Texas 2025 - 89th Regular

Texas House Bill HB3913 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	89R11266 RAL-F
2	2	By: Harless H.B. No. 3913
3	3
4	4
5	5
6	6
7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to the licensing and regulation of certain real estate
10	10	professionals by the Texas Real Estate Commission.
11	11	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	12	SECTION 1. Section 1101.003(a), Occupations Code, is
13	13	amended to read as follows:
14	14	(a) For purposes of this chapter, "qualifying real estate
15	15	courses" include:
16	16	(1) agency law[, which includes the following topics:
17	17	[(A) the relationship between a principal and an
18	18	agent;
19	19	[(B) an agent's authority;
20	20	[(C) the termination of an agent's authority;
21	21	[(D) an agent's duties, including fiduciary
22	22	duties;
23	23	[(E) employment law;
24	24	[(F) deceptive trade practices;
25	25	[(G) listing or buying representation
26	26	procedures; and
27	27	[(H) the disclosure of agency];
28	28	(2) contract law[, which includes the following
29	29	topics:
30	30	[(A) elements of a contract;
31	31	[(B) offer and acceptance;
32	32	[(C) statute of frauds;
33	33	[(D) remedies for breach, including specific
34	34	performance;
35	35	[(E) unauthorized practice of law;
36	36	[(F) commission rules relating to use of adopted
37	37	forms; and
38	38	[(G) owner disclosure requirements];
39	39	(3) principles of real estate[, which includes:
40	40	[(A) an overview of:
41	41	[(i) licensing as a broker or sales agent;
42	42	[(ii) ethics of practice as a license
43	43	holder;
44	44	[(iii) titles to and conveyance of real
45	45	estate;
46	46	[(iv) legal descriptions;
47	47	[(v) deeds, encumbrances, and liens;
48	48	[(vi) distinctions between personal and
49	49	real property;
50	50	[(vii) appraisal;
51	51	[(viii) finance and regulations;
52	52	[(ix) closing procedures; and
53	53	[(x) real estate mathematics; and
54	54	[(B) at least three class hours of instruction on
55	55	federal, state, and local laws relating to housing discrimination,
56	56	housing credit discrimination, and community reinvestment];
57	57	(4) property management[, which includes the
58	58	following topics:
59	59	[(A) the role of a property manager;
60	60	[(B) landlord policies;
61	61	[(C) operational guidelines;
62	62	[(D) leases;
63	63	[(E) lease negotiations;
64	64	[(F) tenant relations;
65	65	[(G) maintenance;
66	66	[(H) reports;
67	67	[(I) habitability laws; and
68	68	[(J) the Fair Housing Act (42 U.S.C. Section 3601
69	69	et seq.)];
70	70	(5) real estate appraisal[, which includes the
71	71	following topics:
72	72	[(A) the central purposes and functions of an
73	73	appraisal;
74	74	[(B) social and economic determinants of the
75	75	value of real estate;
76	76	[(C) appraisal case studies;
77	77	[(D) cost, market data, and income approaches to
78	78	value estimates of real estate;
79	79	[(E) final correlations; and
80	80	[(F) reporting];
81	81	(6) real estate brokerage[, which includes the
82	82	following topics:
83	83	[(A) agency law;
84	84	[(B) planning and organization;
85	85	[(C) operational policies and procedures;
86	86	[(D) recruitment, selection, and training of
87	87	personnel;
88	88	[(E) records and control; and
89	89	[(F) real estate firm analysis and expansion
90	90	criteria];
91	91	(7) real estate finance[, which includes the following
92	92	topics:
93	93	[(A) monetary systems;
94	94	[(B) primary and secondary money markets;
95	95	[(C) sources of mortgage loans;
96	96	[(D) federal government programs;
97	97	[(E) loan applications, processes, and
98	98	procedures;
99	99	[(F) closing costs;
100	100	[(G) alternative financial instruments;
101	101	[(H) equal credit opportunity laws;
102	102	[(I) community reinvestment laws, including the
103	103	Community Reinvestment Act of 1977 (12 U.S.C. Section 2901 et
104	104	seq.); and
105	105	[(J) state housing agencies, including the Texas
106	106	Department of Housing and Community Affairs];
107	107	(8) real estate investment[, which includes the
