Can the team name used by an associated broker be the same as the assumed name used by the associated broker when he or she is not associating with another broker? A license holder's bankruptcy does not affect a pending complaint or limit disciplinary action by TREC. Paragraph 5D provides "If no dollar amount is stated as the Option Fee or if Buyer fails to deliver the Option Fee within the time required, Buyer shall not have the unrestricted right to terminate this contract under this paragraph 5.". [TRELA 1101.558(b-1)]. However, TREC does not have the authority to require a broker to release you from the agreement. How do I change my business physical address? However, Rule 541.1(a) does list the types of criminal offenses that TREC considers directly relate to the duties and responsibilities of a license holder and tend to demonstrate a persons inability to represent the interest of another with honesty, trustworthiness and integrity. A person using a TREC form assumes all risks associated with its use. There is no requirement that a phone number or email address included in an advertisement belong to the broker. It is up to the reasonable judgment of the inspector to determine if the situation encountered during the inspection is or is not a hazard for the inspectors client. What are my rights as a tenant? An advertisement does not include a communication from a license holder to the license holder's current client. If the individual was only acting in one capacity, you should file the complaint with the agency that regulates that function. IABS 1-0, that license holders must use to comply with the statute. Once TREC makes a determination, TREC has 30 days to notify the person of the determination. It depends. Can I take the buyers I represent with me to the new broker if the buyers signed buyer representation agreements? If you wish to file a complaint against a title company in Texas, you need to contact the Texas Department of Insurance. Paragraph 2.A adds the term Counties to reflect the fact that farm and ranch properties could be located across two or more counties. You may want to have a private attorney create a contract for you, or you may check with some of the inspector trade associations to see if they provide templates of pre-inspection contracts. Section 535.229(a)(2)(B) states that an inspector is not required to test an arc-fault circuit interrupter device when the property is occupied or when damage to personal property may result, in the inspectors reasonable judgment. Can I advertise a service provider such as an inspector, moving company, or repair contractor on my website? Please note that an inspector is not required to designate a condition as safe. Yes. For further information, please see Sections 1102.001 and 1102.002 of the Texas Occupations Code and Rule 535.223. A properly constructed and properly functioning bathtub or shower should drain virtually all water (with the exception of minimal amounts that remain due to the surface tension of the water). The second proposed change is found in 535.2(j). For example, you may have paid a fee to obtain an option period in the contract. [Rule 535.2(h)], The earnest money must be deposited by the close of business of the second working day after execution of the contract by the principals, unless a different time is agreed upon in writing by the principals to the transaction. This disclosure may be oral or in writing. While the sale of a manufactured home (no real estate) requires a separate license from the Texas Department of Housing and Community Affairs (TDHCA), under a TDHCA exemption a TREC license holder can sell one manufactured home during a 12-month period without a TDHCA license (see Tex. As a broker, am I the only person who can sign a check written on my trust account? In order to mirror the format of 535.216 (which relates to inspectors), the relevant language of 535.93 has been added to 535.91. 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. Any rights that you have to terminate the contract will be contained in the contract. Do the Standards of Practice require inspectors to determine the headroom clearance on stairs or to report inadequate clearance as a deficiency? How long does a license holder have to keep financial and real estate transactions on file? Contract forms adopted for mandatory use are on our website. May I both inspect the home for and sell to the same person? No. If there are any deficiencies due to fire or other causes, those deficiencies must be reported. [TRELA 1101.558(c)]. In that case, inspectors are required to do their best to determine whether the door is fire-rated and to report accordingly. The sponsoring broker is still responsible for the sales agent's actions, even when the sales agent does not work out of the brokers main office. Does the buyer have to deliver the earnest money to the escrow agent for a contract to be binding? TREC does not review a sales agents advertising. An advertisement cannot in any way imply that a sales agent is the person responsible for the operation of a real estate brokerage. Paragraph 7.F is revised to require that the seller: (i) provide the buyer with copies of documentation from the repair person that shows both the scope of work and payment for the work completed; and (ii) transfer, at sellers expense, any transferable warranties at closing. No. The SOP does not address the absence of a trap in a gas line. The Standards of Practice require inspectors to report as deficient the lack of a 1-3/8 solid wood or fire-rated door between a house and garage. As a result, 535.93 is no longer necessary. A listing agreement is a private contract between a real estate broker and a property owner and is not promulgated by TREC. I am not currently performing inspections, but I'd like to maintain my license. Can a non-license holder use the promulgated contract forms? 