79R6235 MXM-F
By: Ellis S.B. No. 926
A BILL TO BE ENTITLED
AN ACT
relating to the regulation of residential property managers and
providing for mediation and education regarding residential
landlord and tenant disputes; providing penalties.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle A, Title 7, Occupations Code, is
amended by adding Chapter 1104 to read as follows:
CHAPTER 1104. RESIDENTIAL PROPERTY MANAGEMENT
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 1104.001. DEFINITIONS. In this chapter:
(1) "Board" means the governing board of the
department.
(2) "Department" means the Texas Department of Housing
and Community Affairs.
(3) "Executive director" means the executive director
of the department.
(4) "Residential property manager" means a person who
performs, or supervises another person in the performance of,
residential property management services for compensation.
(5) "Residential property management services" means
collecting rent and performing other management activities related
to the lease of residential rental property.
Sec. 1104.002. EXEMPTIONS FROM REGISTRATION. A person is
not required to be registered under this chapter if the person:
(1) performs only maintenance on the leased property;
(2) performs only accounting or bookkeeping
activities;
(3) is the record title holder of the property;
(4) is a governmental entity or is acting on behalf of
a governmental entity; or
(5) is licensed:
(A) as a real estate broker or salesperson under
Chapter 1101; or
(B) to practice law in this state.
[Sections 1104.003–1104.050 reserved for expansion]
SUBCHAPTER B. POWERS AND DUTIES OF BOARD, EXECUTIVE DIRECTOR, AND
DEPARTMENT
Sec. 1104.051. STANDARDS OF CONDUCT. The board by rule
shall establish standards of practice, conduct, and ethics for
registration certificate holders under this chapter.
Sec. 1104.052. MONEY RECEIVED BY DEPARTMENT. The
department shall receive and account for all money received under
this chapter.
Sec. 1104.053. FEES. (a) The department shall set fees in
amounts reasonable and necessary to cover the costs of
administering this chapter, except that the fee for registration or
renewing a registration under this chapter may not exceed $400 for
each registration or renewal.
(b) The department may set a different fee for different
types of residential property managers, taking into consideration
the number of units being managed, the supervision level of the
person, and other factors determined by the department.
Sec. 1104.054. DISPUTE RESOLUTION AND EDUCATION REGARDING
LANDLORD-TENANT DISPUTES. (a) In this section, "Texas nonprofit
corporation" means an organization:
(1) described by Section 501(c)(3) of the Internal
Revenue Code; and
(2) organized as a nonprofit corporation under the
Texas Non-Profit Corporation Act (Article 1396-1.01 et seq.,
Vernon's Texas Civil Statutes).
(b) The department shall contract with at least one Texas
nonprofit corporation for each county with a population of 500,000
or more, and in any other appropriate location as determined by the
department, to:
(1) mediate landlord-tenant disputes in that county or
location related to property management services regulated under
this chapter; and
(2) educate landlords and tenants of their rights and
responsibilities in that county or location related to property
management services regulated under this chapter.
[Sections 1104.055–1104.100 reserved for expansion]
SUBCHAPTER C. PROPERTY MANAGEMENT ADVISORY COUNCIL
Sec. 1104.101. DEFINITION. In this subchapter, "council"
means the Property Management Advisory Council.
Sec. 1104.102. COUNCIL MEMBERSHIP. (a) The council is
composed of six members appointed by the executive director, with
the board's approval.
(b) The executive director shall appoint at least two
members who are residential tenants in this state.
(c) Each member who is not a residential tenant must:
(1) be registered under this chapter; or
(2) be a member of a nonprofit organization or
voluntary trade association whose membership consists primarily of
persons who perform residential property management services in
this state or assist residential tenants in this state.
Sec. 1104.103. MEMBERSHIP RESTRICTIONS. A person is not
eligible for appointment as a council member if the person is
required to register as a lobbyist under Chapter 305, Government
Code.
Sec. 1104.104. TERMS. Members of the council serve
staggered three-year terms, with the terms of two members expiring
on February 1 of each year.
Sec. 1104.105. VACANCY. A council vacancy is filled in the
same manner as the original appointment. A person appointed to fill
a vacancy is appointed to serve the unexpired portion of the term.
Sec. 1104.106. PRESIDING OFFICER. The executive director,
with the board's approval, shall appoint a council member to serve
as presiding officer of the council for a two-year term.
Sec. 1104.107. MEETINGS. The council shall meet at least
once every six months at the call of the presiding officer or at the
call of a majority of council members.
Sec. 1104.108. VOTE REQUIRED FOR ACTION. A council
decision requires the affirmative vote of at least four members.
Sec. 1104.109. COMPENSATION; REIMBURSEMENT. (a) A council
member may not receive compensation for serving on the council.
