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A BILL TO BE ENTITLED
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AN ACT
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relating to the regulation of the sale and inspection of real estate |
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and residential service contracts. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 1101.005, Occupations Code, is amended |
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to read as follows: |
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Sec. 1101.005. APPLICABILITY OF CHAPTER. This chapter |
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does not apply to: |
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(1) an attorney licensed in any state; |
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(2) an attorney-in-fact authorized under a power of |
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attorney to conduct a real estate transaction; |
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(3) a public official while engaged in official |
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duties; |
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(4) an auctioneer licensed under Chapter 1802 while |
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conducting the sale of real estate by auction if the auctioneer does |
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not perform another act of a broker or salesperson; |
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(5) a person conducting a real estate transaction |
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[acting] under a court order or the authority of a will or written |
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trust instrument; |
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(6) a person employed by an owner in the sale of |
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structures and land on which structures are located if the |
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structures are erected by the owner in the course of the owner's |
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business; |
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(7) an on-site manager of an apartment complex; |
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(8) an owner or the owner's employee who leases the |
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owner's improved or unimproved real estate; |
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(9) a partnership or limited liability partnership |
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acting as a broker or salesperson through a partner who is a |
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licensed broker; or |
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(10) a transaction involving: |
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(A) the sale, lease, or transfer of a mineral or |
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mining interest in real property; |
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(B) the sale, lease, or transfer of a cemetery |
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lot; |
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(C) the lease or management of a hotel or motel; |
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or |
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(D) the sale of real property under a power of |
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sale conferred by a deed of trust or other contract lien. |
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SECTION 2. Section 1101.057(a), Occupations Code, is |
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amended to read as follows: |
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(a) It is a ground for removal from the commission that a |
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member: |
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(1) does not have at the time of appointment the |
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qualifications required by Section 1101.051(a) or (b) or 1101.052; |
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(2) does not maintain during service on the commission |
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the qualifications required by Section 1101.051(a) or (b) or |
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1101.052; |
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(3) violates a prohibition established by Section |
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1101.053; |
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(4) cannot[, because of illness or disability,] |
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discharge the member's duties for a substantial part of the member's |
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term; or |
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(5) is absent from more than half of the regularly |
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scheduled commission meetings that the member is eligible to attend |
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during each calendar year, unless the absence is excused by |
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majority vote of the commission. |
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SECTION 3. Section 1101.204(g), Occupations Code, is |
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amended to read as follows: |
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(g) The commission may authorize a commission employee to |
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file a signed, written complaint against a person licensed under |
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this chapter or Chapter 1102 and to conduct an investigation if: |
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(1) a judgment against the person has been paid from |
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the real estate recovery trust account under this chapter or the |
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real estate inspection recovery fund under Chapter 1102; |
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(2) the person is convicted of a criminal offense that |
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may constitute grounds for the suspension or revocation of the |
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person's license; |
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(3) the person fails to honor a check issued to the |
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commission; |
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(4) the person fails to pay the fee and complete |
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required continuing education within the period prescribed by |
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commission rules adopted under Section 1101.457; or |
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(5) the person fails to provide, within a reasonable |
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time, information: |
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(A) requested by the commission in connection |
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with an application to renew a license; or |
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(B) required under Section 1101.652(a)(9). |
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SECTION 4. Section 1101.302(b), Occupations Code, is |
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amended to read as follows: |
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(b) An educational institution shall maintain a corporate |
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surety bond or other security acceptable to the commission that is: |
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(1) in the amount of $20,000 [$10,000]; |
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(2) payable to the commission; and |
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(3) for the benefit of a party who suffers damages |
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caused by the failure of the institution to fulfill obligations |
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related to the commission's approval. |
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SECTION 5. Section 1101.356(a), Occupations Code, is |
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amended to read as follows: |
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(a) An applicant for a broker license must provide to the |
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commission satisfactory evidence that the applicant: |
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(1) has had at least two years of active experience in |
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this state as a license holder during the 36 months preceding the |
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date the application is filed; and |
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(2) has successfully completed at least 60 semester |
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hours, or equivalent classroom hours, of postsecondary education, |
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including: |
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(A) at least 18 semester hours or equivalent |
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classroom hours of core real estate courses, two semester hours of |
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which must be real estate brokerage; and |
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(B) at least 42 hours of core real estate courses |
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or related courses accepted by the commission. |
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SECTION 6. Section 1101.652(a), Occupations Code, is |
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amended to read as follows: |
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(a) The commission may suspend or revoke a license issued |
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under this chapter or take other disciplinary action authorized by |
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this chapter if the license holder: |
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(1) enters a plea of guilty or nolo contendere to or is |
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convicted of a felony in which fraud is an essential element, and |
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the time for appeal has elapsed or the judgment or conviction has |