108	108	following topics:
109	109	[(A) real estate investment characteristics;
110	110	[(B) techniques of investment analysis;
111	111	[(C) the time value of money;
112	112	[(D) discounted and nondiscounted investment
113	113	criteria;
114	114	[(E) leverage;
115	115	[(F) tax shelters depreciation; and
116	116	[(G) applications to property tax];
117	117	(9) real estate law[, which includes the following
118	118	topics:
119	119	[(A) legal concepts of real estate;
120	120	[(B) land description;
121	121	[(C) real property rights and estates in land;
122	122	[(D) contracts;
123	123	[(E) conveyances;
124	124	[(F) encumbrances;
125	125	[(G) foreclosures;
126	126	[(H) recording procedures; and
127	127	[(I) evidence of titles];
128	128	(10) real estate marketing[, which includes the
129	129	following topics:
130	130	[(A) real estate professionalism and ethics;
131	131	[(B) characteristics of successful sales agents;
132	132	[(C) time management;
133	133	[(D) psychology of marketing;
134	134	[(E) listing procedures;
135	135	[(F) advertising;
136	136	[(G) negotiating and closing;
137	137	[(H) financing; and
138	138	[(I) Subchapter E, Chapter 17, Business &
139	139	Commerce Code]; and
140	140	(11) real estate mathematics[, which includes the
141	141	following topics:
142	142	[(A) basic arithmetic skills and review of
143	143	mathematical logic;
144	144	[(B) percentages;
145	145	[(C) interest;
146	146	[(D) the time value of money;
147	147	[(E) depreciation;
148	148	[(F) amortization;
149	149	[(G) proration; and
150	150	[(H) estimation of closing statements].
151	151	SECTION 2. Section 1101.161, Occupations Code, is amended
152	152	to read as follows:
153	153	Sec. 1101.161. GIFTS, GRANTS, AND DONATIONS. The
154	154	commission may solicit and accept a gift, grant, donation, or other
155	155	item of value from any source to pay for any activity under this
156	156	chapter, or Chapter 1102, 1103, or 1104[, or 1303] of this code, or
157	157	Chapter 221, Property Code.
158	158	SECTION 3. Section 1101.204, Occupations Code, is amended
159	159	by adding Subsection (d-1) to read as follows:
160	160	(d-1) Notwithstanding Section 1101.2051, the commission may
161	161	provide a written notice of an investigation to a person licensed
162	162	under this chapter or Chapter 1102 and who is associated with the
163	163	license holder who is the subject of the investigation. The
164	164	commission shall adopt rules to specify the persons who may receive
165	165	notice under this subsection.
166	166	SECTION 4. Section 1101.356(a), Occupations Code, is
167	167	amended to read as follows:
168	168	(a) An applicant for a broker license must provide to the
169	169	commission satisfactory evidence that the applicant:
170	170	(1) has had at least four years of active experience as
171	171	a license holder during the 60 months preceding the date the
172	172	application is filed; [and]
173	173	(2) has successfully completed the number of hours of
174	174	qualifying real estate and related courses required by commission
175	175	rule, not to exceed 60 semester hours or equivalent classroom
176	176	hours; and
177	177	(3) has attended the broker responsibility course
178	178	approved by the commission under Section 1101.458.
179	179	SECTION 5. Section 1101.358(a), Occupations Code, is
180	180	amended to read as follows:
181	181	(a) An applicant for a sales agent license must provide to
182	182	the commission satisfactory evidence that the applicant has
183	183	successfully completed at least 12 semester hours, or equivalent
184	184	classroom hours, of qualifying real estate courses required by
185	185	commission rule [education consisting of:
186	186	[(1) at least four semester hours of qualifying real
187	187	estate courses on principles of real estate; and
188	188	[(2) at least two semester hours of each of the
189	189	following qualifying real estate courses:
190	190	[(A) agency law;
191	191	[(B) contract law;
192	192	[(C) contract forms and addendums; and
193	193	[(D) real estate finance].
