Every leading organization or group of professionals has a foundation that represents what they stand for. Without these foundations the legacy, integrity, advantage, competitive difference, and drive toward continued improvement is nearly impossible to have. For professional real estate agents, specifically REALTORS®, this foundation is the REALTOR’S® Code of Ethics. But what exactly is the REALTOR’S® Code of Ethics, and why is it so important?
The REALTOR’S® Code of Ethics provides the highest safety measures for protecting both buyers and sellers of real estate. Being bound by this code as a REALTOR® offers you a distinct competitive advantage.
The REALTOR’S® Code of Ethics features 17 articles containing detailed rules and standards of conduct. It is designed to ensure that REALTORS® will act accordingly in a number of scenarios and situations; protecting their clients with competency and integrity, and also protecting the esteemed reputation of the National Association of REALTORS®.
The core of this code of ethics is to act in a way that protects all of the interests of who a REALTOR® represents. The expectation is to use all available knowledge and experience and apply it to every transaction. Achieving the best possible results for a client is the focus of the REALTOR’S® Code of Ethics.
Beyond that guiding principle, the rest of the articles included in the code are constructed to help you get to that goal. Overarching themes of honesty, cooperation, communication, and fairness are interwoven into the following 16 articles. The REALTOR’S® Code of Ethics is vitally important to you as a real estate professional, and especially to home buyers and home sellers of real estate as it provides the peace of mind that their best interests are at the root of you actions.
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§531.2 Fidelity
A license holder, while acting as an agent for another, is a fiduciary. Special obligations are imposed when such fiduciary relationships are created. They demand:
§531.3 Integrity
A license holder has a special obligation to exercise integrity in the discharge of the license holder's responsibilities, including employment of prudence and caution so as to avoid misrepresentation, in any way, by acts of commission or omission.
§531.4 Competency
It is the obligation of a license holder to be knowledgeable and competent as a real estate brokerage practitioner. The license holder must:
§531.18 Consumer Information
§531.19 Discriminatory Practices
§531.20 Information About Brokerage Services
Chapter 533 Practice and Procedure
Subchapter A Definitions
§533.1 Definitions
The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise.
Subchapter B General Provisions Relating to Practice and Procedure
§533.2 Purpose and Scope
This subchapter provides for an efficient and uniform system of practice and procedure before the Commission. This subchapter governs the institution, conduct, and determination of adjudicative proceedings required or permitted by law, whether instituted by the Commission or by the filing of an application, claim, complaint, or any other pleading. This subchapter does not enlarge, diminish, modify, or otherwise alter the jurisdiction, powers, or authority of the Commission, the Executive Director, or the substantive rights of any person or agency.
§533.3 Filing and Notice
§533.4 Failure to Answer, Failure to Attend Hearing and Default
§533.5 Transcript Cost; Interpreters and Translators
§533.6 Filing of Exceptions and Replies
§533.7 Final Decisions and Orders
§533.8 Motions for Rehearing
§533.9 Computation of Time
In computing any period of time prescribed or allowed by this Chapter, the day of the act, event, or default after which the designated period of time begins to run is not included. The last day of the period so computed is to be included, unless it is a Saturday, Sunday, or legal holiday, in which event the period runs until the end of the next day that is not a Saturday, Sunday, or legal holiday.
§533.10 Hearing: Subpoenas and Fees
Subchapter C Alternative Dispute Resolution
§533.20 ADR Policy
It is the Commission's policy to encourage the fair and expeditious resolution of all contested matters through voluntary settlement procedures. The Commission is committed to working with all parties to achieve early settlement of contested matters and encourages resolution of disputes at any time.
§533.21 Negotiated Settlement
§533.25 Informal Proceedings
§533.30 Staff Mediation
§533.32 Appointment of Mediator
§533.33 Outside Mediation
§533.35 Stipulations
When the ADR procedures do not result in the full settlement of a matter, the parties in conjunction with the mediator, if applicable, may limit the contested issues through the entry of written stipulations. Such stipulations shall be forwarded or formally presented to the administrative law judge assigned to conduct the contested case hearing on the merits and shall be made part of the hearing record.
§533.36 Agreements
All agreements between or among parties that are reached as a result of ADR must be committed to writing, signed by respondents or applicants and a Commission staff attorney, and submitted to the Commission or Executive Director for approval. Once signed by the Commission or Executive Director, the agreement will have the same force and effect as a written contract.
§533.37 Confidentiality
Subchapter D Negotiated Rulemaking
§533.40 Negotiated Rulemaking
Subchapter E Petition for Adoption of Rules
§533.50 Petition for Adoption of Rules
Chapter 534 General Administration
§534.1 Definitions
The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise.
§534.2 Charges for Copies of Public Information
§534.3 Employee Training and Education
§534.4 Historically Underutilized Businesses Program
To comply with Texas Government Code §2161.003, the Commission adopts by reference the rules of the Comptroller of Public Accounts in 34 TAC Part 1, Chapter 20, Subchapter D (relating to the Historically Underutilized Business Program).
§534.5 Bid Opening and Tabulation
To comply with Texas Government Code, §2156.005(d), the Commission adopts by reference the rules of the Texas Comptroller of Public Accounts in 34 TAC §20.207 (relating to Competitive Sealed Bidding).
§534.6 Negotiation and Mediation of Certain Contract Disputes
To comply with Texas Government Code, §2260.052(c), the Commission adopts by reference the rules of the Office of the Attorney General in 1 TAC Part 3, Chapter 68 (relating to Negotiation and Mediation of Certain Contract Disputes). The rules set forth a process to permit parties to structure a negotiation or mediation in a manner that is most appropriate for a particular dispute regardless of the contract's complexity, subject matter, dollar amount, or method and time of performance.
§534.7 Vendor Protest Procedures
Chapter 535 General Provisions
Subchapter A Definitions
§535.1 Definitions
The following terms and phrases, when used in this chapter, have the following meanings unless the context clearly indicates otherwise.
Subchapter B General Provisions Relating to the Requirements of Licensure
§535.2 Broker Responsibility
§535.3 Compensation to or Paid by a Salesperson
A salesperson may not receive a commission or other valuable consideration except with the written consent of the salesperson's sponsoring broker or the broker who sponsored the salesperson when the salesperson became entitled to the commission or other valuable consideration. A salesperson may not pay a commission or other valuable consideration to another person except with the written consent of the salesperson's sponsoring broker.
§535.4 License Required
§535.5 License Not Required
§535.6 Equitable Interests in Real Property
§535.16 Listings; Net Listings
§535.17 Broker Price Opinion, Comparative Market Analysis, or Sales Price Estimate
§535.20 Referrals from Unlicensed Persons
§535.21 Mailing Address and Other Contact Information
Subchapter C Exemptions to Requirements of Licensure
§535.31 Attorneys at Law
An attorney licensed and eligible to practice law in Texas is exempt from the requirements of the Act but cannot sponsor real estate salespersons or act as the designated broker for a licensed business entity unless the attorney is also licensed as a real estate broker. This provision does not waive the standards of eligibility and qualification elsewhere established in the Act.
§535.32 Attorneys in Fact
A person holding a valid power of attorney recorded in the county in which the particular real property is located and which specifically describes the real property may act as a real estate agent for the owner of such property without being licensed as a real estate broker or sales agent, provided the person does not use powers of attorney to engage in more than three real estate transactions per calendar year.
§535.33 Public Officials
Public officials and employees of governmental or quasi-governmental units are exempt from the requirement of being licensed as a real estate broker or salesperson while performing their official duties.
§535.34 Salespersons Employed by an Owner of Land and Structures Erected by the Owner
Subchapter D The Commission
§535.41 Procedures
§535.42 Jurisdiction and Authority
The Commission does not:
§535.43 Education Standards Advisory Committee
§535.44 Commission Seal
The Commission shall adopt a seal. The seal may be used only by the Commission in connection with official agency business. Any use by other persons, including persons licensed or registered under the Act or Chapter 1102, is prohibited.
§535.45 Certain uses of Seal, Logo, or Name Prohibited
A license holder, certificate holder, registrant or provider may not use all or part of the seal, logo, or name of the Commission or another governmental agency in a manner that implies that the person:
Subchapter E Requirements for Licensure
§535.50 Definitions
The following words and terms, when used in Subchapter E, F, or G of this chapter, shall have the following meanings, unless the context clearly indicates otherwise or a definition from that subchapter supersedes the definition.
§535.51 General Requirements for a Real Estate License
§535.52 Fitness Requirements for Individual Applicant
§535.53 Business Entity; Designated Broker
§535.54 Hearing on License Denial: Probationary Licenses
§535.55 Education and Sponsorship Requirements for a Sales Agent License
§535.56 Education and Experience Requirements for a Broker License
§535.57 Examinations
§535.58 License for Military Service Members, Veterans, or Military Spouses
Subchapter F Requirements for Education Providers, Courses and Instructors for Qualifying Education
§535.60 Definitions
The following words and terms, when used in Subchapter F of this chapter, shall have the following meanings, unless the context clearly indicates otherwise.
§535.61 Approval of Providers of Qualifying Courses
§535.62 Approval of Qualifying Courses
§535.63 Qualifications for Instructors of Qualifying Courses
§535.64 Content Requirements for Qualifying Real Estate Courses
§535.65 Responsibilities and Operations of Providers of Qualifying Courses
§535.66 Credit for Courses Offered by Accredited Colleges or Universities
§535.67 Qualifying Education: Compliance and Enforcement
§535.68 Content Requirements for Easement or Right-of-Way Qualifying Course
To be approved by the Commission, the easement or right-of-way mandatory qualifying course must contain the topics required by §1101.509(b), Texas Occupations Code, and the units outlined in the ERW_QE-0, Qualifying Easement or Right-of-Way Course Approval (ERW–QE-0) Form, hereby adopted by reference.
Subchapter G Requirements for Continuing Education Providers, Courses and Instructors
§535.70 Definitions
The following words and terms, when used in Subchapter G of this chapter, shall have the following meanings, unless the context clearly indicates otherwise.
§535.71 Approval of CE Providers
§535.72 Approval of Non-elective Continuing Education Courses
§535.73 Approval of Elective Continuing Education Courses
§535.74 Qualifications for Continuing Education Instructors
§535.75 Responsibilities and Operations of Continuing Education Providers
§535.77 CE Providers: Compliance and Enforcement
Compliance and enforcement of CE Providers is governed by §535.67 of this title.
Subchapter H Recovery Fund
§535.82 Proration of Payments from the Recovery Trust Account
In the event of multiple valid pending claims against a license holder in excess of the limitations in §1101.610 of the Act, the claims shall be prorated as follows:
§535.83 Association of Designated Broker on Claim
For purposes of §1101.6011 and §1101.610(e) of the Act, the designated broker associated with the claim against a business entity is the broker who was the designated broker at the time of the act that is the subject of the underlying judgment.
Subchapter I License Renewal
§535.91 Renewal of a Real Estate License
§535.92 Continuing Education Requirements
§535.93 Late Renewal Applications
Subchapter J Fees
§535.101 Fees
Subchapter L Inactive License Status
§535.121 Inactive Salesperson License
§535.122 Reactivation of Salesperson License
In order to reactivate a license on inactive status, the license holder must:
§535.123 Inactive Broker Status
Subchapter M Nonresidents
§535.131 Unlawful Conduct; Splitting Fees
§535.132 Eligibility for Licensure
§535.133 Consent To Be Sued; Exception to Requirements
A broker or salesperson who moves to a state other than Texas must file a consent to service of legal process with the Commission. A consent to service is not required when the broker or salesperson's place of business is in Texas.
Subchapter N Suspension and Revocation of Licensure
§535.141 Initiation of Investigation; Order Requirements
§535.142 Consumer Complaint Processing
§535.143 Fraudulent Procurement of License
A violation of, §1101.652(a)(2) of the Act occurs if an applicant, including a designated broker for any business entity eligible for licensure under this chapter, omits material information or makes material misstatements, written or oral, in connection with the filing of an application or renewal application to obtain licensure. This does not include an unintentional mistake of fact the determination of which is within the discretion of the Commission and subject to judicial review.
§535.144 When Acquiring or Disposing of Own Property or Property of Spouse, Parent or Child
§535.145 False Promise
- For purposes of §1101.652(b)(5) of the Act "false promise" includes both oral and written promises. The fact that a written agreement between the parties to a real estate transaction does not recite a promise made by a real estate license holder to one of the parties or that a person did not detrimentally rely on the false promise will not prevent the Commission from determining that a false promise was made. In determining whether this section has been violated, neither a written contractual provision disclaiming oral representations nor the Texas Rules of Evidence Rule 1004, the parol evidence rule, shall prevent the Commission from considering oral promises made by a license holder.
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§535.146 Maintaining Trust Money
- Definitions. In this section:
- "Trust money" means client's money, earnest money, rent, unearned fees, security deposits, or any money held on behalf of another person.
- "Trust account" means an account managed by one party for the benefit of another in a banking institution authorized to do business in Texas.
- Acceptance of Trust Money.
- Any trust money accepted by a broker is held in a fiduciary capacity and must be maintained in a designated trust account maintained by the broker or delivered to an escrow agent authorized in Texas in accordance with the agreement of the principals of the transaction.
- A sales agent shall not maintain a trust account. Any trust money received by a sales agent must be immediately delivered to the sales agent's sponsoring broker.
- Unless a different time to deposit trust money is expressly agreed upon in writing by the principals to the transaction, any trust money received by the broker must be deposited in a trust account or delivered to an authorized escrow agent within a reasonable time, which the Commission has determined to be not later than the close of business of the second working day after the date the broker receives the trust money.