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been affirmed on appeal, without regard to an order granting |
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community supervision that suspends the imposition of the sentence; |
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(2) procures or attempts to procure a license under |
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this chapter for the license holder or a salesperson by fraud, |
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misrepresentation, or deceit or by making a material misstatement |
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of fact in an application for a license; |
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(3) engages in misrepresentation, dishonesty, or |
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fraud when selling, buying, trading, or leasing real property in |
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the name of: |
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(A) the license holder; |
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(B) the license holder's spouse; or |
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(C) a person related to the license holder within |
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the first degree by consanguinity; |
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(4) fails to honor, within a reasonable time, a check |
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issued to the commission after the commission has sent by certified |
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mail a request for payment to the license holder's last known |
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business address according to commission records; |
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(5) fails or refuses to produce on request, for |
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inspection by the commission or a commission representative, a |
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document, book, or record that is in the license holder's |
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possession and relates to a real estate transaction conducted by |
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the license holder; |
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(6) fails to provide, within a reasonable time, |
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information requested by the commission that relates to a formal or |
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informal complaint to the commission that would indicate a |
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violation of this chapter; |
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(7) fails to surrender to the owner, without just |
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cause, a document or instrument that is requested by the owner and |
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that is in the license holder's possession; |
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(8) fails to use a contract form required by the |
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commission under Section 1101.155; |
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(9) fails to notify the commission, not later than the |
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30th day after the date of a final conviction or the entry of a plea |
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of guilty or nolo contendere, that the person has been convicted of |
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or entered a plea of guilty or nolo contendere to a felony or a |
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criminal offense involving fraud; or |
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(10) disregards or violates this chapter. |
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SECTION 7. Section 1101.655(a), Occupations Code, is |
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amended to read as follows: |
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(a) The commission may revoke a license, approval, or |
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[certificate of] registration issued under this chapter or Chapter |
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1102 if the commission makes a payment from the real estate recovery |
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trust account to satisfy all or part of a judgment against the |
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license or registration [certificate] holder. |
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SECTION 8. Section 1102.054(a), Occupations Code, is |
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amended to read as follows: |
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(a) The commission may remove a committee member if the |
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member: |
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(1) does not have at the time of appointment the |
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qualifications required by Section 1102.051; |
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(2) cannot[, because of illness or disability,] |
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discharge the member's duties for a substantial part of the member's |
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term; or |
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(3) is absent from more than half of the regularly |
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scheduled committee meetings that the member is eligible to attend |
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during each year unless the absence is excused by the committee. |
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SECTION 9. Section 1102.111(b), Occupations Code, is |
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amended to read as follows: |
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(b) Rules adopted under Subsection (a) may not require an |
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applicant to: |
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(1) complete more than 320 additional classroom hours |
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of core real estate inspection courses; or |
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(2) have more than seven years of relevant experience. |
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SECTION 10. Sections 1102.402(a) and (c), Occupations Code, |
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are amended to read as follows: |
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(a) The commission may revoke a [the] license issued under |
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this chapter or a license, approval, or registration issued under |
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Chapter 1101 [of an inspector] if the commission makes a payment |
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from the real estate inspection recovery fund to satisfy all or part |
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of a judgment against the person issued the license, approval, or |
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registration [inspector]. |
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(c) A person [whose license is revoked under this section] |
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is not eligible for a [new] license until the person has repaid in |
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full the amount paid from the fund on the person's account, plus |
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interest at the legal rate. |
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SECTION 11. Section 1303.302, Occupations Code, is amended |
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to read as follows: |
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Sec. 1303.302. CERTAIN CONDITIONAL SALES OF PROPERTY |
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PROHIBITED. (a) A seller of a residential property or the buyer's |
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or seller's agent may not condition the sale of the property on the |
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buyer's purchase of a residential service contract. |
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(b) A seller of a residential property or the buyer's or |
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seller's agent shall provide to the buyer a statement that clearly |
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and conspicuously states that: |
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(1) the purchase of a residential service contract is |
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optional; and |
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(2) the buyer may purchase similar coverage through |
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another residential service company or insurance company |
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authorized to engage in business in this state. |
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SECTION 12. Sections 1102.1035 and 1102.2051, Occupations |
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Code, are repealed. |
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SECTION 13. Not later than January 1, 2008, an educational |
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institution that maintains a bond under Section 1101.302(b), |
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Occupations Code, on the effective date of this Act shall obtain a |
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bond in the amount required by Section 1101.302(b), Occupations |
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Code, as amended by this Act. |
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SECTION 14. The change in law made by this Act to Section |
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1101.356(a), Occupations Code, applies only to a license |
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application filed on or after January 1, 2008. A license |
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application filed before that date is covered by the law in effect |
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at the time the application was filed, and the former law is |
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continued in effect for that purpose. |
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SECTION 15. This Act takes effect September 1, 2007. |