Bill Text: TX SB699 | 2015-2016 | 84th Legislature | Enrolled

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Bill Title: Relating to the Texas Real Estate Commission and the regulation of certain real estate professionals.

Sponsorship: Slight Partisan Bill (Republican 2-1)

Status: (Passed) 2015-06-19 - See remarks for effective date [SB699 Detail]

Download: Texas-2015-SB699-Enrolled.html

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S.B. No. 699

AN ACT
relating to the Texas Real Estate Commission and the regulation of
certain real estate professionals.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. The heading to Chapter 1101, Occupations Code,
is amended to read as follows:
CHAPTER 1101. REAL ESTATE BROKERS AND SALES AGENTS [SALESPERSONS]
SECTION 2. Sections 1101.002(1), (1-a), (4), and (7),
Occupations Code, are amended to read as follows:
(1) "Broker":
(A) means a person who, in exchange for a
commission or other valuable consideration or with the expectation
of receiving a commission or other valuable consideration, performs
for another person one of the following acts:
(i) sells, exchanges, purchases, or leases
real estate;
(ii) offers to sell, exchange, purchase, or
lease real estate;
(iii) negotiates or attempts to negotiate
the listing, sale, exchange, purchase, or lease of real estate;
(iv) lists or offers, attempts, or agrees
to list real estate for sale, lease, or exchange;
(v) auctions or offers, attempts, or agrees
to auction real estate;
(vi) deals in options on real estate,
including a lease to purchase or buying, selling, or offering to buy
or sell options on real estate;
(vii) aids or offers or attempts to aid in
locating or obtaining real estate for purchase or lease;
(viii) procures or assists in procuring a
prospect to effect the sale, exchange, or lease of real estate;
(ix) procures or assists in procuring
property to effect the sale, exchange, or lease of real estate;
(x) controls the acceptance or deposit of
rent from a resident of a single-family residential real property
unit; [or]
(xi) provides a written analysis, opinion,
or conclusion relating to the estimated price of real property if
the analysis, opinion, or conclusion:
(a) is not referred to as an
appraisal;
(b) is provided in the ordinary course
of the person's business; and
(c) is related to the actual or
potential management, acquisition, disposition, or encumbrance of
an interest in real property; or
(xii) advises or offers advice to an owner
of real estate concerning the negotiation or completion of a short
sale; and
(B) includes a person who:
(i) is employed by or for an owner of real
estate to sell any portion of the real estate; or
(ii) engages in the business of charging an
advance fee or contracting to collect a fee under a contract that
requires the person primarily to promote the sale of real estate by:
(a) listing the real estate in a
publication primarily used for listing real estate; or
(b) referring information about the
real estate to brokers.
(1-a) "Business entity" means a "domestic entity" or
"foreign entity" as those terms are defined by Section 1.002,
Business Organizations Code, that is qualified to transact business
in this state.
(4) "License holder" means a broker or sales agent
[salesperson] licensed under this chapter.
(7) "Sales agent" ["Salesperson"] means a person who
is sponsored by [associated with] a licensed broker for the purpose
of performing an act described by Subdivision (1).
SECTION 3. The heading to Section 1101.003, Occupations
Code, is amended to read as follows:
Sec. 1101.003. QUALIFYING [CORE] REAL ESTATE COURSES.
SECTION 4. Section 1101.003, Occupations Code, is amended
by amending Subsections (a) and (c) and adding Subsections (d) and
(e) to read as follows:
(a) For purposes of this chapter, "qualifying ["core] real
estate courses" include:
(1) agency law, which includes the following topics:
(A) the relationship between a principal and an
agent;
(B) an agent's authority;
(C) the termination of an agent's authority;
(D) an agent's duties, including fiduciary
duties;
(E) employment law;
(F) deceptive trade practices;
(G) listing or buying representation procedures;
and
(H) the disclosure of agency;
(2) contract law, which includes the following topics:
(A) elements of a contract;
(B) offer and acceptance;
(C) statute of frauds;
(D) remedies for breach, including specific
performance;
(E) unauthorized practice of law;
(F) commission rules relating to use of adopted
forms; and
(G) owner disclosure requirements;
(3) principles of real estate, which includes:
(A) an overview of:
(i) licensing as a broker or sales agent
[salesperson];
(ii) ethics of practice as a license
holder;
(iii) titles to and conveyance of real
estate;
(iv) legal descriptions;
(v) deeds, encumbrances, and liens;
(vi) distinctions between personal and real
property;
(vii) appraisal;
(viii) finance and regulations;
(ix) closing procedures; and
(x) real estate mathematics; and
(B) at least three class hours of [classroom]
instruction on federal, state, and local laws relating to housing
discrimination, housing credit discrimination, and community
reinvestment;
(4) property management, which includes the following
topics:
(A) the role of a property manager;
(B) landlord policies;
(C) operational guidelines;
(D) leases;
(E) lease negotiations;
(F) tenant relations;
(G) maintenance;
(H) reports;
(I) habitability laws; and
(J) the Fair Housing Act (42 U.S.C. Section 3601
et seq.);
(5) real estate appraisal, which includes the
following topics:
(A) the central purposes and functions of an
appraisal;
(B) social and economic determinants of the value
of real estate;
(C) appraisal case studies;
(D) cost, market data, and income approaches to
value estimates of real estate;
(E) final correlations; and
(F) reporting;
(6) real estate brokerage, which includes the
following topics:
(A) agency law;
(B) planning and organization;
(C) operational policies and procedures;
(D) recruitment, selection, and training of
personnel;
(E) records and control; and
(F) real estate firm analysis and expansion
criteria;
(7) real estate finance, which includes the following
topics:
(A) monetary systems;
(B) primary and secondary money markets;
(C) sources of mortgage loans;
(D) federal government programs;
(E) loan applications, processes, and
procedures;
(F) closing costs;
(G) alternative financial instruments;
(H) equal credit opportunity laws;
(I) community reinvestment laws, including the
Community Reinvestment Act of 1977 (12 U.S.C. Section 2901 et
seq.); and
(J) state housing agencies, including the Texas
Department of Housing and Community Affairs;
(8) real estate investment, which includes the
following topics:
(A) real estate investment characteristics;
(B) techniques of investment analysis;
(C) the time value of money;
(D) discounted and nondiscounted investment
criteria;
(E) leverage;
(F) tax shelters depreciation; and
(G) applications to property tax;
(9) real estate law, which includes the following
topics:
(A) legal concepts of real estate;
(B) land description;
(C) real property rights and estates in land;
(D) contracts;
(E) conveyances;
(F) encumbrances;
(G) foreclosures;
(H) recording procedures; and
(I) evidence of titles;
(10) real estate marketing, which includes the
following topics:
(A) real estate professionalism and ethics;
(B) characteristics of successful sales agents
[salespersons];
(C) time management;
(D) psychology of marketing;
(E) listing procedures;
(F) advertising;
(G) negotiating and closing;
(H) financing; and
(I) Subchapter E, Chapter 17, Business & Commerce
Code; and
(11) real estate mathematics, which includes the
following topics:
(A) basic arithmetic skills and review of
mathematical logic;
(B) percentages;
(C) interest;
(D) the time value of money;
(E) depreciation;
(F) amortization;
(G) proration; and
(H) estimation of closing statements.
(c) The commission by rule may prescribe:
(1) the content of the qualifying [core] real estate
courses listed in Subsection (a); and
(2) the title and content of additional qualifying
[core] real estate courses.
(d) A daily course segment for a qualifying course may not
exceed 12 hours.
(e) An applicant, license holder, or education provider may
not report to the commission the completion of an alternative
delivery or correspondence course offered as a qualifying course
until the elapsed time between the time the applicant or license
holder registers for the course and the time the completion of the
course is reported exceeds twice the number of hours for which
credit is claimed.
SECTION 5. Section 1101.004, Occupations Code, is amended
to read as follows:
Sec. 1101.004. REAL ESTATE BROKERAGE [ACTING AS BROKER OR
SALESPERSON]. (a) A person is engaged in real estate brokerage
[acts as a broker or salesperson under this chapter] if the person,
with the expectation of receiving valuable consideration, directly
or indirectly performs or offers, attempts, or agrees to perform
for another person any act described by Section 1101.002(1), as a
part of a transaction or as an entire transaction.
(b) A person is not engaged in real estate brokerage,
regardless of whether the person is licensed under this chapter,
based solely on engaging in the following activities:
(1) constructing, remodeling, or repairing a home or
other building;
(2) sponsoring, promoting, or managing, or otherwise
participating as a principal, partner, or financial manager of, an
investment in real estate; or
(3) entering into an obligation to pay another person
that is secured by an interest in real property.
