TREC Adopts Rules, Proposes New Form, Appoints Committee Members
The Texas Real Estate Commission met early November, adopting new rules, proposing a new form to be voted on in February 2024, and appointing the inaugural Broker Responsibility Advisory Committee.
Visit TREC’s website for all meeting materials.
Adopted Rules
Business Entity Registration
Effective January 1, 2024, license holders with LLCs and S-corporations used for the sole purpose of receiving compensation can register those entities with TREC rather than having to obtain a separate business entity license—as long as certain requirements are met. TREC adopted Rule §535.5, which outlines the requirements business entities must meet to be eligible for this exemption from licensing.
A business entity is not required to be licensed if the business entity:
- Receives compensation on behalf of a broker or sales agent that is earned by the license holder while engaged in real estate brokerage;
- Performs no other real estate acts requiring a license
- Is a limited liability company or S-corporation
- Is registered with TREC
- Is at least 51 percent owned by the license holder on whose behalf the entity receives compensation.
This article from TREC outlines the change in detail.
Additional Required Notice in Wholesale Transactions
TREC adopted rules to comply with statutory changes passed during the most recent legislative session requiring a disclosure be made to the original seller in wholesale/equitable interest transactions and that the disclosures be in writing.
Penalties for Violations of the Obligation to Respond Timely Rule
TREC adopted a rule allowing administrative penalties of $100-1,500 per violation per day for a broker’s or sales agent’s failure to respond timely to parties or other agents in a transaction (Rule §525.157).
Proposed Form
Notice to Purchaser of Special Taxing or Assessment District
TREC proposed a new form for sellers who live in a water district to use when disclosing special tax assessments. Recent legislation replaced the different disclosure notices related to tax assessments made by water districts with a single notice. Water districts are required to post their own notice online (if required by the Tax Code to have a website); however, if the district does not have the notice on its website, this form would allow a seller to complete this proposed form using information obtained from the district.
Appointments to the Broker Responsibility Advisory Committee
TREC in August established a new committee to advise the commission on issues relating to broker responsibility, with the first members announced at this meeting. The following members of Texas REALTORS® were appointed:
- Two-year term: Ashley Conlon (MetroTex), Larry Frawley (Houston), Sammy Scoggin (Beaumont)
- Three-year term: Rina Camhi (Houston), Marvin Jolly (Collin County), Michael Mengden (Houston)
- Four-year term: Marion Napoleon (MetroTex), Brian Sales (Permian Basin), Ty Williams (MetroTex)
- Alternates: Bob Baker (Collin County), Ashton Theiss (Greater Fort Worth)
Source: Texas REALTORS®