194	194	SECTION 6. Sections 1101.458(a), (b), and (c), Occupations
195	195	Code, are amended to read as follows:
196	196	(a) A [designated] broker and [for a business entity
197	197	licensed under this chapter, a broker who sponsors] a sales agent [,
198	198	or a license holder] who supervises another license holder must
199	199	attend during the term of the current license the [at least six
200	200	classroom hours of] broker responsibility course [education
201	201	courses] approved by the commission.
202	202	(b) The commission by rule shall prescribe the title,
203	203	content, and duration of the broker responsibility course
204	204	[education courses] required under this section. The course may
205	205	not exceed six hours of classroom instruction.
206	206	(c) Broker responsibility [education] course hours may be
207	207	used to satisfy the hours described by Sections 1101.356 and
208	208	[Section] 1101.455(f).
209	209	SECTION 7. Section 1101.552, Occupations Code, is amended
210	210	by amending Subsection (e) and adding Subsections (f) and (g) to
211	211	read as follows:
212	212	(e) A license holder shall provide the commission with:
213	213	(1) the license holder's current:
214	214	(A) mailing address;
215	215	(B) business address;
216	216	(C) business [and] telephone number;[,] and
217	217	(D) [the license holder's] business e-mail
218	218	address; and [if available]
219	219	(2) if the license holder is an associated broker, the
220	220	name of the broker with whom the license holder is associated.
221	221	(f) A license holder shall notify the commission of a change
222	222	in the information described by Subsection (e) [license holder's
223	223	mailing or e-mail address or telephone number].
224	224	(g) In this section, "associated broker" means a broker who
225	225	associates with and is paid through another broker under a
226	226	relationship that is intended to be a continuous relationship,
227	227	including as an employee or an ongoing independent contractor.
228	228	SECTION 8. Section 1101.558(b-1), Occupations Code, is
229	229	amended to read as follows:
230	230	(b-1) At the time of a license holder's first substantive
231	231	communication with a party relating to a proposed transaction
232	232	regarding specific real property, the license holder shall provide
233	233	to the party written notice in at least a 10-point font that:
234	234	(1) describes the ways in which a broker can represent
235	235	a party to a real estate transaction, including as an intermediary;
236	236	(2) describes the basic duties and obligations a
237	237	broker has to a party to a real estate transaction that the broker
238	238	represents; [and]
239	239	(3) describes the basic obligations a broker has to a
240	240	party to a real estate transaction that the broker does not
241	241	represent; and
242	242	(4) provides the name, license number, and contact
243	243	information for the license holder and the license holder's
244	244	supervisor and broker, if applicable.
245	245	SECTION 9. Subchapter L, Chapter 1101, Occupations Code, is
246	246	amended by adding Sections 1101.562 and 1101.563 to read as
247	247	follows:
248	248	Sec. 1101.562. REAL PROPERTY SHOWINGS WITHOUT
249	249	REPRESENTATION. (a) A broker may show real property available for
250	250	sale or lease to a party without representing the party if the
251	251	broker:
252	252	(1) has not agreed with the party, either orally or in
253	253	writing, to represent the party;
254	254	(2) is not otherwise acting as the party's agent at the
255	255	time of showing the real property;
256	256	(3) does not provide to the party opinions or advice
257	257	regarding the real property or real estate transactions in general;
258	258	and
259	259	(4) does not perform any other act of real estate
260	260	brokerage for the party.
261	261	(b) Before a broker may show real property under Subsection
262	262	(a), the broker must, as applicable:
263	263	(1) disclose to the party as required by Section
264	264	1101.558(b) if the broker represents the owner of the real
265	265	property; or
266	266	(2) provide to the party the written notice described
267	267	by Section 1101.558(b-1) if the broker does not represent the owner
268	268	of the real property.
269	269	(c) Notwithstanding Subsections (a)(3) and (4), a broker
270	270	showing real property under this section may confirm information to
271	271	a party regarding the size, price, and terms of the real property
272	272	available for sale or lease.
273	273	Sec. 1101.563. WRITTEN AGREEMENT REQUIRED. (a) In this
274	274	section, "residential real property" means:
275	275	(1) a single-family house;
276	276	(2) a duplex, triplex, or quadraplex; or
277	277	(3) a unit in a multiunit residential structure in
278	278	which title to an individual unit is transferred to the owner of the
279	279	unit under a condominium or cooperative system.
