The Texas Real Estate Commission met February 14, 2022. In addition to hearing updates from TREC staff, the Commission elected Jan Fite Miller as vice chair and Jason Hartgraves as secretary. Read on for information on adopted and proposed rule changes.
Consumer Protection Notice
- Remove "Home Warranty Companies" from list of what TREC regulates.
- The form number will change from CN 1-3 to CN 1-4.
Why the Change?
House Bill 1560, which passed during the 87th Texas Legislative Session, moved the regulation of residential service companies, also known as home warranty companies, from TREC to the Texas Department of Licensing and Regulation (TDLR) effective September 1, 2021. The amendment to the Consumer Protection Notice (CPN) removes a reference to home warranty companies being regulated by TREC.
When Can You Use the New Form?
Once posted on our website, form CN 1-4 will be available for voluntary use until April 1, 2022, at which time its use will become mandatory. To ensure that the transition from the previous version of the notice to the updated version is as easy as possible, the URL for the updated notice will be the same as the previous version. As a result, if a business website homepage currently includes a link to the CPN, no additional action will be needed on April 1. Remember, however, that the CPN must also be displayed in a readily noticeable location in each place of business the broker maintains.
535.56, Education and Experience Requirements for a Broker License
- Implements a new, simplified point system for obtaining a broker’s license. (The point system does not increase the requirements to obtain a broker’s license.)
- Updates certain requirements by mandating an applicant must have performed at least one transaction per year for at least four of the five years preceding the date the application is filed.
- Removes the low-point-value categories of Exclusive Right to Sell Listings, Buyer and Tenant Representation Agreements, and Listings.
- Increases the opportunity for agents to count brokerage team activity and delegated supervision by eliminating the previous maximum number of points that could be counted under that category.
Why the Changes?
These changes were recommended by the Broker Responsibility Working Group and are intended to streamline the broker’s license application process.
When Do the Rule Changes Become Effective?
Typically, a rule takes effect 20 days after the date on which it is filed with the Secretary of State. More information on the effective date will be available soon.
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.
Non-substantive changes were proposed during the meeting to Rule Chapters 531, 533, 534, and 541 as part of the agency’s quadrennial rule review. Proposed changes update terminology for consistency throughout the chapters. For example, the proposed amendments to both Rule 531.18, Consumer Information, and Rule 531.20, Information About Brokerage Services, are not intended to change who must comply with these rules (i.e., active real estate brokers and sales agents), but merely to use language consistent with other rules, specifically the term "license holder."
New Rules Opened for Quadrennial Rule Review
Under the Texas Government Code, and the Commission’s FY2022 rule review plan, the rules found within these chapters 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.
- 537, Professional Agreements and Standard Contracts
- 543, Rules Relating to the Provisions of the Texas Timeshare Act New
Easement or Right-of-Way Agent Requirements
House Bill 2730, passed during the 87th Texas Legislative Session, requires that TREC propose and adopt rules related to the requirements for Easement or Right-of-Way (ERW) agents. This includes proposing rules for education providers, ERW agents and applicants, and rules for probationary certificates. Once the proposed rules are published in the Texas Register, you will be able to provide public comment. More information on public comment will be available soon.