- The broker shall not:
- commingle trust money with the broker's personal money or other non-trust money; or
- deposit or maintain trust money in a personal account or any kind of business account.
- The following is prima facie evidence of commingling trust money with the broker's own money:
- placing trust money in a broker's personal or operating account; or
- paying operating expenses or making withdrawals from a trust account for any purpose other than proper disbursement of trust money.
- Trust account requirements.
- The trust account must be clearly identified as a trust account;
- The broker may, but is not required to, maintain separate trust accounts for each client or type of trust money maintained by the broker, such as earnest money deposits or security deposits received for the management of rental property.
- If trust money held by a broker is deposited in an interest bearing account:
- the money must be available for disbursal at the appropriate time; and
- unless otherwise provided for by an agreement signed by the party depositing the money with the broker, any interest earned on the money must be distributed to any parties to whom the money is disbursed.
- A broker may deposit and maintain a reasonable amount of money in the trust account to cover bank service fees, including fees charged for insufficient funds. Detailed records must be kept for any funds deposited under this exception.
- If a broker acquires ownership of trust money held in a trust account, including entitlement to compensation, such money must be removed from the trust account not later the 30th day after the date the broker acquires ownership of the money.
- The broker must retain a documentary record of each deposit or withdrawal from the trust account and provide an accounting to each beneficiary of trust money at least monthly if there has been any activity in the account.
- A broker may only authorize another license holder to withdraw or transfer money from any trust account but the broker remains responsible and accountable for all trust money received by that broker and all deposits to or disbursements from the trust account.
- If a broker deposits trust money in the form of a check in a trust account and the check is dishonored by the financial institution on which it was drawn, the broker shall immediately notify all parties to the transaction in writing.
- Disbursement of trust money.
- A broker may only disburse money from the broker's trust account in accordance with the agreement under which the money was received.
- If any or all of the parties to a real estate transaction make a written demand for payment of trust money, the broker must pay the trust money to the party or parties entitled to the money within a reasonable time, which the Commission has determined to be not later than the 30th day after the date the demand is made.
- If by a subsequent written agreement, all parties to a real estate transaction authorize the broker maintaining trust money to disburse the trust money in a manner not in accordance with the agreement under which the money was received, the broker must pay the trust money to the party or parties entitled to the money under the subsequent written agreement within a reasonable time, which the Commission has determined to be not later than the 30th day after the date the broker receives the subsequent written agreement.
- The broker must immediately notify all parties in writing of any disbursement of trust money under subsections (d)(2) or (3).
- If the broker cannot reasonably determine to which party or parties the trust money should be paid, the broker may pay the trust money into the registry of a court and interplead the parties.
- Records. A broker must maintain all documentation regarding a trust account for four years from the date the document is received or created by the broker.
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§535.147 Splitting Fee with Unlicensed Person
- Except as otherwise provided by the Act or Rules, a broker or salesperson may not share a commission or fees with any person who engages in acts for which a license is required and is not actively licensed as a broker or salesperson.
- An unlicensed person may share in the income earned by a business entity licensed as a broker or exempted from the licensing requirements under the Act if the person engages in no acts for which a license is required and does not lead the public to believe that the person is in the real estate brokerage business.
- A broker or salesperson may not share a commission or fees with an unlicensed business entity created by a license holder for the purpose of collecting a commission or fees on behalf of the license holder.
- A license holder may rebate or pay a portion of the license holder's fee or commission to a party in the transaction when the salesperson has the written consent of the salesperson's sponsoring broker and the party represented by the license holder. A commission or fee may not be paid to any party to the transaction in a manner that misleads a broker, lender, title company, or governmental agency regarding the real estate transaction or the financial resources or obligations of the buyer. A license holder who intends to pay a portion of the license holder's fee or commission to a party the license holder does not represent must obtain the written consent of the party represented by the license holder before making the payment.
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§535.148 Receiving an Undisclosed Commission or Rebate
- A license holder may not receive a commission, rebate, or fee in a transaction from a person other than the person the license holder represents without first disclosing to the license holder's client that the license holder intends to receive the commission, rebate or fee, and obtaining the consent of the license holder's client.
- If a party the license holder does not represent agrees to pay a service provider in the transaction, the license holder must also obtain the consent of that party to accept a fee, commission or rebate from the service provider. As used in this section, the term "service provider" does not include a person acting in the capacity of a real estate broker or sales agent.
- A license holder may not enter into a contract or agreement with a service provider to a real estate transaction in which the license holder represents one or both of the parties if, pursuant to the contract or agreement:
- the license holder provides services for or on behalf of the service provider; and
- the contract or agreement prohibits the license holder from offering similar services for or on behalf of a competing service provider.
- A license holder may not pay or receive a fee or other valuable consideration to or from any other settlement service provider for, but not limited to, the following:
- the referral of inspections, lenders, mortgage brokers, or title companies;
- inclusion on a list of inspectors, preferred settlement providers, or similar arrangements; or
- inclusion on lists of inspectors or other settlement providers contingent on other financial agreements.
- In this section, "settlement service" means a service provided in connection with a prospective or actual settlement, and "settlement service provider" includes, but is not limited to, any one or more of the following:
- a federally related mortgage loan originator;
- a mortgage broker;
- a lender or other person who provides any service related to the origination, processing or funding of a real estate loan;
- a title service provider;
- an attorney;
- a person who prepares documents, including notarization, delivery, and recordation;
- a person who provides credit report services;
- an appraiser;
- an inspector;
- a settlement agent;
- a person who provides mortgage insurance services;
- a person who provides services involving hazard, flood, or other casualty insurance, homeowner's warranties or residential service contracts;
- a real estate agent or broker; and
- a person who provides any other services for which a settlement service provider requires a borrower or seller to pay.
- A license holder must use TREC No. RSC-3, Disclosure of Relationship with Residential Service Company, to disclose to a party to a real estate transaction in which the license holder represents one or both of the parties any payments received for services provided for or on behalf of a residential service company licensed under Texas Occupations Code Chapter 1304.
- The Texas Real Estate Commission adopts by reference TREC No. RSC-3, Disclosure of Relationship with Residential Service Company, approved by the Commission for use by license holders to disclose payments received from a residential service company. This document is published by and available from the Texas Real Estate Commission, P.O. Box 12188, Austin, Texas 78711-2188, www.trec.texas.gov.
- This section does not prohibit:
- normal promotional or educational activity that is not conditioned on the referral of business and that does not involve the defraying of expenses that otherwise would be incurred;
- a payment at market rates to any person for goods actually furnished or for services actually performed; or
- a payment pursuant to a cooperative brokerage or referral arrangement or agreement between active licensed real estate agents and real estate brokers.
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§535.149 Lottery or Deceptive Trade Practice
- For the purposes of §1101.652(b)(14) of the Act, the elements of a "lottery" are the award or distribution of a prize or prizes by chance and the payment of consideration for the opportunity to win the prize.
- The giving of gifts as an inducement for prospective clients does not violate this section or §1101.652(b)(14) of the Act, but license holders when procuring prospects must otherwise comply with the provisions of §535.20 of this title.
- "Deceptive practices" include, but are not limited to the acts described in the Texas Business and Commerce Code §17.46, done in a manner defined in that section.
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§535.153 Violating an Exclusive Agency
- Although a license holder, including one acting as agent for a prospective buyer or prospective tenant, may not attempt to negotiate a sale, exchange, lease, or rental of property under exclusive listing with another broker, the Act 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.
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§535.154 Registration and Use of Alternate, Team and Assumed Business Names Used in Advertisements
- Definitions. For the purposes of this section:
- "Advertisement" has the meaning assigned by §535.155.
- "Alternate name" (commonly known as an alias) means a name used by an individual license holder other than the name shown on the license issued by the Commission, such as a middle name, maiden name, or nickname. It does not include a common derivative of a name, such as Kim for Kimberly or Bill for William, which is considered the same as the name shown on the license.
- "Associated broker" means a broker who associates with and gets 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.
- "Assumed business name" (commonly known as a DBA or trade name) means any name used in business by a broker that meets the requirements of subsection (d), other than the name shown on the broker's license issued by the Commission, a team name, or an alternate name.
- "Team name" means a name used by a group of one or more license holders sponsored by or associated with the same broker that performs real estate activities under an exclusive collective name other than the broker's licensed name or assumed business name.
- Alternate names.
- Before a license holder starts using an alternate name in an advertisement, the license holder must register the name with the Commission on a form approved by the Commission.
- The Commission may request supporting documentation evidencing the legal authority to use the alternate name if the last name submitted is different from the last name shown on the license issued by the Commission.
- A license holder must notify the Commission, and their sponsoring broker, not later than the 10th day after the date the license holder stops using an alternate name.
- Team names:
- A team name may not include any terms that could mislead the public to believe that the team is offering brokerage services independent from its sponsoring broker.
- A team name must end with the word "team" or "group".
- Before an associated broker or a sales agent sponsored by a broker starts using a team name in an advertisement, the broker must register the name with the Commission on a form approved by the Commission.
- A broker must notify the Commission in writing not later than the 10th day after the date the associated broker or a sales agent sponsored by the broker stops using a team name.
- Assumed business names.
- Before a broker, associated broker or a sales agent sponsored by a broker starts using an assumed business name of the broker in an advertisement, the broker must:
- register the name with the Commission on a form approved by the Commission; and
- provide written evidence of legal authority to use the assumed business name in Texas, such as registration of the name with the Secretary of State or county clerk's office.
- A broker must notify the Commission in writing not later than the 10th day after the date the broker stops using an assumed business name.
- Before a broker, associated broker or a sales agent sponsored by a broker starts using an assumed business name of the broker in an advertisement, the broker must:
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§535.155 Advertisements
- Each advertisement must include the following in a readily noticeable location in the advertisement:
- the name of the license holder or team placing the advertisement; and
- the broker's name in at least half the size of the largest contact information for any sales agent, associated broker, or team name contained in the advertisement.
- For the purposes of this section:
- "Advertisement" is any 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. Advertisement does not include:
- a communication from a license holder to the license holder's current client; and
- a directional sign that may also contain only the broker's name or logo.
- Associated broker has the meaning assigned by §535.154.
- "Broker's name" means:
- the broker's name as shown on a license issued by the Commission;
- if an individual, an alternate name registered with the Commission; or
- any assumed business name that meets the requirements of §535.154.
- "Contact Information" means any information that can be used to contact a license holder featured in the advertisement, including a name, phone number, email address, website address, social media handle, scan code or other similar information.
- "Party" means a prospective buyer, seller, landlord, or tenant, or an authorized legal representative of a buyer, seller, landlord, or tenant, including a trustee, guardian, executor, administrator, receiver, or attorney-in-fact. The term does not include a license holder who represents a party.
- "Team name" has the meaning assigned by §535.154.
- "Advertisement" is any 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. Advertisement does not include:
- For an advertisement on social media or by text, the information required by this section may be located on a separate page or on the account user profile page of the license holder, if the separate page or account user profile is:
- readily accessible by a direct link from the social media or text; and
- readily noticeable on the separate page or in the account user profile.
- For purposes of this section and §1101.652(b)(23) of the Act, an advertisement that misleads or is likely to deceive the public, tends to create a misleading impression, or implies that a sales agent is responsible for the operation of the broker's real estate brokerage business includes, but is not limited to, any advertisement:
- that is inaccurate in any material fact or representation;
- that does not comply with this section;
- that identifies a sales agent as a broker;
- that uses a title, such as owner, president, CEO, COO, or other similar title, email or website address that implies a sales agent is responsible for the operations of a brokerage;
- that contains a team name with terms that imply that the team is offering brokerage services independent from its sponsoring broker, including, but not limited to, "brokerage", "company", and "associates";
- that contains the name of a sales agent that is not the name as shown on the sales agent's license issued by the Commission or an alternate name registered with the Commission;
- that contains the name of a sales agent whose name is, in whole or in part, used in a broker's name and that implies that the sales agent is responsible for the operation of the brokerage;
- that causes a member of the public to believe that a person not licensed to conduct real estate brokerage is engaged in real estate brokerage;
- that contains the name or likeness of an unlicensed person that does not clearly disclose that the person does not hold a license;
- that creates confusion regarding the permitted use of a property;
- about the value of a property, unless it is based on an appraisal that is disclosed and readily available upon request by a party or it is given in compliance with §535.17;
- that implies the person making the advertisement was involved in a transaction regarding a property when the person had no such role;
- about a property that is subject to an exclusive listing agreement without the permission of the listing broker and without disclosing the name of the listing broker unless the listing broker has expressly agreed in writing to waive disclosure;
- offering a listed property that is not discontinued within 10 days after the listing agreement is no longer in effect;
- about a property 10 days or more after the closing of a transaction unless the current status of the property is included in the advertisement;
- that offers to rebate a portion of a license holder's compensation to a party if the advertisement does not disclose that payment of the rebate is subject to the consent of the party the license holder represents in the transaction;
- that offers to rebate a portion of a license holder's commission contingent upon a party's use of a specified service provider, or subject to approval by a third party such as a lender, unless the advertisement also contains a disclosure that payment of the rebate is subject to restrictions;
- that offers or promotes the use of a real estate service provider other than the license holder and the license holder expects to receive compensation if a party uses those services, if the advertisement does not contain a disclosure that the license holder may receive compensation from the service provider;
- that ranks the license holder or another service provider unless the ranking is based on objective criteria disclosed in the advertisement; or
- that states or implies that the license holder teaches or offers Commission approved courses in conjunction with an approved school or other approved organization unless the license holder is approved by the Commission to teach or offer the courses.
