Bill Text: TX SB2212 | 2017-2018 | 85th Legislature | Engrossed

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Relating to certain real estate sales, brokerage, and advertising activities, certain functions of the Texas Real Estate Commission.

Spectrum: Partisan Bill (Republican 2-0)

Status: (Passed) 2017-06-15 - Effective on 9/1/17 [SB2212 Detail]

Download: Texas-2017-SB2212-Engrossed.html

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By: Hancock S.B. No. 2212

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.