By: Carona S.B. No. 747
(In the Senate - Filed February 16, 2011; February 23, 2011,
read first time and referred to Committee on Business and Commerce;
March 2, 2011, reported favorably by the following vote: Yeas 7,
Nays 0; March 2, 2011, sent to printer.)
A BILL TO BE ENTITLED
AN ACT
relating to the professions regulated by the Texas Real Estate
Commission.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 1101.002, Occupations Code, is amended
by amending Subdivision (1) and adding Subdivision (1-a) to read as
follows:
(1) "Broker":
(A) means a person who, in exchange for a
commission or other valuable consideration or with the expectation
of receiving a commission or other valuable consideration, performs
for another person one of the following acts:
(i) sells, exchanges, purchases, or leases
real estate;
(ii) offers to sell, exchange, purchase, or
lease real estate;
(iii) negotiates or attempts to negotiate
the listing, sale, exchange, purchase, or lease of real estate;
(iv) lists or offers, attempts, or agrees
to list real estate for sale, lease, or exchange;
(v) [appraises or offers, attempts, or
agrees to appraise real estate;
[(vi)] auctions or offers, attempts, or
agrees to auction real estate;
(vi) [(vii)] deals in options on real
estate, including buying, selling, or offering to buy or sell
options on real estate;
(vii) [(viii)] aids or offers or attempts
to aid in locating or obtaining real estate for purchase or lease;
(viii) [(ix)] procures or assists in
procuring a prospect to effect the sale, exchange, or lease of real
estate; [or]
(ix) [(x)] procures or assists in procuring
property to effect the sale, exchange, or lease of real estate;
(x) collects or accepts rent from residents
of a multifamily dwelling with fewer than five units; or
(xi) provides a written opinion relating to
the estimated price of real property if the opinion:
(a) is not referred to as an
appraisal;
(b) is provided in the ordinary course
of the person's business; and
(c) is related to the management,
sale, exchange, purchase, or lease of real estate; and
(B) includes a person who:
(i) is employed by or for an owner of real
estate to sell any portion of the real estate; or
(ii) engages in the business of charging an
advance fee or contracting to collect a fee under a contract that
requires the person primarily to promote the sale of real estate by:
(a) listing the real estate in a
publication primarily used for listing real estate; or
(b) referring information about the
real estate to brokers.
(1-a) "Business entity" means a "domestic entity" or
"foreign entity" as those terms are defined by Section 1.002,
Business Organizations Code.
SECTION 2. Section 1101.005, Occupations Code, is amended
to read as follows:
Sec. 1101.005. APPLICABILITY OF CHAPTER. This chapter does
not apply to:
(1) an attorney licensed in this [any] state;
(2) an attorney-in-fact authorized under a power of
attorney to conduct a real estate transaction;
(3) a public official while engaged in official
duties;
(4) an auctioneer licensed under Chapter 1802 while
conducting the sale of real estate by auction if the auctioneer does
not perform another act of a broker or salesperson;
(5) a person conducting a real estate transaction
under a court order or the authority of a will or written trust
instrument;
(6) a person employed by an owner in the sale of
structures and land on which structures are located if the
structures are erected by the owner in the course of the owner's
business;
(7) an on-site manager of an apartment complex;
(8) an owner or the owner's employee who leases the
owner's improved or unimproved real estate; or
(9) [a partnership or limited liability partnership
acting as a broker or salesperson through a partner who is a
licensed broker; or
[(10)] a transaction involving:
(A) the sale, lease, or transfer of a mineral or
mining interest in real property;
(B) the sale, lease, or transfer of a cemetery
lot;
(C) the lease or management of a hotel or motel;
or
(D) the sale of real property under a power of
sale conferred by a deed of trust or other contract lien.
SECTION 3. Subchapter D, Chapter 1101, Occupations Code, is
amended by adding Section 1101.161 to read as follows:
Sec. 1101.161. GIFTS, GRANTS, AND DONATIONS. The
commission may solicit and accept a gift, grant, donation, or other
item of value from any source to pay for any activity under this
chapter or Chapter 1102 or 1103.