(b) A council member is entitled to reimbursement for actual
and necessary expenses incurred in performing functions as a
council member, subject to any applicable limitation on
reimbursement provided by the General Appropriations Act.
Sec. 1104.110. COUNCIL ADVISORY POWERS. The council shall:
(1) recommend to the department for adoption standards
of practice, conduct, and ethics for registration holders under
this chapter;
(2) recommend to the department amounts for the fees
set under this chapter;
(3) assist and advise the department in recognizing
continuing education programs and educational courses for
registration holders under this chapter; and
(4) advise the department in establishing educational
requirements for initial applicants for registration under this
chapter.
[Sections 1104.111–1104.150 reserved for expansion]
SUBCHAPTER D. REGISTRATION REQUIREMENTS
Sec. 1104.151. REGISTRATION REQUIRED. (a) A person may not
perform residential property management services for compensation
unless the person holds a certificate of registration issued under
this chapter.
(b) A person may not represent that a person is a
residential property manager or an assistant residential property
manager unless the person holds a certificate of registration under
this chapter.
Sec. 1104.152. VOLUNTARY REGISTRATION. (a) A person who is
not required to hold a certificate of registration under this
chapter may register if the person satisfies the registration
requirements of this chapter.
(b) A person exempt from the registration requirements of
this chapter who elects to register is subject to the requirements
of this chapter to the same extent as any other registration holder.
Sec. 1104.153. REGISTRATION APPLICATION; FEES. (a) An
applicant for registration must file an application with the
department on a form prescribed by the department.
(b) The application must be accompanied by:
(1) a nonrefundable application fee in an amount set
by the department; and
(2) the registration fee.
(c) The department shall refund the registration fee if the
executive director does not approve the application.
Sec. 1104.154. GENERAL ELIGIBILITY FOR REGISTRATION.
Except as provided by Section 1104.155, to be eligible for
registration, an applicant must:
(1) be at least 18 years of age;
(2) hold a high school diploma or its equivalent;
(3) pay the required fees; and
(4) meet any additional qualifications required by
this chapter or by the department.
Sec. 1104.155. REAL ESTATE BROKERS AND APPRAISERS; ISSUANCE
OF CERTIFICATE. (a) The department shall issue a certificate of
registration to an applicant who provides satisfactory proof to the
department that the person holds:
(1) an active real estate broker license or an active
real estate salesperson license under Chapter 1101; or
(2) an active real estate appraiser license or
certificate under Chapter 1103.
(b) Section 1104.154 does not apply to an applicant under
this section.
Sec. 1104.156. ELIGIBILITY TO REGISTER AS RESIDENTIAL
PROPERTY MANAGER. (a) In addition to satisfying the requirements
of Section 1104.154 or 1104.155, an applicant for registration
must:
(1) complete at least 15 classroom hours of
educational courses approved by the department, including at least
four hours of instruction on laws and other legal issues in this
state related to residential property management services; or
(2) submit to the department, if the person is
eligible for registration under Section 1104.155, proof
satisfactory to the department that the applicant has completed at
least four classroom hours of educational programs or courses on
the laws and other legal issues in this state related to residential
property management services.
(b) The department may give appropriate credit to an initial
applicant for educational courses on principles of law related to
residential tenancies completed by the applicant not more than two
years before the date of application.
Sec. 1104.157. ISSUANCE OF CERTIFICATE OF REGISTRATION.
Not later than the 31st day after the date the department receives
an application for registration, the department shall issue the
certificate of registration or deny the application.
[Sections 1104.158–1104.200 reserved for expansion]
SUBCHAPTER E. RENEWAL OF CERTIFICATE OF REGISTRATION
Sec. 1104.201. TERM OF CERTIFICATE OF REGISTRATION. Except
as otherwise provided by the department, a certificate of
registration expires on the second anniversary of the date of
issuance or renewal.
Sec. 1104.202. RENEWAL. The department shall renew the
certificate of registration of an eligible registration
certificate holder on the timely receipt of the required renewal
fee.
Sec. 1104.203. REQUIRED CONTINUING EDUCATION. The
department by rule shall require that to renew a registration, the
registration certificate holder must complete at least 15 classroom
hours of continuing education courses during the term of the
registration, at least six hours of which must include instruction
on laws and other legal issues in this state related to residential
leases and property management services.
Sec. 1104.204. RECOGNITION OF EDUCATIONAL PROGRAMS AND
COURSES. (a) The department by rule shall recognize appropriate
continuing education programs for registration certificate holders
that satisfy the requirements of Section 1104.203.