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§535.156 Dishonesty; Bad Faith; Untrustworthiness
- A license holder's relationship with the license holder's principal is that of a fiduciary. A license holder shall convey to the principal all known information which would affect the principal's decision on whether or not to make, accept or reject offers; however, if the principal has agreed in writing that offers are not to be submitted after the principal has entered into a contract to buy, sell, rent, or lease a property, the license holder shall have no duty to submit offers to the principal after the principal has accepted an offer.
- The license holder must put the interest of the license holder's principal above the license holder's own interest. A license holder must deal honestly and fairly with all parties; however, the license holder represents only the principal and owes a duty of fidelity to such principal.
- A license holder has an affirmative duty to keep the principal informed at all times of significant information applicable to the transaction or transactions in which the license holder is acting as agent for the principal.
- A license holder has a duty to convey accurate information to members of the public with whom the license holder deals.
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Subchapter P Enforcement Action for Unlicensed Activity
§535.181 Investigation and Actions
- If the Commission receives information that indicates that a person has engaged in unlicensed activity, it shall conduct an investigation to determine if such information is accurate. If the information establishes evidence to indicate a probable violation of the Act, the Commission may impose an administrative penalty; issue an order to cease and desist; file a complaint alleging unlicensed activity with the appropriate law enforcement official; or take such other action as may be necessary and proper.
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Subchapter Q Administrative Penalties
§535.191 Schedule of Administrative Penalties
- The Commission may suspend or revoke a license or take other disciplinary action authorized by the Act in addition to or instead of assessing the administrative penalties set forth in this section.
- The administrative penalties set forth in this section take into consideration all of the criteria listed in §1101.702(b) of the Act.
- An administrative penalty range of $100 - $1,500 per violation per day may be assessed for violations of the following sections of the Act and Rules:
- §1101.552;
- §1101.652(a)(3);
- §1101.652(a)(8);
- §1101.652(a-1)(3);
- §1101.652(b)(23);
- §1101.652(b)(29);
- §1101.652(b)(33);
- 22 TAC §535.21(a);
- 22 TAC §535.53;
- 22 TAC §535.65;
- 22 TAC §535.91(d);
- 22 TAC §535.121;
- 22 TAC §535.154;
- 22 TAC §535.155; and
- 22 TAC §535.300.
- An administrative penalty range of $500 - $3,000 per violation per day may be assessed for violations of the following sections of the Act and Rules:
- §§1101.652(a)(4) - (7);
- §1101.652(a-1)(2);
- §1101.652(b)(1);
- §§1101.652(b)(7) - (8);
- §1101.652(b)(12);
- §1101.652(b)(14);
- §1101.652(b)(22);
- §1101.652(b)(28);
- §§1101.652(b)(30) - (31);
- §1101.654(a);
- 22 TAC §531.18;
- 22 TAC §531.20;
- 22 TAC §535.2;
- 22 TAC §535.6(c) - (d);
- 22 TAC §535.16;
- 22 TAC §535.17; and
- 22 TAC §535.144.
- An administrative penalty range of $1,000 - $5,000 per violation per day may be assessed for violations of the following sections of the Act and Rules:
- §1101.351;
- §1101.366(d);
- §1101.557(b);
- §1101.558;
- §§1101.559(a) and (c);
- §1101.560;
- §1101.561(b);
- §1101.615;
- §1101.651;
- §1101.652(a)(2);
- §1101.652(a-1)(1);
- §§1101.652(b)(2) - (6);
- §§1101.652(b)(9) - (11);
- §1101.652(b)(13);
- §§1101.652(b)(15) - (21);
- §§1101.652(b)(24) - (27);
- §1101.652(b)(32);
- 22 TAC §535.141(f);
- 22 TAC §§535.145 - 535.148; and
- 22 TAC §535.156.
- The Commission may assess an additional administrative penalty of up to two times that assessed under subsections (c), (d) and (e) of this section, subject to the maximum penalties authorized under §1101.702(a) of the Act, if a person has a history of previous violations.
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Subchapter R Real Estate Inspectors
§535.201 Definitions
- The following definitions shall apply to this subchapter.
- Client–a buyer or seller, including a prospective buyer or seller, of real property that is the subject of a real estate inspection conducted under Chapter 1102, Occupations Code, and this Subchapter.
- Committee–The Texas Real Estate Inspector Committee.
- Standards of Practice (SOPs)–refers to §§535.227 - 535.233 of this title, which establish the minimum requirements for a real estate inspection conducted under Chapter 1102, Occupations Code, and this Subchapter.
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§535.206 The Texas Real Estate Inspector Committee
- The functions of the Committee are as prescribed by Chapter 1102.
- The Committee consists of nine members appointed by the Commission as follows:
- six members who have been engaged in the practice of real estate inspecting as professional inspectors for at least five years before the member's appointment and who are actively engaged in that practice; and
- three members who represent the public, who are not registered, certified, or licensed by an occupational or regulatory agency in the real estate industry.
- Appointments to the Committee shall be made without regard to the race, color, disability, sex, religion, age, or national origin of the appointee.
- Inspector members of the Committee serve staggered six-year terms, with the terms of two inspector members expiring on December 31 of each odd-numbered year. Inspector members may not serve more than two consecutive full terms. Public members of the Committee serve staggered two year terms, with the term of one public member expiring on December 31 of each even-numbered year and the terms of two public members expiring on December 31 of each odd-numbered year. Public members may not serve more than three consecutive full terms. Initial appointments may be made for terms shorter than six or two years, respectively, in order to establish staggered terms. A member whose term has expired holds office until the member's successor is appointed. If a vacancy occurs during a member's term, the Commission shall appoint a person to fill the unexpired term.
- At a regular meeting in January of each year, the Committee shall elect from its members a presiding officer, assistant presiding officer, and secretary.
- The Commission may remove a Committee member if the member:
- does not have the qualifications required by subsection (b)(1) of this section;
- cannot discharge the member's duties for a substantial part of the member's term;
- is absent from more than half of the regularly scheduled Committee meetings that the member is eligible to attend during each calendar year, unless the absence is excused by majority vote of the Committee; or
- violates Chapter 1102.
- If the executive director of the Commission has knowledge that a potential ground for removal exists, the executive director shall notify the presiding officer of the Commission that the potential ground exists.
- The validity of an action of the Committee is not affected by the fact that it is taken when a ground for removal of a Committee member exists.
- The Committee may meet at the call of a majority of its members. The Committee shall meet at the call of the Commission.
- A quorum of the Committee consists of five members.
- The Committee shall conduct its meetings in substantial compliance with Robert's Rules of Order.
- The secretary of the Committee, or in the secretary's absence, a member designated by the chair, shall prepare written minutes for each meeting and submit the minutes to the Committee for approval.
- At least twice a year, the Committee Chair shall report on the activities of the Committee to the Commission. The Committee may submit its written recommendations concerning the licensing and regulation of real estate inspectors to the Commission at any time the Committee deems appropriate. If the Commission submits a rule to the Committee for development, the chair of the Committee or the chair's designee shall report to the Commission after each meeting at which the proposed rule is discussed on the Committee's consideration of the rule.
- The Committee is automatically abolished on September 1, 2031 unless the Commission subsequently establishes a different date.
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§535.208 Application for a License
- Application.
- A person who intends to be licensed by the Commission must file an application for the license:
- through the online process approved by the Commission; or
- on a form approved by the Commission for that purpose; and
- submit the required fee under §535.210 of this title (relating to Fees).
- The Commission will reject an application submitted without a sufficient filing fee.
- The Commission may request additional information be provided to the Commission relating to an application.
- A person who intends to be licensed by the Commission must file an application for the license:
- General Requirements for Licensure.
- To be eligible for any inspector license, an applicant must:
- meet the following requirements at the time of the application:
- be 18 years of age;
- be a citizen of the United States or a lawfully admitted alien;
- comply with the fingerprinting, education, experience and examination requirements of the Act, Chapter 1102, or the rules of the Commission;
- meet the honesty, trustworthiness, and integrity requirements under the Act; and
- provide proof of financial responsibility as required by Chapter 1102.
- meet the following requirements at the time of the application:
- The fact that an individual has had disabilities of minority removed does not affect the requirement that an applicant be 18 years of age to be eligible for a license.
- To be eligible for any inspector license, an applicant must:
- License for military service members, veterans, or military spouses. Unless otherwise excepted under §535.58 of this title (relating to License for Military Service Members, Veterans, or Military Spouses), an applicant who is a military service member, veteran, or the spouse of a person who is on full-time military service in the armed forces of the United States or serving on active duty as a member of the armed forces of the United States must meet all requirements of this section.
- Terminated application. An application will be terminated and subject to no further evaluation or processing if the applicant fails to satisfy the requirements of subsection (b)(1) of this section within one year from the date the application is filed.
- Denial of application.
- An application for a license may be denied if the Commission determines that the applicant has failed to satisfy the Commission as to the applicant's honesty, trustworthiness and integrity or if the applicant has been convicted of a criminal offense which is grounds for disapproval of an application under §541.1 of this title (relating to Criminal Offense Guidelines). Notice of the denial and any hearing on the denial shall be as provided in Texas Occupations Code, §1101.364, and §535.34 of this title (relating to Salesperson Employed by an Owner of Land and Structures Erected by the Owner).
- Procuring or attempting to procure a license by fraud, misrepresentation or deceit or by making a material misstatement of fact in an application is grounds to deny the application or suspend or revoke the license. It is a violation of this section for a sponsoring professional inspector knowingly to make a false statement to the Commission in an application for a license for an apprentice or a real estate inspector.
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§535.209 Examinations
- Examinations for licensure.
- The examination for a real estate inspector license and for a professional inspector license consists of a national part and a state part.
- The Commission adopts the National Home Inspector Examination developed by the Examination Board of Professional Home Inspectors for the national portion of the examination. For the state portion of the examination, questions shall be used which measure competency in the subject areas required for a license by Chapter 1102, and which demonstrate an awareness of its provisions relating to inspectors.
- Each real estate inspector applicant must achieve a score of at least 70% on the state portion of the examination. Each professional inspector applicant must achieve a score of at least 75% on the state portion of the examination. Examination results are valid for a period of one year from the date the examination is passed.
- Administration of examination. Except as otherwise required by Chapter 1102 or this section, examinations shall be conducted as provided by §535.57 of this title (relating to Examinations) . An applicant is eligible to take a qualifying examination for a license after the Commission has received evidence of completion of all education and experience required by this subchapter.
- Waiver of national portion of examination requirement. The Commission may waive the national portion of the examination of an applicant for a real estate or professional inspector license if the applicant:
- currently holds an active real estate inspector license in another state or actively practices as a home inspector in compliance with the laws of another state; and
- has passed the National Home Inspector Examination developed by the Examination Board of Professional Home Inspectors.
- If the applicant has not satisfied all requirements within one year from the time the commission accepted an application for filing, including passing both parts of the examination, the application is terminated and a new application is required.
- An examination is considered passed when an applicant has received a passing grade on both parts of the examination.
- An applicant who fails the examination three consecutive times may not apply for reexamination or submit a new license application unless the applicant submits evidence satisfactory to the commission that the applicant has completed additional core education as follows, after the date the applicant failed the examination for the third time:
- for an applicant who failed the national part of the examination, 32 hours;
- for an applicant who failed the state part of the examination, 8 hours; and
- for an applicant who failed both parts of the examination, 40 hours.
- Subsections (c) through (f) of this section expire on February 28, 2021.
- Exam Eligibility Effective March 1, 2021. The following eligibility requirements apply to applicant who takes the examination for licensure on or after March 1, 2021:
- Before the applicant is eligible to take the national portion of the examination the applicant must submit evidence of completion of the following courses to the Commission:
- Property and Building Inspection Module I;
- Property and Building Inspection Module II;
- Business Operations and Professional Responsibilities Module; and
- Analysis of Findings and Reporting Module, if required for licensure under §535.214 of this title (relating to Education and Experience Requirements for Licensure).
- Before the applicant is eligible to take the state portion of the examination, the applicant must submit evidence of completion of the following coursework to the Commission, if required for licensure under §535.214 of this title:
- Texas Law Module;
- Texas Standards of Practice Module; and
- Texas Practicum.
- If the applicant has previously passed the national portion of the examination, before the applicant is eligible to take the state portion of the examination, the applicant:
- must submit evidence of completion of the required coursework as provided under this subsection (h)(2) of this section; and
- is not required to complete coursework outlined under subsection (h)(1) of this section.
- If the applicant fails the examination three consecutive times, the applicant may not apply for reexamination or submit a new license application unless the applicant submits evidence to the Commission that the applicant has successfully completed additional qualifying education after the date of the third failed examination, as follows:
- for an applicant who failed the national part of the examination, Property and Building Inspection Module I or Property and Building Inspection Module II; or
- for an applicant who failed the state part of the examination, Texas Law Module, or Texas Standards of Practice Module.
- If if the applicant chooses to take the national portion and state portion of the exam separately, the national portion must be taken before the state portion of the exam.