SECTION 4. Section 1101.301, Occupations Code, is amended
by amending Subsection (c) and adding Subsection (d) to read as
follows:
(c) In establishing accreditation standards for an
educational program under Subsection (a), the commission shall
adopt rules setting an examination passage rate benchmark for each
category of license issued by the commission under this chapter or
Chapter 1102. The benchmark must be based on the average percentage
of examinees that pass the licensing exam on the first attempt. A
program must meet or exceed the benchmark for each license category
[that require a program to establish that at least 55 percent of the
program's graduates have passed a licensing exam the first time the
exam has been taken by the graduates] before the commission may
renew the program's accreditation.
(d) The commission may deny an application for
accreditation if the applicant at any time owns or controls an
educational program or course of study for which accreditation was
revoked.
SECTION 5. Section 1101.351, Occupations Code, is amended
by adding Subsection (a-1) to read as follows:
(a-1) Unless a business entity holds a license issued under
this chapter, a person employed by, sponsored by, or associated
with the business entity may not:
(1) act as or represent that the person is a broker or
salesperson; or
(2) act as a residential rental locator.
SECTION 6. Section 1101.352, Occupations Code, is amended
by adding Subsection (d) to read as follows:
(d) At the time an application is submitted under Subsection
(a), each applicant shall provide the commission with the
applicant's current mailing address, telephone number, and e-mail
address. The applicant shall notify the commission of any change in
the applicant's mailing or e-mail address or telephone number
during the time the application is pending.
SECTION 7. Section 1101.355, Occupations Code, is amended
to read as follows:
Sec. 1101.355. ADDITIONAL GENERAL ELIGIBILITY REQUIREMENTS
FOR [CERTAIN] BUSINESS ENTITIES. (a) To be eligible for a license
under this chapter, a business entity must:
(1) [a corporation must] designate one of its managing
officers as its agent for purposes of this chapter; and
(2) provide proof that the entity maintains errors and
omissions insurance with a minimum annual limit of $1 million for
each occurrence if the designated agent owns less than 10 percent of
the business entity [a limited liability company must designate one
of its managers as its agent for purposes of this chapter].
(b) A business entity [corporation or limited liability
company] may not act as a broker unless the entity's designated
agent is a licensed broker in active status and good standing
according to the commission's records.
(c) A business entity that receives compensation on behalf
of a license holder must be licensed as a broker under this chapter.
SECTION 8. Section 1101.356, Occupations Code, is amended
by amending Subsection (a) and adding Subsection (d) to read as
follows:
(a) An applicant for a broker license must provide to the
commission satisfactory evidence that the applicant:
(1) has had at least six [two] years of active
experience in this state as a license holder during the 84 [36]
months preceding the date the application is filed; and
(2) has successfully completed at least 60 semester
hours, or equivalent classroom hours, of postsecondary education,
including:
(A) at least 18 semester hours or equivalent
classroom hours of core real estate courses, two semester hours of
which must be real estate brokerage; and
(B) at least 42 hours of core real estate courses
or related courses accepted by the commission.
(d) The commission by rule shall establish what constitutes
active experience for purposes of this section and Section
1101.357.
SECTION 9. Section 1101.357, Occupations Code, is amended
to read as follows:
Sec. 1101.357. BROKER LICENSE: ALTERNATE EXPERIENCE
REQUIREMENTS FOR CERTAIN APPLICANTS. An applicant for a broker
license who does not satisfy the experience requirements of Section
1101.356 must provide to the commission satisfactory evidence that:
(1) the applicant:
(A) is a licensed real estate broker in another
state;
(B) has had at least six [two] years of active
experience in that state as a licensed real estate broker or
salesperson during the 84 [36] months preceding the date the
application is filed; and
(C) has satisfied the educational requirements
prescribed by Section 1101.356; or
(2) the applicant was licensed in this state as a
broker in the year preceding the date the application is filed.