280	280	(b) Before a license holder may perform any act of real
281	281	estate brokerage for a prospective buyer of residential real
282	282	property, the license holder must enter into a written agreement
283	283	with the prospective buyer. The written agreement must:
284	284	(1) state:
285	285	(A) the services to be provided by the license
286	286	holder;
287	287	(B) the termination date of the agreement;
288	288	(C) whether the agreement is exclusive;
289	289	(D) as applicable, that the license holder:
290	290	(i) represents the prospective buyer as the
291	291	buyer's agent; or
292	292	(ii) does not represent the prospective
293	293	buyer as the buyer's agent if the only act of real estate brokerage
294	294	being performed is showing real property under Section 1101.562;
295	295	and
296	296	(E) the amount or rate of compensation the
297	297	license holder will receive and how this amount will be determined;
298	298	and
299	299	(2) disclose in conspicuous language that broker
300	300	compensation is not set by law and is fully negotiable.
301	301	(c) A license holder who enters into a written agreement
302	302	with a prospective buyer for the sole purpose of showing real
303	303	property under Section 1101.562 shall enter into a separate
304	304	agreement with the prospective buyer if additional real estate
305	305	brokerage acts are to be provided after showing the real property.
306	306	SECTION 10. Sections 1101.652(a) and (b), Occupations Code,
307	307	are amended to read as follows:
308	308	(a) The commission may suspend or revoke a license issued
309	309	under this chapter or Chapter 1102 or take other disciplinary
310	310	action authorized by this chapter or Chapter 1102 if the license
311	311	holder:
312	312	(1) enters a plea of guilty or nolo contendere to or is
313	313	convicted of a felony or a criminal offense involving fraud, and the
314	314	time for appeal has elapsed or the judgment or conviction has been
315	315	affirmed on appeal, without regard to an order granting community
316	316	supervision that suspends the imposition of the sentence;
317	317	(2) procures or attempts to procure a license under
318	318	this chapter or Chapter 1102 for the license holder by fraud,
319	319	misrepresentation, or deceit or by making a material misstatement
320	320	of fact in an application for a license;
321	321	(3) fails to honor, within a reasonable time, a
322	322	payment [check] issued to the commission after the commission has
323	323	sent by certified mail a request for payment to the license holder's
324	324	last known [business] address according to commission records;
325	325	(4) fails to provide, within a reasonable time,
326	326	information requested by the commission that relates to a formal or
327	327	informal complaint to the commission that would indicate a
328	328	violation of this chapter or Chapter 1102;
329	329	(5) fails to surrender to the owner, without just
330	330	cause, a document or instrument that is requested by the owner and
331	331	that is in the license holder's possession;
332	332	(6) fails to consider market conditions for the
333	333	specific geographic area in which the license holder is providing a
334	334	service;
335	335	(7) fails to notify the commission, not later than the
336	336	30th day after the date of a final conviction or the entry of a plea
337	337	of guilty or nolo contendere, that the person has been convicted of
338	338	or entered a plea of guilty or nolo contendere to a felony or a
339	339	criminal offense involving fraud; or
340	340	(8) disregards or violates this chapter or Chapter
341	341	1102.