25-15, Farm and Ranch Contract, Standard Contract Form TREC No. Yes. Submit a license history from the state in which you are licensed when you file your application so we can determine if you are exempt. TREC's jurisdiction over real estate inspections is limited to inspections performed for a buyer or seller of real property in connection with a transaction. 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. The Information About Brokerage Services (IABS) representations disclosureis not required when: I recently purchased an older home that was inspected before the purchase. The terms of the contract and/or desires of the parties would determine whether the listing agreement can be extended. Occ. [TRELA 1101.651(b)] Further, a business entity that receives compensation on behalf of a license holder must be licensed as a broker. Is the inspector required by the SoP to be knowledgeable of local requirements? If the individual was acting in both capacities, you could file a complaint with both TREC and Texas Department of Savings and Mortgage Lending. The change proposed in subsection (e) of 535.2 is made to clarify who may notify the Commission of the end of delegated supervision in a situation where the delegated supervisor is or later becomes a broker. Does TREC have a promulgated listing agreement form? Is a corroded bathroom fixture that remains operable a defect and required reporting item per TREC? Can you explain them to me? Do the Standards of Practice require inspectors to report as deficient the presence of a commingled water heater drain pan drain line and a temperature/pressure relief drain line? Finally, the amended language adds that the paragraph does not apply to a fee that is not imposed by the Association even if it is collected by the Association for the benefit of a third party. The changes to the existing rules add the title of the form adopted by reference in each rule to the rule title and add clarifying language to specify which forms are for mandatory versus voluntary use by license holders. Can the intermediary delegate to another license holder the authority to appoint license holders associated with the broker intermediary? Yes, Commission Rule 535.3 permits you to receive any compensation through your current sponsoring broker or the broker who sponsored you at the time you earned the right to the compensation. A license holder may reproduce the IABS Form for the purpose of prefilling the Broker Contact Information section. A single drain line for a temperature/pressure relief valve and the pan is not required to be reported as a deficiency. The proposed changes update terminology for consistency and clarity throughout the chapter. Is a screen combustion air opening a required reporting deficiency? The listing broker should inform the seller that the broker is prohibited from sharing compensation with the attorney. Click on the "Next" tab after reading the information on the"Manage my Sponsorship (Sales)" introduction page. TREC only has jurisdiction in situations where the manufactured home is attached to the real estate when you purchased it and your complaint is against a real estate license holder that was involved in that purchase. You may wish to consult with a private attorney regarding your legal rights as a homeowner. Is a real estate broker's license required to call an auction involving real property? If the broker does not appoint associated license holders to represent the buyer and seller respectively, then the broker and/or agent may not offer advice and opinions relevant to the real estate transaction to either party and must not favor one principal in the transaction over the other principal. I am renewing my license. You may also want to consult with a private attorney regarding your legal rights as a homeowner. Yes. Requirements for an assumed business name and team name are set out in Rule 535.154. Otherwise, the buyer should check Paragraph 7D1. Paragraph 7.H is amended to replace the term residential service company with the terminology used by the Texas Department of Licensing and Regulation, which as of September 1, 2021, regulates residential service companies. However, under the home inspector license issued by TREC, the inspector MAY NOT comment on whether termite infestations exist. No. The first proposed change is found in subsection (i)(5). However, the amount ordered may not exceed the amount the consumer actually paid to the license holder for the services subject to TREC regulation and may not require payment of other damages or estimate harm. This could tend to mislead the public that the associated broker is in charge of the brokerage operation. Both the Acts and TREC rules are a great resource for helping consumers know what to expect from a real estate service provider. If a real estate broker has an escrow account, can the broker keep any interest that is earned on the money on deposit? Include your name as it appears on the application, a copy of your government-issued photo ID, and your telephone number to TREC. However, many of the college and law school courses completed by the attorney could count toward the education requirements. [Rule 535.155(d)]. Can a license holder offer to enter an unlicensed person in a drawing to win a cruise for referring a potential lessee or buyer? I bought a house from a builder and the builder gave me a 12-month warranty. No. A licensed TREC inspector is not required to use the promulgated form or the Standards of Practice when inspecting property other than one to four family