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Our license holders are governed by the Texas Real Estate License Act, the Inspector Act, the Residential Service Company Act, and the Timeshare Act. These Acts establish the makeup of the Commission and its advisory committees and outline procedures by which a person can become real estate license holders in Texas. The Acts also describe TREC’s jurisdiction over license holders and registrants.

TREC has the authority to adopt administrative rules to provide specificity to provisions of the Acts. TREC may also adopt rules to establish policy regarding certain practices. Both the Acts and TREC rules are a great resource for helping consumers know what to expect from a real estate service provider.

TREC Rules

The tables below show all of our recently proposed and adopted rules. Written comments on proposed rules are accepted for 30 days after publication in the Texas Register. After that period, comments can be made in person at the next Commission meeting. Please send written comments to TREC's general.counsel@trec.texas.gov. For the complete version of our current rules go to:

Recently Proposed and Adopted Rules

Rule Number Rule Name Proposed Date Adopted Date Effective Date Summary Attachment(s)
22 TAC §535.211 Professional Liability Insurance, or Any Other Insurance that Provides Coverage for Violations of Subchapter G of Chapter 1102 08/07/2017

**No action was taken at the February 12, 2018, Commission meeting and the rule was automatically withdrawn by the Texas Register on February 26, 2018.**

The proposed amendments to §535.211 clarify the minimum standards of financial liability that an inspector must maintain during the period an inspector is licensed. The Legislature has enacted §1102.1141, Texas Occupations Code, which requires an inspector to maintain a minimum of $100,000 financial responsibility in the form of an insurance policy, bond, or other acceptable security, to provide for professional liability coverage to protect the public against a violation of Subchapter G, Chapter 1102, Texas Occupations Code. TREC has long interpreted the language in §1102.1141 to require inspectors who choose to maintain financial responsibility through an insurance policy to obtain a policy with the minimum liability coverage required in the statute excluding any offsets or reductions in coverage for attorney's fees, defense costs, or other costs. The basis for this long-standing interpretation is found in subsection (a)(1)(B), which requires the insurance policy to "provide[] for professional liability coverage to protect the public against a violation of [law]."

TREC has received questions about whether certain clauses in an insurance policy, such as a defense within limits or wasting clause, which reduce the limits of liability insurance coverage available under the policy, comply with the statutory requirements in §1102.1141. Because these and other similar clauses reduce the amount of liability insurance coverage available to protect the public against a violation of Subchapter G, Chapter 1102, Texas Occupations Code, TREC proposes these amendments to clarify its interpretation that an insurance policy containing such clauses does not satisfy the statutory requirements to maintain financial responsibility in §1102.1141.

22 TAC §535.154 Advertising 08/07/2017 11/13/2017 05/15/2018

The repeal is necessary because a new rule is being proposed to provide greater clarity for advertising requirements and to conform the rule with statutory changes made by the 85th Legislature.

22 TAC §535.154 Registration and Use of Alternate, Team and Assumed Business Names Used in Advertisements 08/07/2017 11/13/2017 05/15/2018

The new rules align the rules with statutory changes adopted in SB 2212 by the 85th Legislature effective September 1, 2017 and implement changes to the rules recommended by the Commission's Executive Committee following over a year of study and input from stakeholders. The rule was split into two rules to separate out name and registration of name requirements from advertising requirements. Most of the new requirements involve changes to how team names are defined, registered and used. New statutory provisions and a consensus by stakeholders that team names presently cause most of the consumer confusion in advertisements drove these changes. Much of the new rules contains provisions that are similar or identical to the current rule but have been rewritten for clarity. Additionally, new definitions were added, the requirement for notifying the Commission of the use of an alternate name, assumed business name or team name was amended to require registration of the names with the Commission prior to their use, and the current safe harbor policy regarding the size of the broker's name in advertisement was put into the rule.

Twenty-two comments were received on the proposal as published. One was from a trade association and five other commenters supported their remarks. The trade association was generally in support of the new rules with the exception of subsections (d)(4) and (d)(7). Commission staff after reviewing the comments and consulting with the association recommended revisions that the association endorses. Staff also recommended additional language to further distinguish the definitions of a broker's assumed business name and a team name. Of the remaining commenters, seven were opposed to the requirements for team names and nine were generally in support.

The Commission recognizes that some license holders on teams will need to change their signage under the new rules. To ameliorate this expense, the Commission has extended the effective date of the rule until May 15, 2018 to allow those license holders to spread out the cost of new signage over time.