SECTION 6. Section 1101.005, Occupations Code, is amended
to read as follows:
Sec. 1101.005. APPLICABILITY OF CHAPTER. This chapter does
not apply to:
(1) an attorney licensed in this state;
(2) an attorney-in-fact authorized under a power of
attorney to conduct not more than three [a] real estate
transactions annually [transaction];
(3) a public official while engaged in official
duties;
(4) an auctioneer licensed under Chapter 1802 while
conducting the sale of real estate by auction if the auctioneer does
not perform another act of a broker [or salesperson];
(5) a person conducting a real estate transaction
under a court order or the authority of a will or written trust
instrument;
(6) a person employed by an owner in the sale of
structures and land on which structures are located if the
structures are erected by the owner in the course of the owner's
business;
(7) an on-site manager of an apartment complex;
(8) an owner or the owner's employee who leases the
owner's improved or unimproved real estate; or
(9) a transaction involving:
(A) the sale, lease, or transfer of a mineral or
mining interest in real property;
(B) the sale, lease, or transfer of a cemetery
lot;
(C) the lease or management of a hotel or motel;
or
(D) the sale of real property under a power of
sale conferred by a deed of trust or other contract lien.
SECTION 7. Section 1101.056, Occupations Code, is amended
by adding Subsection (c) to read as follows:
(c) The presiding officer, assistant presiding officer, and
secretary constitute the executive committee of the commission.
SECTION 8. Section 1101.057(c), Occupations Code, is
amended to read as follows:
(c) If the executive director [administrator] has knowledge
that a potential ground for removal exists, the executive director
[administrator] shall notify the presiding officer of the
commission of the potential ground. The presiding officer shall
then notify the governor and the attorney general that a potential
ground for removal exists. If the potential ground for removal
involves the presiding officer, the executive director
[administrator] shall notify the next highest ranking officer of
the commission, who shall then notify the governor and the attorney
general that a potential ground for removal exists.
SECTION 9. Section 1101.058, Occupations Code, is amended
to read as follows:
Sec. 1101.058. PER DIEM; REIMBURSEMENT. (a) A commission
member is entitled to receive:
(1) $75 for each day the member performs the member's
official duties; and
(2) reimbursement for actual and necessary expenses
incurred in performing the member's official duties.
(b) For purposes of this section, the commission by rule may
determine what constitutes a day or actual and necessary expenses.
SECTION 10. Subchapter B, Chapter 1101, Occupations Code,
is amended by adding Sections 1101.060 and 1101.061 to read as
follows:
Sec. 1101.060. QUASI-JUDICIAL IMMUNITY. A member of the
commission is entitled to quasi-judicial immunity from suit for an
action that:
(1) is taken as a member of the commission; and
(2) is in compliance with the law.
Sec. 1101.061. EDUCATIONAL PRESENTATIONS. (a) A member of
the commission or a commission employee may make a presentation to a
group of license holders for which the license holders may receive
credit under Section 1101.455. The commission member or employee
may not receive compensation for the presentation.
(b) Notwithstanding Subsection (a), a commission member or
employee may receive reimbursement for reasonable travel expenses.
SECTION 11. The heading to Subchapter C, Chapter 1101,
Occupations Code, is amended to read as follows:
SUBCHAPTER C. EXECUTIVE DIRECTOR [ADMINISTRATOR] AND OTHER
COMMISSION PERSONNEL
SECTION 12. The heading to Section 1101.101, Occupations
Code, is amended to read as follows:
Sec. 1101.101. EXECUTIVE DIRECTOR [ADMINISTRATOR] AND
OTHER PERSONNEL.
SECTION 13. Sections 1101.101(a), (b), and (d), Occupations
Code, are amended to read as follows:
(a) The commission shall appoint an executive director
[administrator].
(b) The commission may designate a subordinate officer as
deputy executive director [assistant administrator] to act for the
executive director [administrator] in the executive director's
[administrator's] absence.
(d) The commission shall determine the salaries of the
executive director [administrator], officers, and employees of the
commission.
SECTION 14. Section 1101.102, Occupations Code, is amended
to read as follows:
Sec. 1101.102. DIVISION OF RESPONSIBILITIES. The
commission shall develop and implement policies that clearly
separate the policymaking responsibilities of the commission and
the management responsibilities of the executive director
[administrator] and the staff of the commission.
SECTION 15. Section 1101.105, Occupations Code, is amended
to read as follows:
Sec. 1101.105. CAREER DEVELOPMENT [LADDER] PROGRAM;
PERFORMANCE EVALUATIONS. (a) The executive director
[administrator] or the executive director's [administrator's]
designee shall develop an intra-agency career development [ladder]
program. The program must require intra-agency postings of all
nonentry level positions concurrently with any public posting.
(b) The executive director [administrator] or the executive
director's [administrator's] designee shall develop a system of
annual performance evaluations. All merit pay for commission
employees must be based on the system established under this
subsection.
SECTION 16. Sections 1101.106(a) and (b), Occupations Code,
are amended to read as follows:
(a) The executive director [administrator] or the executive
director's [administrator's] designee shall prepare and maintain a
written policy statement to ensure implementation of an equal
employment opportunity program under which all personnel
transactions are made without regard to race, color, disability,
sex, religion, age, or national origin. The policy statement must
include:
(1) personnel policies, including policies relating
to recruitment, evaluation, selection, appointment, training, and
promotion of personnel;
(2) a comprehensive analysis of the commission
workforce that meets federal and state guidelines;
(3) procedures by which a determination can be made of
significant underuse in the commission workforce of all persons for
whom federal or state guidelines encourage a more equitable
balance; and
(4) reasonable methods to appropriately address those
areas of underuse.
(b) A policy statement prepared under Subsection (a) must:
(1) cover a two-year [an annual] period; and
(2) be updated with each strategic plan filed as
required by Chapter 2056, Government Code [at least annually; and
[(3) be filed with the governor].
SECTION 17. Section 1101.152(a), Occupations Code, is
amended to read as follows:
(a) The commission shall adopt rules to charge and collect
fees in amounts reasonable and necessary to cover the costs of
administering this chapter, including a fee for:
(1) filing an original application for a broker
license;
(2) [annual] renewal of a broker license;
(3) filing an original application for a sales agent
[salesperson] license;
(4) [annual] renewal of a sales agent [salesperson]
license;
(5) [annual] registration as an easement or
right-of-way agent;
(6) filing an application for a license examination;
(7) filing a request for a branch office license;
(8) filing a request for a change of place of business,
change of name, return to active status, or change of sponsoring
broker;
(9) filing a request to replace a lost or destroyed
license or certificate of registration;
(10) filing an application for approval of an
education program under Subchapter G;
(11) annual operation of an education program under
Subchapter G;
(12) filing an application for approval of an
instructor of qualifying [core] real estate courses;
(13) transcript evaluation;
(14) preparing a license or registration history;
(15) filing a request [an application] for a moral
character determination; and
(16) conducting a criminal history check for issuing
or renewing a license.
SECTION 18. Section 1101.154, Occupations Code, is amended
to read as follows:
Sec. 1101.154. ADDITIONAL FEE: TEXAS REAL ESTATE RESEARCH
CENTER. (a) The fee for the issuance or renewal of a:
(1) broker license is the amount of the fee set under
Section [Sections] 1101.152 [and 1101.153] and an additional $70
[$20] fee;
(2) sales agent [salesperson] license is the amount of
the fee set under Section 1101.152 and an additional $20 fee; and
(3) certificate of registration is the amount of the
fee set under Section 1101.152 and an additional $20 fee.
(b) The commission shall transmit, not less than quarterly,
the additional fees collected under Subsection (a) to Texas A&M
University for deposit in a separate banking account that may be
appropriated only to support, maintain, and carry out the purposes,
objectives, and duties of the Texas Real Estate Research Center.
SECTION 19. 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 a trade
name that is authorized by a law of this state and registered with
the commission.
SECTION 20. Section 1101.161, Occupations Code, is amended
to read as follows:
Sec. 1101.161. GIFTS, GRANTS, AND DONATIONS. The
commission may solicit and accept a gift, grant, donation, or other
item of value from any source to pay for any activity under this
chapter, or Chapter 1102, [or] 1103, 1104, or 1303 of this code, or
Chapter 221, Property Code.
