S.B. No. 2212
AN ACT
relating to certain real estate sales, brokerage, and advertising
activities, certain functions of the Texas Real Estate Commission.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter A, Chapter 1101, Occupations Code, is
amended by adding Section 1101.0045 to read as follows:
Sec. 1101.0045. EQUITABLE INTERESTS IN REAL PROPERTY.
(a) A person may acquire an option or an interest in a contract to
purchase real property and then sell or offer to sell the option or
assign or offer to assign the contract without holding a license
issued under this chapter if the person:
(1) does not use the option or contract to purchase to
engage in real estate brokerage; and
(2) discloses the nature of the equitable interest to
any potential buyer.
(b) A person selling or offering to sell an option or
assigning or offering to assign an interest in a contract to
purchase real property without disclosing the nature of that
interest to a potential buyer is engaging in real estate brokerage.
SECTION 2. Section 1101.156(b), Occupations Code, is
amended to read as follows:
(b) The commission may not include in rules to prohibit
false, misleading, or deceptive practices by a person regulated by
the commission a rule that:
(1) restricts the use of any advertising medium;
(2) restricts the person's personal appearance or use
of the person's voice in an advertisement;
(3) relates to the size or duration of an
advertisement used by the person; [or]
(4) restricts the person's advertisement under an
assumed or [a] trade name that is authorized by a law of this state
and registered with the commission; or
(5) requires the term "broker," "agent," or a similar
designation or term, a reference to the commission, or the person's
license number to be included in the person's advertisement.
SECTION 3. Section 1101.652(b), Occupations Code, is
amended to read as follows:
(b) The commission may suspend or revoke a license issued
under this chapter or take other disciplinary action authorized by
this chapter if the license holder, while engaged in real estate
brokerage:
(1) acts negligently or incompetently;
(2) engages in conduct that is dishonest or in bad
faith or that demonstrates untrustworthiness;
(3) makes a material misrepresentation to a potential
buyer concerning a significant defect, including a latent
structural defect, known to the license holder that would be a
significant factor to a reasonable and prudent buyer in making a
decision to purchase real property;
(4) fails to disclose to a potential buyer a defect
described by Subdivision (3) that is known to the license holder;
(5) makes a false promise that is likely to influence a
person to enter into an agreement when the license holder is unable
or does not intend to keep the promise;
(6) pursues a continued and flagrant course of
misrepresentation or makes false promises through an agent or sales
agent, through advertising, or otherwise;
(7) fails to make clear to all parties to a real estate
transaction the party for whom the license holder is acting;
(8) receives compensation from more than one party to
a real estate transaction without the full knowledge and consent of
all parties to the transaction;
(9) fails within a reasonable time to properly account
for or remit money that is received by the license holder and that
belongs to another person;
(10) commingles money that belongs to another person
with the license holder's own money;
(11) pays a commission or a fee to or divides a
commission or a fee with a person other than a license holder or a
real estate broker or sales agent licensed in another state for
compensation for services as a real estate agent;
(12) fails to specify a definite termination date that
is not subject to prior notice in a contract, other than a contract
to perform property management services, in which the license
holder agrees to perform services for which a license is required
under this chapter;
(13) accepts, receives, or charges an undisclosed
commission, rebate, or direct profit on an expenditure made for a
principal;
(14) solicits, sells, or offers for sale real property
by means of a lottery;
(15) solicits, sells, or offers for sale real property
by means of a deceptive practice;
(16) acts in a dual capacity as broker and undisclosed
principal in a real estate transaction;
(17) guarantees or authorizes or permits a person to
guarantee that future profits will result from a resale of real
property;
(18) places a sign on real property offering the real
property for sale or lease without obtaining the written consent of
the owner of the real property or the owner's authorized agent;
(19) offers to sell or lease real property without the
knowledge and consent of the owner of the real property or the
owner's authorized agent;
(20) offers to sell or lease real property on terms
other than those authorized by the owner of the real property or the
owner's authorized agent;
(21) induces or attempts to induce a party to a
contract of sale or lease to break the contract for the purpose of
substituting a new contract;
(22) negotiates or attempts to negotiate the sale,
exchange, or lease of real property with an owner, landlord, buyer,
or tenant with knowledge that that person is a party to an
outstanding written contract that grants exclusive agency to
another broker in connection with the transaction;
(23) publishes or causes to be published an
advertisement[, including an advertisement by newspaper, radio,
television, the Internet, or display,] that:
(A) misleads or is likely to deceive the public;
(B) [,] tends to create a misleading impression;
(C) implies that a sales agent is responsible for
the operation of the broker's real estate brokerage business;[,] or
(D) fails to include [identify] the name of the
broker for whom the license holder acts, which name may be the
licensed name, assumed name, or trade name of the broker as
authorized by a law of this state and registered with the commission
[person causing the advertisement to be published as a licensed
broker or agent];
(24) withholds from or inserts into a statement of
account or invoice a statement that the license holder knows makes
the statement of account or invoice inaccurate in a material way;
(25) publishes or circulates an unjustified or
unwarranted threat of a legal proceeding or other action;
(26) establishes an association by employment or
otherwise with a person other than a license holder if the person is
expected or required to act as a license holder;
(27) aids, abets, or conspires with another person to
circumvent this chapter;
(28) fails or refuses to provide, on request, a copy of
a document relating to a real estate transaction to a person who
signed the document;
(29) fails to advise a buyer in writing before the
closing of a real estate transaction that the buyer should:
(A) have the abstract covering the real estate
that is the subject of the contract examined by an attorney chosen
by the buyer; or
(B) be provided with or obtain a title insurance
policy;
(30) fails to deposit, within a reasonable time, money
the license holder receives as escrow or trust funds in a real
estate transaction:
(A) in trust with a title company authorized to
do business in this state; or
(B) in a custodial, trust, or escrow account
maintained for that purpose in a banking institution authorized to
do business in this state;
(31) disburses money deposited in a custodial, trust,
or escrow account, as provided in Subdivision (30), before the
completion or termination of the real estate transaction;
(32) discriminates against an owner, potential buyer,
landlord, or potential tenant on the basis of race, color,
religion, sex, disability, familial status, national origin, or
ancestry, including directing a prospective buyer or tenant
interested in equivalent properties to a different area based on
the race, color, religion, sex, disability, familial status,
national origin, or ancestry of the potential owner or tenant; or
(33) disregards or violates this chapter.
SECTION 4. Subchapter D, Chapter 5, Property Code, is
amended by adding Section 5.086 to read as follows:
Sec. 5.086. EQUITABLE INTEREST DISCLOSURE. Before entering
into a contract, a person selling an option or assigning an interest
in a contract to purchase real property must disclose to any
potential buyer that the person is selling only an option or
assigning an interest in a contract and that the person does not
have legal title to the real property.
SECTION 5. This Act takes effect September 1, 2017.
______________________________ ______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 2212 passed the Senate on
April 25, 2017, by the following vote: Yeas 30, Nays 0, one
present not voting; and that the Senate concurred in House
amendments on May 26, 2017, by the following vote: Yeas 30,
Nays 0, one present not voting.
______________________________
Secretary of the Senate
I hereby certify that S.B. No. 2212 passed the House, with
amendments, on May 23, 2017, by the following vote: Yeas 143,
Nays 0, one present not voting.
______________________________
Chief Clerk of the House
Approved:
______________________________
Date
______________________________
Governor