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. No, TREC does not have the authority to require a license holder to pay another person for monetary damages. [TRELA §1101.558(b)]. 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. Is the inspector required to warn of the risk of Chinese drywall? [Rules 535.146((c)(6) and (e)] TREC requires a broker to maintain for at least four years from the date of a closing or termination of a contract eight specific types of records in a format that can be readily made available to the Commission. Your broker must maintain, on a current basis, written policies and procedures to ensure that each sponsored sales agent complies with the Commission’s advertising rules. I signed a buyer representation agreement, but I want to work with a different Broker. No, only a licensed plumber may perform a hydrostatic test on a system within a home. Paste it into the “Online Services – Login and Registration” web page when you log in. Additionally, the license holder may not use the license holder’s expertise to the disadvantage of the other party. Be sure to sign it. My brother-in-law says I might be able to recover a judgment. 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? In general, no. A TREC licensed inspector may perform inspections on commercial property, as long as no other laws prohibit the inspector from doing so (please check with the Texas Board of Professional Engineering to determine when a Professional Engineer license is required). [Rule 535.154(a)(5)]. Pursuant to Section 535.227(b)(3)(C)(i), inspectors are not required to determine code compliance, utility sources, or regulatory requirements except as specifically required by the standards. TREC offers an informal settlement conference for any contested matter involving a license holder or registrant or certificate holder. Does TREC determine which brokerage business names may be registered with the agency if a name is similar to others already registered? Yes. However, it is often possible to locate gas shut-off valves either behind or near appliances (such as in the cabinet next to the range). [See §535.2(i)(6)]. 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. Yes and yes. Click on this to see what disciplinary actions have been taken. However, a license holder may rebate all or a portion of the fee or commission to the party being represented in the transaction, or, with consent of the party being represented, the license holder can also pay all or a portion to a party the license holder does not represent in the transaction. The use of net listing agreement places the broker’s interest above the principal’s interest with regards to obtaining the best possible price. Can an out-of-state broker conduct brokerage business from another state by mail, phone, the Internet, or other medium? No. Do the Standards of Practice require inspectors to comment on the way a gas pipe enters a crawl space? How can an out-of-state broker sell land in Texas? [Rule 535.147(b)], The intermediary may delegate to another license holder the authority to appoint license holders. Can a sales agent work in a different office than the sponsoring broker’s office? Do the Standards of Practice require inspectors to report as deficient a gas log fireplace with a damper that has not been blocked open? [Rule 535.16(b)]. The use of net listing agreement places the broker’s interest above the principal’s interest with regards to obtaining the best possible price. You could also ask the broker to agree to cancel or release the listing. RESIDENTIAL LISTING AGREEMENT - EXCLUSIVE (RLA PAGE 2 OF 3) (Reviewed by Date Seller acknowledges receipt of a copy of this page. 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. Are locators subject to the agency disclosure requirements of The Real Estate License Act? Requirements for an assumed business name and team name are set out in Rule 535.154. Can a sales agent be the owner of a property management company? Can I receive money for referrals? 6. [Rule 531.20(e)]. TREC is unable to advise you on how to fill out a private contract form. Receiving a social security number and card does not provide lawful status to a DACA recipient, it merely provides proof of the work authorization granted by USCIS. TREC does not have jurisdiction over builders. If you feel the broker knew about the problem with the house and didn't tell you about it, you can file a written complaint with TREC. TREC does not have jurisdiction over Homeowner Associations or Association Management Companies. I want to renew my license active but am unable to complete my CE hours by the license expiration date. The license holder can work for a lender without breaching that duty, but the license holder can't direct a purchaser to any one lender. [Rule 535.155(b)(1)], Yes. The license holder who offers to or actually pays cash to an unlicensed person for a referral is subject to disciplinary action. No. Is a “residential service contract” the same as a “home warranty”? A Property Management Agreement is a private contract and TREC is unable to advise you in private contractual matters. Accordingly, the requirement that inspectors report deficiencies in installed gutter and downspout systems applies only to visible deficiencies in above-ground gutter and downspout systems and not to underground drain piping, cisterns, or other buried components. If TREC records do not show that you have completed your CE at the time you submit your renewal application, you must pay a $200 CE deferral fee, or renew in inactive status. In that case, inspectors are required to do their best to determine whether the door is fire-rated and to report accordingly. If no “Disciplinary Search” line appears under your name search result, then there have not been any disciplinary actions taken against that license holder. If a license holder is not receiving a payment from the company, this should be noted as well. A broker may not take net listings unless the principal requires a net listing and the principal appears to be familiar with current market values of real property. Why can I do? This is a donation and not a rebate. If a buyer's agent is required to disclose his or her status as the buyer’s agent to a listing broker when setting up a showing appointment, must the listing broker also disclose to the buyer's agent that the listing broker represents the seller? 