SECTION 21. Section 1101.202(a), Occupations Code, is
amended to read as follows:
(a) The commission by rule shall:
(1) prescribe a notice containing [establish methods
by which consumers and service recipients are notified of] the
name, mailing address, and telephone number of the commission for
the purpose of directing a complaint to the commission; and
(2) establish methods by which consumers and service
recipients are provided the notice by[. The commission may provide
for that notice:
[(1) on each application for a license or certificate
of registration or written contract for services of] a person
regulated under this chapter or Chapter 1102[;
[(2) on a sign prominently displayed in the place of
business of each person regulated under this chapter or Chapter
1102;
[(3) in a bill for services provided by a person
regulated under this chapter or Chapter 1102;
[(4) in conjunction with the notice required by
Section 1101.615; or
[(5) to be prominently displayed on the Internet
website of a person regulated under this chapter or Chapter 1102].
SECTION 22. Section 1101.205, Occupations Code, is amended
to read as follows:
Sec. 1101.205. COMPLAINT INVESTIGATION OF CERTIFICATE
HOLDER. The commission shall investigate a signed complaint
received by the commission that relates to an act of a certificate
holder or a person required to hold a certificate under Subchapter
K. Section 1101.204 applies to an investigation under this
section.
SECTION 23. Subchapter E, Chapter 1101, Occupations Code,
is amended by adding Section 1101.2051 to read as follows:
Sec. 1101.2051. CONFIDENTIALITY OF INVESTIGATION MATERIAL.
(a) Information or material, including an investigation file, is
confidential and not subject to disclosure under Chapter 552,
Government Code, or any other means of legal compulsion for
release, including disclosure, discovery, or subpoena, if the
information or material is prepared or compiled by the commission
in connection with a complaint, investigation, or audit of any
person subject to the jurisdiction of the commission.
(b) Notwithstanding Subsection (a), information or material
prepared or compiled by the commission in connection with a
complaint, investigation, or audit may be disclosed:
(1) to the respondent of the complaint;
(2) to a person that is the subject of an audit;
(3) to a person providing a service to the commission,
an expert or other witness, or an investigator, if the information
is necessary for preparation for, or a presentation in, a
disciplinary proceeding against an applicant or license holder, or
a subsequent trial or appeal taken from a disciplinary proceeding;
(4) to an entity in another jurisdiction that
licenses, registers, credentials, or disciplines any person
subject to the jurisdiction of the commission;
(5) to a law enforcement agency;
(6) to the State Office of Administrative Hearings; or
(7) to the commission, or a panel of the commission,
for use during any proceeding conducted by the State Office of
Administrative Hearings or in a subsequent trial or appeal of a
commission action or order.
(c) The release of information under Subsection (b) does not
constitute a release or disclosure for purposes of Section 552.007,
Government Code.
(d) The commission may require a confidentiality agreement
be signed by a person entitled to receive information under
Subsection (b) before releasing the information.
(e) Notwithstanding Subsection (a), on the dismissal or
final resolution of a complaint, investigation, or audit,
information or materials prepared or compiled by the commission in
connection with the complaint, investigation, or audit, including a
completed audit report or a final order of the commission, is
subject to disclosure under Chapter 321 or 552, Government Code.
SECTION 24. The heading to Subchapter G, Chapter 1101,
Occupations Code, is amended to read as follows:
SUBCHAPTER G. [ACCREDITATION AND] APPROVAL OF REAL ESTATE
EDUCATIONAL PROGRAMS AND COURSES OF STUDY
SECTION 25. Section 1101.301, Occupations Code, is amended
to read as follows:
Sec. 1101.301. APPROVAL [ACCREDITATION] OF PROGRAMS AND
COURSES OF STUDY. (a) The commission, as necessary for the
administration of this chapter and Chapter 1102, may by rule[:
[(1)] establish standards for the approval
[accreditation] of qualifying educational programs or courses of
study in real estate and real estate inspection conducted in this
state, excluding programs and courses offered by accredited
colleges and universities[;
[(2) establish by rule reasonable criteria for the
approval of real estate and real estate inspection courses; and
[(3) inspect and accredit real estate and real estate
inspection educational programs or courses of study].
(b) The commission shall determine whether a real estate or
real estate inspection course satisfies the requirements of this
chapter or [and] Chapter 1102.
(b-1) The commission may not prohibit correspondence or
alternative delivery courses and programs in real estate inspection
offered as continuing education by accredited colleges and
universities. This subection expires August 31, 2017.
(c) In establishing approval [accreditation] standards for
an educational program under Subsection (a), the commission shall
adopt rules setting an examination passage rate benchmark for each
category of license issued by the commission under this chapter or
Chapter 1102. The benchmark must be based on the average
percentage of examinees that pass the licensing exam on the first
attempt. A program must meet or exceed the benchmark for each
license category before the commission may renew the program's
approval to offer a program or course of study [accreditation] for
the license category.
(d) The commission may deny approval of an application to
offer a program or course of study [for accreditation] if the
applicant owns or controls, or has previously owned or controlled,
an educational program or course of study for which approval to
offer a program or course of study [accreditation] was revoked.
(e) Notwithstanding Subsection (c), the commission may
renew a program's approval to offer a program or course of study on
a probationary basis if the commission determines that the program
is capable of meeting the benchmark under Subsection (c) within a
reasonable time established by the commission.
SECTION 26. Subchapter G, Chapter 1101, Occupations Code,
is amended by adding Section 1101.3015 to read as follows:
Sec. 1101.3015. FEE FOR EDUCATIONAL PROGRAM. (a) Except
as provided by Subsection (b), the commission may not charge more
than one fee for the approval of an application to offer an
educational program or course of study under this subchapter in
multiple formats, including in person, online, or as a
correspondence course.
(b) The commission may adopt a fee schedule to charge a
separate fee for each format in which a provider offers an
educational program or course of study only if the commission by
rule has adopted a policy regarding educational programs or courses
of study that are offered in multiple formats.
SECTION 27. Section 1101.304, Occupations Code, is amended
to read as follows:
Sec. 1101.304. EXAMINATION PASSAGE RATE DATA. (a) The
commission shall adopt rules regarding the collection and
publication of data relating to examination passage rates for
graduates of [accredited] educational programs approved under this
subchapter.
(b) Rules adopted under this section must provide for a
method to:
(1) calculate the examination passage rate;
(2) collect the relevant data from the examination
administrator or the approved [accredited] program; and
(3) post the examination passage rate data on the
commission's Internet website, in a manner aggregated by
educational program and by license group.
(c) The commission shall adopt rules for [In] determining
the educational program a graduate is affiliated with for purposes
of this section[, the educational program is the program the
graduate last attended].
SECTION 28. Sections 1101.305(a) and (c), Occupations Code,
are amended to read as follows:
(a) The commission may appoint a committee to review the
performance of an educational program performing below the
standards set by the commission under Section 1101.301. [The
committee shall consist of:
[(1) at least one commission member;
[(2) at least one member of the commission staff;
[(3) individuals licensed under this chapter or
Chapter 1102; and
[(4) a representative from the Texas Real Estate
Research Center.]
(c) A committee formed under this section may not revoke the
approval [accreditation] of an educational program. The
commission may temporarily suspend a program in the same manner as a
license under Subchapter N.
SECTION 29. Sections 1101.351(a), (b), and (c), Occupations
Code, are amended to read as follows:
(a) Unless a person holds a license issued under this
chapter, the person may not:
(1) act as or represent that the person is a broker or
sales agent [salesperson]; or
(2) act as a residential rental locator.
(b) An applicant for a broker or sales agent [salesperson]
license may not act as a broker or sales agent [salesperson] until
the person receives the license evidencing that authority.
(c) A licensed sales agent [salesperson] may not engage or
attempt to engage in real estate brokerage [act or attempt to act as
a broker or salesperson] unless the sales agent [salesperson] is
sponsored by [associated with] a licensed broker and is acting for
that broker.
SECTION 30. Sections 1101.352(a), (b), and (d), Occupations
Code, are amended to read as follows:
(a) Each applicant for a broker or sales agent [salesperson]
license must submit an application on a form prescribed by the
commission.
(b) Each applicant for a broker or sales agent [salesperson]
license must disclose in the license application whether the
applicant has:
(1) entered a plea of guilty or nolo contendere to a
felony; or
(2) been convicted of a felony and the time for appeal
has elapsed or the judgment or conviction has been affirmed on
appeal.
(d) At the time an application is submitted under Subsection
(a), each applicant shall provide the commission with the
applicant's current mailing address and telephone number, and the
applicant's business e-mail address if available. The applicant
shall notify the commission of any change in the applicant's
mailing or e-mail address or telephone number during the time the
application is pending.
SECTION 31. Section 1101.3521(b), Occupations Code, is
amended to read as follows:
(b) The commission shall refuse to issue a license to or
renew a [the] license on active status of a person who does not
comply with the requirement of Subsection (a).