- Before the applicant is eligible to take the national portion of the examination the applicant must submit evidence of completion of the following courses to the Commission:
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§535.210 Fees
- The Commission shall charge and collect the following fees:
- a fee of $60 for filing an original or reinstatement application for a license as an apprentice inspector;
- a fee of $100 for filing an original or reinstatement application for a license as a real estate inspector, which includes a fee for transcript evaluation;
- a fee of $120 for filing an original or reinstatement application for a license as a professional inspector, which includes a fee for transcript evaluation;
- a fee of $30 for the timely renewal of the license of an apprentice inspector;
- a fee of $50 for the timely renewal of the license of a real estate inspector;
- a fee of $60 for the timely renewal of the license of a professional inspector;
- a fee equal to 1-1/2 times the timely renewal fee for the late renewal of a license within 90 days of expiration;
- a fee equal to 2 times the timely renewal fee for the late renewal of a license more than 90 days but less than six months after expiration;
- a fee for taking a license examination consisting of a national portion and a state portion or retaking the national part of the license examination;
- a fee for taking a license examination without a national portion or retaking the state part of the license examination;
- a fee of $50 to request an inactive professional inspector license be returned to active status;
- a fee of $50 for the filing of a fitness determination;
- the fee required by the Department of Information Resources as a subscription or convenience fee for use of an online payment system;
- a fee of $400 for filing an application for accreditation of a qualifying inspector education program for a period of four years;
- after initial approval of accreditation, a fee of $200 a year for operation of a qualifying inspector education program;
- a fee of $50 plus the following fees per classroom hour approved by the Commission for each qualifying inspector education course for a period of four years:
- $5 for content and examination review;
- $5 for classroom delivery design and presentation review; and
- $10 for distance education delivery design and presentation review.
- a fee of $400 for filing an application for accreditation as a continuing inspector education provider for a period of two years;
- a fee of $50 plus the following fees per classroom hour approved by the Commission for each continuing inspector education course for a period of two years:
- $2.50 for content and examination review;
- $2.50 for classroom delivery design and presentation review; and
- $5 for distance education delivery design and presentation review.
- the fee required under paragraphs (16)(C) and (18)(C) of this subsection will be waived if the course has already been certified by a distance learning certification center acceptable to the Commission.
- a fee of $10 for deposit in the real estate inspection recovery fund upon an applicant's successful completion of an examination; and
- the fee charged by the Federal Bureau of Investigation and Texas Department of Public Safety for fingerprinting or other service for a national or state criminal history check in connection with a license application.
- Fees established by this section must be paid when an application is filed and are not refundable once an application has been accepted for filing.
- If the Commission receives an application that requires payment of a fee, and a sufficient fee was not submitted with the application, the Commission will return the application and notify the person filing the application that the person must pay the fee before the application will be processed.
- If a payment to the Commission by or on behalf of a license holder or applicant is dishonored or reversed by a bank or other financial institution, the Commission shall send a request for payment of the dishonored or reversed payment by certified mail to the last known mailing address of the license holder or applicant as shown in the records of the Commission. If the Commission has sent a request for payment in accordance with the provisions of this section, and the license holder or applicant fails to make good on the payment in the form of a cashier's check, money order, or credit card payment within 30 days after the Commission has mailed the request, the license will be placed on inactive status.
- Placing a license on inactive status under this section does not preclude the Commission from proceeding under Texas Occupations Code, §1101.652(a)(3), against a license holder who has failed to make good a payment issued to the Commission within a reasonable time.
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§535.211 Professional Liability Insurance, or Any Other Insurance that Provides Coverage for Violations of Subchapter G of Chapter 1102
- When an applicant for a license issued under Chapter 1102 has met all other licensing requirements, the Commission shall notify the applicant that the applicant must provide proof of professional liability insurance, or any other insurance that provides coverage for violations of Subchapter G of Chapter 1102, before the license will be issued.
- An inspector must maintain financial responsibility during the period the license is active.
- The applicant must provide proof of insurance using a Certificate of Insurance form approved by the Commission and signed by the applicant's insurance agent, or any other proof of insurance acceptable to the Commission.
- An inspector must notify the Commission within 10 days of the cancellation or non-renewal of professional liability insurance coverage, or any other insurance that provides coverage for violations of Subchapter G of Chapter 1102.
- 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.
- The requirement that an inspector carry financial responsibility does not require coverage for violations wherein providing such insurance coverage would be as against public policy.
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§535.212 Education and Experience Requirements for a License
- Educational Requirements for a Real Estate Inspector License. To become licensed as a real estate inspector a person must satisfy the 90-hour education requirement for licensure by completing the following coursework:
- 10 hours in foundations;
- 8 hours in framing;
- 10 hours in building enclosure;
- 10 hours in roof systems;
- 8 hours in plumbing systems;
- 10 hours in electrical systems;
- 10 hours in heating, ventilation, and air conditioning systems;
- 8 hours in appliances;
- 4 hours in Texas Standards of Practice;
- 4 hours in Texas Standard Report Form/Report Writing; and
- 8 hours in Texas Legal/Ethics.
- Educational Requirements for a Professional Inspector License. To become licensed as a professional inspector, a person must satisfy the 130-hour education requirement for licensure by completing the courses required for licensure as a real estate inspector in subsection (a) of this section; and
- 8 additional hours in Texas Standard Report Form/Report Writing;
- 8 additional hours in non-elective coursework in legal, ethics, SOPs, and report writing as defined in §535.218 of this title (relating to Continuing Education Required for Renewal); and
- 8 additional hours in Texas Standard Report Form/Report Writing;
- Experience Requirements. To meet the experience requirements for licensure or to sponsor apprentice inspectors or real estate inspectors, the Commission considers an improvement to real property to be any unit capable of being separately rented, leased or sold, subject to the following restrictions:
- An inspection of an improvement to real property that includes the structural and equipment/systems of the unit constitutes a single inspection.
- The Commission may not give experience credit to the same applicant or professional inspector for more than three inspections per day. No more than three applicants may receive credit for the inspection of the same unit within a 30 day period, and no more than three apprentice inspectors may receive credit for an inspection of the same unit on the same day.
- An applicant for a real estate inspector license must have:
- been licensed as an apprentice inspector on active status for a total of at least three months within the 12 month period before the filing of the application; and
- completed 25 inspections.
- An applicant for a professional inspector license must have:
- been licensed as a real estate inspector on active status for a total of at least 12 months within the 24 month period before the filing of the application; and
- completed 175 inspections.
- Substitute Experience Requirements for a Real Estate Inspector License.
- A person may satisfy the substitute experience requirements for licensure as a real estate inspector as follows:
- complete a total of 32 additional hours of qualifying inspection coursework, which must include the following:
- 8 hours in Texas Standard Report Form/Report Writing;
- 8 hours in non-elective coursework in legal, ethics, SOPs, and report writing as defined in §535.218 of this title;
- 16 hours in any qualifying inspection subject(s); and
- complete:
- 20 hours of field work through ride-along inspection course sessions as defined in §535.213(g) of this title (relating Qualifying Real Estate Inspector Instructors and Courses); and
- 12 hours of an approved interactive experience training module.
- complete a total of 32 additional hours of qualifying inspection coursework, which must include the following:
- Exceptions. The Commission may award substitute experience credit to an applicant who has not met the additional qualifying course requirements under this subsection if:
- the applicant:
- has three years of experience in a field directly related to home inspection, including but not limited to installing, servicing, repairing or maintaining the structural, mechanical and electrical systems found in improvements to real property; and
- provides to the Commission two affidavits from persons who have personal knowledge of the applicant's work, detailing the time and nature of the applicant's relevant experience; or
- The applicant:
- has at least two years of experience as an active practicing licensed or registered architect, professional engineer, or engineer-in-training and has completed 16 additional hours of qualifying inspection coursework, which must include the following:
- 8 hours in Texas Standard Report Form/Report Writing; and
- 8 hours in non-elective coursework in legal, ethics, SOPs, and report writing as defined in §535.218 of this title; and
- submits a license history from the regulatory agency that issued the license or registration documenting the period of practice as a licensed or registered architect, professional engineer, or engineer-in-training.
- has at least two years of experience as an active practicing licensed or registered architect, professional engineer, or engineer-in-training and has completed 16 additional hours of qualifying inspection coursework, which must include the following:
- the applicant:
- A person may satisfy the substitute experience requirements for licensure as a real estate inspector as follows:
- Substitute Experience Requirements for a Professional Inspector License.
- A person may satisfy the substitute experience requirements for licensure as a professional inspector as follows:
- complete a total of 200 additional hours of qualifying inspection coursework, which must include the following:
- 30 hours in foundations;
- 30 hours in framing;
- 24 hours in building enclosure;
- 24 hours in roof systems;
- 16 hours in plumbing systems;
- 24 hours in electrical systems;
- 24 hours in heating, ventilation, and air conditioning systems;
- 6 hours in appliances;
- 8 hours in non-elective coursework in legal, ethics, SOPs, and report writing as defined in §535.218 of this title;
- 8 hours in Standard Report Form/Report writing; and
- 6 hours in any core inspection subject(s); and
- complete:
- 40 hours of field work through ride-along inspection course sessions as defined in §535.213(g) of this title; and
- 24 hours of an approved interactive experience training module.
- complete a total of 200 additional hours of qualifying inspection coursework, which must include the following:
- Exceptions. The Commission may award substitute experience credit to an applicant who has not met the additional qualifying course requirements under this subsection if:
- the applicant:
- has five years of experience in a field directly related to home inspection, including but not limited to installing, servicing, repairing or maintaining the structural, mechanical and electrical systems found in improvements to real property; and
- provides to the Commission two affidavits from persons who have personal knowledge of the applicant's work, detailing the time and nature of the applicant's relevant experience; or
- The applicant has:
- at least three years of experience as an active practicing licensed or registered architect, professional engineer, or engineer-in-training, who has completed a total of 16 additional hours of qualifying inspection coursework, which must include the following:
- 8 hours in Texas Standard Report Form/Report Writing; and
- 8 hours in non-elective coursework in legal, ethics, SOPs, and report writing as defined in §535.218 of this title; and
- submits a license history from the regulatory agency that issued the license or registration documenting the period of practice as a licensed or registered architect, professional engineer, or engineer-in-training.
- at least three years of experience as an active practicing licensed or registered architect, professional engineer, or engineer-in-training, who has completed a total of 16 additional hours of qualifying inspection coursework, which must include the following:
- the applicant:
- A person may satisfy the substitute experience requirements for licensure as a professional inspector as follows:
- For purposes of this section:
- "qualifying inspection coursework" means course work on the subject matters listed in §535.213(e) of this title; and
- "interactive experience training module" means education that provides regular and substantive interaction between the students and the instructor, either synchronously or asynchronously, and is delivered:
- in-person to students in the classroom; or
- through the use of one or more of the following technologies:
- the internet;
- one-way and two-way transmissions through open broadcast, closed circuit, cable, microwave, broadband lines, fiber optics, satellite or wireless communications devices;
- audio conferencing; or
- video cassettes, DVDs, and CD-ROMs, if the cassettes, DVDs, or CD-ROMs are used in a course in conjunction with any of the technologies listed in clauses (i) through (iii) of this subparagraph.
- Education submitted under this section will only be accepted to satisfy the requirements for licensure if started before March 1, 2021 and completed and submitted in conjunction with an application filed by June 30, 2021.
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§535.213 Qualifying Real Estate Inspector Instructors and Courses
- Subsections (a) - (f) of this section shall expire on February 28, 2021, and only apply to satisfy the education requirements for a license under §535.212 of this title (relating to Education and Experience Requirements for a License).
- Approval of Inspector Qualifying Courses. Inspector qualifying courses are approved and regulated as required by §535.62 of this title (relating to Approval of Qualifying Courses).
- A classroom course may include up to 50% of total course time for appropriate field trips relevant to the course topic. Field trips may not be included as part of distance education delivery courses.
- A course approved to satisfy a specific subject matter requirement under §535.212 of this title must address each part of the subject as described by this section.
- Approved Qualifying Courses of Study. The subjects approved for credit for qualifying inspector courses are those courses prescribed by §1102.001(5), Texas Occupations Code and the following:
- Foundations, which shall include the following topics:
- site analysis/location;
- grading;
- foundations;
- flat work;
- material;
- foundation walls;
- foundation drainage;
- foundation waterproofing and damp proofing;
- columns; and
- under floor space.
- Framing, which shall include the following topics:
- flashing;
- wood frame - stick/balloon;
- roof structure - rafters/trusses;
- floor structure;
- porches/decks/steps/landings/balconies;
- doors;
- ceilings;
- interior walls;
- stairways;
- guardrails/handrails/balusters;
- fireplace/chimney;
- sills/columns/beams/joist/sub-flooring;
- wall systems/structure - headers;
- rammed earth;
- straw bale;
- ICF;
- panelized;
- masonry;
- wood I joist;
- roof sheathing;
- wood wall;
- steel wall;
- wood structural panel; and
- conventional concrete.
- Building Enclosure, which shall include the following topics:
- review of foundation and roofing relation;
- review of flashing;
- cladding;
- windows/glazing;
- weather barriers;
- vapor barriers;
- insulation;
- energy codes; and
- ingress/egress.
- Roof Systems, which shall include the following topics:
- review - rafters, roof joist, ceiling joist, collar ties, knee walls, purling, trusses, wood I joist, roof sheathing, steel framing;
- roof water control;
- skylights;
- flashing;
- ventilation/non-ventilation;
- attic access;
- re-roofing;
- slopes - step roof/low slope/near flat;
- materials - asphalt, fiberglass, wood shake, wood shingle, slate, clay tile, concrete tile, fiber cement (asbestos cement, mineral cement), metal, roll, build up, modified bitumen, synthetic rubber (EPDM), plastic (PVC); and
- valleys.
- Plumbing Systems, which shall include the following topics:
- water supply systems;
- fixtures;
- drains;
- vents;
- water heaters (gas and electric);
- gas lines; and
- hydro-therapy equipment.
- Electrical Systems, which shall include the following topics:
- general requirements, equipment location and clearances;
- electrical definitions;
- services;
- branch circuit and feeder requirements;
- wiring methods;
- power and lights distribution;
- devices and light fixtures; and
- swimming pool.
- HVAC Systems, which shall include the following topics:
- heating;
- ventilation;
- air conditioning; and
- evaporative coolers.
