The Texas Real Estate Commission met May 2, 2022. In addition to hearing updates from TREC staff, the Commission contemplated a proposed new flood disclosure form for leases, non-substantive proposed changes from the quadrennial rule review, and adopted a rule change for easement or right-of-way (ERW) agents. The Commission also heard a presentation from Gary Maler, executive director of the Texas Real Estate Research Center at Texas A&M University.
Market Trends and Annual Report from Texas Real Estate Research Center
Texas Real Estate Research Center Executive Director Gary Maler says don’t believe the experts when it comes to what will happen next in the economy. "The truth is, we don’t know what’s going to happen. ... There are all kinds of opinions in the Center … so we’re divided within the house about what we think is going on."
Maler said that Texas is one of the leading states in terms of population growth, and that Austin attracted the most people from Los Angeles, while Houston attracted the most Californians overall. Almost 45% of Dallas and Houston population increase is from foreign immigrants.
"Home prices are up by double digits just about everywhere," says Maler. He shared other stats, including that:
- There is one month’s supply of homes
- Housing sales are up 6.1% in 2021
- The average price is up 16.1%
- Price per square foot up is up almost 20%.
ERW Agent Requirements
Generally, the amendments to Chapter 535 add requirements related to the completion of qualifying and continuing education courses to obtain or maintain a certificate of registration. All amendments implement statutory changes enacted by the 87th Texas Legislature. The changes set forth rules for education providers and ERW agents and applicants, as well as address rules for probationary certificates.
Why the Changes?
House Bill 2730, passed during the 87th Texas Legislative Session, requires that TREC adopt rules related to the requirements for ERW agents.
When Do These Rule Changes Become Effective?
These adopted changes become effective September 1, 2022, except for 535.406, which will have an effective date of January 1, 2023, to correspond with implementation of continuing education requirements in HB 2730.
Quadrennial Rule Review
Texas law requires state agencies, including the Commission, to undergo a comprehensive rule review every four years. During this process, the Commission reviews all currently enacted rules to determine if they should be continued, amended, or repealed.
Chapter 537, Professional Agreements and Standard Contracts
The proposed amendments and new rules to Chapter 537 are made as a result of the Commission’s quadrennial rule review and are technical or non-substantive in nature.
Texas real estate license holders are generally required to use forms promulgated by TREC when negotiating contacts for the sale of real property. The proposed changes to the existing rules add the title of the form adopted by reference in each rule to the rule title and add clarifying language to specify which forms are for mandatory versus voluntary use by license holders. The new rules pair previously existing forms that were available for voluntary use by license holders with a rule to provide greater clarity about the forms’ purpose and use. These proposed amendments and new rules will be posted in the Texas Register with an open public comment period forthcoming.
Proposed Flood Disclosure Form for Leases
A bill passed during the 87th Texas Legislative Session requires a landlord to disclose, in certain situations, whether the landlord is aware that the dwelling is located in a 100‐year floodplain or that the dwelling has flooded within the last five years. In response, the Broker-Lawyer Committee recommended the Commission propose a voluntary new form, Landlord’s Floodplain and Flood Notice (TREC 54-0).
Because landlords of temporary residential leases are not exempted, the proposed changes also add a new paragraph referencing the notice in the Seller’s Temporary Residential Lease (TREC 15‐5) and the Buyer’s Temporary Residential Lease (TREC 16-5).
Additionally, the proposed amendments to 535.26, Standard Contract Form TREC No. 15‐ 5, and 535.27, Standard Contract Form TREC No. 16‐5, contain proposed changes made as a result of the Commission’s quadrennial rule review. Those changes add the corresponding standard contract form title to the rule title and add clarifying language to specify that both forms adopted by reference in these rules are for mandatory use by license holders.
The earliest these changes and the proposed new form could be adopted is at the August Commission meeting with a potential effective date later this year. The public comment period will open after the proposals are published in the Texas Register.
New Rule Chapter Opened for Quadrennial Rule Review
The rules found within Chapter 535, General Provisions, will be reviewed and considered for re-adoption, revision, or repeal. The review will include whether the reasons for initially adopting these rules continue to exist.
Where to Find Meeting Materials
You can find redlined versions of forms and rules in the meeting materials packet on the meeting page.