Rule 535.153 states that §1101.652(b)(22) of TRELA does not prohibit a license holder from soliciting a listing from the owner while the owner's property is subject to an exclusive listing with another broker, provided the listing does not commence until after the current listing expires. A license holder's bankruptcy does not affect a pending complaint or limit disciplinary action by TREC. Rule 535.52(b) also addresses conduct that tends to demonstrate that an applicant does not possess the requisite honesty, trustworthiness or integrity. The lack of a damper clamp is required to be reported as a deficiency when a gas appliance or artificial gas logs (but not merely a log lighter pipe) is present. With what agency should I file a complaint? of Savings & Mortgage Lending at, Property Tax Consultants (see the Property Tax Consultant Board of the Texas Dept. Must the permission of the owner authorizing the agent to offer the unit for rent be in writing? [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. We don't know, since you will be governed by the laws in that state. You can contact them at for information on the requirements to obtain a license to inspect for mold. No. If I am buying, selling or leasing property for a relative, do I need to disclose that I have a real estate license? Yes, as with all license holders, this can only be done with the prior consent of the person the locator represents. My buyer only has $3000 in closing costs. Can my broker's real estate office offer my inspection services to their clients? What happens now? Does TREC have an improved commercial earnest money contract form? Under Texas law, a license holder may not “create a misleading impression” in their advertisement. In response to the 2nd question, an inspector must keep in mind that his role is primarily to document the condition of the home at the time of the inspection per §535.227(b)(1). The requirements for emergency escape and rescue openings in sleeping rooms and the sill heights and sizes of the emergency escape openings in sleeping rooms have varied through the years. The Commission does not have jurisdiction over title companies. Does a lease for a term of longer than one year and a contract for the sale of real estate need to be in writing to be enforceable? You should consult with a private attorney for advice regarding termination of your contract. The latest Texas REALTOR ® Magazine Minute shows the correct earnest money deadline for three possible scenarios so you can be confident in your own … For more information, see the Complaint Overview manual. Yes, but a locator will be required to first obtain the consent of the apartment complex if the locator does not represent the tenant. I’m buying a house. Can an attorney get a broker license without first being licensed as a sales agent? [Rule 535.154(a)(5)]. Can a license holder offer to enter an unlicensed person in a drawing to win a cruise for referring a potential lessee or buyer? [Rule 531.1]. You will not post any defamatory, discriminatory, libelous, threatening, vulgar, sexually explicit, abusive, profane, rude, or obscene content (including comments); b. [Rule 535.155(b)(1)], Yes. Then click on the license holder’s name from the list that you are given. This is a donation and not a rebate. As copper gas line material is only a concern in areas where there may be corrosive additives in the gas supply, the presence of copper gas line material is not required to be reported as deficient. Campground membership sales are regulated by the Texas Secretary of State’s 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. Further, TREC will consider all advertisements in their entirety and if an email address or URL] makes the advertisement misleading or deceptive, it violates the law. [See §§535.2(g), 535.154, and 535.155 (effective May 15, 2018); TRELA 1101.652(b)(23)]. Failure to repay a loan constitutes a breach of your private agreement with the license holder and is not a violation of TRELA or the Rules. It is not a violation of TRELA or the Rules for a license holder to rebate a portion of their compensation to a party in the transaction. [TRELA §1101.652(b)(1)]. The material provided here is for informational purposes only and is not intended and should not be considered as legal advice for your particular matter. Am I entitled to the earnest money? Yes. What are the required areas for exhaust ventilators? If you are a member, you may find a listing agreement form that meets your needs through TAR. The primary duty of the agent is to represent the interests of the agent’s client, not the agent's own interests. In Texas, business names and "DBA"s are regulated under common law (deceptively similar names may give rise to a private cause of action) and "notice" laws which may provide certain presumptions or tacit protections to names recorded at the local county clerk's office or with the Secretary of State. Does the use of the TREC Disclosure of Relationship with Residential Service Company form (RSC-2) apply to both sale and lease transactions? Do I need a license to lease or rent