- Appliances, which shall include the following topics:
- dishwasher;
- food waste disposer;
- kitchen exhaust hood;
- range, cooktop, and ovens (electric and gas);
- microwave cooking equipment;
- trash compactor;
- bathroom exhaust fan and heater;
- whole house vacuum systems;
- garage door operator;
- doorbell and chimes; and
- dryer vents.
- Texas Standards of Practice, which shall include the following topics:
- review of general principles and specific Texas practice standards;
- inspection guidelines for structural systems;
- inspection guidelines for electrical systems;
- inspection guidelines for heating, ventilation, and air conditioning systems;
- inspection guidelines for plumbing systems;
- inspection guidelines for appliances; and
- inspection guidelines for optional systems.
- Legal/Ethics, which shall include the following topics:
- Chapter 1102;
- rules of the Commission related to inspectors;
- agency enforcement action relating to inspectors; and
- related case law.
- Texas Standard Report Form/Report Writing, which shall include the following topics:
- use of the required inspection report form;
- allowed reproductions;
- allowed changes;
- exceptions from use of the form;
- review of typical comments for each heading in the report; and
- review of generally accepted technical writing techniques.
- Other approved courses as they relate to real estate inspections, which shall include one or more of the following topics:
- Environmental Protection Agency;
- Consumer Product Safety Commission; and
- general business practices.
- Foundations, which shall include the following topics:
- Ride-along inspection course for qualifying education.
- A ride-along inspection course must:
- at a minimum consist of one full residential property inspection per 8 hours of course credit;
- review applicable standards of practice and departure provisions contained in §§535.227 - 535.233 of this title (relating to Standards of Practice); and
- consist of no more than four students per instructor.
- The instructor of a ride-along inspection course may:
- review report writing;
- deliver a notice regarding the ride-along session on a form approved by the Commission to the prospective buyer or seller of the home being inspected.
- A ride-along inspection course must:
- Subsections (h) - (i) of this section are effective March 1, 2021 and apply to the education requirements for a license under §535.214 of this title (relating to Education and Experience Requirements for a License).
- Approval of Inspector Qualifying Courses. Inspector qualifying courses are approved and regulated as required by §535.62 of this title.
- Approved Qualifying Courses of Study. The subjects approved for credit for qualifying inspector courses consist of the following modules:
- Property and Building Inspection Module I (40 hours), which shall contain the following topics, the units of which are outlined in the Property and Building Inspection I Qualifying Inspector Course Approval Form:
- Site conditions; assessing defects and issues that may affect people or the performance of the building - 300 minutes;
- Exterior components; assessing defects and issues that may affect people or the performance of the building - 300 minutes;
- Roof components; assessing defects and issues that may affect people or the performance of the building - 300 minutes;
- Structural components; assessing defects and issues that may affect people or the performance of the building - 300 minutes;
- Interior components; assessing defects and issues that may affect people or the performance of the building - 300 minutes;
- Permanently installed kitchen appliances; assessing for proper condition and operations - 300 minutes; and
- Fireplaces, fuel-burning appliances, and their chimney and vent systems; assessing defects and issues that may affect people or the performance of the building - 200 minutes.
- Property and Building Inspection Module II (40 hours), which shall contain the following topics, the units of which are outlined in the Property and Building Inspection II Qualifying Real Estate Inspector Course Approval Form:
- Electrical systems; assessing defects and issues that may affect people or the performance of the building - 300 minutes;
- Cooling Systems; assessing defects and issues that may affect people or the performance of the building - 300 minutes;
- Heating systems; assessing defects and issues that may affect people or the performance of the building - 300 minutes;
- Insulation, moisture management systems, and ventilation systems in conditioned and unconditioned spaces; assessing defects and issues that may affect people or the performance of the building - 300 minutes;
- Plumbing systems; assessing defects and issues that may affect people or the performance of the building - 300 minutes;
- Mechanical exhaust systems; assessing defects and issues that may affect people or the performance of the building - 300 minutes; and
- Optional Systems - 200 minutes.
- Analysis of Findings and Reporting Module (20 hours), which shall contain the following topics, the units of which are outlined in the Analysis of Findings and Reporting Module Qualifying Real Estate Inspector Course Approval Form:
- Informing the client what was inspected and describing building systems and components by their distinguishing characteristics - 200 minutes;
- Describing inspection methods and limitations in the inspection report to inform the client what was not inspected and why - 200 minutes;
- Describing systems and components inspected that are not functioning properly or are defective - 200 minutes;
- Describing systems and components in need of further evaluation or action - 200 minutes; and
- Describing the implication of defects so that the client understands what could occur if the defects are not corrected - 200 minutes.
- Business Operations and Professional Responsibilities Module (10 hours), which shall contain the following topics, the units of which are outlined in the Business Operations and Professional Responsibilities Qualifying Real Estate Inspector Course Approval Form:
- Elements of the written inspection contract and the rights and responsibilities of the inspector and the client - 250 minutes; and
- Inspector's responsibility to maintain the quality, integrity, and objectivity of the inspection process - 250 minutes.
- Texas Law Module (20 hours), which shall contain the following topics, the units of which are outlined in the Texas Law Module, Qualifying Real Estate Inspector Course Approval Form:
- Licensing Law; Chapter 1102 Texas Occupations Code - 200 minutes;
- General Provisions; TREC Rules, Chapter 535 Subchapter R - 400 minutes; and
- Inspector Legal & Ethics - 400 minutes.
- Texas Standards of Practice Module (24 hours), which shall contain the following topics, the units of which are outlined in the Texas Standards of Practice Module Qualifying Real Estate Inspector Course Approval Form:
- Structural systems; Texas SOP exclusions and unique reporting requirements - 400 minutes;
- Electrical systems; Texas SOP exclusions and unique reporting requirements - 400 minutes; and
- Mechanical systems; Texas SOP exclusions and unique reporting requirements - 400 minutes.
- Texas Practicum (40 hours); which shall consist of a minimum of five complete and in-person inspections.
- The Texas Practicum must:
- be supervised by a currently licensed inspector who has:
- been actively licensed as a Professional Inspector for at least five years; and
- at least three years of supervisory or training experience with inspectors; or
- performed a minimum of 200 real estate inspections as a Texas professional inspector; and
- consist of no more than four students per inspector supervising the Texas Practicum.
- be supervised by a currently licensed inspector who has:
- The inspector supervising the Texas Practicum must evaluate that upon completion by the student, each report is:
- considered satisfactory for release to an average consumer; and
- demonstrates an understanding of:
- report writing;
- client interaction;
- personal property protection; and
- concepts critical for the positive outcome of the inspection process.
- An applicant may request credit for completing the Texas Practicum (40 hours) by submitting the credit request form approved by the Commission.
- Audits.
- The Commission staff may conduct an audit of any information provided on a Texas Practicum credit request form, including verifying that the inspector supervising the Texas Practicum meets the qualifications required to supervise the practicum.
- The following acts committed by a supervisory inspector conducting the Texas Practicum are grounds for disciplinary action:
- making material misrepresentation of fact;
- making a false representation to the Commission, either intentionally or negligently, that a student completed the Texas Practicum in its entirety, satisfying all requirements for credit to be awarded.
- The Texas Practicum must:
- Property and Building Inspection Module I (40 hours), which shall contain the following topics, the units of which are outlined in the Property and Building Inspection I Qualifying Inspector Course Approval Form:
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§535.214 Education and Experience Requirements for a License
- Sponsored Experience and Education Requirements for a Real Estate Inspector License. To become licensed as a real estate inspector a person must:
- satisfy the 90-hour education requirement for licensure by completing the following coursework:
- Property and Building Inspection Module I, total 40 hours;
- Property and Building Inspection Module II, total 40 hours; and
- Business Operations and Professional Responsibilities Module, total 10 hours;
- have been licensed as an apprentice inspector on active status for a total of at least three months within the 12 month period before the filing of the application;
- complete 25 inspections; and
- pass the licensure examinations set out in §535.209 of this title (relating to Examinations).
- satisfy the 90-hour education requirement for licensure by completing the following coursework:
- Sponsored Experience and Education Requirements for a Professional Inspector License. To become licensed as a professional inspector, a person must:
- satisfy the 134-hour education requirement for licensure by completing the following coursework:
- Property and Building Inspection Module I, total 40 hours;
- Property and Building Inspection Module II, total 40 hours;
- Business Operations and Professional Responsibilities Module, total 10 hours;
- Texas Law Module, total 20 hours; and
- Texas Standards of Practice Module, total 24 hours;
- have been licensed as a real estate inspector on active status for a total of at least 12 months within the 24 month period before the filing of the application;
- complete 175 inspections; and
- pass the licensure examinations set out in §535.209 of this title.
- satisfy the 134-hour education requirement for licensure by completing the following coursework:
- Sponsored Experience Criteria. To meet the experience requirements for licensure under subsections (a) or (b) of this section, or to sponsor apprentice inspectors or real estate inspectors:
- the Commission considers an improvement to real property to be any unit capable of being separately rented, leased or sold; and
- an inspection of an improvement to real property that includes the structural and equipment/systems of the unit constitutes a single inspection.
- Substitute Experience and Education Requirements for a Real Estate Inspector License. As an alternative to §535.214(a) of this title, to become a licensed real estate inspector, a person must:
- complete a total of 154 hours of qualifying inspection coursework, which must include the following:
- Property and Building Inspection Module I, total 40 hours;
- Property and Building Inspection Module II, total 40 hours;
- Business Operations and Professional Responsibilities Module, total 10 hours;
- Texas Standards of Practice Module, total 24 hours; and
- Texas Practicum, total 40 hours; and
- pass the licensure examinations set out in §535.209 of this title.
- be sponsored by a professional inspector.
- complete a total of 154 hours of qualifying inspection coursework, which must include the following:
- Substitute Experience and Education Requirements for a Professional Inspector License. As an alternative to §535.214(b) of this title, to become a licensed professional inspector, a person must:
- complete a total of 194 hours of qualifying inspection coursework, which must include the following:
- Property and Building Inspection Module I, total 40 hours;
- Property and Building Inspection Module II, total 40 hours;
- Business Operations and Professional Responsibilities Module, total 10 hours;
- Analysis of Findings and Reporting Module, total 20 hours;
- Texas Law Module, total 20 hours;
- Texas Standards of Practice Module, total 24 hours; and
- Texas Practicum, total 40 hours; and
- pass the licensure examinations set out in §535.209 of this title.
- complete a total of 194 hours of qualifying inspection coursework, which must include the following:
- Courses completed for a real estate inspector license under this section shall count towards the identical qualifying inspection coursework for licensure as a profession inspector.
- Experience Credit. The Commission may award credit for education required under subsection (d) and (e) to an applicant who:
- has three years of experience in a field directly related to home inspection, including but not limited to installing, servicing, repairing or maintaining the structural, mechanical and electrical systems found in improvements to real property; and
- provides to the Commission two affidavits from persons who have personal knowledge of the applicant's work, detailing the time and nature of the applicant's relevant experience.
- This rule is effective March 1, 2021.
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§535.215 Inactive Inspector Status
- For the purposes of this section, an "inactive" inspector is a licensed professional inspector, real estate inspector, or apprentice inspector who is not authorized by law to engage in the business of performing real estate inspections as defined by Chapter 1102.
- The Commission may place an inspector on inactive status for any of the following reasons:
- the written request of the inspector to be placed on inactive status as provided for under subsection (c); or
- the inspector's failure to satisfy continuing education requirements. In addition, the inspector's license is inactive when the following occurs:
- termination of sponsorship by a professional inspector;
- the death of the inspector's sponsoring professional inspector;
- the expiration, suspension, or revocation of the license of the inspector's sponsoring professional inspector;
- the failure of the license holder to provide to the Commission proof of financial responsibility as required by Chapter 1102 and on a form approved by the Commission for that purpose; or
- the expiration or non-renewal of the inspector's financial responsibility as required by Chapter 1102.
- To be placed on inactive status by request, an inspector must do the following:
- file a request for inactive status or submit a letter containing the inspector's name, license number and current mailing address; and
- if the inspector is a licensed professional inspector, confirm in writing that the inspector has, at least 30 days prior to filing the request for inactive status, given any real estate inspectors or apprentice real estate inspectors sponsored by the inspector written notice that the inspector will no longer be their sponsor.
- A professional inspector on inactive status may apply to the Commission for return to active status by:
- filing a request online or on a form approved by the Commission;
- providing the Commission with documentation that the inspector has satisfied all continuing education requirements under Chapter 1102 and this chapter; and
- submitting any required fee.
- An apprentice inspector or real estate inspector who has been placed on inactive status may return to status if:
- the inspector has completed all applicable continuing education requirements; and
- the inspector's sponsoring professional inspector has requested that the apprentice inspector or real estate inspector be returned to active status on a form approved by the Commission.
- If a professional inspector terminates the sponsorship of an apprentice inspector or real estate inspector, the license of the apprentice inspector or real estate inspector immediately becomes inactive.
- Inactive inspectors may not perform inspections. Performance of inspections while on inactive status is grounds for disciplinary action against the inactive license holder. A professional inspector who has been placed on inactive status may not return to practice or sponsor apprentices or inspectors until the professional inspector has met the requirements to be returned to active status under this section. It is a violation of this section and grounds for disciplinary action against a professional inspector for the professional inspector to permit an inactive apprentice inspector or an inactive real estate inspector to perform inspections in association with, or on behalf of, the professional inspector.
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§535.216 Renewal of License
- Renewal application.
- A license issued by the Commission under Chapter 1102, Occupations Code, expires on the date shown on the face of the license issued to the license holder.