SECTION 10. Section 1101.358, Occupations Code, is amended
to read as follows:
Sec. 1101.358. SALESPERSON LICENSE: EDUCATION
REQUIREMENTS. (a) An applicant for a salesperson license must
provide to the commission satisfactory evidence that the applicant
has completed at least 12 [14] semester hours, or equivalent
classroom hours, of postsecondary education consisting of[,
including]:
(1) at least four semester hours of core real estate
courses on principles of real estate; and
(2) at least two semester hours of each of the
following core real estate courses:
(A) agency law;
(B) contract law; [and]
(C) contract forms and addendums; and
(D) real estate finance [one additional core real
estate course; and
[(3) at least four semester hours of core real estate
courses or related courses].
(b) The commission shall waive the education requirements
of Subsection (a) if the applicant has been licensed in this state
as a broker or salesperson within the six months [year] preceding
the date the application is filed.
(c) If an applicant for a salesperson license was licensed
as a salesperson within the six months [year] preceding the date the
application is filed and the license was issued under the
conditions prescribed by Section 1101.454, the commission shall
require the applicant to provide the evidence of successful
completion of education requirements that would have been required
if the license had been maintained without interruption during the
preceding six months [year].
SECTION 11. Subsection (f), Section 1101.401, Occupations
Code, is amended to read as follows:
(f) An applicant must satisfy the examination requirement
not later than one year [six months] after the date the license
application is filed.
SECTION 12. Subsections (e) and (f), Section 1101.451,
Occupations Code, are amended to read as follows:
(e) A person whose license has been expired for 90 days or
less may renew the license by paying to the commission a fee equal
to 1-1/2 times the required renewal fee. If a license has been
expired for more than 90 days but less than six months [one year],
the person may renew the license by paying to the commission a fee
equal to two times the required renewal fee.
(f) If a person's license has been expired for six months
[one year] or longer, the person may not renew the license. The
person may obtain a new license by submitting to reexamination and
complying with the requirements and procedures for obtaining an
original license.
SECTION 13. Section 1101.453, Occupations Code, is amended
to read as follows:
Sec. 1101.453. ADDITIONAL RENEWAL REQUIREMENTS FOR
[CERTAIN] BUSINESS ENTITIES. (a) To renew a license under this
chapter, a business entity must:
(1) [a corporation must] designate one of its managing
officers as its agent for purposes of this chapter; and
(2) provide proof that the entity maintains errors and
omissions insurance with a minimum annual limit of $1 million for
each occurrence if the designated agent owns less than 10 percent of
the business entity [a limited liability company must designate one
of its managers as its agent for purposes of this chapter].
(b) A business entity [corporation or limited liability
company] may not act as a broker unless the entity's designated
agent is a licensed broker in active status and good standing
according to the commission's records.
SECTION 14. Subsection (a), Section 1101.454, Occupations
Code, is amended to read as follows:
(a) An applicant applying for the first renewal of a
salesperson license must provide to the commission satisfactory
evidence of completion of at least 18 semester hours, or equivalent
classroom hours, [of postsecondary education, including 14 hours]
of core real estate courses.
SECTION 15. Subchapter J, Chapter 1101, Occupations Code,
is amended by adding Section 1101.458 to read as follows:
Sec. 1101.458. ADDITIONAL EDUCATION REQUIREMENTS FOR
CERTAIN LICENSE HOLDERS. (a) A broker who sponsors a salesperson,
or a license holder who supervises another license holder, must
attend during the term of the current license at least six classroom
hours of broker responsibility education courses approved by the
commission.
(b) The commission by rule shall prescribe the title,
content, and duration of broker responsibility education courses
required under this section.
(c) Broker responsibility education course hours may be
used to satisfy the hours described by Section 1101.455(f).
(d) This section does not apply to a broker who is exempt
from continuing education requirements under Section 1101.456.
SECTION 16. Subsection (b), Section 1101.502, Occupations
Code, is amended to read as follows:
(b) To be eligible to receive a certificate of registration
or a renewal certificate under this subchapter, a business
[corporation, limited liability company, partnership, limited
liability partnership, or other] entity must designate as its agent
one of its managing officers[, partners, or managers] who is
registered under this subchapter.
SECTION 17. Subchapter K, Chapter 1101, Occupations Code,
is amended by adding Section 1101.5041 to read as follows:
Sec. 1101.5041. CRIMINAL HISTORY RECORD INFORMATION
REQUIREMENT FOR CERTIFICATE. An applicant for an original
certificate of registration or renewal of a certificate of
registration must comply with the criminal history record check
requirements of Section 1101.3521.