SECTION 32. Section 1101.353(a), Occupations Code, is
amended to read as follows:
(a) If before applying for a license under this chapter a
person requests that the commission determine whether the person's
moral character complies with the commission's moral character
requirements for licensing under this chapter and pays the required
fee [prescribed by Section 1101.152], the commission shall make its
determination of the person's moral character.
SECTION 33. Section 1101.354, Occupations Code, is amended
to read as follows:
Sec. 1101.354. GENERAL ELIGIBILITY REQUIREMENTS. To be
eligible to receive a license under this chapter, a person must:
(1) at the time of application:
(A) be at least 18 years of age;
(B) be a citizen of the United States or a
lawfully admitted alien; and
(C) be a resident of this state;
(2) satisfy the commission as to the applicant's
honesty, trustworthiness, and integrity;
(3) demonstrate competence based on an examination
under Subchapter I; and
(4) complete the required courses of study, including
any required qualifying [core] real estate courses prescribed under
this chapter[; and
[(5) complete at least:
[(A) three classroom hours of course work on
federal, state, and local laws governing housing discrimination,
housing credit discrimination, and community reinvestment; or
[(B) three semester hours of course work on
constitutional law].
SECTION 34. Section 1101.355, Occupations Code, is amended
by amending Subsections (a) and (b) and adding Subsection (b-1) to
read as follows:
(a) To be eligible for a license under this chapter, a
business entity must:
(1) designate one of its managing officers as its
broker [agent] for purposes of this chapter; and
(2) provide proof that the entity maintains errors and
omissions insurance with a minimum annual limit of $1 million for
each occurrence if the designated broker [agent] owns less than 10
percent of the business entity.
(b) A business entity may not act as a broker unless the
entity's designated broker [agent] is a licensed individual broker
in active status and good standing according to the commission's
records.
(b-1) In determining whether a designated broker is in good
standing under this section, the commission may consider:
(1) the disciplinary history of:
(A) the broker; or
(B) any business entity for which the broker
serves or previously served as a designated broker; and
(2) the payment status of any amount owed to the
commission by:
(A) the broker; or
(B) any business entity for which the broker
serves or previously served as a designated broker.
SECTION 35. Section 1101.356(a), Occupations Code, is
amended to read as follows:
(a) An applicant for a broker license must provide to the
commission satisfactory evidence that the applicant:
(1) has had at least four years of active experience in
this state as a license holder during the 60 months preceding the
date the application is filed; and
(2) has successfully completed at least 60 semester
hours, or equivalent classroom hours, of postsecondary education,
including:
(A) at least 18 semester hours or equivalent
classroom hours of qualifying [core] real estate courses, two
semester hours of which must consist of a [be] real estate brokerage
course completed not more than two years before the application
date; and
(B) at least 42 semester hours of qualifying
[core] real estate courses or related courses accepted by the
commission.
SECTION 36. Section 1101.357, Occupations Code, is amended
to read as follows:
Sec. 1101.357. BROKER LICENSE: ALTERNATE EXPERIENCE
REQUIREMENTS FOR CERTAIN APPLICANTS. An applicant for a broker
license who does not satisfy the experience requirements of Section
1101.356 must provide to the commission satisfactory evidence that:
(1) the applicant:
(A) holds an active [is a licensed] real estate
broker license in another state;
(B) has had at least four years of active
experience in that state as a licensed real estate broker or sales
agent [salesperson] during the 60 months preceding the date the
application is filed; and
(C) has satisfied the educational requirements
prescribed by Section 1101.356; or
(2) the applicant was licensed in this state as a
broker in the six months [year] preceding the date the application
is filed.
SECTION 37. Section 1101.358, Occupations Code, is amended
to read as follows:
Sec. 1101.358. SALES AGENT [SALESPERSON] LICENSE:
EDUCATION REQUIREMENTS. (a) An applicant for a sales agent
[salesperson] license must provide to the commission satisfactory
evidence that the applicant has completed at least 12 semester
hours, or equivalent classroom hours, of postsecondary education
consisting of:
(1) at least four semester hours of qualifying [core]
real estate courses on principles of real estate; and
(2) at least two semester hours of each of the
following qualifying [core] real estate courses:
(A) agency law;
(B) contract law;
(C) contract forms and addendums; and
(D) real estate finance.
(b) The commission shall waive the education requirements
of Subsection (a) if the applicant has been licensed in this state
as a broker or sales agent [salesperson] within the six months
preceding the date the application is filed.
(c) If an applicant for a sales agent [salesperson] license
was licensed as a sales agent [salesperson] within the six months
preceding the date the application is filed and the license was
issued under the conditions prescribed by Section 1101.454, the
commission shall require the applicant to provide the evidence of
successful completion of education requirements that would have
been required if the license had been maintained without
interruption during the preceding six months.
SECTION 38. Section 1101.359, Occupations Code, is amended
to read as follows:
Sec. 1101.359. ALTERNATE EDUCATION REQUIREMENTS FOR
CERTAIN LICENSE HOLDERS. An applicant for a broker license who is
not subject to the education requirements of Section 1101.356(a)(2)
and an applicant for a sales agent [salesperson] license who is not
subject to the education requirements of Section 1101.358 or
1101.454 must provide to the commission satisfactory evidence that
the applicant has completed the number of classroom hours of
continuing education that would have been required for a timely
renewal under Section 1101.455 during the two years preceding the
date the application is filed.
SECTION 39. Sections 1101.360(a) and (c), Occupations Code,
are amended to read as follows:
(a) A resident of another state who is not a licensed real
estate broker and who was formerly licensed in this state as a
broker or sales agent [salesperson] may apply for a license under
this chapter not later than six months after [the first anniversary
of the date of the] expiration of the former license.
(c) A nonresident applicant must submit with the
application an irrevocable consent to a legal action against the
applicant in the court of any county in this state in which a cause
of action may arise or in which the plaintiff may reside. The
action may be commenced by service of process or pleading
authorized by the laws of this state or by delivery of process on
the executive director [administrator] or deputy executive
director [assistant administrator] of the commission. The consent
must:
(1) stipulate that the service of process or pleading
is valid and binding in all courts as if personal service had been
made on the nonresident in this state;
(2) be acknowledged; and
(3) if made by a corporation, be authenticated by its
seal.
SECTION 40. Section 1101.362, Occupations Code, is amended
to read as follows:
Sec. 1101.362. WAIVER OF LICENSE REQUIREMENTS: PREVIOUS
LICENSE HOLDERS. The commission by rule may waive some or all of
the requirements for a license under this chapter for an applicant
who was licensed under this chapter within the two [six] years
preceding the date the application is filed.
SECTION 41. Section 1101.363(b), Occupations Code, is
amended to read as follows:
(b) The commission may issue an inactive sales agent
[salesperson] license to a person who applies for a sales agent
[salesperson] license and satisfies all requirements for the
license. The person may not act as a sales agent [salesperson]
unless the person is sponsored by a licensed broker who has notified
the commission as required by Section 1101.367(b).
[Notwithstanding Section 1101.367(b), the licensed broker is not
required to pay the fee required by that subsection.]
SECTION 42. Sections 1101.366(a), (b), (c), (d), and (f),
Occupations Code, are amended to read as follows:
(a) The commission may place on inactive status the license
of a broker if the broker:
(1) is not acting as a broker;
(2) is not sponsoring a sales agent [salesperson]; and
(3) submits a written application to the commission
before the expiration date of the broker's license.
(b) The commission may place on inactive status the license
of a broker whose license has expired if the broker applies for
inactive status on a form prescribed by the commission not later
than six months after [the first anniversary of] the expiration
date of the broker's license.
(c) A broker applying for inactive status shall terminate
the broker's association with each sales agent [salesperson]
sponsored by the broker by giving written notice to each sales agent
[salesperson] before the 30th day preceding the date the broker
applies for inactive status.
(d) A broker on inactive status:
(1) may not perform any activity regulated under this
chapter; and
(2) must pay [annual] renewal fees.
(f) The commission shall remove a broker's license from
inactive status if the broker:
(1) submits an application to the commission;
(2) pays the required fee; and
(3) submits proof of attending [at least 15 classroom
hours of] continuing education as specified by Section 1101.455
during the two years preceding the date the application under
Subdivision (1) is filed.
SECTION 43. Section 1101.367, Occupations Code, is amended
to read as follows:
Sec. 1101.367. INACTIVE LICENSE: SALES AGENT
[SALESPERSON]. (a) When the relationship [association] of a sales
agent [salesperson] with the sales agent's [salesperson's]
sponsoring broker terminates, the terminating party [broker] shall
immediately notify in writing both the other party and [return the
salesperson license to] the commission. On receiving the written
notice, the commission shall place the sales agent license on
inactive status [A salesperson license returned under this
subsection is inactive].