(b) The department shall recognize a continuing education
course, including a course on the laws and other legal issues
related to residential tenancies, that is:
(1) approved by the Texas Real Estate Commission or
the Texas Appraiser Licensing and Certification Board; and
(2) completed by a registration certificate holder who
also holds a real estate broker license or real estate salesperson
license under Chapter 1101.
(c) The department may recognize an educational program or
course:
(1) related to residential tenancies; and
(2) offered or sponsored by a public provider or a
recognized private provider, including:
(A) the comptroller;
(B) the State Bar of Texas;
(C) the Texas Real Estate Commission;
(D) an institution of higher education that meets
program and accreditation standards comparable to those for public
institutions of higher education as determined by the Texas Higher
Education Coordinating Board; or
(E) a nonprofit and voluntary trade association,
institute, or organization:
(i) whose membership consists primarily of
persons who are residential property managers; and
(ii) that subscribes to a code of
professional conduct or ethics.
(d) The department may recognize a private provider of an
educational program or course if the provider:
(1) applies to the department on a form prescribed by
the department; and
(2) pays in the amounts set by the department:
(A) a nonrefundable application fee; and
(B) an educational provider's fee.
(e) The department shall refund the educational provider's
fee if the department does not recognize the provider's educational
program or course.
[Sections 1104.205–1104.250 reserved for expansion]
SUBCHAPTER F. ADMINISTRATIVE PENALTY
Sec. 1104.251. IMPOSITION OF ADMINISTRATIVE PENALTY. The
board may impose an administrative penalty on a person who
violates:
(1) this chapter; or
(2) a rule adopted or order issued by the board or
department.
Sec. 1104.252. AMOUNT OF PENALTY. (a) The administrative
penalty shall be assessed by the board in an amount that may not
exceed $5,000. Each day a violation continues or occurs is a
separate violation for purposes of imposing a penalty.
(b) The amount of the penalty shall be based on:
(1) the seriousness of the violation;
(2) the respondent's history of previous violations;
(3) the amount necessary to deter a future violation;
(4) efforts made by the respondent to correct the
violation; and
(5) any other matter that justice may require.
(c) The board shall by rule or by procedure published in the
Texas Register establish a written enforcement plan that provides
notice to registration certificate holders of the specific range of
penalties that apply to specific alleged violations and the
criteria by which the department determines the amount of a
proposed administrative penalty.
Sec. 1104.253. NOTICE OF VIOLATION AND PENALTY. If, after
investigation of a possible violation and the facts surrounding the
possible violation, the executive director determines that a
violation occurred, the executive director shall issue to the
respondent a notice of alleged violation. The notice must:
(1) include a brief summary of the alleged violation;
(2) state the amount of the recommended administrative
penalty; and
(3) inform the respondent that the respondent has the
right to a hearing on the occurrence of the alleged violation, the
amount of the penalty, or both.
Sec. 1104.254. PENALTY TO BE PAID OR HEARING REQUESTED. (a)
Not later than the 20th day after the date the respondent receives
the notice under Section 1104.253, the respondent may:
(1) accept the executive director's determination and
recommended administrative penalty; or
(2) make a written request for a hearing on that
determination.
(b) If the respondent accepts the determination, the board
by order shall approve the determination and require the respondent
to pay the recommended penalty.
Sec. 1104.255. HEARING ON RECOMMENDATIONS. (a) If the
respondent requests a hearing, the hearing shall be conducted by
the State Office of Administrative Hearings.
(b) The State Office of Administrative Hearings shall
consider the department's applicable substantive rules and
policies when conducting a hearing under this subchapter.
(c) An administrative law judge at the State Office of
Administrative Hearings shall:
(1) make findings of fact and conclusions of law; and
(2) promptly issue to the board a proposal for
decision as to the occurrence of the violation and the amount of any
proposed administrative penalty.
Sec. 1104.256. DECISION BY BOARD; NOTICE OF ORDER. (a)
Based on the findings of fact, conclusions of law, and proposal for
decision, the board by order may determine that:
(1) a violation occurred and impose an administrative
penalty; or
(2) a violation did not occur.
(b) The executive director shall give notice of the order to
the respondent.
(c) The order must:
(1) include separate statements of the findings of
fact and conclusions of law;
(2) state the amount of any penalty imposed;
(3) inform the respondent of the respondent's right to
judicial review of the order; and
(4) include any other information required by law.
Sec. 1104.257. OPTIONS FOLLOWING DECISION: PAY OR APPEAL.
(a) Not later than the 30th day after the date the board's order
becomes final, the respondent shall:
(1) pay the administrative penalty; or
(2) file a petition for judicial review contesting the
fact of the violation, the amount of the penalty, or both.