SECTION 18. Section 1101.552, Occupations Code, is amended
by adding Subsection (e) to read as follows:
(e) A license holder shall provide the commission with the
license holder's current mailing address, telephone number, and
e-mail address. A license holder shall notify the commission of a
change in the license holder's mailing or e-mail address or
telephone number.
SECTION 19. Section 1101.554, Occupations Code, is amended
to read as follows:
Sec. 1101.554. COPY [CUSTODY] OF SALESPERSON LICENSE.
[(a)] The commission shall deliver or mail a copy of each
salesperson license to the broker with whom the salesperson is
associated.
[(b) The broker shall keep the license under the broker's
custody and control.]
SECTION 20. Subchapter N, Chapter 1101, Occupations Code,
is amended by adding Section 1101.6561 to read as follows:
Sec. 1101.6561. SUSPENSION OR REVOCATION OF EDUCATIONAL
PROGRAM ACCREDITATION. The commission may suspend or revoke an
accreditation issued under Subchapter G or take any other
disciplinary action authorized by this chapter if the provider of
an educational program or course of study violates this chapter or a
rule adopted under this chapter.
SECTION 21. (a) Not later than December 1, 2011, the Texas
Real Estate Commission shall adopt rules necessary to implement
Section 1101.301, Occupations Code, as amended by this Act, and
Subsection (d), Section 1101.356, and Section 1101.458,
Occupations Code, as added by this Act.
(b) Subsection (e), Section 1101.552, Occupations Code, as
added by this Act, applies only to a broker or salesperson license
issued or renewed on or after December 1, 2011. A license issued or
renewed before December 1, 2011, is governed by the law in effect
immediately before the effective date of this Act, and the former
law is continued in effect for that purpose.
(c) Subsection (b), Section 1101.502, Occupations Code, as
amended by this Act, and Section 1101.5041, Occupations Code, as
added by this Act, apply only to an application for a certificate of
registration or renewal of a certificate of registration filed with
the Texas Real Estate Commission on or after December 1, 2011. An
application filed before that date is governed by the law in effect
at the time the application was filed, and the former law is
continued in effect for that purpose.
(d) Section 1101.458, Occupations Code, as added by this
Act, applies only to a license issued or renewed on or after
September 1, 2012. A license issued or renewed before September 1,
2012, is governed by the law in effect immediately before the
effective date of this Act, and the former law is continued in
effect for that purpose.
(e) Sections 1101.352, 1101.355, 1101.356, 1101.357, and
1101.401, Occupations Code, as amended by this Act, apply only to an
application for a real estate broker or salesperson license
submitted to the Texas Real Estate Commission on or after the
effective date of this Act. An application for a license submitted
before that date is governed by the law in effect on the date the
application was submitted, and the former law is continued in
effect for that purpose.
(f) Section 1101.358, Occupations Code, as amended by this
Act, applies only to an application for a real estate salesperson
license submitted to the Texas Real Estate Commission on or after
September 1, 2012. An application for a license submitted before
that date is governed by the law in effect on the date the
application was submitted, and the former law is continued in
effect for that purpose.
(g) Sections 1101.451, 1101.453, and 1101.454, Occupations
Code, as amended by this Act, apply only to the renewal of a real
estate broker or salesperson license that expires on or after the
effective date of this Act. A license that expires before that date
is governed by the law in effect on the date the license expires,
and the former law is continued in effect for that purpose.
(h) A person who holds a license as a real estate broker
issued before the effective date of this Act may continue to renew
that license without complying with the changes in law made by this
Act to Sections 1101.356 and 1101.357, Occupations Code.
(i) Sections 1101.002 and 1101.005, Occupations Code, as
amended by this Act, apply, with respect to conduct that
constitutes acting as a broker or salesperson under Chapter 1101,
Occupations Code, only to conduct engaged in on or after the
effective date of this Act. Conduct engaged in before the effective
date of this Act is governed by the law in effect when the conduct
was engaged in, and the former law is continued in effect for that
purpose.
SECTION 22. This Act takes effect September 1, 2011.
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