(b) The commission may return [remove] a sales agent
[salesperson] license to active [from inactive] status under
Subsection (a) if, before the expiration date of the sales agent
[salesperson] license, a licensed broker files a request with the
commission advising the commission that the broker assumes
sponsorship of the sales agent [salesperson], accompanied by the
appropriate fee.
(c) As a condition of returning to active status, an
inactive sales agent [salesperson] whose license is not subject to
the education requirements of Section 1101.454 must provide to the
commission proof of attending [at least 15 hours of] continuing
education as specified by Section 1101.455 during the two years
preceding the date the application to return to active status is
filed.
SECTION 44. Sections 1101.401(c) and (d), Occupations Code,
are amended to read as follows:
(c) The examination must be of sufficient scope in the
judgment of the commission to determine whether a person is
competent to act as a broker or sales agent [salesperson] in a
manner that will protect the public.
(d) The examination for a sales agent [salesperson] license
must be less exacting and less stringent than the broker
examination.
SECTION 45. Section 1101.402, Occupations Code, is amended
to read as follows:
Sec. 1101.402. WAIVER OF EXAMINATION. The commission shall
waive the examination requirement for an applicant for[:
[(1)] a broker or sales agent license if:
(1) [(A)] the applicant was previously licensed in
this state as a broker or sales agent; and
(2) [(B)] the application is filed before the second
[first] anniversary of the expiration date of the equivalent [that]
license[; and
[(2) a salesperson license if:
[(A) the applicant was previously licensed in
this state as a broker or salesperson; and
[(B) the application is filed before the first
anniversary of the expiration date of that license].
SECTION 46. Section 1101.404, Occupations Code, is amended
to read as follows:
Sec. 1101.404. EXAMINATION RESULTS. (a) Not later than
the 10th [30th] day after the date an examination is administered,
the commission or the testing service shall notify each examinee of
the results of the examination. [If an examination is graded or
reviewed by a national testing service, the commission shall notify
each examinee of the results of the examination not later than the
14th day after the date the commission receives the results from the
testing service.]
(b) If the notice of the results of an examination [graded
or reviewed by a national testing service] will be delayed for more
than 10 [90] days after the examination date, the commission shall
notify each examinee of the reason for the delay before the 10th
[90th] day.
(c) If requested in writing by a person who fails an
examination, the commission shall provide to the person an analysis
of the person's performance on the examination. The request must be
accompanied by a statement identifying the person.
(d) The results of an examination are confidential.
SECTION 47. Section 1101.405, Occupations Code, is amended
to read as follows:
Sec. 1101.405. REEXAMINATION. (a) An applicant who fails
an examination may apply for reexamination by filing a request
accompanied by the proper fee.
(b) An applicant who fails the examination three
consecutive times may not apply for reexamination or submit a new
license application unless the applicant submits evidence
satisfactory to the commission that the applicant has completed
additional education, as prescribed by the commission, since the
date of the applicant's last examination.
SECTION 48. Subchapter I, Chapter 1101, Occupations Code,
is amended by adding Section 1101.406 to read as follows:
Sec. 1101.406. GUIDELINES; STUDY GUIDES. (a) The
commission shall:
(1) publish guidelines and examination study guides;
(2) make the guidelines and study guides available to
applicants; and
(3) update the guidelines and study guides as
necessary.
(b) Except for the examination and other testing products
that require secure and discreet protection, the contents of study
guides and other material developed by the commission or with the
commission's authorization are within the public domain and free of
copyright restrictions.
(c) A person other than the commission may not profit from
the reproduction and distribution of material described by
Subsection (b) and may sell the material only at a price that equals
the cost of reproducing and distributing the material.
SECTION 49. Sections 1101.451(a) and (f), Occupations Code,
are amended to read as follows:
(a) The commission may issue or renew a license for a period
of [not to exceed] 24 months.
(f) If a person's license has been expired for six months or
longer, the person may not renew the license. The person may
obtain a new license by [submitting to reexamination and] complying
with the requirements and procedures for obtaining an original
license.
SECTION 50. Section 1101.453, Occupations Code, is amended
to read as follows:
Sec. 1101.453. ADDITIONAL RENEWAL REQUIREMENTS FOR
BUSINESS ENTITIES. (a) To renew a license under this chapter, a
business entity must:
(1) designate one of its managing officers as its
broker [agent] for purposes of this chapter; and
(2) provide proof that the entity maintains errors and
omissions insurance with a minimum annual limit of $1 million for
each occurrence if the designated broker [agent] owns less than 10
percent of the business entity.
(b) A business entity may not act as a broker unless the
entity's designated broker [agent] is a licensed individual broker
in active status and good standing according to the commission's
records.
SECTION 51. The heading to Section 1101.454, Occupations
Code, is amended to read as follows:
Sec. 1101.454. SALES AGENT [SALESPERSON] LICENSE RENEWAL.
SECTION 52. Section 1101.454(a), Occupations Code, is
amended to read as follows:
(a) An applicant applying for the first renewal of a sales
agent [salesperson] license must provide to the commission
satisfactory evidence of completion of at least 18 semester hours,
or equivalent classroom hours, of qualifying [core] real estate
courses, including the hours required by Section 1101.455(e).
SECTION 53. Sections 1101.455(b), (c), (e), (f), (h), (i),
(j), and (l), Occupations Code, are amended to read as follows:
(b) A license holder who is not subject to the education
requirements of Section 1101.454 must attend during the term of the
current license [at least 15 classroom hours of] continuing
education courses approved by the commission. The commission by
rule shall prescribe the number of classroom hours of continuing
education courses the license holder must attend, which must be at
least 15 classroom hours. The commission may not increase the
number of required classroom hours by more than three over the term
of a license.
(c) The commission by rule may:
(1) prescribe the title, content, and duration of
continuing education courses that a license holder must attend to
renew a license; and
(2) approve as a substitute for the classroom
attendance required by Subsection (b):
(A) relevant educational experience; and
(B) alternative delivery or correspondence
courses.
(e) At least eight [six] of the continuing education hours
required by Subsection (b) must provide current information on
[cover] the following legal topics:
(1) commission rules;
(2) fair housing laws;
(3) Property Code issues, including landlord-tenant
law;
(4) agency law;
(5) antitrust laws;
(6) Subchapter E, Chapter 17, Business & Commerce
Code;
(7) disclosures to buyers, landlords, tenants, and
sellers;
(8) promulgated [current] contract and addendum
forms;
(9) unauthorized practice of law;
(10) case studies involving violations of laws and
regulations;
(11) [current] Federal Housing Administration and
Department of Veterans Affairs regulations;
(12) tax laws;
(13) property tax consulting laws and legal issues;
[or]
(14) other legal topics approved by the commission; or
(15) the ethical requirements of engaging in real
estate brokerage.
(f) The remaining [nine] hours may be devoted to other real
estate-related topics and courses approved by the commission.
(h) The commission shall automatically approve the
following courses as courses that satisfy the mandatory continuing
education requirements of Subsection (f):
(1) qualifying [core] real estate courses; and
(2) real estate-related courses approved by the State
Bar of Texas for minimum continuing legal education participatory
credit.
(i) The commission may not require an examination for a
course under this section unless the course is:
(1) an alternative delivery or [a] correspondence
course; or
(2) a course described by Subsection (e) or Section
1101.458 [offered by an alternative delivery system, including
delivery by computer].
(j) Daily classroom course segments offered under this
section must be at least one hour and not more than 10 hours.
(l) An applicant, license holder, or education provider may
not report to the commission the completion of an alternative
delivery or correspondence [An online] course offered under this
section until the elapsed time between the time the applicant or
license holder registers for the course and the time the completion
of the course is reported is equal to or greater than the number of
hours for which credit is claimed [may not be completed in less than
24 hours].
SECTION 54. Section 1101.458(a), Occupations Code, is
amended to read as follows:
(a) A designated broker for a business entity licensed under
this chapter, a [A] broker who sponsors a sales agent
[salesperson], or a license holder who supervises another license
holder[,] must attend during the term of the current license at
least six classroom hours of broker responsibility education
courses approved by the commission.
SECTION 55. Section 1101.552(e), Occupations Code, is
amended to read as follows:
(e) A license holder shall provide the commission with the
license holder's current mailing address and telephone number, and
the license holder's business e-mail address if available. A
license holder shall notify the commission of a change in the
license holder's mailing or e-mail address or telephone number.
SECTION 56. Section 1101.553, Occupations Code, is amended
to read as follows:
Sec. 1101.553. DISPLAY OF LICENSE. [(c)] A residential
rental locator shall prominently display in a place accessible to
clients and prospective clients:
(1) the locator's license;
(2) a statement that the locator is licensed by the
commission; and
(3) the notice required [name, mailing address, and
telephone number of the commission as provided] by Section
1101.202(a).
