Yes, but with limitations. Language is also added to clarify that these fees should be prorated pursuant to Paragraph 13 of the Contract. The Addendum Regarding Residential Leases is also amended to add a checkbox in Paragraph B.1 related to notice of oral leases. However, under the home inspector license issued by TREC, the inspector MAY NOT comment on whether termite infestations exist. 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. [TRELA 1101.652(b)(23)], No. Therefore, there must be a separately signed document of authorization by the seller for a hydrostatic test. Some TREC licensed home inspectors are also licensed wood destroying insect inspectors, and therefore, may inspect a home for termites, etc. Do the Standards of Practice require inspectors to report as deficient a plumbing fixture that does not fully drain, retaining a slight amount (such as a few cups) of residual water? Yes. Inspectors are not required to report the presence of transite pipe as a deficiency. If the inspection you are proposing relates to a purchase or sale transaction, then TREC's Standards of Practice would apply, and a written report would be required. 52-1, Addendum Regarding Fixture Leases, Salespersons Employed by an Owner of Land and Structures Erected by the Owner, Certain Uses of Seal, Logo, or Name Prohibited, General Requirements for a Real Estate License, Fitness Requirements for Individual Applicant, Hearing on License Denial: Probationary Licenses, Education and Sponsorship Requirements for a Sales Agent License, Education and Experience Requirements for a Broker License, License for Military Service Members, Veterans, or Military Spouses, Approval of Providers of Qualifying Courses, Qualifications for Instructors of Qualifying Courses, Content Requirements for Qualifying Real Estate Courses, Responsibilities and Operations of Providers for Qualifying Courses, Credit for Courses Offered by Accredited Colleges and Universties, Qualifying Education: Compliance and Enforcement, Approval of Non-elective Continuing Education Courses, Qualifications for Continuing Education Instructors, Responsibilities and Operations of Continuing Education Providers, Proration of Payments from the Recovery Trust Account, Prohibited Activity While on Inactive License Status, Consent to Be Sued, Exceptions to Requirements, Initiation of Investigation; Order Requirements, Receiving an Undisclosed Commission or Rebate, Education and Experience Requirements for a License, Qualifying Real Estate Inspector Instructors and Courses, Continuing Education Required for Renewal, Registration of Easement or Right-of-Way Agents, Complaints, Disciplinary Action and Appeals. You may want to call one of the tenant assistance associations for help or contact a private attorney. [Rule 535.146(c)(2)] The Commission can take disciplinary action against you if you fail within a reasonable time to properly account for or remit money that you receive on behalf of another person. Neither loose carpet nor floor squeaks, without further evidence of deficient conditions, is required to be reported as deficient. The Texas Association of Realtors (TAR) provides certain forms to its members. 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. The absence of an anti-entrapment cover in a spa is not a required reporting item. Is the Information About Brokerage Services Form promulgated by TREC mandatory? This section gives the Commission authority to suspend or revoke a license holder that has entered a plea of guilty or nolo contendere or has been convicted of a felony or any criminal offense that involves fraud (including misdemeanors). An inspector is not required to recommend fixes. A mistake in the use of a form may result in financial loss or an unenforceable contract. No. "Real estate" means any interest in real property, including a leasehold, located in or outside this state. Effective Date and Title Company are capitalized throughout. Is a water heater covered by an insulation cover deficient and a required reporting item? It is important to remember that there will always be a single intermediary broker even if another license holder has been authorized to make the specific appointments. [TRELA 1101.558(c)]. The presence of carpet in a garage is not required to be reported as a deficiency. I am having problems with a manufactured home that I purchased recently and wish to file a complaint against the manufacturer and broker/dealer. This disclosure may be oral or in writing. 44-3, Addendum for Reservation of Oil, Gas, and Other Minerals, Standard Contract Form TREC No. 2. The proposed amendments to 535.141(i) will limit an existing regulation to correspond with applicable law. A license is also required for any person who controls the acceptance or deposit of rent from a resident of a single-family residential real property unit. The proposed amendments to 535.222 address the situation where payment is received prior to the scheduled inspection and require the report to be delivered to the client within two days of completion of the inspection. Is observance of gas shut-off valves and connections with a digital camera placed behind or under appliances considered a reasonable method for discovering deficiencies in inaccessible areas? Is a locator permitted to rebate a portion of the locator's fee to the tenant? 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. The primary purpose of the license law to protect the public from dishonesty or incompetence among real estate agents. You may also wish to consult with a private attorney before any possible warranties or other legal remedies expire. 