The Texas Real Estate Commission met May 1 to adopt and propose rules. View the meeting materials packet, which provides more details about the changes, on TREC’s website. Here are highlights from the meeting.
TREC adopts “equitable interest” rule
Imagine a scenario where a buyer makes an offer for a property that is accepted by the seller, and though the parties haven’t closed yet, the buyer offers to sell his interest in the property to a second buyer. Under the adopted rule, if the original buyer does not disclose his interest in the property to the second buyer, TREC says he is engaging in real estate brokerage, meaning such activities would fall under its jurisdiction. The rule also sets forth additional disclosure requirements for license holders. See agenda item 12 on page 35 of the TREC Meeting Materials packet for more details and look for additional information from TAR on how to comply. Similar language has also made its way into two bills this legislative session—HB 2534 and SB 2212.
Broker-related rule adoptions and proposals
- A change to business entities and designated broker rules: TREC adopted a change to rule 535.53(b)(5)(B) to clarify that designated brokers can own at least 10% of a business entity through a verified ownership chain in other business entities. See agenda item 13 on page 43 of the TREC Meeting Materials packet for more details.
- Who can be a designated broker? TREC proposed a rule change to Section 535.53(b)(5)(A) to clarify who can be a designated broker. The current rule provides that an officer, manager, or partner for the entity can act as designated broker. The proposed rule makes clear the designated broker can be a corporate officer, an LLC manager, an LLC member with managing authority, or a general partner for that entity. See agenda item 20 on page 83 of the TREC Meeting Materials packet for more details.
- Broker-entity renewal deadline proposal: TREC proposed amendments to Section 535.91 to establish a deadline for submitting business entity license renewals. The proposed change adds that a renewal application for a business entity broker is filed timely if the application and all required supporting documentation is received by TREC, or postmarked, not later than the 10th business day before the license expiration date. See agenda item 23 on page 105 of the TREC Meeting Materials packet for more details.