TREC Adopts and Proposes Rules Following Legislative Session

The Texas Real Estate Commission met August 7 and adopted and proposed several rules. Visit TREC’s website for all meeting materials.

Adopted Rules

Consumer Protection Notice (TXR 2503, TREC CN 1-5)

TREC updated this form to remove references to the real estate inspection recovery fund, which was eliminated by House Bill 1363 in the most recent session of the Texas Legislature. The updated version is now available on

Seller’s Disclosure Notice (TXR 1406, TREC 55-O)

TREC updated this form to include a spot to note if the seller is aware of whether the property has fuel gas piping and what type. The updated form is mandatory Sept. 1. Texas REALTORS® has updated its seller’s disclosure notice, which is available on and through zipForm and other forms vendors.

Earn CE Credit by Attending a Commission Meeting

Allows license holders to receive up to 4 hours of CE credit for attending one commission meeting per license period. Previously, license holders had to attend the February commission meeting to receive credit. License holders must attend the meeting in its entirety; no partial credit for attendance will be awarded. (22 TAC §535.92)

New Broker Responsibility Advisory Committee Established

TREC established the Broker Responsibility Advisory Committee, which advises the commission on issues surrounding broker responsibility. The Broker Responsibility Advisory Committee replaces the Broker Responsibility Working Group. If you are interested in applying for the new Broker Responsibility Advisory Committee, visit TREC’s website. (22 TAC §535.46)

Proposed Rules

The following rules will be voted on at the commission’s next meeting in November.

Requirements and Process for Business Entity Registration

Currently, business entities that receive compensation on behalf of a license holder must be licensed as a broker. Senate Bill 1577 allows certain entities—limited liability companies and s-corporations—to register with the commission in lieu of obtaining a license. To be eligible for registration, these exempted entities must perform no acts of a broker, other than receiving compensation, and be at least 51% owned by the license holder on whose behalf the business entity receives compensation. The proposed rule changes reflect this statutory change and establish fees for such registration ($140) and later certification of compliance with the requirements ($70).

Under the proposed rules a a license holder will be required to notify the commission in writing not later than the 10th day after the date the business entity no longer qualifies for the exemption.

Additional Disclosure Required when Wholesaling/Selling Equitable Interests in Real Property

This rule would require a person selling an option or assigning an interest in a contract to purchase real property to disclose in writing the nature of the equitable interest to both the seller and potential buyer. The current rule requires disclosure (not necessarily in writing) to a potential buyer. The update to this rule reflects the statutory changes enacted in Senate Bill 1577. (22 TAC §535.6)

Penalties for Failure to Comply with New Obligation to Respond Timely Rule

This rule would allow for an administrative penalty of $100-$1,500 per violation per day for violations of the new Obligation to Respond Timely rule (§535.157). (22 TAC §535.191)