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's bankruptcy does not affect a pending complaint or limit disciplinary action by TREC. Yes, but the ad must disclose that payment of the rebate is subject to the consent of the seller and if the rebate is contingent upon certain restrictions, such as the use of a particular service provider, the ad must contain a disclosure that payment of the rebate is subject to restrictions. The Addendum Regarding Fixture Leases is also amended to add a checkbox in Paragraph B.1 related to notice of oral leases. The Standards of Practice do not require an inspector to dig up gas lines in order to determine their condition. The proposed amendments to Chapter 535 are made as a result of the Commissions quadrennial rule review. If a homeowner wanted to hire a consultant to perform a cursory, major defect visual inspection, including the foundation, roof, plumbing, electrical, and major appliances, would TREC require any written report? A name used in advertising by an associated broker that is not the associated brokers licensed name must be registered as a team name by the broker he or she is associated with and meet all the requirements for a team name. If the license holder is an agent of the buyer, the license holder owes a fiduciary duty to the buyer. Can a license holder be disciplined for paying a commission or a fee to or dividing a commission or fee with an unlicensed person for services as a real estate agent? The corresponding reference to the Commissions form Addendum containing Notice of Obligation to Pay Improvement District Assessment is removed from Paragraph 22. The unlicensed person may share in the income earned by a real estate brokerage if the person engages in no acts for which a license is required. Your broker must maintain, on a current basis, written policies and procedures to ensure that each sponsored sales agent complies with the Commissions advertising rules. How long does a license holder have to keep financial and real estate transactions on file? What are the penalties for unlicensed brokerage activity? On my inspection report, the inspector reported certain things in the house as safety hazards or code violations. At a minimum, bathrooms and water closets that that do not have an operative window must be reported as deficient if they lack an exhaust fan that vents to outside air. A resolution, minutes or other official record of the business entity. 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. Under Texas law, a license holder may not create a misleading impression in their advertisement. Do the Standards of Practice require inspectors to report as deficient the lack of a dishwasher power receptacle in an adjacent cabinet (for example, under a kitchen sink)? Before the earnest money was deposited, the buyer backed out. The Real Estate License Act is a part of the Texas Occupations Code, Chapter 1101. Paragraph 2.A(1) is amended to add a reference to a exhibit. Written comments on proposed rulesare accepted for 30 days after publication in the Texas Register. What level of precision is expected for the approximation of average insulation depth? 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? TRELA and the Rules do not prohibit an individual from having other licenses. In general, no. While this configuration does not comport with current codes, the Standards of Practice do not require inspectors to inspect to todays code. Is the proximity of the return to the gas fired appliances a required reporting deficiency? No. 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. TREC requires licensure if the person seeks or has an expectation of compensation for offering to locate a unit in an apartment complex to a prospective tenant. Can an individual broker use an assumed business name in advertising? What is the definition of an accepted industry practice? The proposed changes update terminology for consistency and clarity throughout the chapter. For example, you may have paid a fee to obtain an option period in the contract. 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. 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? We tried to buy a house but our loan application was not approved. , or TREC rules. ], Yes. 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. Include your name as it appears on the application, a copy of your government-issued photo ID, and your telephone number to TREC. An attorney will need to prepare an appropriate form. I will be holding the security deposit for an owner whose property I am managing. Paragraph 3.D is amended to alter the calculation of the sales price adjustment shouldthe survey reveal a difference in acreage. The Commission may suspend or revoke or take other disciplinary action against a license holder who pays any portion of a commission or fee to anyone other than a licensed Texas broker or a broker licensed in another state. If so, does that entity have to be licensed as a real estate broker? 1101.002. TREC does not require a pre-inspection or employment contract to be signed by the parties to the inspection. These Acts establish the makeup of the Commission and its advisory committees and outline procedures by which a person can become real estate license holders in Texas. Must the permission of the owner authorizing the agent to offer the unit for rent be in writing? You should consult with a private attorney to determine whether you have a claim and what deadlines may apply to your claim. [TRELA 1101.803, Rule 535.2(a)] A sales agent may not lawfully engage in brokerage activity unless the sales agent is associated with, and acting for, a sponsoring broker at all times. 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 relatives behalf. Can I take the buyers I represent with me to the new broker if the buyers signed buyer representation agreements? 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.". My corporation owns property. 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? [Rule 535.131(b)]. Theproposed changes to 535.64 streamline the rule and modify two of qualifying course approval forms that are adopted by reference. Can a license holder who negotiates a transaction also be employed by a lender and direct a purchaser to that lender to get a loan? [TRELA 1101.652(b)(1)] Typically, sign ordinances prohibit placing a sign on a utility pole, traffic signal box, or in a road median. The proposed amendments will limit an existing regulation to correspond with applicable law. Is a starter course tab that is not sealed material, deficient and a required reporting item per TREC? When the rental locator represents a tenant and not an apartment complex, as demonstrated by a written representation agreement or other evidence of representation, the locator is not required to obtain the consent of the apartment complex because the complex is not his client. As a licensed inspector I would like to advertise that my company performs wood destroying insect inspections. How should an inspector identify deficiencies in the power ventilators without operating them? No. 