real property if I am an employee of the property owner? Be sure to sign it. Can I file a TREC complaint against the agent? The listing broker can agree to reduce the commission if requested by the seller without violating the prohibition on splitting. Is the definition of accessible, as applied to gas appliance connections, left to the reasonable judgment of the inspector? No. By interacting with any of our blog posts, you agree to comply with the following terms and conditions: Texas REALTORS®, in its sole discretion, reserves the right to remove any content you have uploaded, posted, or submitted onto any of our blog posts if we believe that it violates these terms or conditions. Rule 535.155 requires each advertisement to include the following items in a  readily noticeable location in the advertisement: To be eligible for a real estate license, applicants must prove to TREC that they have the required honesty, trustworthiness & integrity. Section 535.228(c)(3) of the Standards of Practice do require inspectors to report as a deficiency a starter course tab that is not sealed material. This notice must be in writing. A license holder is not required to provide the statutory written statement at the open house. A buyer representation agreement is intended to be a legal and binding contract. We also accept copies of tax records which indicate ownership. 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. 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)]. [TRELA §1101.803, Rule 535.2(a)] Despite this flexibility, a sales agent may not lawfully engage in brokerage activity unless the sales agent is associated with, and acting for, the sponsoring broker at all times. Is a screen combustion air opening a required reporting deficiency? What are inspectors required to report regarding gas supply lines? TREC also added a provision that allows the seller to terminate the contract if the buyer doesn’t deliver the earnest money within 3 days of the contract Effective Date. Do partnerships need to be licensed if real estate brokerage activity is performed under the partnership name? Paragraph 23 in the 1-4 Family Residential Contract provides "If no dollar amount is stated as the Option Fee or if the Buyer fails to pay the Option Fee to Seller within the time prescribed, this paragraph will not be a part of this contract and Buyer shall not have the unrestricted right to terminate this contract." [TRELA §1101.002(1) and Rules 535.4 and 535.5]. A sales agent may not accept compensation for a real estate transaction from anyone other than the broker the sales agent was associated with at the time the commission was earned and may not pay a commission to a person except through the sales agent’s sponsoring broker. A key distinction between a limited function referral office and another brokerage is the agreement between the agent and the broker to limit the agent’s actions to generating referrals. The new Texas Accredited Commercial Specialist program is a stepp…, Issues Mobilization and Political Advocacy Assessment, TACS – Texas Accredited Commercial Specialist, TAHS – Texas Affordable Housing Specialist, TRLP – Texas REALTORS® Leadership Program, TRLS – Texas Residential Leasing Specialist, TRPM – Texas Residential Property Manager, How to Meet The New Earnest-Money Deadline. [Rule 535.5(d).] Can I find out online if there have been any disciplinary actions against an agent? Do the Standards of Practice require inspectors to report copper gas lines as deficient? [Rule 535.16(b)]. [TRELA §1101.351(c)] Thus, a sales agent may not work for a broker who is not the sales agent’s sponsoring broker or work for another broker or out of another broker's office. I signed a listing agreement with a broker and don’t understand some of the terms in the agreement. After living in the home a few weeks, the dishwasher started leaking and had to be replaced. You should discuss the terms of the listing agreement with a private attorney. Is a broker responsible for the actions of a sales agent who owns his or her own real estate business entity? Is the inspector required to comment on or report as deficient those gas appliance shut-off valves and connectors not visible or accessible without moving the gas appliances? The entity must, if it engages in real estate brokerage, hold a separate license. Is it illegal or unethical for an agent to present two offers to the seller at the same time? Do I have to disclose that fee to my client and use a TREC form? Can the intermediary delegate to another license holder the authority to appoint license holders associated with the broker intermediary? Do the Standards of Practice require inspectors to report double-tapped neutral wires on a panel box terminal as deficient? The guide was not licensed, but she showed us the lots and told us about possible developments on the land. No, not unless the broker agrees to hold money belonging to others or to act as an escrow agent. A broker is prohibited from sharing fees with or otherwise compensating the attorney acting as a buyer’s agent unless the attorney holds an active real