- If a license holder intends to renew an unexpired license, the license holder must, on or before the expiration date of the current license:
- file a renewal application through the online process on the Commission's website or on the applicable form approved by the Commission;
- pay the appropriate fee as required by §535.210 of this title;
- comply with the fingerprinting requirements of Chapter 1102, Occupations Code;
- satisfy the applicable continuing education requirements of Chapter 1102, Occupations Code, and this subchapter; and
- provide proof of financial responsibility as required in Chapter 1102, Occupations Code, on a form approved by the Commission.
- An apprentice inspector or a real estate inspector must be sponsored by a licensed professional inspector in order to renew a license on an active status.
- Renewal Notice.
- The Commission will send a renewal notice to each license holder at least 90 days before the license expiration date.
- If a license holder intends to renew a license, failure to receive a renewal notice does not relieve the license holder from responsibility of applying for renewal as required in this section.
- Request for information.
- The Commission may request a license holder to provide additional information to the Commission in connection with a renewal application.
- A license holder must provide the information requested by the Commission within 30 days after the date of the Commission's request.
- Failure to provide the information requested within the required time is grounds for disciplinary action under Chapter 1102, Occupations Code.
- Renewal on inactive status.
- Licensed professional inspectors, real estate inspectors and apprentice inspectors may renew a license on inactive status.
- Inspectors are not required to complete continuing education courses as a condition of renewing a license on inactive status, but must satisfy continuing education requirements before returning to active status.
- Late Renewal.
- If a license has been expired for less than six months, a license holder may renew the license by:
- filing a renewal application through the online process on the Commission's website or on the applicable form approved by the Commission;
- paying the appropriate late renewal fee as required by §535.210 of this title (related to Fees);
- satisfying the applicable continuing education requirements; and
- providing proof of financial responsibility on a form approved by the Commission.
- To renew a license on active status without any lapse in active licensure, an apprentice or real estate inspector must also submit a Real Estate Apprentice and Inspector Sponsorship Form certifying sponsorship for the period from the day after the previous license expired to the day the renewal license issued, and for the period beginning on the day after the renewal license issued. The same inspector may be the sponsor for both periods. The Commission will renew the license on inactive status for the period(s) in which the apprentice or real estate inspector was not sponsored.
- If a license has been expired for less than six months, a license holder may renew the license by:
- License Reinstatement.
- If a license has been expired for more than six months, a license holder may not renew the license.
- A license holder may reinstate an expired license if the license holder:
- has held a professional inspector or real estate inspector license during the 24 months preceding the date the reinstatement application is filed;
- submits evidence satisfactory to the commission of successful completion of the continuing education hours required for the renewal of that license; and
- satisfies the commission as to the applicant's honesty, trustworthiness, and integrity.
- Applicants for a real estate inspector license must submit evidence of sponsorship by a professional inspector.
- An applicant for reinstatement is not required to take an examination.
- Denial of Renewal or Reinstatement. The Commission may deny an application for license renewal or reinstatement if a license holder is in violation of the terms of a Commission order.
- Renewal of license for military service member. A license holder on active duty in the United States armed forces is entitled to two years of additional time to renew an expired license without being subject to any increase in fee, any education or experience requirements or examination if the license holder:
- provides a copy of official orders or other official documentation acceptable to the Commission showing that the license holder was on active duty during the license holder's last renewal period; and
- pays the renewal application fee in effect when the previous license expired.
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§535.217 Mailing Address and Other Contact Information
- Each license holder shall provide a mailing address, phone number, and email address, if available, to the Commission and shall report all subsequent changes not later than the 30th day after the date of a change of any of the listed contact information. If a license holder fails to update the contact information, the last known contact information provided to the Commission is the license holder's contact information.
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§535.218 Continuing Education Required for Renewal
- Continuing education required for renewal.
- Before renewal of an inspector license, a license holder must take the 32 hours of continuing education which shall include the following:
- 24 hours in the following subjects:
- Foundations;
- Framing;
- Building Enclosures;
- Roof Systems;
- Plumbing Systems;
- Electrical Systems;
- HVAC Systems;
- Appliances;
- Texas Standard Report Form Writing;
- Other approved courses related real estate inspections; and
- eight hours of non-elective coursework in legal, ethics, SOPs, and report writing consisting of the following coursework:
- 4 hours of Standards of Practice Review; and
- 4 hours of Legal and Ethics.
- 24 hours in the following subjects:
- An inspector who files an application for reinstatement of an expired license within two years of the expiration date of the previous license must provide evidence satisfactory to the Commission that the applicant has completed any continuing education that would have been otherwise required for timely renewal of the previous license had that license not expired.
- An inspector is not eligible to receive more than 16 hours continuing education credit for any one single subject described in subsection (a)(1) of this section.
- Before renewal of an inspector license, a license holder must take the 32 hours of continuing education which shall include the following:
- Receiving continuing education credit for ride-along inspection course.
- Up to eight hours of continuing education credit per two year license period may be given to a license holder for completion of a ride-along inspection course.
- At a minimum, a ride-along inspection course must:
- consist of one full residential property inspection; and
- review applicable standards of practice and departure provisions contained in §§535.227 - 535.233 of this title.
- In order to qualify for real estate inspector continuing education credit, a ride-along inspection course shall consist of no more than two students per session.
- The instructor of a ride-along inspection course may:
- review report writing; and
- deliver a notice regarding the ride-along session on a form approved by the Commission to the prospective buyer or seller of the home being inspected.
- Mandatory Standards of Practice Review course.
- To be approved by the Commission, the Standards of Practice Review course shall contain the topics and the units outlined in the SOP-1, CE Course Approval Form, Standards of Practice Review, hereby adopted by reference.
- Each Standards of Practice Review course expires on August 31 of each odd-numbered year.
- Continuing education credit for students.
- Courses submitted for inspector continuing education credit must be successfully completed during the term of the current license holder.
- The Commission may not grant continuing education credit twice for a course with the same course content taken by a licensee within a two year period.
- Unless a real estate inspection continuing education course is offered by alternative delivery methods, completion of a final examination is not required for a license holder to receive continuing education credit for a course.
- The commission will not grant partial credit to an inspector who attends a portion of a course.
- Continuing education credit for course taken outside of Texas. An inspector may receive continuing education elective credit for a course taken to satisfy the continuing education requirements of a country, territory, or state other than Texas if:
- the inspector licensed in Texas held an active inspector license in a country, territory, or state other than Texas at the time the course was taken;
- the course was approved for continuing education credit for an inspector license by a country, territory, or state other than Texas at the time the course was taken;
- the successful completion of the course has been evidenced by a course completion certificate, a letter from the provider or such other proof satisfactory to the Commission;
- the subject matter of the course was predominately devoted to a subject acceptable for continuing education credit for an inspector licensed in Texas; and
- the inspector licensed in Texas has filed a Continuing Education (CE) Credit Request for an Out of State Course, with the Commission.
- Continuing education credit for instructors.
- Providers may request continuing education credit be given to instructors of real estate inspection courses subject to the following guidelines:
- instructors may receive credit for only those portions of the course which they teach; and
- instructors may receive full course credit by attending all of the remainder of the course.
- An Instructor of a ride-along inspection course is eligible to receive continuing education credit for a ride-along inspection course conducted by the instructor if the Commission is provided a certification of course completion within one week of completion of the course, on a form approved by the Commission.
- Instructors of ride-along inspection course sessions may only receive up to 8 hours of continuing education credit for teaching the course per license period.
- Providers may request continuing education credit be given to instructors of real estate inspection courses subject to the following guidelines:
- Continuing education credit for attendance at a meeting of the Texas Real Estate Inspector Committee. An inspector licensed in Texas may receive up to four hours of continuing education elective credit per license period for attendance in person at any meeting of the full Texas Real Estate Inspector Committee, provided that the inspector attend the entire meeting. Partial credit will not be awarded.
- Continuing education credit for courses taken by persons who hold another occupational license issued by a governmental body in Texas. An inspector licensed in Texas may receive continuing education credit for a course taken to satisfy the continuing education requirements for another occupational license if:
- the inspector files the applicable form with the Commission;
- the inspector holds one of the following occupational licenses, including but not limited to:
- plumber;
- electrician;
- architect;
- professional engineer;
- air conditioner and refrigeration technician; or
- structural pest control applicator or technician;
- at the time the course was taken:
- the inspector held an active occupational license issued by a governmental body in Texas; and
- the course was approved for continuing education credit for the other occupational license;
- the inspector demonstrates successful completion of the course by submitting:
- a course completion certificate;
- a letter from the provider; or
- other proof satisfactory to the Commission; and
- the primary subject matter of the course was a subject acceptable for continuing education credit for an inspector licensed in Texas.
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§535.219 Schedule of Administrative Penalties
- The Commission may suspend or revoke a license or take other disciplinary action authorized by Chapter 1102 in addition to or instead of assessing the administrative penalties set forth in this section.
- The administrative penalties set forth in this section consider the criteria listed in §1101.702(b) of the Act.
- An administrative penalty range of $100 - $1,500 per violation per day may be assessed for violations of the following sections of Chapter 1101, Chapter 1102 and this subchapter:
- §1101.652(a)(8);
- §1102.118;
- §1102.305;
- §1102.364;
- 22 TAC §535.216(d);
- 22 TAC §535.217;
- 22 TAC §535.220(a) - (d);
- 22 TAC §535.221; and
- 22 TAC §535.223.
- An administrative penalty range of $500 - $3,000 per violation per day may be assessed for violations of the following sections of Chapter 1101, Chapter 1102 and this subchapter:
- §§1101.652(a)(3) - (4);
- §1102.301;
- 22 TAC §535.222;
- 22 TAC §535.226(d) - (e); and
- 22 TAC §§535.227 - 535.233.
- An administrative penalty of $1,000 - $5,000 per violation per day may be assessed for violations of the following sections of Chapter 1101, Chapter 1102 and this subchapter:
- §§1101.652(a)(2), (5) - (6);
- §1102.101;
- §1102.102;
- §1102.103;
- §1102.302;
- §1102.303;
- §1102.304;
- 22 TAC §535.208(f);
- 22 TAC §535.211;
- 22 TAC §535.215;
- 22 TAC §535.220(e)(1), (3) - (7); and
- 22 TAC §535.224(b)(1) - (2).
- The Commission may assess an administrative penalty of up to two times that outlined under subsections (c), (d), and (e) of this section, subject to the maximum penalties authorized under §1101.702(a) of the Act, if a person has a history of previous violations.
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§535.220 Professional Conduct and Ethics
- The responsibility of those persons who engage in the business of performing independent inspections of improvements in real estate transactions imposes integrity beyond that of a person involved in ordinary commerce. Each inspector must maintain a high standard of professionalism, independence, objectivity and fairness while performing inspections in a real estate transaction. Each inspector license holder must also uphold, maintain, and improve the integrity, reputation, and practice of the home inspection profession.
- The relationship between an inspector and a client should at a minimum meet the following guidelines.
- In accepting employment as an inspector, the inspector should protect and promote the interest of the client to the best of the inspector's ability and knowledge, recognizing that the client has placed trust and confidence in the inspector.
- In the interest of the client and the inspector's profession, the inspector should endeavor always to maintain and increase the inspector's level of knowledge regarding new developments in the field of inspection.
- The inspector should conduct the inspector's business in a manner that will assure the client of the inspector's independence from outside influence and interests that might compromise the inspector's ability to render a fair and impartial opinion regarding any inspection performed.
- The relationship between an inspector and the public should at a minimum meet the following guidelines.
- The inspector should deal with the general public at all times and in all manners in a method that is conducive to the promotion of professionalism, independence and fairness to the inspector's, the inspector's business and the inspection industry.
- The inspector should attempt to assist the general public in recognizing and understanding the need for inspections, whether the inspector is selected to perform such inspection or not.
- The inspector accepts the duty of protecting the public against fraud, misrepresentation or unethical practices in the field of real estate inspections.
- The relationship of the inspector with another inspector should at a minimum meet the following guidelines.
- The inspector should bind himself to the duty of maintaining fairness and integrity in all dealings with other inspectors and other persons performing real estate inspections.
- The inspector should cooperate with other inspectors to insure the continued promotion of the high standards of the real estate inspection profession and pledges himself to the continued pursuit of increasing competence, fairness, education and knowledge necessary to achieve the confidence of the public.
- If an inspector has knowledge of a possible violation of the rules of the Commission or Chapter 1102, the inspector should report the possible violation to the Commission.
- An inspector shall comply with the following requirements.
- An inspector shall not inspect a property when any compensation or future referrals depend on reported findings or on the closing or settlement of a property.
- In this section, "settlement service" means a service provided in connection with a prospective or actual settlement, and "settlement service provider" includes, but is not limited to, any one or more of the following:
- federally related mortgage loan originator;
- mortgage broker;
- a lender or other person who provides any service related to the origination, processing or funding of a real estate loan;
- a title service provider;
- an attorney;
- a person who prepares documents, including notarization, delivery, and recordation;
- a person who provides credit report services;
- an appraiser;
- an inspector;
- a settlement agent;
- a person who provides mortgage insurance services;
- a person who provides services involving hazard, flood, or other casualty insurance, homeowner's warranties, or residential service contract;
- a real estate agent or broker; and
- a person who provides any other services for which a settlement service provider requires a borrower or seller to pay.
- An inspector shall not pay or receive a fee or other valuable consideration to or from any other settlement service provider for, but not limited to, the following:
- the referral of inspections;
- inclusion on a list of inspectors, preferred providers, or similar arrangements; or
- inclusion on lists of inspectors contingent on other financial agreements.