residential. Is the absence of gutters a defect and required reporting item per TREC? [TRELA 1101.652(b)(24)]. In addition, pursuant to Chapter 53 of the Texas Occupations Code (www.statutes.legis.state.tx.us/) and Rule 541.1(c), TREC will consider evidence of certain mitigating factors and rehabilitation. [TRELA 1101.351(a)(2), Rule 535.4(k)]. To become active, a professional inspector would need to send in the Return to Active Status form (or, for apprentice or real estate inspectors, the sponsorship form) along with the applicable fee and the required proof of insurance. Paying the deferral fee allows you to continue to be active in real estate activities and provides an additional 60 days from your expiration date to complete your CE. If the license holder did not participate in that specific transaction, he cannot state or imply that his actions resulted in the sale of that property. 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. An inspector who meets all other renewal requirements but does not show proof of insurance will receive an inactive license (which does not permit the inspector to perform inspections). Is the definition of accessible, as applied to gas appliance connections, left to the reasonable judgment of the inspector? My corporation owns property. 30-16, Residential Condominium Contract (Resale), Standard Contract Form TREC No. Assumed Business Name (also known as a dba) is another name for the brokers business that can be used by all sponsored sales agents and brokers associated with this broker. The amendments clarify that when multiple boxes are checked for a particular item on the report form, the inspector must also explain the reason for checking multiple boxes. Please see TREC rule 537.28 for changes that apply to all contract forms. Is the inspector required to perform any inspection of the meter? Do I have to tell you about my crime? TREC may also adopt rules to establish a policy regarding certain practices. Yes. Question is not clear. My agent moved to another brokers office and I want them to continue to handle my listing. This means that if you wait until your renewal to notify the Commission of your felony, you could be subject to the penalty, in addition to any disciplinary action related to the crime. Can a name used in advertising be both an assumed business name and a team name? Paragraph D.2(a) and (b) are amended to clarify the casualty insurance requirements and new paragraph D.2 is added to address casualty insurance. Mechanical components like dishwashers can and will break down. Keep in mind that the associated broker registers the assumed business name that is used when they are not associating with another broker and the broker that they are associating with registers the team name being used when associating with that broker. Sec. Texas Real Estate Act: Basic Provisions and Subchapters A-I Principles of Real Estate 1 The Texas Real Estate License Law (TRELA) is contained in Title 7, Chapter 1101 of the Texas statutes. Thus, for example, any authorization language in the special provisions of the standard Resale contract is not separate consent by a seller. [Rule 535.4(i). What qualifies as proof of ownership of the business entity? Can I broker real estate located in another state? In addition, an applicant may not have to take the national portion of the licensing examination if the applicant maintains a license equivalent to the license being applied for and has already passed a comparable national examination that is accredited by a nationally recognized real estate regulatory association such as ARELLO. Yes, Section 535.228(f)(2)(E)(i) requires inspectors to report deficiencies in weather stripping. Disciplinary action by TREC is not a prerequisite for pursuing a lawsuit against a license holder. TREC will only discuss advertising questions with a broker directly. Javascript is disabled in your browser. If installed and if visible, the installation described in your question is required to be reported as a deficiency. Is wrinkled loose carpet a defect and required reporting item per TREC? 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. Now we have changed our minds and don't want to buy the house after all. Can a license holder offer or pay cash to an unlicensed person for referring a potential lessee or buyer? The buyer may, however, seek to be released from the buyer representation agreement. Is a licensed attorney required to hold a real estate license to act as a broker? [TRELA 1101.652(b)(3)] Should you want to take legal action against the seller and/or the broker for damages, you will need to consult with a private attorney. Can a rental locator rebate a portion of the rental locators fee received from the apartment complex to a prospective tenant if the tenant uses the locators services? There are two additional amendments that were recommended by the BRWG. The inspector must use reasonable judgment in determining if the emergency escape and rescue openings are sufficient for the intended purpose of the openings for the inspectors client. Each day a violation continues can be considered a separate violation for imposition of the administrative penalties. Additionally, inthe Farm and Ranch Contract, the Sellers Disclosures paragraph has been amended to: (i) add checkboxes 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. If the buyer fails to deliver the earnest money within the time required, the seller may terminate the contract, exercise the remedies under Paragraph 15 of the contract, or both. See Rule 535.146(d) for proper procedures for handling earnest money disputes where the broker is holding the money in a trust or escrow account. 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. 