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  By: Hancock  S.B. No. 2212
         (In the Senate - Filed March 10, 2017; March 29, 2017, read
  first time and referred to Committee on Business & Commerce;
  April 18, 2017, reported adversely, with favorable Committee
  Substitute by the following vote:  Yeas 8, Nays 0, 1 present not
  voting; April 18, 2017, sent to printer.)
Click here to see the committee vote
 
  COMMITTEE SUBSTITUTE FOR S.B. No. 2212 By:  Hancock
 
 
A BILL TO BE ENTITLED
 
AN ACT
 
  relating to certain real estate brokerage and advertising
  activities.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subchapter A, Chapter 1101, Occupations Code, is
  amended by adding Section 1101.0045 to read as follows:
         Sec. 1101.0045.  EQUITABLE INTERESTS IN REAL PROPERTY.
  (a)  A person may acquire an option or an interest in a contract to
  purchase real property and then sell or offer to sell the option or
  assign or offer to assign the contract without holding a license
  issued under this chapter if the person:
               (1)  does not use the option or contract to purchase to
  engage in real estate brokerage; and
               (2)  discloses the nature of the equitable interest to
  any potential buyer.
         (b)  A person selling or offering to sell an option or
  assigning or offering to assign an interest in a contract to
  purchase real property without disclosing the nature of that
  interest to a potential buyer is engaging in real estate brokerage.
         SECTION 2.  Section 1101.156(b), Occupations Code, is
  amended to read as follows:
         (b)  The commission may not include in rules to prohibit
  false, misleading, or deceptive practices by a person regulated by
  the commission a rule that:
               (1)  restricts the use of any advertising medium;
               (2)  restricts the person's personal appearance or use
  of the person's voice in an advertisement;
               (3)  relates to the size or duration of an
  advertisement used by the person; [or]
               (4)  restricts the person's advertisement under an
  assumed or [a] trade name that is authorized by a law of this state
  and registered with the commission; or
               (5)  requires the term "broker," "agent," or a similar
  designation or term, a reference to the commission, or the person's
  license number to be included in the person's advertisement.
         SECTION 3.  Section 1101.652(b), Occupations Code, is
  amended to read as follows:
         (b)  The commission may suspend or revoke a license issued
  under this chapter or take other disciplinary action authorized by
  this chapter if the license holder, while engaged in real estate
  brokerage:
               (1)  acts negligently or incompetently;
               (2)  engages in conduct that is dishonest or in bad
  faith or that demonstrates untrustworthiness;
               (3)  makes a material misrepresentation to a potential
  buyer concerning a significant defect, including a latent
  structural defect, known to the license holder that would be a
  significant factor to a reasonable and prudent buyer in making a
  decision to purchase real property;
               (4)  fails to disclose to a potential buyer a defect
  described by Subdivision (3) that is known to the license holder;
               (5)  makes a false promise that is likely to influence a
  person to enter into an agreement when the license holder is unable
  or does not intend to keep the promise;
               (6)  pursues a continued and flagrant course of
  misrepresentation or makes false promises through an agent or sales
  agent, through advertising, or otherwise;
               (7)  fails to make clear to all parties to a real estate
  transaction the party for whom the license holder is acting;
               (8)  receives compensation from more than one party to
  a real estate transaction without the full knowledge and consent of
  all parties to the transaction;
               (9)  fails within a reasonable time to properly account
  for or remit money that is received by the license holder and that
  belongs to another person;
               (10)  commingles money that belongs to another person
  with the license holder's own money;
               (11)  pays a commission or a fee to or divides a
  commission or a fee with a person other than a license holder or a
  real estate broker or sales agent licensed in another state for
  compensation for services as a real estate agent;
               (12)  fails to specify a definite termination date that
  is not subject to prior notice in a contract, other than a contract
  to perform property management services, in which the license
  holder agrees to perform services for which a license is required
  under this chapter;
               (13)  accepts, receives, or charges an undisclosed
  commission, rebate, or direct profit on an expenditure made for a
  principal;
               (14)  solicits, sells, or offers for sale real property
  by means of a lottery;