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. Is a licensed attorney required to hold a real estate license to act as a broker? Can you explain them to me? [Rule 535.147(d)]. The sale of mobile or manufactured homes requires a separate license from the Texas Department of Housing and Community Affairs (TDHCA); however a TREC license holder is not required to be separately licensed by TDHCA if the manufactured or mobile home is attached to real property that is being offered for a sale, exchange, or lease transaction. [TRELA §1101.702] The Commission may also issue a “cease and desist” order. A buyer representation agreement is intended to be a legal and binding contract. In addition, a license holder’s failure to deposit the earnest money within a reasonable time is a violation of §1101.652(b)(30) of TRELA. [Rule 535.4(i).]. 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. If the broker agrees, then the contract can be mutually rescinded. The absence of an anti-entrapment cover in a spa is not a required reporting item. Can you help me? Net Listing Agreement – A net listing agreement is when the agent’s commission is the excess of funds above a fixed number. [TRELA §1101.351(a)(2), Rule 535.4(k)]. Has anyone used a Net Listing? A listing agreement is a private contract between a real estate broker and a property owner and is not promulgated by TREC. I have a property management company and engage in leasing activity. Can TREC obtain reimbursement of commissions paid by buyers and sellers to brokers and sales agents for compensation in real estate transactions? The Risks of Using a Net Listing Agreement. Does Deferred Action for Childhood Arrivals (DACA) status qualify as a lawfully admitted alien? I am a broker licensed in another state and would like to apply in Texas. Is this legal? Rule 531.20(b) states that each broker and sales agent must provide a link on its homepage to the IABS Form labeled "Texas Real Estate Commission Information About Brokerage Services". 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. This form (RSC-2)  is required only when a residential service company agrees to pay a license holder for a service provided to or on behalf of the company. Can a non-license holder use the promulgated contract forms? Is the proximity of the return to the gas fired appliances a required reporting deficiency? The person may not use the power of attorney to engage in more than three real estate transactions per calendar year. What is the definition of an “accepted industry practice”? A:  Yes. 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? Inspectors are not required to inspect to trade or industry association standards. Is a keyed deadbolt on the interior of an exterior egress door deficient and a required reporting item per TREC? The listing agent represents the seller and has a duty to present all offers in a timely manner to the seller. The Standards of Practice require only that the pipe entry be reported as deficient when the gas piping is concealed in a duct, plenum, or chase. The guide was not licensed, but she showed us the lots and told us about possible developments on the land. Like a listing agreement, the buyer representation agreement must be in writing and signed by the buyer to be binding. Generally, no. Also, a party to a contested matter filed with the State Office of Administrative Hearings (SOAH) may, before a hearing, request that the matter first be heard by a SOAH mediator. I wish to file a complaint with TREC regarding a home inspector. As an inspector, when do I have to show proof of E&O insurance? Yes. Is the presence of a gas shut off valve that requires a tool to turn off deficient? Section 535.228(d)(1)(B) requires an inspector to report “approximate average depth of attic insulation.” We are unable to prescribe a certain "level of precision” that would satisfy this requirement; any of the examples you presented would satisfy the requirement to report the depth of insulation, as long as they accurately reflect the conditions. 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. No. To be considered a lawfully admitted alien, you must have a green card or Permanent Resident card. Purely cosmetic corrosion is not required to be reported as a deficiency. Is the definition of accessible, as applied to gas appliance connections, left to the reasonable judgment of the inspector? A hydrostatic test is a way in which pipeline, plumbing, gas cylinders, boilers, and fuel tanks can be tested for strength and leaks. Previously we went through the 24 paragraphs of the purchase contract, information that both buyer and seller need to know. of Savings & Mortgage Lending at www.sml.texas.gov), Property Tax Consultants (see the Property Tax Consultant Board of the Texas Dept. Click "Change/Verify Contact Information" and click "Select". 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. No. ©Texas Association of REALTORS®, Inc. 2014 1. We also accept copies of tax records which indicate ownership. Listing agreements are private contracts between a real estate broker and a seller. In limited circumstances, TREC may order a license holder or registrant or certificate holder to pay a refund to a consumer. In addition, the IABS is not generally required when the license holder is acting solely as a principal in the transaction. No. The broker, however, remains responsible and accountable for the trust account and for the proper handling of trust money received by the broker. Thus, for example, any authorization language in the special provisions of the standard Resale contract is not separate consent by a seller. [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. (1) a transaction is for a residential lease less than one year and a sale is not being considered;  No. (2) a meeting is with a party currently known to be represented by another license holder; or Can I break my contract and list with someone else? Is TREC interested in compliance by residential rental locators? As the question suggests, it is sometimes also possible to use a digital camera to “see” in areas that are not otherwise accessible and there are multiple means of detection of gas leaks in existence, such as through the use of hand held detectors (however, these would be considered specialized tools and are not required to be used in performing inspections). While the complainant may be present at the conference, they are not a party to the proceeding. A license holder’s failure to properly complete a TREC promulgated form completely and accurately could be considered negligence and subject the license holder to disciplinary action. Does a broker have to supervise the daily activities of a sales agent? Not unless the person depositing the money has signed an agreement authorizing the broker to keep the interest. Is the Information About Brokerage Services Form promulgated by TREC mandatory? 