The Texas Real Estate Commission’s advisory committees and working groups have made several recommendations that the Commissioners will discuss and potentially propose or adopt during the TREC Meeting on February 13. Here are the highlights of what will be considered, including inspection report rule changes, proposed SAE requirements, and changes that affect broker responsibility and sales agent oversight of brokerage activity.

Broker Responsibility

Recommended Rule on Response Times

The Broker Responsibility Working Group (BRWG) recommended a new rule, 535.157, that requires a broker or sales agent to respond to his or her principal, a broker or sales agent representing another party to a real estate transaction, or an unrepresented party to a real estate transaction within two calendar days.

The working group also proposed amending 535.2(j) to modify the language of that subsection to accommodate the new rule 22 TAC 535.157, which requires both brokers and sales agents to respond to principals to a real estate transaction or their license holders within two calendar days. Importantly, the requirement a sponsoring broker respond to his or her sponsored agents is still in effect under 22 TAC 535.2.

Recommended Rule Amendments on Oversight of New Brokerage Activities

The BRWG also recommended amending 535.2(i)(5) to increase the minimum number of times a broker must ensure assistance and coaching for a new type of brokerage activity performed by an agent from one time to three times.

Education

Residential Property Management Course Outline Recommended for Proposal

The Education Standards Advisory Committee (ESAC) opened the Property Management qualifying course outline for review. Section 1101.003, Qualifying Real Estate Courses, states the property management course must include:

• The role of a property manager
• Landlord policies
• Operational guidelines
• Leases
• Lease negotiations
• Tenant relations
• Maintenance
• Reports
• Habitability laws
• The Fair Housing Act (42 U.S.C. Section 3601 et seq.).

Because commercial property management is not a course topic required by statute and aside from leasing, is not an area regulated by the Commission, the committee decided to strike a portion of the current Commercial Property Management section of the course—keeping some basics—to reallocate that time to other areas of the course outline that need more emphasis.

The committee also recommends renaming the course to Residential Property Management to underscore the relevant content of the course and the Commission’s jurisdiction. ESAC approved all changes during its January meeting and recommended the Commission propose the revised course outline at the February meeting.

Real Estate Brokerage Course Outline Recommended for Proposal

ESAC proposed changes to the agency’s Real Estate Brokerage course approval form to better address the broker-agent relationship and associated responsibilities.

Recommendation to Require Qualifying Real Estate Brokerage Course in SAE Hours

ESAC at its last meeting recommended the Commission propose an amendment to 535.55, Education and Sponsorship Requirements for Sales Agent License, to make the 30-hour Real Estate Brokerage course a mandatory course as part of the SAE requirement. This would not remove the statutory requirement that a broker applicant have taken this course not more than two years prior to submitting his or her application, meaning broker applicants would likely have to take this course twice.

Inspectors

Instructor Course Credit for Ride-Along Courses for CE

The Texas Real Estate Inspector Committee (TREIC) recommended the Commission propose a change to Section 535.18 that would extend the amount of time an instructor of a ride-along inspection course can submit documentation to obtain Continuing Education (CE) credit from one week to within the term of their current license period.

Proposal to Clarify Delivery Deadlines for Inspection Reports

TREIC recommended a change to Section 535.222(a)(2) to clarify the two-day inspection report delivery deadline. The change clarifies that in instances where payments are provided in full prior to the inspection, the inspector is required deliver the report to the client within two days of completion of the inspection.

Proposed Amendments to Section 535.223, Standard Inspection Report Form

In November, 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 document 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. TREIC reviewed the public comments it received on the proposals and ultimately voted to recommend the Commission adopt the rule in February without any changes made in response to those comments.

Unauthorized Practice of Law

Based on recommendations from the Unauthorized Practice of Law Working Group, the Commission in November proposed a new rule—Section 537.1, Definitions—and amendments to Section 537.11, Use of Standard Contract Forms. The proposals were published in the Texas Register to allow for public comment. The working group reviewed hundreds of public comments TREC received, most opposing the proposed amendment to 537.11 (a)(4) 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. After reviewing these comments, the working group recommended dropping this change and reverting back to the current language for this section, which allows license holders to use brokerage forms prepared by an attorney when no mandatory TREC form exists as long as certain requirements are met.

The Commission will discuss the working group’s recommendation and vote whether to re-propose the new rule and amendments to Section 537.11—without the change prohibiting brokerage forms. In the event the new rule and amendments to 537.11 are re-proposed, stakeholders will have another opportunity to review and provide public comment.

What Happens Next?

After the rules discussed above are formally proposed by the Commission and published in the Texas Register, a public comment period will open, and you will be able to submit feedback to TREC via the online public comment tool.

If the Commission adopts amendments to the rule related to inspection report forms during the February 13 meeting, it will become effective 20 days after publication in the Texas Register.

Where to Find Meeting Materials

Download the agenda and meeting materials and make plans to livestream the meeting or attend in person.

Earn CE Credit for Attending the TREC Meeting in Person

Earn up to four hours of continuing education (CE) credit by attending the TREC Meeting on Monday, February 13, at 10 a.m. CT in Austin. Breaks called by the Commissioners during the meeting do not count toward CE credit, and you do not automatically earn four hours if the meeting is shorter than four hours. Make sure to sign in when you arrive to ensure you receive CE. Watching the livestream will does not qualify for CE credit.