If a broker maintains a trust account, it must be clearly identified as a trust account. [TRELA 1101.751], An unlicensed person may not engage in any activity for which a license is required. The damage from the termites has cost me thousands of dollars to repair. Language is also added to specify whether the escrow account will or will not be services by a third-party servicer at either the buyers or sellers expense. What kind of criminal matters will prevent an applicant from obtaining a real estate license? Can you help? The corresponding language in Paragraph 6.F is also amended. No. A single drain line for a temperature/pressure relief valve and the pan is not required to be reported as a deficiency. If the permission is given over the telephone, for example, the license holder should document who gave the permission and how it was given in case that information is later requested by TREC in connection with a complaint. Is an inspector required to report as deficient an electronic sensor in a garage door that is more than six inches above the garage floor even though the general limitations section states that an inspector is not required to inspect a photoelectric sens. I have a license in another state. What are inspectors required to report regarding AFCIs? No. I typically negotiate the resale of the properties for the corporation. See Section 535.230(d)(4). Texas Occupations Code Section 1101.002 - Definitions You should contact a private attorney if you have any questions about extending a listing agreement. Otherwise, you should consult with a private attorney. Paragraph 3 is amended to add that a note must be secured by vendors and deed of trust liens only if required by the buyers lender. No. If TREC records do not show that you have completed your CE at the time you submit your renewal application, you must pay a $200 CE deferral fee, or renew in inactive status. Can a listing broker share a portion of the listing brokers commission with an attorney who represented the buyer in a real estate transaction? Both the State and National sections of the exam must be passed before the application expiration date. Paragraph D.2(b) is further amended to add a requirement that the seller provide the buyer with an annual accounting of the escrow account, use escrow deposits to pay taxes and insurance premiums in a timely manner in certain circumstances, and hold the escrow deposit in a separate account. [Rule 535.155(b)(4) and TRELA 1101.652(b)(23)], Yes, as long as the size of the brokers name itself (not the whole logo) is at least the size of the largest contact information. Is the inspector required to warn of the risk of Chinese drywall? A key distinction between a limited function referral office and another brokerage is the agreement between the agent and the broker to limit the agents actions to generating referrals. Is the inspector required to inspect a water metering device to determine if a leak may exist? If the inspection you are proposing is not in anticipation of a purchase or sale, then TREC's requirements would not apply, and the parameters of the inspection would be governed by the agreement between the inspector and his or her client. Please see TREC rule 537.28 for changes that apply to all contract forms. Can my broker's real estate office offer my inspection services to their clients? Paragraph 21 is amended to add a line for a courtesy copy to another individual, like an agent. Do I need a license to sell a manufactured (mobile) home? Is wrinkled loose carpet a defect and required reporting item per TREC? [Rule 541.1(d)] Before applying for a license, a person may request TREC to determine whether the persons fitness complies with the requirements for licensing by filing a Fitness Determination (FT). This notice must be in writing. Under the current law, a broker must agree to act as an intermediary in accordance with the statute if the broker agrees to represent more than one party in a transaction. The proposed changes to the Property Management course outline (being renamed Residential Property Management) are made to more accurately reflect the agencys jurisdiction and ensure relevancy. A license holder may not represent both principals as a dual agent under the revisions to TRELA. Is a receptacle on a garage ceiling that is not GFCI protected deficient and a required reporting item per TREC? A person's license in another state or experience in real estate brokerage or any related business does not substitute for the educational requirements. 1101.758. Is the inspector required by the SoP to be knowledgeable of local requirements? 9-16, Unimproved Property Contract, Standard Contract Form TREC No. You must use a form drafted by an attorney or a form supplied by either the buyer or seller. Is the TREC inspector required to inform the client of the CSST litigation history? My real estate application was filed with a name that is different than the name on my government issued ID. If your sponsoring broker is unable to help you with your questions about a Texas Association of Realtors (TAR) listing agreement form, you can direct your questions to TAR. If it does, TREC will ask you to provide a copy of the Order of Expungment or Non-disclosure and upon receipt will not consider that offense in determining a person's fitness for licensure. No. It depends. The answer to the first question is No. The specific requirement to report the deficiency takes precedence over the general limitation against inspecting an photoelectric sensor. (1) personal delivery; No. In some instances, the inspector will only be able to report that he or she was not able to determine whether the door was fire-rated