- An inspector shall not receive a fee or other valuable consideration, directly or indirectly, for referring services that are not settlement services or other products to the inspector's client without the client's written consent.
- This section does not prohibit an inspector from paying or receiving a fee or other valuable consideration, such as to or from a contractor, for services actually rendered.
- An inspector shall not accept employment to repair, replace, maintain or upgrade systems or components of property covered by the Standards of Practice under this subchapter on which the inspector has performed an inspection under a real estate contract, lease, or exchange of real property within 12 months of the date of the inspection.
- Inspectors shall not disclose inspection results or client information without prior approval from the client. Inspectors, at their discretion, may disclose observed immediate safety hazards to occupants exposed to such hazards when feasible.
- This subsection does not prohibit:
- normal promotional or educational activity that is not conditioned on the referral of business and that does not involve the defraying of expenses that otherwise would be incurred; or
- a payment at market rates to any person for goods actually furnished or for services actually performed.
- The inspector should make a reasonable attempt to cooperate with other professionals and related tradespersons at all times and in all manners in a method that is conducive to the promotion of professionalism, independence and fairness to the inspector, the inspector's business, and the inspection industry.
- Each active licensed inspector shall provide the consumer notice adopted under §531.18 of this title in the manner described by that section.
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§535.221 Advertisements
- For the purposes of this section, advertisements are all communications created or caused to be created by a licensed inspector for the purpose of inducing or attempting to induce a member of the public to use the services of the inspector, including but not limited to the following types of communications when disseminated for this purpose: inspection reports, business cards, invoices, signs, brochures, email, the Internet, electronic transmissions, text messages, and purchased telephone directory displays and advertising by newspaper, radio and television.
- Advertisements by a person licensed as an inspector must contain the name or assumed business name of the license holder. The advertisements must also contain the license number of the person. If the person is licensed as a real estate inspector or as an apprentice inspector, the advertisements must also contain the following:
- the name or assumed name of the person's sponsoring professional inspector; and
- a statement indicating that the person is sponsored by that professional inspector.
- A licensed professional inspector, real estate inspector or apprentice inspector shall notify the Commission in writing within 30 days after the inspector starts or stops using a name in business other than the name in which the inspector is licensed.
- Websites containing advertising by one or more inspectors must include the license number of each licensed person whose name or assumed business name appears on the website. For the purposes of an inspector's or inspection company's own website, it is sufficient for the license number(s) to appear on a single prominent page of the website, such as the main page or the "About Us" page. For the purposes of social networking websites, including websites through which license holders may transmit electronic messages to other members of the same site, it is sufficient for license number(s) to appear on the inspector's main or profile page.
- The Commission may reprimand or suspend or revoke the license of a person who is found to have engaged in false or misleading advertising or to have failed to comply with provisions of this section.
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§535.222 Inspection Reports
- For each inspection, the inspector shall:
- prepare a written inspection report noting observed deficiencies and other items required to be reported; and
- deliver the report to the client within two days of receipt of payment for the inspection, unless otherwise agreed in writing by the client.
- The inspection report shall include:
- the name and license number of each inspector who participated in performing the inspection, as well as the name(s) and license number(s) of any supervising real estate inspector(s) and sponsoring professional inspector(s), if applicable;
- the address or other unique description of the property on each page of the report; and
- the client's name.
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§535.223 Standard Inspection Report Form
- The Commission adopts by reference Property Inspection Report Form REI 7-6, approved by the Commission for use in reporting inspections results. This document is published by and available from the Commission website: www.trec.texas.gov, or by writing to the Commission at Texas Real Estate Commission, P.O. Box 12188, Austin, Texas 78711-2188.
- Except as provided by this section, inspections performed for a prospective buyer or prospective seller of substantially complete one-to-four family residential property shall be reported on Form REI 7-6 adopted by the Commission ("the standard form").
- If an inspector uses computer software or other means to produce an inspection report, the inspector must reproduce the text of the standard form verbatim and the spacing, borders and placement of text must be identical to the standard form.
- An inspector may make the following changes to the standard form:
- delete the line for name and license number, of the sponsoring inspector, if the inspection was performed solely by a professional inspector;
- change the typeface; provided that it is no smaller than a 10 point font;
- change the color of the typeface and checkboxes;
- use legal sized (8-1/2" by 14") paper;
- add a cover page to the report form;
- add footers to each page of the report except the first page and may add headers to each page of the report;
- place the property identification and page number at either the top or bottom of the page;
- add subheadings under items, provided that the numbering of the standard items remains consistent with the standard form;
- list other items in the corresponding appropriate section of the report form and additional captions, letters, and check boxes for those items;
- delete inapplicable subsections of Section VI., Optional Systems, and re-letter any remaining subsections;
- delete "Other" subsections of Section I. through Section VI.;
- as the inspector deems necessary:
- allocate such space for comments in:
- the "Additional Information Provided by the Inspector" section; and
- each section provided for comments for each inspected item;
- attach additional pages of comments; or
- both;
- allocate such space for comments in:
- include a service agreement/inspection contract or contractual terms between the inspector and a client with the standard form under the "Additional Information Provided by the Inspector" section or as an attachment to the standard form;
- attach additional pages to the form if:
- it is necessary to report the inspection of a component, or system not contained in the standard form; or
- the space provided on the form is inadequate for a complete reporting of the Inspection;
- attach additional reporting information produced by computer software so long as the standard report form is provided before that information; and
- Remove the Commission's logo or substitute the inspector's logo in place of the Commission's logo.
- The inspector shall renumber the pages of the standard form to correspond with any changes made necessary due to adjusting the space for comments or adding additional items and shall number all pages of the report, including any addenda.
- The inspector shall indicate, by checking the appropriate boxes on the form, whether each item was inspected, not inspected, not present, or deficient and explain the findings in the corresponding section in the body of the report form.
- This section does not apply to the following:
- re-inspections of a property performed for the same client;
- inspections performed for or required by a lender or governmental agency;
- inspections for which federal or state law requires use of a different report;
- quality control construction inspections of new homes performed for builders, including phased construction inspections, inspections performed solely to determine compliance with building codes, warranty or underwriting requirements, or inspections required by a municipality and the builder or other entity requires use of a different report, and the first page of the report contains a notice either in bold or underlined reading substantially similar to the following: "This report was prepared for a builder or other entity in accordance with the builder's requirements. The report is not intended as a substitute for an inspection of the property by an inspector of the buyer's choice. Standard inspections performed by a license holder and reported on Commission promulgated report forms may contain additional information a buyer should consider in making a decision to purchase." If a report form required for use by the builder or builder's employee does not contain the notice, the inspector may attach the notice to the first page of the report at the time the report is prepared by the inspector;
- an inspection of a building or addition that is not substantially complete; or
- inspections of a single system or component as outlined in clause (ii) of this subparagraph, provided that the first page of the report contains a notice either in bold or underlined reading substantially similar to the following: "This report was prepared for a buyer or seller in accordance with the client's requirements. The report addresses a single system or component and is not intended as a substitute for a complete standard inspection of the property. Standard inspections performed by a license holder and reported on a Commission promulgated report form may contain additional information a buyer should consider in making a decision to purchase."
- If the client requires the use of a report form that does not contain the notice, the inspector may attach the notice to the first page of the report at the time the report is prepared by the inspector.
- An inspection is considered to be of a single system or component if the inspection only addresses one of the following or a portion thereof:
- foundation;
- framing/structure, as outlined in §535.213(e)(2) of this title;
- building enclosure;
- roof system;
- plumbing system;
- electrical system;
- HVAC system;
- a single appliance; or
- a single optional system as stated in the Standards of Practice.
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§535.224 Practice and Procedure
- Proceedings shall be conducted in the manner contemplated by §§533.1 - 533.8, 533.20, 533.30 - 533.37 and 533.40 of this title and with the Texas Government Code, Chapter 2001, et seq.
- In addition to the grounds for disciplinary action provided in Chapter 1102, a license of an inspector may be suspended or revoked by the Commission if the inspector:
- fails to maintain professional liability insurance coverage, a bond or any other security acceptable by the Commission that provides coverage for violations of Subchapter G of Chapter 1102 during the period a license is active; or
- fails to notify the Commission within 10 days of the cancellation or non-renewal of professional liability insurance coverage, a bond or any other security acceptable by the Commission that provides coverage for violations of Subchapter G of Chapter 1102.
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§535.226 Sponsorship of Apprentice Inspectors and Real Estate Inspectors
- An apprentice inspector or real estate inspector may be sponsored by only one licensed professional inspector.
- A change in sponsorship shall be reported to the Commission immediately. If the sponsorship has ended because the professional inspector has terminated the sponsorship, the professional inspector shall immediately so notify the apprentice or real estate inspector in writing. If the sponsorship has ended because the apprentice inspector or real estate inspector has left the sponsorship, the apprentice inspector or real estate inspector shall immediately so notify the professional inspector in writing.
- An apprentice inspector or real estate inspector who is on active status may act for the new sponsoring professional inspector once the Commission has been notified of the change and any required fee has been submitted. If the apprentice or real estate inspector is on inactive status, the return to active status shall be subject to the requirements of §535.215 of this title.
- A licensed professional inspector is responsible for the conduct of a sponsored apprentice inspector. At a minimum, a licensed professional inspector shall provide direct supervision of the apprentice inspector by:
- accompanying the apprentice inspector during the performance of all inspections performed by the apprentice or arranging for a real estate inspector to accompany the apprentice; and
- reviewing any written inspection report prepared by the apprentice inspector for compliance with the provisions of the standards of practice adopted by the Commission.
- A licensed professional inspector is responsible for the conduct of a sponsored real estate inspector. A licensed professional inspector shall provide indirect supervision in a manner which protects the public when dealing with the real estate inspector. At a minimum a professional inspector shall provide indirect supervision of the real estate inspector by:
- communicating with the real estate inspector on a regular basis about the inspections being performed by the real estate inspector; and
- reviewing on a regular basis written inspection reports prepared by the real estate inspector for compliance with the provisions of the standards of practice adopted by the Commission.
- A sponsoring professional inspector may delegate the supervision of an apprentice inspector or real estate inspector to another professional inspector who is qualified to sponsor, but the sponsor remains responsible for the conduct of the sponsored inspector.
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§535.227 Standards of Practice: General Provisions
- Scope.
- These standards of practice apply when a professional inspector or real estate inspector who is licensed under this chapter accepts employment to perform a real estate inspection for a prospective buyer or seller of real property.
- These standards of practice define the minimum requirements for a real estate inspection conducted on a one to four family unit that is substantially completed. Substantially completed means the stage of construction when a new building, addition, improvement, or alteration to an existing building can be occupied or used for its intended purpose.
- For the purposes of these standards of practice a real estate inspection:
- is a limited visual survey and basic performance evaluation of the systems and components of a building using normal controls that provides information regarding the general condition of a residence at the time of inspection;
- is not intended to be a comprehensive investigation or exploratory probe to determine the cause or effect of deficiencies noted by the inspector; and
- requires the use of reasonable and appropriate tools to satisfy the requirements of the standards of practice. However an inspection does not require the use of:
- specialized equipment, including but not limited to:
- thermal imaging equipment;
- moisture meters;
- gas or carbon monoxide detection equipment;
- environmental testing equipment and devices;
- elevation determination devices;
- ladders capable of reaching surfaces over one story above ground surfaces;
- cameras or other tools used to inspect the interior of a drain or sewer line; or
- drones; or
- specialized procedures, including but not limited to:
- environmental testing;
- elevation measurement;
- calculations; or
- any method employing destructive testing that damages otherwise sound materials or finishes.
- specialized equipment, including but not limited to:
- These standards of practice do not prohibit an inspector from providing a higher level of inspection performance than required by these standards of practice or from inspecting components and systems in addition to those listed under the standards of practice. If an inspector provides services beyond the scope required by these standards of practice, including the use of specialized equipment, or inspects components and systems in addition to those listed under the standards of practice, the inspector must possess the competency required to do so.
- Definitions.
- Accessible–In the reasonable judgment of the inspector, capable of being approached, entered, or viewed without:
- hazard to the inspector;
- having to climb over obstacles, moving furnishings or large, heavy, or fragile objects;
- using specialized equipment or procedures;
- disassembling items other than covers or panels intended to be removed for inspection;
- damaging property, permanent construction or building finish; or
- using a ladder for portions of the inspection other than the roof or attic space.
- Chapter 1102–Texas Occupations Code, Chapter 1102.
- Component–A part of a system.
- Cosmetic–Related only to appearance or aesthetics, and not related to performance, operability, or water penetration.
- Deficiency–In the reasonable judgment of the inspector, a condition that:
- adversely and materially affects the performance of a system, or component; or
- constitutes a hazard to life, limb, or property as specified by these standards of practice.
- Deficient–Reported as having one or more deficiencies.
- Gas distribution system–All gas lines between the point of delivery and appliance shutoff valves.
- The point of delivery for a natural gas system is:
- the outlet of the service meter assembly;
- the outlet of the service regulator; or
- the service shut valve where a meter is not provided. Where a system shutoff valve is provided after the outlet of the service meter assembly, such valve shall be considered to be downstream of the point of delivery.
- The point of delivery for undiluted liquefied petroleum gas systems is the outlet of the service pressure regulator, exclusive of line gas regulators, in the system.
- The point of delivery for a natural gas system is:
- Inspect–To operate in normal ranges using ordinary controls at typical settings, look at and examine accessible systems or components and report observed deficiencies as specified by these standards of practice.
- Performance–Achievement of an operation, function or configuration relative to accepted industry standard practices with consideration of age and normal wear and tear from ordinary use.
