The Texas Real Estate Commission met November 7 and received updates from advisory committees and staff, adopted revised forms, and proposed revisions to rules related to the inspection form and the unauthorized practice of law. Here are a few key takeaways from the meeting.

Appointments Made to ESAC, TREIC

The Commission appointed the following individuals to serve on the Education Standards Advisory Committee (ESAC):

• Kelea Youngblood, Education Member
• Mike Crowley, Education Member
• Ruben Pena, License Holder Member
• Bill Steddum, License Holder Member
• Kara Bang, License Holder Member
• Kandi Luensmann, License Holder Member

The Commission appointed Thomas Carl Leatherman as a license holder member alternate and Cynthia Baas as an education member alternate, should a vacancy occur.

The Commission reappointed Brian Carroll to serve as a public member on the Texas Real Estate Inspector Committee (TREIC), and appointed Ronald Castillo to serve as a public member alternate should a vacancy occur.

Adopted Changes

Revised Forms

The Texas Real Estate Broker-Lawyer Committee (BLC) met October 14 to discuss public comments on proposed form changes from the August TREC Meeting. After reviewing 123 public comments, the committee made some non-substantive changes and recommended the forms be adopted at the TREC meeting.

When Will the Revised Forms Be Available?

The Notice to Prospective Buyer form is a voluntary use form and may be used once posted on the agency’s website. All remaining contract forms, once posted on the agency website, will be available for voluntary use until February 1, 2023, when their use becomes mandatory.

Where Can I Find More Information on Form Changes?

Read TREC Form Changes Effective February 1, 2023 and download the meeting materials for redline versions you can review.

Proposed Changes

Proposed Amendments to Section 535.223, Standard Inspection Report Form

The Commission proposed amendments to Section 535.223 to clarify that when multiple boxes are checked for a particular item on the Property Inspection Report Form (REI 7-6), the inspector must also explain the reason for checking multiple boxes. The proposed amendments also remove single-system inspections from the list of exemptions—meaning the requirements in Section 535.223 would apply to those inspections.

Proposed Amendments to Define Informational Items, Clarify the Unauthorized Practice of Law

Based on recommendations from the Unauthorized Practice of Law Working Group, the Commission proposed a new rule—Section 537.1, Definitions—and amendments to Section 537.11, Use of Standard Contract Forms. Section 537.1 includes a definition for the new term "informational items," which is intended to better describe the type of information that a license holder can add to a contract form. This definition mirrors the newly adopted language in Paragraph 11 of the Commission's contract forms.

The proposed amendments to Section 537.11 reorganize and consolidate the rule for clarity and simplify the language regarding when a license holder is required to use a Commission-approved contract form and what is considered the unauthorized practice of law.

Specifically, the proposed changes in subsection (a) align the rule language more closely with the applicable statutory language and simplify the list of exceptions related to contract form use by license holders.

The exception found in subsection (a)(4) is amended to eliminate the ability of license holders to use contract forms prepared by an attorney for a brokerage when no Commission-approved contract form for mandatory use exists.

Subsections (b) through (d) provide further guidance to license holders and members of the public on what the Commission considers to be the unauthorized practice of law.

Subsection (d)(2) provides that it is not the practice of law to add language to or strike language from a contract form, if specifically instructed in writing by a principal, as long as any change is made conspicuous, including underlining additions, striking through deletions, or employing some other method which clearly indicates the change being made.

Finally, the proposed changes to subsection (h) update the language regarding reproduction of Commission-approved contract forms to better account for changes in technology.

What is Next for These Proposed Changes?

A public comment period will open after the proposals are published in the Texas Register. Look for more information from TREC when the comment period officially opens. The earliest these proposed changes could be adopted is at the February 2023 Commission meeting.

New Inspector Termination Form

Brokers have long had a termination form to inform TREC when a sales agent relationship is terminated. The Commission approved a new Notice of Apprentice/Real Estate Inspector Termination (REI-TS-0) form to be used by inspectors to terminate an apprentice or real estate inspector relationship. The form also includes a line for the sponsoring inspector to fill in the inspector’s DBA, so TREC staff can remove that information from the terminated inspector’s records.

Where to Find Meeting Materials

You can find redlined versions of forms and rules in the meeting materials packet on the meeting page.