or that the door appeared to be (or did not appear to be) fire-rated. It is important to remember that there will always be a single intermediary broker even if another license holder has been authorized to make the specific appointments. Is the inspector required to inspect to trade or industry association standards? TREC contract forms require the buyer to deliver any earnest money to the escrow agent. The sales agents agreement should also address how compensation is handled with the broker. No. In this chapter: (1) "Broker": Rule 535.34 provides guidelines to determine if evidence of an employer/employee relationship exists. Will Your Criminal Record or Disciplinary History Keep You from Getting Licensed? A broker must review all ads to ensure this result is avoided. No. The standards of practice do not address this condition. If the duties include showing or leasing the property for the owner for which the manager gets paid, a license is required. No. 2. a required reporting item? Can an individual sales agent use an assumed business name in advertising? Also, although TREC does not regulate where a license holder places a sign, a license holder is responsible for compliance with any rules, restrictions, or regulations covering placement of a sign in their local area. No, only a licensed plumber may perform a hydrostatic test on a system within a home. No. How long does an agent have to deposit the earnest money once a binding contract has been negotiated? Is a license holder required to provide a party with written information relating to agency? [See Rule 535.144]. In inspecting an attic with a powered ventilator, which is not required to be operated, the inspector should perform a visual inspection and consider the totality of the ventilation system. TREC only handles the licensing and discipline of real estate inspectors, you would need to contact the state agency in charge of collecting state sales tax which is the Texas Comptroller of Public Accounts. Splitting Commissions With Out-of-State Brokers - FindLaw Is the presence of a gas shut off valve that requires a tool to turn off deficient? Do the Standards of Practice require inspectors to comment on the way a gas pipe enters a crawl space? Can the inspector advertise that he inspects plumbing? [TRELA 1101.651(b)] Further, a business entity that receives compensation on behalf of a license holder must be licensed as a broker. We are unable to provide a general definition. What was the name of the first licensing act?, What has the name of the committee that was formed in 1949 to administer the Real Estate Dealers License Act?, Which act requires real estate professionals to be licensed? Evidence of a past fire is not, in itself, a deficiency. The broker may appoint an agent to represent the seller and an agent to represent the buyer. The proposed changes to 22 TAC535.72 are being made to reflect the fact that in 2021, a new eight-hour non-elective coursethe Inspector Legal and Ethics and Standards of Practice Reviewreplaced the two four-hour courses in 2021. The Texas Association of Realtors (TAR) provides certain forms to its members. Section 535.233(2)(B)(i), however, requires an inspector to report as deficient the presence of a single blockable main drain. No. The specific details of the supervision that the sales agents sponsoring broker exercises over the sales agents actions should take into consideration the sales agents experience and ability, acknowledging the fact that the brokeris responsible for the sales agents actions, and should be described in a written agreement between the sales agent and the sales agents sponsoring broker. (6) Can I advertise a service provider such as an inspector, moving company, or repair contractor on my website? Occupations Code Chapter 1102. Real Estate Inspectors [Rule 535.154(a)(5)]. A brokers name includes a brokers assumed business name that has been registered with TREC. [TRELA 1101.652(b)(11)]. TREC does not require inspectors to inspect to any of the various building codes and cannot assist you in determining what code provisions were applied in a particular situation. PDF Texas Real Estate Act: Basic Provisions and Subchapters A-I Click on the "Manage my Sponsorship (Sales)" and click on the "Select" tab. Read the information on the"Change/Verify Contact Information" introduction page and click Next. I want to renew my sales agent or broker license active but am unable to complete my CE hours by the license expiration date. Paragraph B is amended to modify the time period within which the seller may terminate. Is it permitted to submit an invoice to an apartment complex falsely claiming that the locator has procured a tenant for the apartment complex? [TRELA 1101.558(c)(3)]. We are selling our house and the buyer never paid the option fee. [Rule 531.20(e)]. the buyer executes a Buyer Representation Agreement or other written document that authorizes the broker to act as intermediary and specifies the conduct that is prohibited under TRELA 1101.651(d) in conspicuous bold or underlined print. Yes, as long as the ad complies with Rule 535.155 (effective May 15, 2018), which requires the consent of the party the license holder represents in a transaction. Inspectors are not required to inspect anything buried, hidden, latent, or concealed. Practicing real estate without an active license is a criminal offense, specifically, a Class A misdemeanor punishable by confinement of up to one year in a county jail and a fine of up to $4,000. [TRELA 1101.652(b)(1)] Typically, sign ordinances prohibit placing a sign on a utility pole, traffic signal box, or in a road median. Recovery of these losses is a civil