estate license. I am a sales agent. Yes. The Texas Association of Realtors (TAR) provides certain forms to its members. No. If you are acting on your own behalf or on behalf of your spouse, parent or child, you must inform any person with whom you deal that you are a licensed broker or sales agent acting on that relative’s behalf. The foreign broker must either associate with a Texas broker who handles all the negotiations and other acts that require a license in Texas, including showing the broker’s listings or soliciting listing of real property, or obtain a Texas real estate license. Note, however, that the Inspector Committee may consider a change to the Standards to create an exception for garage ceiling receptacles serving garage door openers. See also Rules 535.154 and 535.155 regarding advertising. Your sponsoring broker should review your advertising because your sponsoring broker is responsible for ensuring that your advertising complies with TREC’s advertising rules, and both you and your sponsoring broker can be disciplined if your advertising violates TREC rules. The Texas Association of Realtors (TAR) provides certain forms to its members. The website for that agency is and their toll free number is 800.252.5555. Inspectors are not required to inspect anything buried, hidden, latent, or concealed. FOR EARNEST MONEY If the 3rd day falls on a Saturday, Sunday or legal holiday, the Earnest Money is due by the end of the day on the next day that is not a Saturday, Sunday or legal holiday. No, a hydrostatic test is not mandatory in the inspection of a property. No. No. Rule 531.20(d) states that providing a link to the IABS Form in a footnote or signature block of an email is insufficient. Some TREC licensed home inspectors are also licensed wood destroying insect inspectors, and therefore, may inspect a home for termites, etc. A broker is not required to directly supervise sponsored sales agents; this responsibility may be delegated to another person with the required level of experience and expertise to provide proper supervision under the law. The damage from the termites has cost me thousands of dollars to repair. It is the responsibility of the applicant to provide that evidence to TREC. The person who made the referral and received cash would be considered an unlicensed person engaged in the business of real estate brokerage [TRELA §1101.351(a)] and could be subject to administrative penalties and criminal charges. You may also wish to contact your local code enforcement authority for more information about relevant codes. There appears to me much confusion surrounding the consequences for buyers and sellers when a closing date specified in an earnest money contract for real property passes without performance. However, you should consult with a private attorney for advice on this matter. The Information About Brokerage Services (IABS) representations disclosure is not required when: [Rule 535.146(b)(1)]. Pursuant to Section 535.227(b)(3)(A)(vi) of the Standards of Practice, an inspector is not required to inspect or test metering devices. However, if you pay the seller an agreed option fee, you have the unrestricted right to terminate the contract for any reason if you give written notice to the seller during the option period. For a more detailed discussion of what an unlicensed person can and cannot do, see the article on our website titled “Use of Unlicensed Assistants in Real Estate Transactions.”. The buyer MUST DELIVER THE EARNEST MONEY within 3 days after the Effective Date = Excluding weekends or legal holidays, this is a hard date. Yes, as long as the advertisement complies with Rule 535.155 (effective May 15, 2018) regarding any restrictions that might apply. Download the PDF here. Initialed for identification by Buyer and Seller TREC NO. Can a broker share a commission or other compensation with an attorney when the attorney is a principal in the transaction? [TRELA § 1101.558], Yes, if the assumed business name of the associated broker meets the requirements for a team name since a team name must be used when the associated broker is associating with another broker. See also Chapter 209, Property Code. What do I need to send with my complaint to TREC? [TRELA §1101.756] TREC can also pursue administrative penalties not to exceed $5,000 for each violation. You can ask the broker to release you from the buyer representation agreement. We are selling our house and the buyer never paid the option fee. [TRELA §1101.002] Further to receive or maintain a license, a business entity must designate an individual holding an active Texas real estate broker license, in good standing, who is an officer, manager, or general partner of the entity to act for it. TREC will only discuss advertising questions with a broker directly. I am a sales agent, Sally White. No. Can an associated broker use his or her own assumed business name in advertising? Is the inspector required to determine the presence of Chinese drywall? Do I have any recourse against the inspector for failing to note on his report that there was a gas leak outside the