               (15)  solicits, sells, or offers for sale real property
  by means of a deceptive practice;
               (16)  acts in a dual capacity as broker and undisclosed
  principal in a real estate transaction;
               (17)  guarantees or authorizes or permits a person to
  guarantee that future profits will result from a resale of real
  property;
               (18)  places a sign on real property offering the real
  property for sale or lease without obtaining the written consent of
  the owner of the real property or the owner's authorized agent;
               (19)  offers to sell or lease real property without the
  knowledge and consent of the owner of the real property or the
  owner's authorized agent;
               (20)  offers to sell or lease real property on terms
  other than those authorized by the owner of the real property or the
  owner's authorized agent;
               (21)  induces or attempts to induce a party to a
  contract of sale or lease to break the contract for the purpose of
  substituting a new contract;
               (22)  negotiates or attempts to negotiate the sale,
  exchange, or lease of real property with an owner, landlord, buyer,
  or tenant with knowledge that that person is a party to an
  outstanding written contract that grants exclusive agency to
  another broker in connection with the transaction;
               (23)  publishes or causes to be published an
  advertisement[, including an advertisement by newspaper, radio,
  television, the Internet, or display,] that:
                     (A)  misleads or is likely to deceive the public;
                     (B)  [,] tends to create a misleading impression;
                     (C)  implies that a sales agent is responsible for
  the operation of the broker's real estate brokerage business; [,]
  or
                     (D)  fails to include [identify] the name of the
  broker for whom the license holder acts, which name may be the
  licensed name, assumed name, or trade name of the broker as
  authorized by a law of this state and registered with the commission
  [person causing the advertisement to be published as a licensed
  broker or agent];
               (24)  withholds from or inserts into a statement of
  account or invoice a statement that the license holder knows makes
  the statement of account or invoice inaccurate in a material way;
               (25)  publishes or circulates an unjustified or
  unwarranted threat of a legal proceeding or other action;
               (26)  establishes an association by employment or
  otherwise with a person other than a license holder if the person is
  expected or required to act as a license holder;
               (27)  aids, abets, or conspires with another person to
  circumvent this chapter;
               (28)  fails or refuses to provide, on request, a copy of
  a document relating to a real estate transaction to a person who
  signed the document;
               (29)  fails to advise a buyer in writing before the
  closing of a real estate transaction that the buyer should:
                     (A)  have the abstract covering the real estate
  that is the subject of the contract examined by an attorney chosen
  by the buyer; or
                     (B)  be provided with or obtain a title insurance
  policy;
               (30)  fails to deposit, within a reasonable time, money
  the license holder receives as escrow or trust funds in a real
  estate transaction:
                     (A)  in trust with a title company authorized to
  do business in this state; or
                     (B)  in a custodial, trust, or escrow account
  maintained for that purpose in a banking institution authorized to
  do business in this state;
               (31)  disburses money deposited in a custodial, trust,
  or escrow account, as provided in Subdivision (30), before the
  completion or termination of the real estate transaction;
               (32)  discriminates against an owner, potential buyer,
  landlord, or potential tenant on the basis of race, color,
  religion, sex, disability, familial status, national origin, or
  ancestry, including directing a prospective buyer or tenant
  interested in equivalent properties to a different area based on
  the race, color, religion, sex, disability, familial status,
  national origin, or ancestry of the potential owner or tenant; or
               (33)  disregards or violates this chapter.
         SECTION 4.  Subchapter D, Chapter 5, Property Code, is
  amended by adding Section 5.086 to read as follows:
         Sec. 5.086.  EQUITABLE INTEREST DISCLOSURE. Before entering
  into a contract, a person selling an option or assigning an interest
  in a contract to purchase real property must disclose to any
  potential buyer that the person is selling only an option or
  assigning an interest in a contract and that the person does not
  have legal title to the real property.
         SECTION 5.  This Act takes effect September 1, 2017.
 
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