TREC Seeks Your Feedback on Proposed Broker Succession Rule
In May, the Texas Real Estate Commission (TREC) proposed a new rule to address what happens when a business entity’s designated broker passes away.
Currently, Texas law requires a licensed business entity to have a designated broker who meets specific requirements. If this broker dies, both the business entity’s license and any sponsored sales agent licenses become inactive. This means that neither the entity nor the sales agents can perform any real estate services requiring a license, even if they are in the middle of a transaction.
The proposed rule offers a helpful solution. If a business entity sponsors sales agents, their licenses will not become inactive immediately upon the designated broker’s death. Instead, there will be a 14-day “safe harbor” period. During this time, the entity and agents can continue to operate while they appoint a new designated broker before the licenses become inactive.
TREC wants to hear from you! Share your thoughts on this proposal by going to TREC’s comment form and selecting “535.124 – Death of a Designated Broker” from the dropdown menu. You can submit your comments until July 7. The rule could be adopted as early as the August 19 TREC meeting.
Remember, your feedback is important!