The Texas Broker-Lawyer Committee (BLC) met April 12 and discussed the National Association of Realtors proposed settlement agreement for a lawsuit it is involved with related to commissions that may affect members of NAR, Texas Realtors, and local boards of Realtors—all voluntary membership organizations. While many TREC license holders are members, not all of them are, nor are they required to be.

TREC is not a party to the litigation. TREC takes its direction from the Texas Legislature, which has given TREC narrow regulatory authority over license holder compensation—specifically, that a broker is the one who gets paid. However, because of possible consumer protection issues and the potential impact of the settlement, the BLC considered whether TREC contract form language may be affected by the proposed settlement.

BLC Discussion

The discussion began with BLC Co-Chair John George providing background on the issue. Texas Realtors General Counsel Lori Levy then explained in greater detail the terms of the settlement, which has not been approved by the courts, and changes NAR plans to make to MLS rules.

Opinions ranged from “wait-and-see” to “act right away” to make changes to TREC’s promulgated forms to include language around compensation. BLC members agreed the proposed settlement merited further discussion.

Compensation Subcommittee Created

After much conversation, BLC created a subcommittee composed of broker members Melissa Hailey, Christie Tatum Janszen, Leigh York, BLC Co-Chair Ron Walker, and attorneys Brian Watts and SJ Swanson.

Provide Your Feedback

BLC is seeking stakeholder comments on the following ideas:

• Remove all references to the multiple listing services in the contract forms.
• Include a simple statement that any and all fees to the brokers in the transaction will be paid pursuant to separate agreements between the parties and their brokers or between the brokers.
• Identify the fees to be paid to each broker in a manner similar to the model found in TREC’s Farm and Ranch Contract form (TREC 25-15) or the Texas Realtors commercial contract form.
• Remove all references to brokerage fees in the contract forms and publish an addendum for the payment of brokerage fees using either model found in the Farm and Ranch Contract form or in the Texas Realtors commercial contract form.
• Insert a new subparagraph in Paragraph 12A in which the Seller may agree to pay a specific concession to pay fees payable to the Buyer’s broker.
• In Paragraph 12A, include in the definition of Buyer’s Expenses a statement similar to “broker fees Buyer has agreed to pay” and in the definition of Seller’s Expenses a statement similar to "broker fees Seller has agreed to pay."

You can submit public comment on these potential changes by email or attend the next BLC meeting in person.

Watch Highlights of BLC’s Discussion

Next Steps

The BLC’s next meeting is July 12 at 9 a.m. CT. BLC will continue to monitor the status of the proposed settlement and discuss any suggestions from the Compensation Subcommittee at its next meeting in July. They will also review comments received about the above ideas.

Where to Find Meeting Materials

Download meeting materials and find the recording of the meeting on the TREC website.