home due to a corroded gas line? Do I still have to use the TREC Disclosure of Relationship with Residential Service Company form (RSC-2)? What is the estimated time frame to process an Fitness Determination (FD) form? [TRELA §1101.759] Finally, as a State Agency represented in civil court proceedings, TREC can obtain injunctive relief, including court costs and attorneys fees incurred in obtaining such relief. [TRELA §1101.357 and §1101.362, Rule 535.62(b)]. Some gas shut off valves are safety or emergency shut off devices and some are not. Know Tennessee licensing laws and/or rules concerning Principal Broker supervision including branch offices, exemptions to licensure, adverting, and Earnest Money/Security/Trust Deposits. Inspectors are not required to remove water heater covers to inspect the water heater. [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. Paragraph 5 is amended to require Earnest Money to be delivered within 3 days after the Effective Date. On the first page of the newly updated Texas contracts, it states that “Within 3 days after the Effective Date, Buyer must deliver $___ earnest money … You will need to consult a private attorney. Yes. At the conclusion of the informal conference, the Commission member or TREC staff may propose an informal settlement. The Commission does have jurisdiction to open a complaint that alleges a License Holder discriminated against an owner, potential buyer, landlord, or potential tenant on the basis of race, color, religion, sex, disability, familial status, national origin, or ancestry. An inspector may request inactive status in writing at any time. Listing agreements are private contracts between the property owner and the real estate broker, not the sales agent. I did not get it inspected since the seller and the broker said everything was in good shape. 3. unsafe? I’m changing sponsoring brokers. [Rule 535.63(a)] To be eligible for a Texas license, an out-of-state license holder must meet all current Texas licensing requirements found on our website. Yes. Only with appropriate disclosure and consent. No. Any amount of cash or a credit or bonus toward rent owed is also not allowed as a reward for a referral. Although a license holder may not pay an unlicensed person valuable consideration for referring a potential lessee or buyer, gifts of merchandise with a retail value of $50 or less are not considered valuable consideration. I am having problems with a manufactured home that I purchased recently and wish to file a complaint against the manufacturer and broker/dealer. As long as the attorney is licensed in Texas, they are exempt from the licensure requirements. [TRELA §1101.652(b)(11) & (26)] However, a license holder may compensate an unlicensed person from a foreign country or state that does not require a license to engage in real estate brokerage activities, if the person otherwise complies with the law of the foreign country and practices there as a real estate broker. 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. The Standards of Practice do not require an inspector to dig up gas lines in order to determine their condition. However, TREC does not have the authority to require a broker to release you from the agreement. Inspectors are not required to measure the headroom clearance of every flight of stairs. Can a sales agent work in a different office than the sponsoring broker’s office? In that case, inspectors are required to do their best to determine whether the door is fire-rated and to report accordingly. You can ask the original broker to release you from the agreement or contact a private attorney to advise you if you can terminate the listing agreement in some other fashion. [Rule 535.147(d)]. The Standards of Practice do not address tamper-resistant receptacles. TREC publishes the Information About Brokerage Services Form, TREC No. Yes, but if you offer, recommend, or promote the use of a service provider and expect to receive compensation from the service provider when a party uses the service, the ad must disclose that you may receive the compensation. Yes and yes. If a gas shut-off valve cannot be located, this should be reported. Is the inspector required by the Standards to state or explain a condition as a hazard to the consumer? Is a real estate broker's license required to call an auction involving real property? See, Evidence of registration of the assumed business name with the Secretary of State or in the county or counties where the broker does business is adequate proof of authority to do business under that name. No. At the time of first substantive communication with a party relating to a proposed transaction regarding specific real property, a license holder must provide a written notice regarding agency, commonly referred to as “Information About Brokerage Services” or IABS Form. Yes. The transaction has fallen through and now the broker won't return the earnest money. 