SECTION 57. Section 1101.554, Occupations Code, is amended
to read as follows:
Sec. 1101.554. COPY OF SALES AGENT [SALESPERSON] LICENSE.
The commission shall deliver [or mail] a copy of each sales agent
[salesperson] license to the broker that is sponsoring [with whom]
the sales agent [salesperson is associated].
SECTION 58. Section 1101.558, Occupations Code, is amended
by adding Subsections (b-1) and (b-2) and amending Subsection (c)
to read as follows:
(b-1) At the time of a license holder's first substantive
communication with a party relating to a proposed transaction
regarding specific real property, the license holder shall provide
to the party written notice in at least a 10-point font that:
(1) describes the ways in which a broker can represent
a party to a real estate transaction, including as an intermediary;
(2) describes the basic duties and obligations a
broker has to a party to a real estate transaction that the broker
represents; and
(3) provides the name, license number, and contact
information for the license holder and the license holder's
supervisor and broker, if applicable.
(b-2) The commission by rule shall prescribe the text of the
notice required under Subsections (b-1)(1) and (2) and establish
the methods by which a license holder shall provide the notice.
(c) A license holder is not required to [shall] provide [to
a party to a real estate transaction at the time of the first
substantive dialogue with the party] the notice required [written
statement prescribed] by Subsection (b-1) if [(d) unless]:
(1) the proposed transaction is for a residential
lease for less [not more] than one year and a sale is not being
considered; [or]
(2) the license holder meets with a party who the
license holder knows is represented by another license holder; or
(3) the communication occurs at a property that is
held open for any prospective buyer or tenant and the communication
concerns that property.
SECTION 59. Subchapter M, Chapter 1101, Occupations Code,
is amended by adding Section 1101.6011 to read as follows:
Sec. 1101.6011. APPLICABILITY TO BUSINESS ENTITY. For
purposes of this subchapter, a claim against a business entity
license holder is also a claim against the broker who is the
business entity's designated broker.
SECTION 60. Section 1101.602, Occupations Code, is amended
to read as follows:
Sec. 1101.602. ENTITLEMENT TO REIMBURSEMENT. An aggrieved
person is entitled to reimbursement from the trust account if a
person described by Section 1101.601 engages in conduct that
requires a license or certificate of registration under this
chapter and is described by Section 1101.652(a-1)(1)
[1101.652(a)(3)] or (b), if the person is a license holder, or
Section 1101.653(1), (2), (3), or (4), if the person is a
certificate holder.
SECTION 61. Sections 1101.603(a), (c), (d), and (e),
Occupations Code, are amended to read as follows:
(a) In addition to other fees required by this chapter, the
commission shall collect [an applicant for an original license must
pay] a fee of $10 to deposit to the credit of the trust account from
an applicant for an original license or certificate of
registration.
(c) Notwithstanding any other law, the [The] commission
shall deposit to the credit of the trust account or the real estate
inspection recovery fund, as determined by the commission,[:
[(1) fees collected under Subsections (a) and (b); and
[(2)] an administrative penalty collected under
Subchapter O for a violation by a person licensed under this chapter
or Chapter 1102 [as a broker or salesperson].
(d) Notwithstanding any other law, an [An] administrative
penalty collected under Subchapter O for a violation by a person who
is not licensed under this chapter or Chapter 1102 shall be
deposited to the credit of the trust account or the real estate
inspection recovery fund, as determined by the commission.
(e) On a determination by the commission at any time that
the balance in the trust account is less than $1 million, each
license or certificate holder at the next [license] renewal must
pay, in addition to the renewal fee, an additional [a] fee [that is
equal to the lesser] of $10 [or a pro rata share of the amount
necessary to obtain a balance in the trust account of $1.7 million].
The commission shall deposit the additional fee to the credit of the
trust account.
SECTION 62. Section 1101.605(b), Occupations Code, is
amended to read as follows:
(b) When an aggrieved person brings an action for a judgment
that may result in an agreed judgment and order for payment from the
trust account, the aggrieved person and the license or certificate
holder against whom the action is brought shall notify the
commission in writing before entry of the agreed judgment and
deliver a copy of all petitions and pleadings and the proposed
agreed judgment to the commission. The commission will notify the
parties not later than the 30th day after the date of receiving the
documents if the commission intends to relitigate material and
relevant issues as to the applicability of the trust account to the
agreed judgment as provided by Section 1101.608 [action].
SECTION 63. Section 1101.606, Occupations Code, is amended
by amending Subsections (a) and (b) and adding Subsection (c-1) to
read as follows:
(a) Except as provided by Subsections [Subsection] (c) and
(c-1), an aggrieved person who obtains a court judgment against a
license or certificate holder for an act described by Section
1101.602 may, after final judgment is entered, execution returned
nulla bona, and a judgment lien perfected, file a verified claim in
the court that entered the judgment.
(b) After the 20th day after the date the aggrieved person
gives written notice of the claim to the commission and judgment
debtor, the person may apply to the court that entered the judgment
for an order for payment from the trust account of the amount unpaid
on the judgment. The aggrieved person and the commission may
attempt to reach a settlement of the claim before setting a hearing
before the court. If the aggrieved person does not schedule a
hearing before the first anniversary of the date the application
was filed, recovery is waived [court shall proceed promptly on the
application].
(c-1) If the judgment obtained against the license holder
includes multiple defendants who are jointly and severally liable
or the judgment against the license holder was severed from a suit
with multiple defendants, the aggrieved person may not file a
verified claim in the court that entered the judgment until the
aggrieved person has obtained a judgment against all defendants and
received payment from or obtained a writ of execution returned
nulla bona for all defendants.
SECTION 64. Section 1101.607, Occupations Code, is amended
to read as follows:
Sec. 1101.607. ISSUES AT HEARING. At the hearing on the
application for payment from the trust account, the aggrieved
person must show:
(1) that the judgment is based on facts allowing
recovery under this subchapter;
(2) that the person is not:
(A) the spouse of the judgment debtor or the
personal representative of the spouse; [or]
(B) a license or certificate holder who is
seeking to recover compensation, including a commission, in the
real estate transaction that is the subject of the application for
payment; or
(C) related to the judgment debtor within the
first degree by consanguinity;
(3) that, according to the best information available,
the judgment debtor does not have sufficient attachable assets in
this or another state to satisfy the judgment;
(4) the amount that may be realized from the sale of
assets liable to be sold or applied to satisfy the judgment; and
(5) the balance remaining due on the judgment after
application of the amount under Subdivision (4).
SECTION 65. Sections 1101.608(a) and (c), Occupations Code,
are amended to read as follows:
(a) On receipt of notice under Section 1101.606, the
commission may agree to pay all or part of the claim without a
hearing. If the commission and the aggrieved person do not reach a
settlement or the commission does not agree that the claim meets one
or more of the requirements of this subchapter [and the scheduling
of a hearing], the commission may notify the attorney general of the
commission's desire to schedule a hearing, enter an appearance,
file a response, appear at the hearing, defend the action, or take
any other action the commission considers appropriate.
(c) The commission may relitigate in the hearing any
material and relevant issue that was determined in the action that
resulted in the judgment, including an agreed judgment, in favor of
the aggrieved person.
SECTION 66. Section 1101.610, Occupations Code, is amended
by adding Subsection (e) to read as follows:
(e) For purposes of this section, a business entity and the
broker who is the business entity's designated broker are
considered a single license holder.
SECTION 67. Section 1101.615(a), Occupations Code, is
amended to read as follows:
(a) The commission by rule shall prescribe a notice
regarding the availability of payment from the trust account for
aggrieved persons and establish methods by which each [Each]
license and certificate holder shall provide the notice to
consumers and service recipients [of the availability of payment
from the trust account for aggrieved persons:
[(1) in conjunction with the notice required by
Section 1101.202;
[(2) on a written contract for the license or
certificate holder's services;
[(3) on a brochure that the license or certificate
holder distributes;
[(4) on a sign prominently displayed in the license or
certificate holder's place of business;
[(5) in a bill or receipt for the license or
certificate holder's services; or
[(6) in a prominent display on the Internet website of
a person regulated under this chapter].
SECTION 68. Sections 1101.651(b), (c), and (d), Occupations
Code, are amended to read as follows:
(b) A sales agent [salesperson] may not accept compensation
for a real estate transaction from a person other than the broker
that is sponsoring [with whom] the sales agent [salesperson is
associated] or was sponsoring the sales agent [associated] when the
sales agent [salesperson] earned the compensation.
(c) A sales agent [salesperson] may not pay a commission to
a person except through the broker that is sponsoring [with whom]
the sales agent [salesperson is associated] at that time.
