The amendments, in part, implement statutory changes enacted by the 88th Legislature in SB 422, which first, expands out-of-state occupational license recognition to include military service members, as long as certain criteria are met. SB 422 also modifies the time period within which verification of good standing occurs, as well as issuance of a license after certain conditions are satisfied, from “as soon as practicable” to no later than 30 days. The bill also addresses the term of the license in situations of divorce or other events impacting the military spouse’s status. The rule amendments reflect these statutory changes.

In addition, as a result of education requirements being added for easement and right-of-way agents (ERWs) during the 87th Legislative Session, language is added making clear that ERW applicants must otherwise comply with the requirements in 22 TAC §535.400, unless excepted by §535.58. Additionally, language is being struck from the rule to better reflect the statutory framework under Chapter 55, Occupations Code. Finally, a statement of purpose is being added to the rule to make clear that this rule addresses the requirements provided under Chapter 55, Occupations Code, and not federal law.

The amendments reflect statutory changes enacted by the 88th Legislature in HB 1363, which eliminated the real estate inspection recovery fund. The changes to §535.219 replace a repealed statutory section with a related rule—22 TAC §535.220(g) (although related, this rule is authorized by another statutory provision).

The amendments address a violation of 22 TAC §535.157 (relating to Obligation to Respond Timely), which was recently adopted by the Commission. Current rule 535.157 obligates a broker and 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 of a real estate transaction within two calendar days. Under the changes to 535.191, a violation of §535.157 could result in an administrative penalty of $100 - $1,500 per violation per day.

The amendments implement statutory changes enacted by the 88th Legislature in SB 1577, which become effective January 1, 2024. Currently, Chapter 1101, Occupations Code, requires business entities who receive compensation on behalf of a license holder to be licensed as a broker. SB 1577 allows certain entities—limited liability companies and s-corporations (as that term is defined by federal law)—to register with the Commission in lieu of obtaining a license. In order to be eligible for registration, these exempted entities must: (i) perform no acts of a broker, other than receiving said compensation on behalf of a license holder; and (ii)  be at least 51 percent owned by the license holder on whose behalf the business entity receives compensation. The rule changes reflect this statutory change.

New §535.35 implements statutory changes enacted by the 88th Legislature in SB 1577, which becomes effective January 1, 2024. Currently, §1101.355(c), Occupations Code, requires business entities who receive compensation on behalf of a license holder to be licensed as a broker. Licensure requires certain conditions be satisfied, including, for instance, that the entity have a designated broker and payment of an initial license application fee of $150 and a subsequent $72 application fee to renew. SB 1577 amends §1101.355 by allowing certain entities—limited liability companies and s-corporations (as that term is defined by federal law)—to register with the Commission in lieu of obtaining a license and requires the Commission to adopt rules providing for this registration. The new rule outlines the requirements these exempt business entities must follow to register the business entity with the Commission. The changes also provide a term for the registration once issued, as well as an obligation to certify continuing compliance. Additionally, SB 1577 also amends §1101.152, Occupations Code, which specifically directs the Commission to adopt a rule to charge and collect fees in amounts reasonable and necessary to cover the costs of registering a business entity. Therefore, the changes set forth the fee obligations for such registration and certification of continued compliance. Finally, a license holder must also notify the Commission in writing not later than the 10th day after the date the business entity no longer qualifies for the exemption.