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Many rules were adopted at TREC’s November 19, 2019 meeting, including rule changes to implement Sunset Advisory Commission recommendations and mandates, changes to implement other legislation, and fee changes.   Additionally, TREC considered recommendations by the Broker-Lawyer Committee related to promulgated forms. 

Of the legislative and sunset related changes, highlights include rules adopted to eliminate branch office and instructor licenses and discontinuation the consideration of student loan defaults in license renewals.  The Commission implemented these changes in practice on September 1, 2019, pursuant to the law changes.  Announcements were made as these changes unfolded, however, the process to update the rules is now complete. 

Additionally, a new rule §535.58 related to the license of military service members, veterans, or military spouses was adopted to implement SB 1200 and to consolidate all military-related rules in one place.  Pursuant to this legislation, the rule allows military spouses with a license in another state or territory to practice in Texas if the license in the other jurisdiction is “substantially equivalent.”  The substantial equivalency is a key requirement that requires TREC to identify what states and territories may have that equivalency for each license type.  This examination is ongoing.

The Commission also adopted rules to eliminate several fees, which will streamline and simplify the current fee structure.  Specifically, the Commission eliminated the fee to establish or change a relationship with a sponsoring broker or professional inspector and to change a license holder’s name.  The fee rules were also amended to address the process for follow-up payment after a dishonored payment.  These fee changes are effective as of January 2020.

The Commission additionally approved changes to both the Third Party Financing Addendum and the Addendum for Authorizing Hydrostatic Testing.  The Third Party Financing Addendum was amended to clarify that the three-day notice requirement in 2.B does not apply to Paragraph 4 and the “time is of the essence” language was moved to the body of Paragraph 2 for clarity.  These forms will be available for voluntary use starting in January with required use starting March 1, 2020. 

While the Broker-Lawyer Committee (BLC) recommended additional changes that were proposed by the Commission in August, all other form changes were withdrawn from consideration by the Commission at the recommendation of the BLC to allow two newly established BLC working groups to further consider changes.  One working group is focusing on the Seller’s Disclosure paragraph found in the Unimproved Property Contract (paragraph 7.E.), the Farm and Ranch Contract (paragraph 7.H.), and both the New Home Contracts (paragraph 7.I. for Incomplete Construction and 7.H. for Completed Construction).   The other working group is focusing on the proposed paragraph concerning leases.  Additionally, while the BLC recommended a proposed removal of the language specifying the payment of a fee between brokers (page 9 of the One to Four Family Residential Contract), the committee subsequently withdrew that recommendation.  Instead, the committee is considering modifying the current language; that modification may be further considered at the next meeting.  The BLC meets again on January 10, 2020 to consider making recommendations to additional forms.  If recommendations are made that are proposed by the Commission, they would not be adopted before the May Commission meeting, with an effective date later in the year.

License Holders and the public are encouraged to review and comment on any proposed changes to the rules by emailing through January 12, 2020. These proposed rules will be up for adoption in February.