(d) A broker and any broker or sales agent [salesperson]
appointed under Section 1101.560 who acts as an intermediary under
Subchapter L may not:
(1) disclose to the buyer or tenant that the seller or
landlord will accept a price less than the asking price, unless
otherwise instructed in a separate writing by the seller or
landlord;
(2) disclose to the seller or landlord that the buyer
or tenant will pay a price greater than the price submitted in a
written offer to the seller or landlord, unless otherwise
instructed in a separate writing by the buyer or tenant;
(3) disclose any confidential information or any
information a party specifically instructs the broker or sales
agent [salesperson] in writing not to disclose, unless:
(A) the broker or sales agent [salesperson] is
otherwise instructed in a separate writing by the respective party;
(B) the broker or sales agent [salesperson] is
required to disclose the information by this chapter or a court
order; or
(C) the information materially relates to the
condition of the property;
(4) treat a party to a transaction dishonestly; or
(5) violate this chapter.
SECTION 69. Section 1101.652, Occupations Code, is amended
to read as follows:
Sec. 1101.652. GROUNDS FOR SUSPENSION OR REVOCATION OF
LICENSE. (a) The commission may suspend or revoke a license
issued under this chapter or Chapter 1102 or take other
disciplinary action authorized by this chapter or Chapter 1102 if
the license holder:
(1) enters a plea of guilty or nolo contendere to or is
convicted of a felony or a criminal offense involving fraud, and the
time for appeal has elapsed or the judgment or conviction has been
affirmed on appeal, without regard to an order granting community
supervision that suspends the imposition of the sentence;
(2) procures or attempts to procure a license under
this chapter or Chapter 1102 for the license holder [or a
salesperson] by fraud, misrepresentation, or deceit or by making a
material misstatement of fact in an application for a license;
(3) [engages in misrepresentation, dishonesty, or
fraud when selling, buying, trading, or leasing real property in
the name of:
[(A) the license holder;
[(B) the license holder's spouse; or
[(C) a person related to the license holder
within the first degree by consanguinity;
[(4)] fails to honor, within a reasonable time, a
check issued to the commission after the commission has sent by
certified mail a request for payment to the license holder's last
known business address according to commission records;
(4) [(5) fails or refuses to produce on request, for
inspection by the commission or a commission representative, a
document, book, or record that is in the license holder's
possession and relates to a real estate transaction conducted by
the license holder;
[(6)] fails to provide, within a reasonable time,
information requested by the commission that relates to a formal or
informal complaint to the commission that would indicate a
violation of this chapter or Chapter 1102;
(5) [(7)] fails to surrender to the owner, without
just cause, a document or instrument that is requested by the owner
and that is in the license holder's possession;
(6) [(8) fails to use a contract form required by the
commission under Section 1101.155;
[(9)] fails to notify the commission, not later than
the 30th day after the date of a final conviction or the entry of a
plea of guilty or nolo contendere, that the person has been
convicted of or entered a plea of guilty or nolo contendere to a
felony or a criminal offense involving fraud; or
(7) [(10)] disregards or violates this chapter or
Chapter 1102.
(a-1) 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:
(1) engages in misrepresentation, dishonesty, or
fraud when selling, buying, trading, or leasing real property in
the name of:
(A) the license holder;
(B) the license holder's spouse; or
(C) a person related to the license holder within
the first degree by consanguinity;
(2) fails or refuses to produce on request, within a
reasonable time, for inspection by the commission or a commission
representative, a document, book, or record that is in the license
holder's possession and relates to a real estate transaction
conducted by the license holder; or
(3) fails to use a contract form required by the
commission under Section 1101.155.
(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 [acting as a broker or salesperson]:
(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 [salesperson], 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 [salesperson] 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 misleads or is likely to
deceive the public, tends to create a misleading impression, or
fails to identify the 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 [agent] 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 70. Section 1101.655, Occupations Code, is amended
by amending Subsections (a) and (b) and adding Subsection (d) to
read as follows:
(a) The commission shall [may] revoke a license, approval,
or registration issued under this chapter or Chapter 1102 if:
(1) the commission makes a payment from the real
estate recovery trust account under Subchapter M on behalf of a [to
satisfy all or part of a judgment against the] license or
registration holder; and
(2) the license or registration holder does not repay
the real estate recovery trust account the full amount of a payment
made on the license or registration holder's behalf before the 31st
day after the date the commission provides notice to the license or
registration holder.
(b) The commission may probate an order revoking a license,
approval, or registration under this section.
(d) For the purposes of this section, if payment is made
from the real estate recovery trust account on behalf of a business
entity license holder or a designated broker of a business entity
license holder, the commission shall proceed under Subsection (a)
against both the business entity and designated broker.
SECTION 71. Section 1101.6561, Occupations Code, is amended
to read as follows:
Sec. 1101.6561. SUSPENSION OR REVOCATION OF EDUCATIONAL
PROGRAM [ACCREDITATION]. The commission may suspend or revoke the
approval to offer a program or course of study [an accreditation]
issued under Subchapter G or take any other disciplinary action
authorized by this chapter if the provider of an educational
program or course of study violates this chapter or a rule adopted
under this chapter.
SECTION 72. Section 1101.661, Occupations Code, is amended
to read as follows:
Sec. 1101.661. FINAL ORDER. The commission may issue a
final order in a proceeding under this subchapter or Subchapter O
regarding a person whose license has expired [during the course of
an investigation or administrative proceeding].
SECTION 73. Section 1101.662(c), Occupations Code, is
amended to read as follows:
(c) A license may be suspended under this section without
notice or hearing on the complaint if:
(1) institution of proceedings for a contested case
hearing [before the commission] is initiated simultaneously with
the temporary suspension; and
(2) a hearing is held under Chapter 2001, Government
Code, and this chapter as soon as possible.
SECTION 74. Subchapter N, Chapter 1101, Occupations Code,
is amended by adding Section 1101.663 to read as follows:
Sec. 1101.663. REAPPLYING AFTER REVOCATION, SURRENDER, OR
DENIAL. A person whose license or registration has been revoked, a
person who has surrendered a license or registration issued by the
commission, or a person whose application for a license or
registration has been denied after a hearing under Section 1101.657
may not apply to the commission for a license or registration before
the second anniversary of the date of the revocation, surrender, or
denial.
SECTION 75. Subchapter N, Chapter 1101, Occupations Code,
is amended by adding Section 1101.664 to read as follows:
Sec. 1101.664. FAILURE TO APPEAR; COSTS. (a) If a
respondent receives proper notice of a contested case hearing but
does not appear in person at the hearing, the administrative law
judge may conduct the hearing or enter an order, as the
administrative law judge determines appropriate.
(b) The respondent is bound by the results of the hearing to
the same extent as if the respondent had appeared.
(c) The administrative law judge may award reasonable costs
to the commission on a request for and proof of costs incurred if
the respondent fails to appear at the hearing. In this subsection,
the term "costs" means all costs associated with the hearing,
including the costs charged by the State Office of Administrative
Hearings and any costs related to hearing preparation, discovery,
depositions, subpoenas, service of process, witness expenses,
travel expenses, and investigation expenses.
SECTION 76. Section 1101.7015, Occupations Code, is amended
to read as follows:
Sec. 1101.7015. DELEGATION OF EXECUTIVE DIRECTOR'S
[ADMINISTRATOR'S] AUTHORITY. The commission may authorize the
executive director [administrator] to delegate to another
commission employee the executive director's [administrator's]
authority to act under this subchapter.
SECTION 77. Section 1101.702(b), Occupations Code, is
amended to read as follows:
(b) In determining the amount of the penalty, the executive
director [administrator] shall consider:
(1) the seriousness of the violation, including the
nature, circumstances, extent, and gravity of the prohibited acts;
(2) the history of previous violations;
(3) the amount necessary to deter a future violation;
(4) efforts to correct the violation; and
(5) any other matter that justice may require.
SECTION 78. Section 1101.703, Occupations Code, is amended
to read as follows:
Sec. 1101.703. NOTICE OF VIOLATION AND PENALTY. [(a)] If,
after investigation of a possible violation and the facts relating
to that violation, the executive director [administrator]
determines that a violation has occurred, the executive director
[administrator] may issue a notice of violation stating:
(1) a brief summary of the alleged violation;
(2) the executive director's [administrator's]
recommendation on the imposition of the administrative penalty or
another disciplinary sanction, including a recommendation on the
amount of the penalty; and
(3) that the respondent has the right to a hearing to
contest the alleged violation, the recommended penalty, or both.
SECTION 79. Section 1101.704, Occupations Code, is amended
to read as follows:
Sec. 1101.704. PENALTY TO BE PAID OR HEARING REQUESTED.