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. I bought a house from a builder and the builder gave me a 12-month warranty. What is the definition of a “commission”? a gift card to a restaurant or department store) is not defined as valuable consideration and is permissible. A license holder is not required to provide the statutory written statement at the open house. Assuming the attorney is licensed in Texas, the seller and buyer may work something out between themselves regarding any compensation to be paid to the Texas attorney. Late fees will be waived for … [TRELA §1101.355(c)]. They will instruct you on your contract procedure for obtaining repairs. The minimum penalty is $500; maximum is $3,000 per failure to report. Is the Disclosure of Relationship with Residential Service Company form required for every transaction? A broker’s name alone is okay. [Rule 535.154(d)], Assumed Business Name (also known as a dba) is another name for the broker’s business that can be used by all sponsored sales agents and brokers associated with this broker. TREC may suspend or revoke a license if the license holder places a sign on a property offering it for lease or rental without the written permission of the owner or the owner's authorized agent. 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. Does the use of the TREC Disclosure of Relationship with Residential Service Company form (RSC-2) apply to both sale and lease transactions? 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. Complete the complaint form on our website by answering each question. 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. We assume you are referring to composition shingle roofing. 2. [TRELA §1101.652(b)(23)], No. [Rule 535.146(e)], No, but a Texas broker may share a commission with a foreign license holder so long as the foreign license holder does not engage in an activity requiring a license in Texas. In cases such as this, the listing broker still needs to present the offer to the seller. Is a starter course tab that is not sealed material, deficient and a required reporting item per TREC? [Rule 535.147(d)]. 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? Exclusive Right to Sell Listing: The Exclusive Right to Sell listing is the most commonly used listing agreement among homeowners and real estate agents.It’s a legally binding contract that allows the real estate agent (or brokerage) full and total control over the transaction and rights to the agreed upon commission once the home sells. However, if you are not a member of TAR, you should have an attorney draft the necessary documents. I only represent buyers. In addition, since it is not a violation of §1101.652(a-1)(1) or §1101.652(b) of the License Act, any judgment obtained would not be eligible for payment from the Real Estate Recovery Trust Account. Section 1101.652(a)(7) of the License Act provides that if you have entered a plea of guilty or nolo contendere or have been convicted of a felony or any criminal offense that involves fraud (including misdemeanors), you must disclose this to the Commission not later than the 30th day after the final conviction or the entry of a plea of guilty or nolo contendere. Those rules prohibit a license holder from adding anything except factual matters or business details to a form adopted by TREC for mandatory use. Is the inspector required to warn or advise of the alleged risks if TREC determines the panel is not required to be reported as deficient? No. Pursuant to the general limitations in the Standards of Practice, inspectors are not required to determine the presence of “Chinese drywall” or to report its symptoms or risks. It appears that the inspector who inspected my home before my purchase missed major termite infestation. Yes. Does TREC have a promulgated buyer representation agreement? Probably not. As such, the buyer would still be represented by the sales agent’s previous broker. [Rule 531.1]. [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. How do I change my business physical address? of Insurance at www.tdi.texas.gov), Auctioneers (see the Texas Dept. If it does, TREC will ask you to provide a copy of the Order of Expungment or Non-disclosure and upon receipt will not consider that offense in determining a person's fitness for licensure. I recently purchased an older home that was inspected before the purchase. Failure of the intermediary broker or the sponsored sales agents to comply with the Intermediary Provisions of TRELA §§ 1101.558-561 may subject them to disciplinary sanctions by the TREC, including but not limited to, revocation, suspension, reprimand and/or an administrative penalty. Does a property manager have to be licensed? See [Rule 535.146(c)(6)]. A name used in advertising by an associated broker that is not the associated broker’s 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. Is a hand rail that is not continuously deficient a required reporting item per TREC? Can a real estate license be revoked because a license holder files for bankruptcy? [TRELA §1101.005(2) and Rule 535.32]. The reason this is a less common agreement is that net listings are illegal in many states. Including such information in your advertisement could be construed to be misleading in that a consumer may believe that you or members of your company are licensed to inspect for wood-destroying insects. 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? 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. I was trying to buy a house and the earnest money was deposited in the broker's escrow or trust account. 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.”. [Rule 535.155(b)(1)]. In some instances, the inspector will only be able to report that he or she was not able to determine whether the door was fire-rated or that the door appeared to be (or did not appear to be) fire-rated. Though, net listing agreements are often considered to be especially risky for real estate professionals. You must use a form drafted by an attorney or a form supplied by either the buyer or seller. Presuming an upstairs floor or the ceiling below does not exhibit obvious evidence of failure, is a squeaky floor a defect and required reporting item per TREC? County, Texas. No, a hydrostatic test is not mandatory in the inspection of a property. Can an unlicensed person own a real estate company and receive all or a portion of a commission paid to a licensed broker? A rental agent who solicits a prospect by phone must be licensed.

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