22 TAC §535.155 Advertisements 08/07/2017 11/13/2017 05/15/2018

The new rules align the rules with statutory changes adopted in SB 2212 by the 85th Legislature effective September 1, 2017 and implement changes to the rules recommended by the Commission's Executive Committee following over a year of study and input from stakeholders. The rule was split into two rules to separate out name and registration of name requirements from advertising requirements. Most of the new requirements involve changes to how team names are defined, registered and used. New statutory provisions and a consensus by stakeholders that team names presently cause most of the consumer confusion in advertisements drove these changes. Much of the new rules contains provisions that are similar or identical to the current rule but have been rewritten for clarity. Additionally, new definitions were added, the requirement for notifying the Commission of the use of an alternate name, assumed business name or team name was amended to require registration of the names with the Commission prior to their use, and the current safe harbor policy regarding the size of the broker's name in advertisement was put into the rule.

Twenty-two comments were received on the proposal as published. One was from a trade association and five other commenters supported their remarks. The trade association was generally in support of the new rules with the exception of subsections (d)(4) and (d)(7). Commission staff after reviewing the comments and consulting with the association recommended revisions that the association endorses. Staff also recommended additional language to further distinguish the definitions of a broker's assumed business name and a team name. Of the remaining commenters, seven were opposed to the requirements for team names and nine were generally in support.

The Commission recognizes that some license holders on teams will need to change their signage under the new rules. To ameliorate this expense, the Commission has extended the effective date of the rule until May 15, 2018 to allow those license holders to spread out the cost of new signage over time.

22 TAC §535.300 Advertising by Residential Rental Locators 08/07/2017 11/13/2017 05/15/2018

The amendments are adopted to align the rules with statutory changes in SB 2212 adopted by the 85th Legislature to be effective September 1, 2017. As required by the statutory changes, the amendments eliminate the current required reference to the Commission in all advertising. "Salesperson" was also updated to the statutory term "sales agent" wherever it appeared.

22 TAC §537.11 Use of Standard Contract Forms 08/07/2017 11/13/2017 05/15/2018

Texas real estate license holders are generally required to use forms promulgated by TREC when negotiating contacts for the sale of real property. These forms are drafted and recommended for adoption by the Texas Real Estate Broker-Lawyer Committee, an advisory body consisting of six attorneys appointed by the President of the State Bar of Texas, six brokers appointed by TREC, and one public member appointed by the governor.

Twenty-seven comments were received on the amendments as published. Four were from trade associations. One comment was in full support of the changes. The other non-association comments were from members of one of the associations in support of the letter written by that association. All of the associations expressed concern over having to revise their forms used by Commission license holders to meet the requirements of proposed amendments. The Commission did not feel that this presented an undue burden on the associations, especially in light of the increased consumer protection in the form of greater transparency in the forms. However, some of the comments presented by the associations did result in staff recommended changes to the proposal. One comment was received regarding the possibility that the changes proposed in subsection (a)(3) was an overly restrictive interpretation of the statutory exception in Texas Occ. Code §1101.155(b). The Commission agreed and changed that provision to mirror the statutory language. While most of the associations understood and agreed with the intent behind subsection (a)(4), they opposed new subsection (b) and requested revisions to (a)(4) to allow the associations to be able to quickly respond to changes in the market and meet the needs of their members. The Commission agreed and deleted new subsection (b) and revised subsection (a)(4) to require several additional disclosures only when a form changed the rights, obligations or remedies of a party under a contract or addendum form approved by the Commission for mandatory use by license holders.

22 TAC §535.65 Responsibilities and Operations of Providers of Qualifying Courses 11/13/2017 02/12/2018 03/05/2018

The amendments to §535.65 implement changes made to Chapter 53 of the Texas Occupations Code in HB 1508, adopted by the 85th Legislature effective September 1, 2017. These changes require education providers to notify potential students before they enroll in an occupational licensing education program that a criminal history may make them ineligible for the license they seek and that they have a right to request a criminal history evaluation from the licensing authority. The statutory changes also provide authority for licensing agencies to order reimbursements be paid to the student if the provider fails to give the required notices. In addition, subsection (h)(1) is amended to clarify that all final examinations are to be closed book examinations. This change was recommended by the Commission's Education Standards Advisory Committee.

22 TAC §537.20 Standard Contract Form TREC No. 9-12 11/13/2017 02/12/2018 03/05/2018

Texas real estate license holders are generally required to use forms promulgated by TREC when negotiating contacts for the sale of real property. These forms are drafted and recommended for adoption by the Texas Real Estate Broker-Lawyer Committee, an advisory body consisting of six attorneys appointed by the President of the State Bar of Texas, six brokers appointed by TREC, and one public member appointed by the governor.