(a) Not later than the 20th day after the date the person receives
the notice under Section 1101.703, the person may:
(1) accept the executive director's [administrator's]
determination, including the recommended administrative penalty;
or
(2) request in writing a hearing on the occurrence of
the violation, the amount of the penalty, or both.
(b) If the person accepts the executive director's
[administrator's] determination, or fails to respond in a timely
manner to the notice, the commission by order shall approve the
determination and order payment of the recommended penalty or
impose the recommended sanction.
SECTION 80. Section 1101.706, Occupations Code, is amended
to read as follows:
Sec. 1101.706. NOTICE OF ORDER. The executive director
[administrator] shall give notice of the commission's order to the
person. The notice must:
(1) include the findings of fact and conclusions of
law, separately stated;
(2) state the amount of any penalty imposed;
(3) inform the person of the person's right to judicial
review of the order; and
(4) include other information required by law.
SECTION 81. Sections 1101.707(b) and (c), Occupations Code,
are amended to read as follows:
(b) Within the 30-day period prescribed by Subsection (a), a
person who files a petition for judicial review may:
(1) stay enforcement of the penalty by:
(A) paying the penalty to the court for placement
in an escrow account; or
(B) giving the court a supersedeas bond in a form
approved by the court that:
(i) is for the amount of the penalty; and
(ii) is effective until judicial review of
the order is final; or
(2) request the court to stay enforcement by:
(A) filing with the court an affidavit of the
person stating that the person is financially unable to pay the
penalty and is financially unable to give the supersedeas bond; and
(B) giving a copy of the affidavit to the
executive director [administrator] by certified mail.
(c) If the executive director [administrator] receives a
copy of an affidavit under Subsection (b)(2), the executive
director [administrator] may file with the court, within five days
after the date the copy is received, a contest to the affidavit.
SECTION 82. Section 1101.708, Occupations Code, is amended
to read as follows:
Sec. 1101.708. COLLECTION OF PENALTY. (a) If the person
does not pay the administrative penalty and the enforcement of the
penalty is not stayed, the executive director [administrator] may
refer the matter to the attorney general for collection of the
penalty.
(b) If the attorney general notifies the commission that the
attorney general will not pursue collection of the penalty, the
commission may pursue collection of the penalty by any lawful
means.
SECTION 83. The heading to Section 1101.753, Occupations
Code, is amended to read as follows:
Sec. 1101.753. CIVIL PENALTY FOR CERTAIN VIOLATIONS BY
BROKER, SALES AGENT [SALESPERSON], OR CERTIFICATE HOLDER.
SECTION 84. Section 1101.753(a), Occupations Code, is
amended to read as follows:
(a) In addition to injunctive relief under Sections
1101.751 and 1101.752, a person who receives a commission or other
consideration as a result of acting as a broker or sales agent
[salesperson] without holding a license or certificate of
registration under this chapter is liable to the state for a civil
penalty of not less than the amount of money received or more than
three times the amount of money received.
SECTION 85. The heading to Section 1101.754, Occupations
Code, is amended to read as follows:
Sec. 1101.754. PRIVATE CAUSE OF ACTION FOR CERTAIN
VIOLATIONS BY BROKER, SALES AGENT [SALESPERSON], OR CERTIFICATE
HOLDER.
SECTION 86. Section 1101.754(a), Occupations Code, is
amended to read as follows:
(a) A person who receives a commission or other
consideration as a result of acting as a broker or sales agent
[salesperson] without holding a license or certificate of
registration under this chapter is liable to an aggrieved person
for a penalty of not less than the amount of money received or more
than three times the amount of money received.
SECTION 87. The heading to Section 1101.758, Occupations
Code, is amended to read as follows:
Sec. 1101.758. CRIMINAL PENALTY FOR CERTAIN VIOLATIONS BY
BROKER, SALES AGENT [SALESPERSON], OR CERTIFICATE HOLDER.
SECTION 88. Section 1101.758(a), Occupations Code, is
amended to read as follows:
(a) A person commits an offense if the person acts as a
broker or sales agent [salesperson] without holding a license under
this chapter or engages in an activity for which a certificate of
registration is required under this chapter without holding a
certificate.
SECTION 89. Section 1101.803, Occupations Code, is amended
to read as follows:
Sec. 1101.803. GENERAL LIABILITY OF BROKER. A licensed
broker is liable to the commission, the public, and the broker's
clients for any conduct engaged in under this chapter by the broker
or by a sales agent [salesperson] associated with or acting for the
broker.
SECTION 90. Section 1101.805(c), Occupations Code, is
amended to read as follows:
(c) This section does not diminish a broker's
responsibility for the acts or omissions of a sales agent
[salesperson] associated with or acting for the broker.
SECTION 91. Section 1101.806(b), Occupations Code, is
amended to read as follows:
(b) A person may not maintain an action to collect
compensation for an act as a broker or sales agent [salesperson]
that is performed in this state unless the person alleges and proves
that the person was:
(1) a license holder at the time the act was commenced;
or
(2) an attorney licensed in any state.
SECTION 92. Sections 1101.106(c), 1101.152(c), 1101.455(d)
and (g), 1101.558(a), (d), and (e), 1101.603(b), and 1101.615(b),
Occupations Code, are repealed.
SECTION 93. Section 1101.060, Occupations Code, as added by
this Act, applies only to an action that is taken by a member of the
Texas Real Estate Commission on or after the effective date of this
Act. An action taken before that date is governed by the law in
effect on the date the action was taken, and the former law is
continued in effect for that purpose.
SECTION 94. The changes in law made by this Act relating to
the eligibility for a license or certificate of registration under
Chapter 1101, Occupations Code, or to requirements for an
application under that chapter apply only to an application
submitted to the Texas Real Estate Commission on or after the
effective date of this Act. An application submitted before that
date is governed by the law in effect on the date the application
was submitted, and the former law is continued in effect for that
purpose.
SECTION 95. The changes in law made by this Act relating to
an application for inactive status under Chapter 1101, Occupations
Code, apply only to an application for inactive status submitted to
the Texas Real Estate Commission on or after the effective date of
this Act. An application submitted before that date is governed by
the law in effect on the date the application was submitted, and the
former law is continued in effect for that purpose.
SECTION 96. Section 1101.405, Occupations Code, as amended
by this Act, does not apply to an examination taken before the
effective date of this Act.
SECTION 97. The changes in law made by this Act relating to
the requirements for renewal of a license or certificate of
registration under Chapter 1101, Occupations Code, or to the
continuing education requirements under that chapter apply only to
an application for renewal of a license or certificate that expires
on or after the effective date of this Act. A license or
certificate of registration that expires before that date is
governed by the law in effect immediately before the effective date
of this Act, and the former law is continued in effect for that
purpose.
SECTION 98. The Texas Real Estate Commission shall adopt
rules prescribing the notice required by Section 1101.558,
Occupations Code, as amended by this Act, not later than February 1,
2016. A real estate broker or sales agent is not required to comply
with the requirements of that section, as amended by this Act,
before that date.
SECTION 99. The changes in law made by this Act to
Subchapter M, Chapter 1101, Occupations Code, apply only to a claim
commenced under that subchapter on or after the effective date of
this Act. A claim commenced before that date is governed by the law
in effect on the date the claim was commenced, and the former law is
continued in effect for that purpose.
SECTION 100. The changes in law made by this Act relating to
the grounds for disciplinary action under Chapter 1101 or 1102,
Occupations Code, apply only to conduct that occurs on or after the
effective date of this Act. Conduct that occurs before that date is
governed by the law in effect on the date the conduct occurred, and
the former law is continued in effect for that purpose.
SECTION 101. (a) Except as provided by Subsection (b) of
this section, this Act takes effect January 1, 2016.
(b) The change in law made by this Act to Section 1101.154,
Occupations Code, takes effect September 1, 2015, but only if S.B.
765 or similar legislation of the 84th Legislature, Regular
Session, 2015, that repeals Section 1101.153, Occupations Code, is
enacted and becomes law. If legislation described by this
subsection does not become law, the change in law made by this Act
to Section 1101.154, Occupations Code, has no effect.
______________________________ ______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 699 passed the Senate on
April 7, 2015, by the following vote: Yeas 30, Nays 1; and that
the Senate concurred in House amendments on May 29, 2015, by the
following vote: Yeas 30, Nays 1.
______________________________
Secretary of the Senate
I hereby certify that S.B. No. 699 passed the House, with
amendments, on May 26, 2015, by the following vote: Yeas 124,
Nays 17, four present not voting.
______________________________
Chief Clerk of the House
Approved:
______________________________
Date
______________________________
Governor