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. The rules also include corresponding contract forms adopted by reference. A broker may not enter into a net listing agreement unless the principal requires a net listing and the principal is clearly familiar with the current market values of real property. The link must be in at least a 10 point font and in a readily noticeable place on the homepage of the business website of the broker and sales agent. The proposed amendments to 537.11 reorganize and consolidate the rule for clarity, and simplify the language regarding when a license holder is required to use a Commission-approved contract form and what is considered the unauthorized practice of law. No. [TRELA 1101.652(b)(24)]. Update contact information and Place of Business (business physical) address on the Contact Information page and click "Next". Can I use a power of attorney to engage in a real estate brokerage transaction without a real estate license? 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. New paragraph 4.D is added to address surface leases and includes options regarding whether the seller has delivered copies of written leases or provided notice of oral leases to the buyer, similar to the existing natural resource lease paragraph. 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 brokers listings or soliciting listing of real property, or obtain a Texas real estate license. Is a TREC inspector required to report the presence of CSST as a deficiency? 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. A brokers name includes a brokers assumed business name that has been registered with TREC. The proposed amendments to 535.101 will decrease fees paid to the agency by removing the late reporting fee authorized by subsection (a)(21). Am I required to complete the Legal Update I and Legal Update II courses? 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. Inspectors are not required to remove water heater covers to inspect the water heater. 36-10, Addendum for Property Subject to Mandatory Membership in a Property Owners Association, Standard Contract Form TREC No. Rule 535.52(b) also addresses conduct that tends to demonstrate that an applicant does not possess the requisite honesty, trustworthiness or integrity. 30-16, Residential Condominium Contract (Resale), Standard Contract Form TREC No. The proposed change to 535.54 reflects the proposed repeal of 535.93. The proposed changes to 535.218(f) serve to extend the amount of time an instructor of a ride-along inspection course can provide a certificate of course completion to receive continuing education credit. Starting with the effective (final execution) date of the contract, the first day of the period starts the next day. Since the cruise would have a value greater than $50, it is defined as valuable consideration. I signed a buyer representation agreement, but I want to work with a different Broker. Under Actions for the sponsoring broker, click "Terminate" and then click "Next". 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). If the inspection you are proposing is not in anticipation of a purchase or sale, then TREC's requirements would not apply, and the parameters of the inspection would be governed by the agreement between the inspector and his or her client. The broker must provide a monthly accounting of trust money if there has been any activity in the account. No, unless a refund is ordered by TREC in conjunction with an agreement resulting from an informal settlement conference or an administrative order. If the broker agrees, then the contract can be mutually rescinded. If you feel that the broker has not fulfilled the broker's part of the agreement, i. e. advertising, holding open houses, etc., then you may have grounds to terminate the contract but you would need to contact a private attorney for help in making that determination. What is the difference between an assumed business name and a team name? The proposed changes to 22 TAC 535.214 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. No, only a licensed plumber may perform a hydrostatic test on a system within a home. 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. However, if you are not a member of TAR, you should have an attorney draft the necessary documents. There is no requirement that a phone number or email address included in an advertisement belong to the broker. 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. Another potential example of a misleading advertisement is a license holder who included a list of Recently Sold Homes in his advertisement that included many properties where he had no role in the transaction, but he failed to make it clear in the ad which if any of those transactions he was involved in. [Rule 535.2(e)] However, the broker remains responsible for the authorized acts of the brokers sales agents [TRELA 1101.803, Rule 535.2(a) ] and has many affirmative duties regarding written policies, record keeping and advising, training, approving advertising for and responding to sales agents. The minimum penalty is $500; maximum is $3,000 per failure to report. 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. Does TREC consider a logo that contains the brokers full name sufficient for the broker name requirement? [Rule 535.154(a)(5)]. No, not unless the broker agrees to do so. [Rule 535.154(a)(5)]. [TRELA 1101.355 and Rules 535.50(5) and 535.53]. It is a violation of the law for a license holder to draft an instrument that transfers or otherwise affects an interest in real property. During this option period, an inspection can be performed and if specific repairs are identified, the parties can negotiate to amend the contract to address these items, or the buyer can terminate the contract. Request inactive status by following the steps below: If you prefer, you can also submit the Application for Inactive Broker or Sales Agent Status form by email. Therefore, it would violate Section 1102.303 for you to inspect any property your broker has listed or where you were personally involved. All inspections would be subject to 1102.301 et seq. [TRELA 1101.652(b)(11)]. I did not get it inspected since the seller and the broker said everything was in good shape. 