The Broker Lawyer Committee recommended revisions to the contract forms adopted by reference under the proposed amendments to Chapter 537 to address issues that have arisen since the last contract revisions.

The Broker Lawyer Committee recommends the changes listed below for adoption. The changes apply to all contract forms unless specified otherwise. Paragraph numbers referenced are from the One to Four Family Residential Contract (Resale).

Paragraph 2 is amended to clarify that any reservations of mineral rights must be done in a separate addendum.

Paragraph 5 is amended to require Earnest Money to be delivered within 3 days of the Effective Date. If the 3rd day falls on a Saturday, Sunday or legal holiday, the earnest money is due on the next day that is not a Saturday, Sunday or legal holiday. Seller may terminate the contract if buyer fails to timely deliver the Earnest Money and time is made of the essence for this paragraph.
 
“Effective Date” is made a defined term throughout the contracts but is still tied to the final date of acceptance provided on the signature page.

Paragraph 6A(9) is amended to include an exception for minerals as approved by the Texas Department of Insurance.

Paragraph 6B the phrase “due to factors beyond Seller’s control” is removed from the sentence allowing Buyer to terminate the contract if the Commitment and Exception documents are not timely received.

Paragraph 6 D is amended to define the time by which seller is to cure objections as the“Cure Period”, provide a specific time frame by which the buyer must notify the seller that the buyer will terminate or waive the objections if the objections are not cured within the Cured Period, and address additional time periods for the buyer to object and the seller to cure if a revised commitment, revised survey, or updated exception documents are provided. A reference in this paragraph to items in 6A was also updated to include the new item 6A(9).

Paragraph 20 is amended to clarify what is meant by “applicable law” and an “affidavit” when seller is a “foreign person.”

The space for fax numbers were removed from the Broker Information page and a space for phone numbers for the brokers were added.

Separate receipt boxes were added to the forms for Earnest Money, the Contract and Additional Earnest Money.

Initial boxes for Seller and Buyer were removed from the Broker Information Page and Earnest Money Receipt pages.

Paragraph 2B(2) and 2C (Condominium Contract Only) is amended to clarify that the seller bears the expense to deliver the condominium documents and the resale certificate to buyer.

Paragraph 2F. Reservations (Farm and Ranch Contract Only) is amended to strike the parenthetical stating that reservations may be included in special provisions (suggesting that reservations are to be addressed only in a properly drafted addendum). The list of Addenda in Paragraph 22 was amended to add the Addendum for Reservation of Oil, Gas, and Other Minerals.

A new addendum is proposed to address who pays for and is responsible for damages from a hydrostatic test, if the parties agree to have one performed.

A new addendum is proposed to address the situation where the parties create a contingency to the contract based on the appraisal performed by the lender and termination rights or waiver associated with that contingency.

PDF icon 9-12 draft.pdf
22 TAC §537.28 Standard Contract Form TREC No. 20-13 11/13/2017 02/12/2018 03/05/2018 PDF icon 20-13 draft.pdf
22 TAC §537.30 Standard Contract Form TREC No. 23-14 11/13/2017 02/12/2018 03/05/2018 PDF icon 23-14 draft.pdf
22 TAC §537.31 Standard Contract Form TREC No. 24-14 11/13/2017 02/12/2018 03/05/2018 PDF icon 24-14 draft.pdf
22 TAC §537.32 Standard Contract Form TREC No. 25-11 11/13/2017 02/12/2018 03/05/2018 PDF icon 25-11 draft.pdf
22 TAC §537.37 Standard Contract Form TREC No. 30-12 11/13/2017 02/12/2018 03/05/2018 PDF icon 30-12 draft.pdf
22 TAC §537.55 Standard Contract Form TREC No. 48-0 11/13/2017 02/12/2018 03/05/2018

The new addendum addresses who pays for and is responsible for damages from a hydrostatic test, if the parties agree to have one performed.

PDF icon 48-0 draft.pdf
22 TAC §537.56 Standard Contract Form TREC No. 49-0 11/13/2017 02/12/2018 03/05/2018

The new addendum addresses the situation where the parties create a contingency to the contract based on the appraisal performed by the lender and termination rights or waiver associated with that contingency.