5. The license holder who offers to or actually pays cash to an unlicensed person for a referral is subject to disciplinary action. No. A residential service contract is part of a transaction but I am not getting paid by the residential service company. [TRELA §1101.005(4)] However, it is clear from the statute that an auctioneer may not perform any act of a broker or sales agent, such as the preparation of a written agreement for the transaction. The formation of a real estate contract requires "consideration" for the contract to be binding. When a rental locator represents an apartment complex, the locator needs the consent of the apartment complex. Texas REALTORS® is committed to advocating for a strong real estate industry, advancing a culture of continued learning, and staying ahead of issues concerning members and their clients. However, an inspector who advertises or represents that he or she will inspect to a higher standard could be subject to disciplinary action for failure to do so. What level of precision is expected for the “approximation” of average insulation depth? If the promise was made at closing in front of the title company closing agent, you could include this witness’ name and contact information and describe what this witness may know. Can I take the buyers I represent with me to the new broker if the buyers signed buyer representation agreements? Sam A. Moak is an attorney with the Huntsville law firm of Moak & Moak, P.C. The buyer's earnest money will not be returned if the buyer does not obtain financing (d) The option period is explained. You should contact your attorney to obtain advice with respect to any particular issue or problem. Is a broker responsible for the actions of a sales agent who transacts business from a separate location? Do the Standards of Practice require inspectors to report as deficient a gas log fireplace with a damper that has not been blocked open? The sales agent must turn all money received over to the sales agent's sponsoring broker. Who registers an assumed business name, team, or alternate name? 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. Can TREC review my advertising and advise me whether my advertising complies with TREC Rules? Looking to close your first deal? Is a licensed attorney required to hold a real estate license to act as a broker? If you made the referral while you were active, however, you may collect that fee while you are expired or on inactive status. Assumed Business Name: Broker [Rule 535.154(d)(1)], Alternate Name: Individual License Holder [Rule 535.154(b)(1)]. Your rights against the license holder may be subject to a two-year statute of limitations. No, only a licensed plumber may perform a hydrostatic test on a system within a home. The Commission members have instructed the staff to enforce the law vigorously. Do I need a license to sell or lease mineral or mining interests? What should I do if TREC doesn’t promulgate a form that I need? The Mediator, acting as a facilitator between the complainant and license holder, assists the parties in trying to reach an agreed settlement. The license holder, registrant or certificate holder may accept or reject the settlement offer. Texas REALTORS® provides content through various online platforms, including this blog. This change requires that the earnest money be delivered to the escrow agent within 3 days of the contract Effective Date and if … No. Those rules prohibit a license holder from adding anything except factual matters or business details to a form adopted by TREC for mandatory use. Unless an exception applies, the requirements apply to all proposed real estate transactions. trec contract. There is no requirement that a phone number or email address included in an advertisement belong to the broker. If Buyer obtains the Subdivision Information within the time required, Buyer may terminate the contract within 3 days after Buyer receives the Subdivision Information or prior to closing, whichever occurs first, and the earnest money will be refunded to Buyer. TREC is unable to advise you on how to fill out a private contract form. Yes. 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. Can a broker be the designated broker for more than one business entity? Otherwise, the buyer should check Paragraph 7D1. Under inspector advertising Rule 535.221, an inspector may not engage in false or misleading advertising. [Rule 535.155 (effective May 15, 2018)] You may advertise an inspector’s 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 buyer may, however, seek to be released from the buyer representation agreement. Most buyers in your client’s 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 “yes” answer to the criminal questions on a reinstatement application requires an applicant to submit a Background History form along with copies of the offense court records and a written explanation. If the rebate is to a party the license holder does not represent, the license holder must obtain the consent of the party represented by the license holder before making the payment. See [Rule 535.146(c)(6)]. The standards of practice are not based on a specific requirement such as those promulgated by model building codes. 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