(b) Within the 30-day period, a respondent who acts under
Subsection (a)(2) may stay enforcement of the penalty by:
(1) paying the penalty to the department for placement
in an escrow account;
(2) giving the department a supersedeas bond in a form
approved by the executive director that:
(A) is for the amount of the penalty; and
(B) is effective until judicial review of the
order is final; or
(3) filing with the department a sworn statement that
the respondent is financially unable to pay the penalty and is
financially unable to give the supersedeas bond.
Sec. 1104.258. COLLECTION OF PENALTY. If the person on whom
the administrative penalty is imposed fails to pay the penalty and
enforcement of the penalty is not stayed, the department or the
attorney general may bring an action to collect the penalty.
Sec. 1104.259. REMITTANCE OF PENALTY AND INTEREST. (a) If,
after judicial review, the administrative penalty is reduced or not
imposed, the executive director shall:
(1) remit to the respondent the appropriate amount,
plus accrued interest, if the respondent paid the penalty; or
(2) execute a release of the bond, if the person gave a
supersedeas bond.
(b) Interest accrues under Subsection (a)(1) at the rate
charged on loans to depository institutions by the New York Federal
Reserve Bank. The interest shall be paid for the period beginning
on the date the penalty is paid and ending on the date the penalty is
remitted.
[Sections 1104.260-1104.300 reserved for expansion]
SUBCHAPTER G. OTHER PENALTIES AND ENFORCEMENT PROVISIONS
Sec. 1104.301. DISCIPLINARY POWERS OF BOARD. After a
hearing, the board may refuse to issue or renew a certificate of
registration, impose an administrative sanction, seek injunctive
relief, or seek a civil penalty under this chapter against a
registration holder for:
(1) a violation of this chapter or a rule adopted under
this chapter;
(2) gross incompetence in the performance of
residential property management services;
(3) dishonesty or fraud committed while performing
residential property management services; or
(4) a violation of the standards of practice, conduct,
or ethics adopted by the department.
Sec. 1104.302. CIVIL PENALTY. The attorney general or the
board may institute an action in a district court in Travis County
to collect a civil penalty from a person who violates this chapter
or a rule or order of the board or the department under this
chapter.
Sec. 1104.303. INJUNCTIVE RELIEF. (a) The attorney
general or the board may institute an action in a district court in
Travis County for injunctive relief to restrain a violation by a
person who appears to be in violation of or threatening to violate
this chapter or a rule or order of the board or the department under
this chapter.
(b) The attorney general and the board may recover
reasonable expenses incurred in obtaining injunctive relief under
this section, including court costs, reasonable attorney's fees,
investigative costs, witness fees, and deposition expenses.
Sec. 1104.304. ADMINISTRATIVE SANCTIONS. (a) The board
shall revoke, suspend, or refuse to renew a registration or shall
reprimand a registration certificate holder for a violation of a
ground listed under Section 1104.301.
(b) The board may place on probation a person whose
registration is suspended. If a registration suspension is
probated, the board may require the person to:
(1) report regularly to the department on matters that
are the basis of the probation;
(2) limit practice to the areas prescribed by the
board; or
(3) continue or renew professional education until the
person attains a degree of skill satisfactory to the board in those
areas that are the basis for the probation.
Sec. 1104.305. RIGHT TO HEARING; ADMINISTRATIVE PROCEDURE.
(a) A respondent is entitled to a hearing conducted by the State
Office of Administrative Hearings if the board proposes to deny,
suspend, or revoke a registration.
(b) A proceeding under this chapter to deny, suspend, or
revoke a registration is considered to be a contested case under
Chapter 2001, Government Code.
Sec. 1104.306. CRIMINAL PENALTIES. (a) A person required
to register under this chapter commits an offense if the person:
(1) is not registered under this chapter; and
(2) performs residential property management services
for compensation.
(b) A person commits an offense if the person:
(1) knows that a person required to register under
this chapter is not registered; and
(2) represents that the person required to register is
a residential property manager or assistant residential property
manager.
(c) An offense under this section is a Class B misdemeanor.
SECTION 2. (a) Not later than January 1, 2006, the Texas
Department of Housing and Community Affairs shall prescribe fees
and forms, adopt rules, appoint the Property Management Advisory
Council, and take any other action required by Chapter 1104,
Occupations Code, as added by this Act.
(b) The initial Property Management Advisory Council
members appointed under Section 1104.102(c)(1), Occupations Code,
as added by this Act, are not required to be registered under
Chapter 1104, Occupations Code, as added by this Act, but are
required to be eligible for registration under that chapter.
SECTION 3. Sections 1104.151, 1104.152, and Subchapters F
and G, Chapter 1104, Occupations Code, as added by this Act, take
effect July 1, 2006.
SECTION 4. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2005.