342	342	(b) The commission may suspend or revoke a license issued
343	343	under this chapter or take other disciplinary action authorized by
344	344	this chapter if the license holder, while engaged in real estate
345	345	brokerage:
346	346	(1) acts negligently or incompetently;
347	347	(2) engages in conduct that is dishonest or in bad
348	348	faith or that demonstrates untrustworthiness;
349	349	(3) makes a material misrepresentation to a potential
350	350	buyer concerning a significant defect, including a latent
351	351	structural defect, known to the license holder that would be a
352	352	significant factor to a reasonable and prudent buyer in making a
353	353	decision to purchase real property;
354	354	(4) fails to disclose to a potential buyer a defect
355	355	described by Subdivision (3) that is known to the license holder;
356	356	(5) makes a false promise that is likely to influence a
357	357	person to enter into an agreement when the license holder is unable
358	358	or does not intend to keep the promise;
359	359	(6) pursues a continued and flagrant course of
360	360	misrepresentation or makes false promises through an agent or sales
361	361	agent, through advertising, or otherwise;
362	362	(7) fails to make clear to all parties to a real estate
363	363	transaction the party for whom the license holder is acting;
364	364	(8) receives compensation from more than one party to
365	365	a real estate transaction without the full knowledge and consent of
366	366	all parties to the transaction;
367	367	(9) fails within a reasonable time to properly account
368	368	for or remit money that is received by the license holder and that
369	369	belongs to another person;
370	370	(10) commingles money that belongs to another person
371	371	with the license holder's own money;
372	372	(11) pays a commission or a fee to or divides a
373	373	commission or a fee with a person other than a license holder or a
374	374	real estate broker or sales agent licensed in another state for
375	375	compensation for services as a real estate agent;
376	376	(12) fails to specify a definite termination date that
377	377	is not subject to prior notice in a contract, other than a contract
378	378	to perform property management services, in which the license
379	379	holder agrees to perform services for which a license is required
380	380	under this chapter;
381	381	(13) accepts, receives, or charges an undisclosed
382	382	commission, rebate, or direct profit on an expenditure made for a
383	383	principal;
384	384	(14) solicits, sells, or offers for sale real property
385	385	by means of a lottery;
386	386	(15) solicits, sells, or offers for sale real property
387	387	by means of a deceptive practice;
388	388	(16) acts in a dual capacity as broker and undisclosed
389	389	principal in a real estate transaction;
390	390	(17) guarantees or authorizes or permits a person to
391	391	guarantee that future profits will result from a resale of real
392	392	property;
393	393	(18) places a sign on real property offering the real
394	394	property for sale or lease without obtaining the written consent of
395	395	the owner of the real property or the owner's authorized agent;
396	396	(19) offers to sell or lease real property without the
397	397	knowledge and consent of the owner of the real property or the
398	398	owner's authorized agent;
399	399	(20) offers to sell or lease real property on terms
400	400	other than those authorized by the owner of the real property or the
401	401	owner's authorized agent;
402	402	(21) induces or attempts to induce a party to a
403	403	contract of sale or lease to break the contract for the purpose of
404	404	substituting a new contract;
405	405	(22) negotiates or attempts to negotiate the sale,
406	406	exchange, or lease of real property with an owner, landlord, buyer,
407	407	or tenant with knowledge that that person is a party to an
408	408	outstanding written contract that grants exclusive agency to
409	409	another broker in connection with the transaction;
410	410	(23) publishes or causes to be published an
411	411	advertisement that:
412	412	(A) misleads or is likely to deceive the public;
413	413	(B) tends to create a misleading impression;
414	414	(C) implies that a sales agent is responsible for
415	415	the operation of the broker's real estate brokerage business; or
416	416	(D) fails to include the name of the broker for
417	417	whom the license holder acts, which name may be the licensed name,
418	418	assumed name, or trade name of the broker as authorized by a law of
419	419	this state and registered with the commission;
420	420	(24) withholds from or inserts into a statement of
421	421	account or invoice a statement that the license holder knows makes
422	422	the statement of account or invoice inaccurate in a material way;
423	423	(25) publishes or circulates an unjustified or
424	424	unwarranted threat of a legal proceeding or other action;
425	425	(26) establishes an association by employment or
426	426	otherwise with a person other than a license holder if the person is
427	427	expected or required to act as a license holder;
428	428	(27) aids, abets, or conspires with another person to
429	429	circumvent this chapter;
430	430	(28) fails or refuses to provide, on request, a copy of
431	431	a document relating to a real estate transaction to a person who
432	432	signed the document;
433	433	(29) fails to advise a buyer in writing before the
434	434	closing of a real estate transaction that the buyer should:
435	435	(A) have the abstract covering the real estate
436	436	that is the subject of the contract examined by an attorney chosen
437	437	by the buyer; or
438	438	(B) be provided with or obtain a title insurance
439	439	policy;
440	440	(30) fails to deposit, within a reasonable time, money
441	441	the license holder receives as escrow or trust funds in a real
442	442	estate transaction:
443	443	(A) in trust with a title company authorized to
444	444	do business in this state; or
445	445	(B) in a custodial, trust, or escrow account
446	446	maintained for that purpose in a banking institution authorized to
447	447	do business in this state;
448	448	(31) disburses money deposited in a custodial, trust,
449	449	or escrow account, as provided in Subdivision (30), before the
450	450	completion or termination of the real estate transaction;
451	451	(32) discriminates against an owner, potential buyer,
452	452	landlord, or potential tenant on the basis of race, color,
453	453	religion, sex, disability, familial status, national origin, or
454	454	ancestry, including directing a prospective buyer or tenant
455	455	interested in equivalent properties to a different area based on
456	456	the race, color, religion, sex, disability, familial status,
457	457	national origin, or ancestry of the potential owner or tenant; [or]
458	458	(33) disregards or violates this chapter; or
459	459	(34) fails to enter into a written agreement with a
460	460	prospective buyer as required by Section 1101.563.
