
28-11 (c) The commission shall deposit a penalty collected under
28-12 this section to the credit of the residential service company fund.
28-13 SECTION 19. (a) Except as provided by Subsection (b) of this
28-14 section, this Act takes effect September 1, 2001.
28-15 (b) The changes in law made by this Act to Sections 7(d) and
28-16 (e), The Real Estate License Act (Article 6573a, Vernon's Texas
28-17 Civil Statutes), take effect January 1, 2002, and apply only to an
28-18 application for a real estate broker license or real estate
28-19 salesperson license filed on or after that date. An application
28-20 filed before January 1, 2002, is governed by the law in effect on
28-21 the date the application was filed, and the former law is continued
28-22 in effect for that purpose.
28-23 (c) The changes in law made by this Act to Sections 8(f) and
28-24 23(o)(7) and (15), The Real Estate License Act (Article 6573a,
28-25 Vernon's Texas Civil Statutes), apply only to a cause of action
28-26 that arises on or after the effective date of this Act. A cause of
28-27 action that arises before the effective date of this Act is
29-1 governed by the law in effect on the date the cause of action
29-2 arose, and the former law is continued in effect for that purpose.
29-3 (d) The changes in law made by this Act to Sections 19(a),
29-4 23(m)(2), and 24(f), The Real Estate License Act (Article 6573a,
29-5 Vernon's Texas Civil Statutes), apply only to an offense committed
29-6 on or after the effective date of this Act. For purposes of this
29-7 subsection, an offense is committed before the effective date of
29-8 this Act if any element of the offense occurs before that date. An
29-9 offense committed before the effective date of this Act is covered
29-10 by the law in effect when the offense was committed, and the former
29-11 law is continued in effect for that purpose.
29-12 (e) The changes in law made by this Act to Sections
29-13 23(f)(3)-(6), The Real Estate License Act (Article 6573a, Vernon's
29-14 Texas Civil Statutes), apply only to the renewal of a real estate
29-15 inspector license or professional inspector license that expires on
29-16 or after the effective date of this Act. A license that expires
29-17 before that date is governed by the law in effect on the date the
29-18 license expires, and the former law is continued in effect for that
29-19 purpose.
29-20 (f) The change in law made by this Act to Section 23(k), The
29-21 Real Estate License Act (Article 6573a, Vernon's Texas Civil
29-22 Statutes), applies only to the renewal of a real estate inspector
29-23 license or professional inspector license that expires on or after
29-24 December 31, 2001. A license that expires before that date is
29-25 governed by the law in effect on the date the license expires, and
29-26 the former law is continued in effect for that purpose.
29-27 (g) The changes in law made by this Act that relate to a
30-1 disciplinary action or the imposition of an administrative penalty
30-2 apply only to a violation of The Real Estate License Act (Article
30-3 6573a, Vernon's Texas Civil Statutes) or the Residential Service
30-4 Company Act (Article 6573b, Revised Statutes) that occurs on or
30-5 after the effective date of this Act. A violation that occurs
30-6 before the effective date of this Act is governed by the law in
30-7 effect on the date the violation occurred, and the former law is
30-8 continued in effect for that purpose.