PDF icon 49-0 draft.pdf
22 TAC §541.1 Criminal Offense Guidelines 11/13/2017 05/07/2018 05/28/2018

The amendments to §541.1,  are recommended by the Enforcement Committee of the Commission after review of the list of crimes that directly related to an applicant’s fitness to practice as a real estate license holder, inspector or easement and right-of-way agent.

22 TAC §535.52 Moral Character Requirements for Individual Applicant 11/13/2017 05/07/2018 05/28/2018

The amendments to §535.52, clarify that violating the terms of an administrative order by the Commission or any other governmental body tends to indicate that the applicant does not possess the honesty, trustworthiness or integrity to hold a real estate license.

22 TAC §533.4 Failure to Answer; Failure to Attend Hearing and Default 02/12/2018 05/07/2018 05/28/2018

The amendments to §533.4 increases the time to respond to a Notice of Alleged Violation from 20 days to 30 days. The amendment is being made to conform this rule with §533.3, which the Commission amended in November 2017. The word “Administrator” was changed to “Executive Director” to conform to the current statutory language.

22 TAC 535.155 Advertisements 05/07/2018

The proposed amendments to §535.155 clarify that a sign giving directions to property for sale or lease is not considered an advertisement if it only contains the directional arrows or the directional arrows and the listing broker’s logo or name only. In addition, the word “realty” was removed from the prohibited terms set out in subsection (d)(5) to allow this word to be used at the beginning or middle of a team name.

22 TAC §535.201 Definitions 05/07/2018

The proposed amendments to §535.201 add a definition for the term "client" and remove unused definitions of "code organization" and "trade association." These proposed amendments are recommended by the Texas Real Estate Inspector Committee.

22 TAC §537.45 Standard Contract Form TREC No. 38-5 05/07/2018

The Broker Lawyer Committee recommended revisions to the contract forms adopted by reference under the rules set out in Chapter 537 to address issues that have arisen since the last contract revisions. Some of those revisions or new addenda created additional rights of termination for Buyer or Seller. The revisions to the Notice of Buyer’s Termination of Contract and the new Notice of Seller’s Termination of Contract, reflect those items. The revisions to the Notice of Buyer's Termination of Contract and the new Notice of Seller's Termination of Contract, reflect those items. The Broker Lawyer Committee also recommended the new Release of Earnest Money, which can be used in conjunction with the termination forms.

PDF icon 38-5 draft2018 Buyer's Termination.pdf
22 TAC §537.47 Standard Contract Form TREC No. 40-7 05/07/2018

The Broker Lawyer Committee recommended revisions to the contract forms adopted by reference under the rules set out in Chapter 537 to address issues that have arisen since the last contract revisions. Some of those revisions or new addenda created additional rights of termination for Buyer or Seller. The revisions to the Notice of Buyer's Termination of Contract and the new Notice of Seller's Termination of Contract, reflect those items. The Broker Lawyer Committee also recommended the new Release of Earnest Money, which can be used in conjunction with the termination forms.

The Committee also recommended a few clarifying revisions to the Third Party Financing Addendum and reformatted it so that it was consistent with other Commission promulgated addenda.

PDF icon 40-7 draft2018 Third Party Financing1.pdf
22 TAC §537.57 Standard Contract Form TREC No. 50-0 05/07/2018

The Broker Lawyer Committee recommended revisions to the contract forms adopted by reference under the rules set out in Chapter 537 to address issues that have arisen since the last contract revisions. Some of those revisions or new addenda created additional rights of termination for Buyer or Seller. The revisions to the Notice of Buyer’s Termination of Contract and the new Notice of Seller’s Termination of Contract, reflect those items. The revisions to the Notice of Buyer's Termination of Contract and the new Notice of Seller's Termination of Contract, reflect those items. The Broker Lawyer Committee also recommended the new Release of Earnest Money, which can be used in conjunction with the termination forms.

PDF icon 50-0 draft2018NEW seller's termination.pdf
22 TAC §537.58 Standard Contract Form TREC No. 51-0 05/07/2018

The Broker Lawyer Committee recommended revisions to the contract forms adopted by reference under the rules set out in Chapter 537 to address issues that have arisen since the last contract revisions. Some of those revisions or new addenda created additional rights of termination for Buyer or Seller. The revisions to the Notice of Buyer's Termination of Contract and the new Notice of Seller's Termination of Contract, reflect those items. The Broker Lawyer Committee also recommended the new Release of Earnest Money, which can be used in conjunction with the termination forms.

PDF icon 51-0 draft2018NEW release of earnest money.pdf