461	461	SECTION 11. Section 1101.653, Occupations Code, is amended
462	462	to read as follows:
463	463	Sec. 1101.653. GROUNDS FOR SUSPENSION OR REVOCATION OF
464	464	CERTIFICATE. The commission may suspend or revoke a certificate of
465	465	registration issued under this chapter if the certificate holder:
466	466	(1) engages in dishonest dealing, fraud, unlawful
467	467	discrimination, or a deceptive act;
468	468	(2) makes a misrepresentation;
469	469	(3) acts in bad faith;
470	470	(4) demonstrates untrustworthiness;
471	471	(5) fails to honor, within a reasonable time, a
472	472	payment [check] issued to the commission after the commission has
473	473	mailed a request for payment to the certificate holder's last known
474	474	address according to the commission's records;
475	475	(6) fails to provide to a party to a transaction a
476	476	written notice prescribed by the commission that:
477	477	(A) must be given before the party is obligated
478	478	to sell, buy, lease, or transfer a right-of-way or easement; and
479	479	(B) contains:
480	480	(i) the name of the certificate holder;
481	481	(ii) the certificate number;
482	482	(iii) the name of the person the
483	483	certificate holder represents;
484	484	(iv) a statement advising the party that
485	485	the party may seek representation from a lawyer or broker in the
486	486	transaction; and
487	487	(v) a statement generally advising the
488	488	party that the right-of-way or easement may affect the value of the
489	489	property;
490	490	(7) directly or indirectly accepts a financial
491	491	incentive to make an initial offer that the certificate holder
492	492	knows or should know is lower than the adequate compensation
493	493	required under the Texas Constitution; or
494	494	(8) disregards or violates this chapter or a
495	495	commission rule relating to certificate holders.
496	496	SECTION 12. The following provisions of the Occupations
497	497	Code are repealed:
498	498	(1) Section 1101.002(8); and
499	499	(2) Section 1101.805(f).
500	500	SECTION 13. Section 1101.204, Occupations Code, as amended
501	501	by this Act, applies only with respect to a notice regarding a
502	502	complaint filed on or after the effective date of this Act. A
503	503	notice regarding a complaint filed before the effective date of
504	504	this Act is governed by the law in effect on the date the complaint
505	505	was filed, and the former law is continued in effect for that
506	506	purpose.
507	507	SECTION 14. Section 1101.356(a), Occupations Code, as
508	508	amended by this Act, applies only to an application for a broker
509	509	license under Chapter 1101, Occupations Code, submitted on or after
510	510	the effective date of this Act. An application submitted before the
511	511	effective date of this Act is governed by the law in effect on the
512	512	date the application was submitted, and the former law is continued
513	513	in effect for that purpose.
514	514	SECTION 15. Section 1101.358(a), Occupations Code, as
515	515	amended by this Act, applies only to an application for a sales
516	516	agent license under Chapter 1101, Occupations Code, submitted on or
517	517	after the effective date of this Act. An application submitted
518	518	before the effective date of this Act is governed by the law in
519	519	effect on the date the application was submitted, and the former law
520	520	is continued in effect for that purpose.
521	521	SECTION 16. Section 1101.652(b), Occupations Code, as
522	522	amended by this Act, applies only to conduct occurring on or after
523	523	the effective date of this Act. Conduct occurring before the
524	524	effective date of this Act is governed by the law in effect on the
525	525	date the conduct occurred, and the former law is continued in effect
526	526	for that purpose.
527	527	SECTION 17. This Act takes effect January 1, 2026.