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The Texas Real Estate Inspector Committee (TREIC) met July 17. We received public comments on new items and some comments on some agenda items. It is good to see stakeholders taking an interest in the process and providing input more frequently.

One public comment expressed concern that inspectors are being strongly encouraged to pay brokerages for the opportunity visit their offices or even just talk to their agents.

Longtime TREC rules prohibit inspectors from paying to be listed among preferred settlement service providers—inspectors, mortgage companies, and title companies. A few years ago, 535.148(d) was implemented for brokers and sales agents, which also prohibits brokerages from charging settlement service providers to be included on the preferred provider list. Read more about what is allowed and what is not.

Of course, brokers and agents can refer clients to providers they have an established professional relationship with as part of a list of options, regardless of whether that service provider has paid the broker to be on such a list. Ultimately, clients should choose their service provider, not the agent or broker.

If brokerages are violating this rule, then file a complaint with the Commission. TREC does not have the ability to monitor all license holders in the state for compliance. TREC is a complaint-driven entity. The rules can be put into place, but unless a complaint is filed, there should be no expectation of TREC to help correct the problem.

There may be a concern of retribution from a company if a complaint is filed. Though that may be a somewhat valid concern, the conduct will likely not be corrected if a complaint is not filed. As license holders, we have a duty to report those that are violating the rules, inspectors, sales agents, or brokers alike, as part of our own ethical standards as laid out in the TREC rules.

Committee members also discussed the current inspection report form and whether it could use some reformatting. That task in and of itself is quite an endeavor. Though there were mixed feelings regarding this topic, it will be submitted to the Standards of Practice subcommittee to look into next year. Considering that multiple members of TREIC will be changing in January, it is prudent to start the next Standards of Practice review process when the new members are in place.

We had an incredible number of applicants for TREIC member positions to be filled for 2024, and the one current vacancy. Both inspector and public applications were higher than I have ever seen. The Commissioners have a subcommittee working on reviewing those applications and conducting interviews, and those selected to serve will be announced in the coming months. Fortunately, a current member of TREIC is a part of that subcommittee, which will ensure that inspector input will be taken into consideration. TREIC appreciates TREC Chair Scott Kesner including an inspector committee member in this process.

House Bill 1363 by Kuempel, which repeals the Real Estate Inspector Recovery Fund, was signed by Gov. Greg Abbott and is effective September 1, 2023. Considering that inspectors are all required to carry E&O insurance, and the lack of claims against the recovery fund since that requirement, this has been a redundant and underutilized fund that TREIC recommended be eliminated. Keep in mind that this will not happen overnight, as there is a phase out process that will need to occur, so prospective inspectors who submit their application prior to September 1, 2023, are required to pay a fee for deposit in the Real Estate Inspection Recovery Fund after passing their exam.

The next meeting of the Texas Real Estate Inspector Committee will be on October 16. License holders are always encouraged to attend in person or remotely. License holders who attend in person are eligible to receive CE credit for the meeting as well. Up to four hours per renewal cycle can be credited to a license holder.