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. A sales agent may own the firm but the business must be conducted through the sales agent's sponsoring broker. However, a real estate license holder's failure to deposit earnest money in accordance with the terms of the contract could form the basis of a complaint. Unlicensed individuals who conduct residential rental location activity are subject to administrative penalties and criminal charges. Both the State and National sections of the exam must be passed before the application expiration date. It depends. All license holders criminal backgrounds are rechecked upon renewal, however, this does not excuse a license holder from notifying the Commission not later than the 30th day after the final conviction. The proposed removal of the venue provision in subsection(b)(5) of 535.67 is made to be consistent with current State Office of Administrative Hearing processes. The form is also amended to replace the parenthetical following Paragraph 9, Other Modifications, with a statement that real estate brokers and sales agents are prohibited from practicing law. Yes. The term does not include an interest given as security for the performance of an obligation. The proposed changes to 22 TAC 535.224 more fully cite the applicable rules. Yes, as with all license holders, this can only be done with the prior consent of the person the locator represents. The buyer should only choose Paragraph 7D2 if there are specific repairs known at the time of the contract that the buyer wants the seller to pay for. Only an active licensed sales agent sponsored by a licensed business entity may make a referral on behalf of the brokerage, and any referral fee must be paid to the sponsoring broker. [Rule 535.147(d)]. No. Cease and Desist Order. Lines have also been inserted into the blank. I signed a contract to purchase a timeshare interest yesterday. Do the Standards of Practice require inspectors to report as deficient evidence of a past attic fire? Do I need a license to act as an on-site manager of an apartment complex? Language is also added to clarify that these fees should be prorated pursuant to Paragraph 13 of the Contract. If you are a member, TAR may have a form that fits your needs. No. Can an associated broker refer to himself or herself as a "broker" in an advertisement? Also, new 22 TAC 535.120 will create a new regulation in order to provide greater consumer protection through clarity to license holders regarding conducting licensed activity while on an inactive license status. This notice must be in writing. 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. [TRELA 1101.652(b)(1)]. [Rule 535.155 (effective May 15, 2018)] You may advertise an inspectors services, however, an inspector may not pay a fee or other valuable consideration for (1) a referral, (2) inclusion on a list of inspectors or preferred providers, or a similar arrangement; or (3) inclusion on a list of inspections contingent on other financial agreements. The broker intermediary may, with the written consent of the parties, appoint separate individual license holder associated with the broker to work with and advise the party to whom they have been appointed. Is a link to the IABS form required on my website? The license holder should inform the purchaser that the license holder is employed by the lender and give the names of several institutions to the purchaser. In addition, the IABS is not generally required when the license holder is acting solely as a principal in the transaction. Section 535.231(a)(2)(E)(ix) requires inspectors to report deficiencies in the condition of the gas distribution system. Verify contact information on the Application Summary page and click Submit. The information is not supposed to appear on a background check; however it still may by mistake. You have to provide the appropriate cancellation notice to the developer before the sixth day after you signed the contract. Is the inspector required to warn of the risk of Chinese drywall? Can an individual sales agent use an assumed business name in advertising? I already have a license. The Commission can not make a determination about the validity of your contract. The sales agent must turn all money received over to the sales agent's sponsoring broker. If a license holder is convicted of a felony or a criminal offense involving fraud it is a violation of section 1101.652(a)(1) of the License Act. A license holder should also be familiar with Rules 537.11(f)-(g). In 22 TAC 535.52(b)(4), the term denial is added to better reflect current agency practice. Although the proposed changes remove the specific topics and units listed in the rule itself, those topics and units will continue to be listed in the forms adopted by reference. TREC does not have jurisdiction over manufacturers or dealers of manufactured homes. TREC leaves the determination of "similar" names to the Secretary of State's rules or to common law remedies. You can be exempt from taking the National portion of the exam if you hold an active license in a state that participates in the National exam accreditation with ARELLO. TREC does not have jurisdiction over title companies. Can a broker be the designated broker for more than one business entity? [TRELA 1101.558-1101.561 and 1101.651(d)], Generally, in Texas, filing an assumed business name is required to put the public on notice that you are doing business under a name other than your legal name. The public needs to know the broker with whom they will have a legal agreement (remember listing agreements, etc. Yes, as long as the church member who made the referral receives nothing that may be defined as valuable