action and should be discussed with a private attorney. Include your name as it appears on the application, a copy of your government-issued photo ID, and your telephone number to TREC. What is proof of legal authority to use an assumed business name in Texas? Can a non-license holder use the promulgated contract forms? Unless an exception applies, a locator representing either party must disclose that representation on the first contact with the other party. Criminal Penalty for Certain Violations by Residential Rental Locator. The Commission can not make a determination about the validity of your contract. The exceptions to the representation disclosure are in TRELA 1101.558(c). You may also wish to consult with a private attorney before any possible warranties or other legal remedies expire. Yes. [Rule 535.227(b)(3)(C)(i)]. A buyer can use the option period to perform an inspection of the property and negotiate an amendment to the contract for any necessary repairs as a result of the inspection. Section 535.228(e)(3)(A) of the Standards of Practice states that inspectors are not required to report cosmetic damage or the condition of floor, wall, or ceiling coverings. You'll need to know TRELA in and out, first for the licensing exam and then for your work in the industry afterward! In such a situation, the designatedbroker for the entityis still responsible for the sales agent's actions, even when the sales agent ownsthe licensed business entity. The Commission does not have the authority to revoke or suspend a license holder that has been only charged or accused of committing a felony or criminal offense that involves fraud. I am licensed as a real estate sales agent and as a professional home inspector. What can unlicensed office personnel or an unlicensed assistant do? Section 535.231(a)(2)(E)(ix) requires inspectors to report deficiencies in the condition of the gas distribution system. Yes, within certain limitations. Javascript is disabled in your browser. Thus, for example, any authorization language in the special provisions of the standard Resale contract is not separate consent by a seller. No, filing a complaint with TREC is not a prerequisite to obtaining funds from one of the two recovery accounts maintained by TREC for paying judgments taken by consumers against real estate license holders or inspectors. However, if the cover is not removed, and its presence interferes with the inspection of any part of the water heater, the inspector must advise the client and report the resulting limitations of the inspection in accordance with the departure provision, Section 535.227(b)(5). [TRELA 1101.002(1) and Rules 535.4 and 535.5]. Further, a judgment that involves conduct thatviolates 1101.652(a-1)(1) or 1101.652(b) of TRELA may be eligible for payment from the Real Estate Recovery Trust Account even if the debt was discharged in bankruptcy. No, but a license holder is required to provide a written notice to the other party that the license holder is licensed as a real estate broker or sales agent before entering into a contract, including a lease. The name on your government issued photo ID must match the name on your real estate license application. The primary duty of the agent is to represent the interests of the agents client, not the agent's own interests. The standards of practice are not based on a specific requirement such as those promulgated by model building codes. Campground membership sales are regulated by the Texas Secretary of States Office, Statutory Documents Section, under the provisions of the Texas Camping Membership Resort Act [Chapter 222, Texas Property Code] and you should check with that agency regarding its requirements. However, because TREC must dispose of certain documents in accordance with a records retention plan, TREC may no long have those documents and an applicant should be prepared to resubmit documents and the explanation previously submitted. Can I use Sallys Spectacular Properties or White Real Estate for my business name on my advertising? "Real estate" means any interest in real property, including a leasehold, located in or outside this state. The primary purpose of the license law to protect the public from dishonesty or incompetence among real estate agents. See question regarding the difference between the types of names to figure out which one is appropriate for your situation. New paragraph 9.B(5) provides that private transfer fees will be the obligation of the seller, unless otherwise provided in this contract. An attorney who wants to become licensed as a broker must first apply and meet requirements to become licensed as a real estate sales agent. [Rule 535.154(a)(4)], Team Name is a name used only by a team or group of one or more sponsored sales agents or brokers associated with this broker. From the Start Menu page, click on the dropdown menu under the "Change your license information and manage relationships" category. I recently purchased an older home that was inspected before the purchase. If a broker has an exclusive listing with a seller, may another broker solicit a listing from the same seller that would begin after the other listing expired? An inspector may request inactive status in writing at any time. Paragraph 2.B(2) and 2.C(2) are amended to clarify the timing related to termination and to add a reference to the applicable Property Code provision. Texas Real Estate License ACT (TRELA) (Purpose) 1. Although this is not mandatory, it may still be placed on a sign. Is the presence of carpet on an attached garage floor deficient and a required reporting item per TREC? A license holder should also be familiar with Rules 537.11(f)-(g). Can