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. What is the difference if a broker appoint sales agents to represent the buyer and the seller or if the broker makes no appointments to the principals in a real estate transaction? No. Paragraph 21 is amended to add a line for a courtesy copy to another individual, like an agent. A real estate license is not required for a person who calls an auction of real property, provided the person is licensed as an auctioneer by the Texas Department of Licensing and Regulation. In addition, an inspector must retain sufficient records of professional liability insurance coverage, or any other insurance that provides coverage for violations of Subchapter G of Chapter 1102, to document to the commission continuous coverage for the preceding two year license period. What about a buyer? In addition, a referral drawing may be considered a contest defined as an illegal lottery under Sections 47.01(7) & 47.03(5) of the Texas Penal Code. If you do have an unreported felony, or an unreported criminal offense involving fraud, report it to the Commission as soon as possible. TREC does not have jurisdiction over licensed repair providers. Question is not clear. Theentity must,if it engages in real estate brokerage,hold aseparate license. Protect the public from dishonest or incompetent brokers or salesperson, 2. prescribe certain minimum standards and qualifications for licensing brokers and salespersons, maintain high standards in the real estate profession, 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. [Rule 535.155(b)(1)], Yes. [Rule 535.146(c)(3)] Accounting is more simple if the broker puts all escrow money into a non-interest bearing account, To avoid an advertisement that implies the sales agent is responsible for the operation of the brokerage in this situation, the sales agent should make sure that the ad clearly indicates that the sales agent is not the broker. TREC only handles the licensing and discipline of real estate inspectors, you would need to contact the state agency in charge of collecting state sales tax which is the Texas Comptroller of Public Accounts. May a license holder who is a rental locator advertise that they will pay a prospective tenant a portion of their fee received from an apartment complex if the tenant uses the locators services? Campground membership sales are regulated by the Texas Secretary of States 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. [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. An inspector may request inactive status in writing at any time. If the underlying conduct violates 1101.652(a-1)(1) or 1101.652(b) of TRELA, disciplinary action can be taken against the license holder for the underlying conduct. Paragraph numbers referenced are from the One to Four Family Residential Contract (Resale). 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. Drip and rake edge flashing materials are recommended by most shingle manufacturers but are not required. What are the agency disclosure requirements for a real estate license holder? If I am buying, selling or leasing property for a relative, do I need to disclose that I have a real estate license? The use of net listing agreement places the brokers interest above the principals interest with regards to obtaining the best possible price. A buyer can use the option period to perform an inspection of the property and negotiate an amendment to the contract for any necessary repairs as a result of the inspection. (a) The Texas Real Estate Commission consists of nine members appointed by the governor with the advice and consent of the senate as follows: (1) six members who have been engaged in the brokerage business as licensed brokers as their major occupation for the five years preceding appointment; and (2) three members who represent the public. 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. I am also a licensed real estate sales agent. Can a broker be the designated broker for more than one business entity? Under Rule 535.156, a real estate license holder has a duty to disclose to a client any relationship the license holder has with an inspector performing an inspection on property that is the subject of a transaction involving the license holder. TREC does not require inspectors to inspect to any of the various building codes and cannot assist you in determining what code provisions were applied in a particular situation. Any name used by an individual sales agent, other than the name on the license or a registered alternate name, is considered a team name under TREC rules and must meet the team name requirements. Is the absence of an anti-entrapment cover in a spa deficient and a required reporting item per TREC? The proposed changes to 22 TAC 535.219 correct a reference to another rule. Please send written commentsto TREC'sgeneral.counsel@trec.texas.gov. A brokers name alone is okay. Can I get an extension to complete my hours? The website for that agency is www.comptroller.texas.gov and their toll free number is 800.252.5555. What qualifies as proof of ownership of the business entity? No. In Texas, any person who reports on wood destroying insects in a home must be licensed by the state as a wood destroying insect inspector. [Rule 535.155(b)(3)]. [TRELA 1101.558(b-1)]. If the guide is an employee of the owner of the lots, she would not be required to be licensed. She didnt state that she sold it but an average person reading the card could surely and reasonably imply an erroneous claim of involvement. Both the State and National sections of the exam must be passed before the application expiration date. 1101.801. A security deposit can also be deposited in an account separate from the trust or escrow account, but this is not a requirement. Can TREC obtain reimbursement of commissions paid by buyers and sellers to brokers and sales agents for compensation in real estate transactions? A new instructional parenthetical is added in Paragraph C. Additionally, the interest in modified to reflect a per annum interest rate. No. and more. (2) a meeting is with a party currently known to be represented by another license holder; or The proposed amendments to 535.91 eliminate the lookback period currently found in 535.93, which 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. Yes. [Rule 535.146(b)(1)]. 23-18, New Home Contract (Incomplete Construction), Standard Contract Form TREC No. This must be done before making the payment. 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. The mere presence of corrugated stainless steel tubing (CSST) is not, in itself, required to be reported as a deficiency, nor are inspectors required to notify the client of the litigation history or the risks associated with CSST.
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