consideration from the church or the license holder. I am a 25% stockholder in a corporation that holds title to a number of investment properties. Section 535.229(a)(1)(G)(vii) requires an inspector to report a deficiency in the operation of an installed ground-fault or arc-fault circuit interrupter device. None of the forms promulgated by TREC are intended for use as a contract for deed. Please see TREC rule 537.28 for changes that apply to all contract forms. Last night I reconsidered. We also accept copies of tax records which indicate ownership. Can you explain the terms to me? Is a keyed deadbolt on the interior of an exterior egress door deficient and a required reporting item per TREC? Finally, subsection (i) is removed to more appropriately reflect agency practice and jurisdiction. [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. Both TREC forms 20-14and 30-12, The One to Four Family Residential Contract (Resale) and Residential Condominium Contract (Resale), state, Any hydrostatic testing must be separately authorized by Seller in writing. Starting with the effective (final execution) date of the contract, the first day of the period starts the next day. Section 535.231(a)(3)(A) states that inspectors are not required to operate any main, branch, or shut-off valves. Paragraph 9.B(3) is amended to add the transfer of any warranties to correspond with the change in Paragraph 7F. Before a broker or sales agent sponsored by the broker can represent both the buyer and seller in a transaction, all of the following steps must occur: Under Rules 535.154 and535.155 (effective May 15, 2018), an advertisement is defined asany form of communication by or on behalf of a license holder designed to attract the public to use real estate brokerage services and includes, but is not limited to, all publications, brochures, radio or television broadcasts, all electronic media including email, text messages, social media, the Internet, business stationery, business cards, displays, signs and billboards." This includes a definition for the new term informational items, which is intended to better describe the type of information that a license holder can add to a contract form. However, if you are not a member of TAR, you should have an attorney draft the necessary documents. Can TREC obtain reimbursement of commissions paid by buyers and sellers to brokers and sales agents for compensation in real estate transactions? The proposed changes to 535.141 are made to better track Chapter 1101, Occupations Code, and to better reflect the potential for consumer harm. They are only required to conduct a visual inspection of the property, and buried gas lines are not required to be inspected. Do I need a real estate license to sell a campground membership? Do the Standards of Practice require inspectors to report as deficient the absence of weep holes along the bottom course of brick and above steel lintels? While this configuration does not comport with current codes, the Standards of Practice do not require inspectors to inspect to todays code. What requirements does TREC impose on inspectors/consultants who perform maintenance consultations? Yes. 40-10, Third Party Financing Addendum, Standard Contract Form TREC No. No. Leaving both boxes in blank in Paragraph 7D or altering the contract terms by adding language that does not enumerate specific repairs in Paragraph 7D2 could be considered to be acting negligently or incompetently if a complaint were to be filed in connection with the transaction [TRELA 1101.652(b)(1)]. No. No. The purpose of the proposed repeal is to eliminate the lookback period currently found in 535.93, which currently allows a license holder to renew after the expiration date of their license without any lapse in active licensure, as long as certain certifications are made. [Rule 537.11(a)] If you are a member of The Texas Association of Realtors (TAR), you may use a form prepared by TAR attorneys. It appears that the inspector who inspected my home before my purchase missed major termite infestation. Otherwise, you should consult with a private attorney. TREC does not consider URLs or email addresses to be advertisements in and of themselves. Yes, within certain limitations. How do I request inactive status for my sales agent license? If a buyer wishes to have a hydrostatic test performed on a home, what is required for a seller to consent to such a test? Please see TREC rule 537.28 for changes that apply to all contract forms. Associated broker means a broker who associates with and is paid through another broker under a relationship that is intended to be a continuous relationship, including but not limited to, an employment or ongoing independent contractor relationship. The Standards of Practice require inspectors to perform a visual inspection. Most buyers in your clients situation will then also elect to pay an option fee pursuant to Paragraph 23 in exchange for the right to terminate for any reason within a negotiated number of days. A broker may authorize another license holder to withdraw or transfer money from a trust account. Does TREC have a promulgated buyer representation agreement? Additionally, if you are a sales agent, Rule 535.3 permits you to receive compensation through your current sponsoring broker or the broker who sponsored you at the time you earned the right to the compensation. Some TREC licensed home inspectors are also licensed wood destroying insect inspectors, and therefore, may inspect a home for termites, etc. Paragraph numbers referenced are from the One to Four Family Residential Contract (Resale). No. [Rule 535.155(b)(1)]. Inspectors are not required to report the presence of transite pipe as a deficiency.