all or part of the educational hours be waived in view of a person's business experience? if hired for that purpose. The definition of accepted industry practice is situation-specific and may depend on the context in which the question is being asked. Is the absence of a dirt or drip leg, 1. a deficiency? The proposed changes to 22 TAC535.218 are being made to reflect the fact that in 2021, a new eight-hour non-elective coursethe Inspector Legal and Ethics and Standards of Practice Reviewreplaced the two four-hour courses in 2021. [Rule 535.16(b)]. What are my rights as a tenant? The license holder who offers to or actually pays cash to an unlicensed person for a referral is subject to disciplinary action. In addition, since it is not a violation of 1101.652(a-1)(1) or 1101.652(b) of the License Act, any judgment obtained would not be eligible for payment from the Real Estate Recovery Trust Account. Paragraph 2.A adds the term Counties to reflect the fact that farm and ranch properties could be located across two or more counties. [TRELA 1101.561(b)] To the extent a dual agency relationship is created by accident or otherwise, a license holder must resolve the matter by immediate compliance with the notice and consent requirements under TRELA 1101.558-561 and act as either an intermediary or represent only one of the principals in a transaction while working with the other principal only as a customer. A broker or designated broker of a business entity who sponsor one or more sales agents or a delegated supervisor of one or more license holders must complete the six-hour Broker Responsibility Course as part of the 18-hour CE requirement. I went on a tour to inspect unimproved lots. Is a broker required to act as an escrow agent or hold the money of others? Amounts beyond this that remain due to indentations or improper slope in the tub or shower (including shelves, ledges, etc.) Yes, as with all license holders, this can only be done with the prior consent of the person the locator represents. Yes. The intermediary may delegate to another license holder the authority to appoint license holders. Section 535.230(2)(J)(vi)(I)of the Standards of Practice requires inspectors to report as deficient, in gas HVAC units, deficiencies in combustion, and dilution air. I am sponsored by a broker but want to use an assumed name for my advertisements. Inspectors are not required to inspect to trade or industry association standards. What is the difference between an assumed business name and a team name? The Texas Real Estate Act (TRELA) is state legislation that sets standards for how real estate agents conduct themselves in Texas. Is a licensed attorney required to hold a real estate license to act as a broker? See, for example, Rules 535.4, 535.5,and 535.131. (1) a transaction is for a residential lease less than one year and a sale is not being considered; Once TREC makes a determination, TREC has 30 days to notify the person of the determination. Is a license holder acting as a principal required to provide a party with written information relating to agency? They should comment on visible damage regardless of the underlying cause and note it as a deficiency on their report, but may not assess that the damage was specifically caused by wood destroying insects. [TRELA 1101.351(c)]. These course approval form revisions were recommended by the Education Standards Advisory Committee. If the business entity is a series LLC, you must include a copy of the Certificate of Filing from the Secretary of State's Office with the Franchise Tax Account Status page. Can TREC give me information about what codes the inspector is referring to? The testing pressure is always higher than the normal operating pressure of the system. Can an associated broker use his or her own assumed business name in advertising? In that case, inspectors are required to do their best to determine whether the door is fire-rated and to report accordingly. A TREC contract form, however, is intended for use primarily by licensed real estate brokers or sales agents who are trained in their correct use. Inspectors are not required to remove water heater covers to inspect the water heater. Frequently Asked Questions | TREC Language related to license reinstatement is removed from535.56. No. The broker must provide a monthly accounting of trust money if there has been any activity in the account. Is an inspector required to determine if a light fixture is approved for its location over a bathtub or shower? Can a license holder offer to give a $50 gift card to an unlicensed person for referring a potential lessee or buyer? If the seller has accepted your offer, you may have a binding contract. In 22 TAC 535.58, proposed changes are made to remove references to residency requirements, which were removed from Chapter 1101, Texas Occupations Code, as a result of the agencys most recent Sunset review andwill limit an existing regulation to correspond with applicable law. Subsection (a) is being amended to correct a typographical error in the subsection. The order must be the result of a complaint matter that resulted in an agreement with the license holder or registrant or certificate holder from an informal settlement conference or an enforcement order. The intermediary and any associated license holders appointed by the intermediary broker are prohibited from disclosing, without the written authorization from the seller, that the seller will accept a price less than the asking price or that the buyer will pay a price greater than the price submitted in a written offer. These Acts establish the makeup of the Commission and its advisory committeesand outline procedures