Texas House Bill HB2998

Texas 2021 - 87th Regular

Caption

Relating to the requirement that certain business entities obtain a license from the Texas Real Estate Commission.

Impact

The impact of this bill will particularly affect small business entities engaged in real estate transactions. By exempting particular business structures from licensing requirements under well-defined conditions, the bill aims to simplify regulatory burdens on these businesses and encourage entrepreneurial activity in the real estate sector. This change seeks to make it easier for brokers to manage and operate their business entities without the need for additional licensing, thereby increasing efficiency in real estate transactions.

Summary

House Bill 2998 addresses licensing requirements for certain business entities operating in the real estate sector in Texas. The bill amends Section 1101.355 of the Occupations Code, specifying that certain entities, specifically limited liability companies and S corporations, are exempt from obtaining a real estate license under specific conditions. These conditions stipulate that the entity must be registered with the Texas Real Estate Commission, be at least 51 percent owned by a licensed broker, and only receive compensation on behalf of the licensed entity during brokerage activities.

Sentiment

General sentiment around HB 2998 seems to be favorable. The legislative discussions indicate a recognition of the need to modernize regulations to reflect the evolving nature of business within the real estate sector. Supporters argue that the changes will reduce barriers to entry for business owners and can lead to increased market participation, enhancing economic activity in Texas's real estate market.

Contention

While the bill has garnered support, there may be concerns regarding consumer protection and the potential for unlicensed entities to operate in the market without adequate oversight. Opponents may argue that easing licensing requirements could lead to unqualified individuals undertaking real estate transactions, which could harm consumers. However, such criticisms were not prominently featured in available discussions, suggesting that the bill's passage may proceed largely uncontested.