by which a person can become real estate license holders in Texas. The proposed change in 22 TAC 535.66(c)(1) is made to reflect current course approval practice by the Texas Higher Education Coordinating Board. Some TREC licensed home inspectors are also licensed wood destroying insect inspectors, and therefore, may inspect a home for termites, etc. 30-16, Residential Condominium Contract (Resale), Standard Contract Form TREC No. The proposed removal of the venue provision in subsection(e)(2) of 535.71 is made to be consistent with current State Office of Administrative Hearing processes. If a broker does not have a written agreement to represent the buyer, what recourse does the broker have if another broker steals a client? Shouldnt the inspector have told me this unit was about to fail? In limited circumstances, TREC may order a license holder or registrant or certificate holder to pay a refund to a consumer. A licensed broker is prohibited from sharing compensation with anyone who acts in the capacity of a broker but is not licensed as a broker [TRELA 1101.651(a) and 1101.652(b)(11)]. There is no requirement that a phone number or email address included in an advertisement belong to the broker. The heading to Section 1101.552, Occupations Code, is amended to read as follows: . [Rule 535.154(a)(5)]. TREC does not have jurisdiction over manufacturers or dealers of manufactured homes. Our $500 earnest money had been deposited with a title company and they said they wouldn't return it without a release signed by the seller, which the seller won't sign. TREC does not have jurisdiction over title companies. Rules and Laws Our license holders are governed by the Texas Real Estate License Act, the Inspector Act, and the Timeshare Act. [Rules 535.2(c), 535.146(c)(7).]. Additionally, in the Unimproved Property Contract, the Sellers Disclosures paragraph has been amended to: (i) add check boxes to each disclosure item to indicate whether the seller is or is not aware; and (ii) add two additional disclosures relating to whether the property is located in a floodplain or if any tree located on the property has oak wilt. TREC attorneys can provide general advice about the applicability or interpretation of the provisions of The Real Estate License Act and TREC Rules but cannot, with few exceptions, give advice pertaining to specific matters or transactions, other laws, or civil matters. TREC does not have jurisdiction over licensed repair providers. Can an out-of-state broker conduct brokerage business from another state by mail, phone, the Internet, or other medium? If so, what is the minimum distance the damper should be open? Subsection (b) of 535.55 also contains a proposed change recommended by the Education Standards Advisory Committee that would require a sales agent to complete the 30-hour qualifying real estate brokerage course as part of the additional 90 hours of qualifying courses that must be completed by the expiration date of the sales agents initial licensing period. Can a license holder offer to enter an unlicensed person in a drawing to win a cruise for referring a potential lessee or buyer? Question is not clear. You cannot use either company name because each implies that Sally, a sales agent, is in charge. [TRELA 1101.005(1)] The Texas licensed attorney can do everything a broker can do except sponsor sales agents, or act as the designated broker for a business entity licensed by TREC. [Rule 535.220(e)(3)] Also, acceptance of a fee from a service provider may violate the Federal Real Estate Settlement Procedures Act (RESPA), which prohibits certain referral fees and kickbacks. [TRELA 1101.354(2)] Each applicant is evaluated individually and TRELA does not contain a list of crimes or number of crimes that would automatically disqualify an applicant from obtaining a license. Otherwise, the guide needs to be licensed in accordance with 1101.002(1) of TRELA. Will I need to take both sections of the exam when I reapply? Your sponsoring broker should review your advertising because your sponsoring broker is responsible for ensuring that your advertising complies with TRECs advertising rules, and both you and your sponsoring broker can be disciplined if your advertising violates TREC rules. [TRELA 1101.652(b)(11)]. The brokers name in at least half the size of the largest contact information for any sales agent, associated broker, or team name contained in the advertisement. Do partnerships need to be licensed if real estate brokerage activity is performed under the partnership name? As a result, 535.93 is no longer necessary. Yes, unless the person is an employee of the owner of the apartments or otherwise exempt, residential rental locators are required to be licensed as either a real estate broker or sales agent. This must be done before making the payment. TREC Rules do not prohibit a broker from using the word team or group anywhere in a brokers licensed or assumed business name. The proposed changes to 22 TAC535.74 are being made to reflect the fact that in 2021, a new eight-hour non-elective coursethe Inspector Legal and Ethics and Standards of Practice Reviewreplaced the two four-hour courses in 2021. I passed one section of the exam and my application has expired. A broker may not enter into a net listing agreement unless the principal requires a net listing and the principal is clearly familiar with the current market values of real property. Paragraph 2.A(1) is amended to add a reference to a exhibit. The formation of a real estate contract requires "consideration" for the contract to be binding. I listed my property for sale with a broker and the broker has done nothing about selling the house.