- Report–To provide the inspector's opinions and findings regarding systems and components required by the standards of practice.
- Standards of practice–§§535.227 - 535.233 of this title.
- Accessible–In the reasonable judgment of the inspector, capable of being approached, entered, or viewed without:
- General Requirements. The inspector shall:
- operate fixed or installed equipment and appliances listed herein in at least one mode with ordinary controls at typical settings;
- visually inspect accessible systems or components from near proximity to the systems and components, and from the interior of the attic and crawl spaces; and
- complete the standard inspection report form as required by §535.222 and §535.223 of this title.
- General limitations. The inspector is not required to:
- inspect:
- items other than those listed within these standards of practice;
- elevators;
- detached buildings, decks, docks, fences, waterfront structures, or related equipment;
- anything buried, hidden, latent, or concealed;
- sub-surface drainage systems;
- automated or programmable control systems, automatic shutoff, photoelectric sensors, timers, clocks, metering devices, signal lights, lightning arrestor system, remote controls, security or data distribution systems, solar panels or smart home automation components; or
- concrete flatwork such as driveways, sidewalks, walkways, paving stones or patios;
- report:
- past repairs that appear to be effective and workmanlike except as specifically required by these standards;
- cosmetic or aesthetic conditions; or
- wear and tear from ordinary use;
- determine:
- the presence or absence of pests, termites, or other wood-destroying insects or organisms;
- the presence, absence, or risk of:
- asbestos;
- lead-based paint;
- mold, mildew;
- corrosive or contaminated drywall "Chinese Drywall"; or
- any other environmental hazard, environmental pathogen, carcinogen, toxin, mycotoxin, pollutant, fungal presence or activity, or poison;
- types of wood or preservative treatment and fastener compatibility;
- the cause or source of a condition;
- the cause or effect of deficiencies; or
- any of the following issues concerning a system or component:
- insurability or warrantability;
- suitability, adequacy, compatibility, capacity, reliability, marketability, or operating costs;
- recalls, counterfeit products, or product lawsuits;
- life expectancy or age;
- energy efficiency, vapor barriers, or thermostatic performance;
- compliance with any code, listing, testing or protocol authority;
- utility sources; or
- manufacturer or regulatory requirements, except as specifically required by these standards;
- anticipate future events or conditions, including but not limited to:
- decay, deterioration, or damage that may occur after the inspection;
- deficiencies from abuse, misuse or lack of use;
- changes in performance of any component or system due to changes in use or occupancy;
- the consequences of the inspection or its effects on current or future buyers and sellers;
- common household accidents, personal injury, or death;
- the presence of water penetrations; or
- future performance of any item;
- operate shutoff, safety, stop, pressure or pressure-regulating valves or items requiring the use of codes, keys, combinations, or similar devices;
- designate conditions as safe;
- recommend or provide engineering, architectural, appraisal, mitigation, physical surveying, realty, or other specialist services;
- review historical records, installation instructions, repair plans, cost estimates, disclosure documents, or other reports;
- verify sizing, efficiency, or adequacy of the ground surface drainage system;
- verify sizing, efficiency, or adequacy of the gutter and downspout system;
- operate recirculation or sump pumps;
- remedy conditions preventing inspection of any item;
- apply open flame or light a pilot to operate any appliance;
- turn on decommissioned equipment, systems or utility services; or
- provide repair cost estimates, recommendations, or re-inspection services.
- inspect:
- In the event of a conflict between the general provisions set out in this section, and the specific provisions specified elsewhere in the standards of practice, specific provisions shall take precedence.
- Departure provision.
- An inspector may depart from the inspection of a component or system required by the standards of practice only if:
- the inspector and client agree the item is not to be inspected;
- the inspector is not qualified to inspect the item;
- in the reasonable judgment of the inspector, the inspector determines that:
- conditions exist that prevent inspection of an item;
- conditions or materials are hazardous to the health or safety of the inspector; or
- the actions of the inspector may cause damage to the property; or
- the item is a common element of a multi-family development and is not in physical contact with the unit being inspected, such as the foundation under another building or a part of the foundation under another unit in the same building.
- If an inspector departs from the inspection of a component or system required by the standards of practice, the inspector shall:
- notify the client at the earliest practical opportunity that the component or system will not be inspected; and
- make an appropriate notation on the inspection report form, stating the reason the component or system was not inspected.
- If the inspector routinely departs from inspection of a component or system required by the standards of practice, and the inspector has reason to believe that the property being inspected includes that component or system, the inspector shall not perform the inspection of the property until the inspector notifies the client, or the prospective client, that the component or system will not be inspected.
- An inspector may depart from the inspection of a component or system required by the standards of practice only if:
- Enforcement. Failure to comply with the standards of practice is grounds for disciplinary action as prescribed by Chapter 1102.
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§535.228 Standards of Practice: Minimum Inspection Requirements for Structural Systems
- Foundations.
- The inspector shall:
- render a written opinion as to the performance of the foundation;
- report:
- the type of foundations; and
- the vantage point from which the crawl space was inspected;
- generally report present and visible indications used to render the opinion of adverse performance, such as:
- binding, out-of-square, non-latching doors;
- framing or frieze board separations;
- sloping floors;
- window, wall, floor, or ceiling cracks or separations; and
- rotating, buckling, cracking, or deflecting masonry cladding; and
- report as Deficient:
- deteriorated materials;
- deficiencies in foundation components such as; beams, joists, bridging, blocking, piers, posts, pilings, columns, sills or subfloor;
- deficiencies in retaining walls related to foundation performance;
- exposed or damaged reinforcement;
- crawl space ventilation that is not performing; and
- crawl space drainage that is not performing.
- The inspector is not required to:
- enter a crawl space or any area where headroom is less than 18 inches or the access opening is less than 24 inches wide and 18 inches high;
- provide an exhaustive list of indicators of possible adverse performance; or
- inspect retaining walls not related to foundation performance.
- The inspector shall:
- Grading and drainage.
- The inspector shall report as Deficient:
- drainage around the foundation that is not performing;
- deficiencies in grade levels around the foundation; and
- deficiencies in installed gutter and downspout systems.
- The inspector is not required to:
- inspect flatwork or detention/retention ponds (except as related to slope and drainage);
- determine area hydrology or the presence of underground water; or
- determine the efficiency or performance of underground or surface drainage systems.
- The inspector shall report as Deficient:
- Roof covering materials.
- The inspector shall:
- inspect the roof covering materials from the surface of the roof;
- report:
- type of roof coverings;
- vantage point from where the roof was inspected;
- evidence of water penetration; and
- evidence of previous repairs to the roof covering material, flashing details, skylights and other roof penetrations; and
- report as Deficient deficiencies in:
- fasteners;
- adhesion;
- roof covering materials;
- flashing details;
- skylights; and
- other roof penetrations.
- The inspector is not required to:
- inspect the roof from the roof level if, in the inspector's reasonable judgment:
- the inspector cannot safely reach or stay on the roof; or
- significant damage to the roof covering materials may result from walking on the roof;
- determine:
- the remaining life expectancy of the roof covering; or
- the number of layers of roof covering material;
- identify latent hail damage;
- exhaustively examine all fasteners and adhesion; or
- provide an exhaustive list of locations of deficiencies and water penetrations.
- inspect the roof from the roof level if, in the inspector's reasonable judgment:
- The inspector shall:
- Roof structures and attics.
- The inspector shall:
- report:
- the vantage point from which the attic space was inspected;
- approximate average depth of attic insulation; and
- evidence of water penetration; and
- report as Deficient:
- attic space ventilation that is not performing;
- deflections or depressions in the roof surface as related to adverse performance of the framing and decking; and
- missing insulation; and
- deficiencies in:
- installed framing members and decking;
- attic access ladders and access openings; and
- attic ventilators.
- report:
- The inspector is not required to:
- enter attics or unfinished spaces where openings are less than 22 inches by 30 inches or headroom is less than 30 inches;
- operate powered ventilators; or
- provide an exhaustive list of locations of deficiencies and water penetrations.
- The inspector shall:
- Interior walls, ceilings, floors, and doors.
- The inspector shall:
- report evidence of water penetration; and
- report as Deficient:
- deficiencies in the condition and performance of doors and hardware;
- deficiencies related to structural performance or water penetration; and
- the absence of or deficiencies in fire separation between the garage and the living space and between the garage and its attic.
- The inspector is not required to:
- report cosmetic damage or the condition of floor, wall, or ceiling coverings; paints, stains, or other surface coatings; cabinets; or countertops; or
- provide an exhaustive list of locations of deficiencies and water penetrations.
- The inspector shall:
- Exterior walls, doors, and windows.
- The inspector shall:
- report evidence of water penetration; and
- report as Deficient:
- the absence of performing emergency escape and rescue openings in all sleeping rooms;
- an attached garage doorway that is not equipped with self-closing or automatic closing devices;
- a door between the residence and an attached garage that is:
- a solid wood door less than 1-3/8 inches thick;
- a solid honeycomb core steel door less than 1-3/8 inches thick; or
- not a 20-minute fire-rated door;
- missing or damaged screens;
- deficiencies related to structural performance or water penetration; and
- deficiencies in:
- weather stripping, gaskets or other air barrier materials;
- claddings;
- water resistant materials and coatings;
- flashing details and terminations;
- the condition and performance of exterior doors, garage doors and hardware; and
- the condition and performance of windows and components.
- The inspector is not required to:
- report the condition of awnings, blinds, shutters, security devices, or other non-structural systems;
- determine the cosmetic condition of paints, stains, or other surface coatings;
- operate a lock if the key is not available; or
- provide an exhaustive list of locations of deficiencies and water penetrations.
- The inspector shall:
- Exterior and interior glazing.
- The inspector shall report as Deficient:
- insulated windows that are obviously fogged or display other evidence of broken seals;
- deficiencies in glazing, weather stripping and glazing compound in windows and doors;
- the absence of safety glass in hazardous locations; and
- the absence of fall protection at windows that are located less than 24 inches from the finished floor and greater than 72 inches from the finished grade.
- The inspector is not required to:
- exhaustively inspect insulated windows for evidence of broken seals;
- exhaustively inspect glazing for identifying labels; or
- identify specific locations of damage.
- The inspector shall report as Deficient:
- Interior and exterior stairways.
- The inspector shall report as Deficient:
- spacing between intermediate balusters, spindles, or rails for steps, stairways, guards, and railings that permit passage of an object greater than 4 inches in diameter, except that on the open side of the staircase treads, spheres less than 4-3/8 inches in diameter may pass through the guard rail balusters or spindles; and
- deficiencies in steps, stairways, landings, guardrails, and handrails.
- The inspector is not required to exhaustively measure every stairway component.
- The inspector shall report as Deficient:
- Fireplaces and chimneys.
- The inspector shall report as Deficient:
- built-up creosote in accessible areas of the firebox and flue;
- the presence of combustible materials in near proximity to the firebox opening;
- the absence of fireblocking at the attic penetration of the chimney flue, where accessible; and
- deficiencies in the:
- damper;
- lintel, hearth, hearth extension, and firebox;
- gas fixture installed in the fireplace not associated with the gas distribution system;
- circulating fan;
- combustion air vents; and
- chimney structure, termination, coping, crown, caps, and spark arrestor.
- The inspector is not required to:
- verify the integrity of the flue;
- perform a chimney smoke test; or
- determine the adequacy of the draft.
- The inspector shall report as Deficient:
- Porches, Balconies, Decks, and Carports.
- The inspector shall:
- inspect:
- attached balconies, carports, and porches; and
- abutting porches, decks, and balconies that are used for ingress and egress; and
- report as Deficient:
- on decks 30 inches or higher above the adjacent grade, spacings between intermediate balusters, spindles, or rails that permit passage of an object greater than four inches in diameter; and
- deficiencies in accessible components.
- inspect:
- The inspector is not required to:
- exhaustively measure every porch, balcony, deck, or attached carport components; or
- enter any area where headroom is less than 18 inches or the access opening is less than 24 inches wide and 18 inches high.
- The inspector shall:
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§535.229 Standards of Practice: Minimum Inspection Requirements for Electrical Systems
- Service entrance and panels.
- The inspector shall report as Deficient:
- a drop, weatherhead or mast that is not securely fastened to the building;
- the absence of or deficiencies in the grounding electrode system;
- missing or damaged dead fronts or covers plates;
- conductors not protected from the edges of electrical cabinets, gutters, or cutout boxes;
- electrical cabinets and panel boards not appropriate for their location; such as a clothes closet, bathrooms or where they are exposed to physical damage;
- electrical cabinets and panel boards that are not accessible or do not have a minimum of 36-inches of clearance in front of them;
- deficiencies in:
- electrical cabinets, gutters, cutout boxes, and panel boards;
- the insulation of the service entrance conductors, drip loop, separation of conductors at weatherheads, and clearances;
- the compatibility of overcurrent devices and conductors;
- the overcurrent device and circuit for labeled and listed 250 volt appliances;
- bonding and grounding;
- conductors; and
- the operation of installed ground-fault or arc-fault circuit interrupter devices; and
- the absence of:
- trip ties on 250 volt overcurrent devices or multi-wire branch circuit;
- appropriate connections;
- anti-oxidants on aluminum conductor terminations; and
- main disconnecting means.
- The inspector is not required to:
- determine present or future sufficiency of service capacity amperage, voltage, or the capacity of the electrical system;
- conduct voltage drop calculations;
- determine the accuracy of overcurrent device labeling;
- remove covers where hazardous as judged by the inspector;
- verify the effectiveness of overcurrent devices; or
- operate overcurrent devices.
- The inspector shall report as Deficient:
- Branch circuits, connected devices, and fixtures.
- The inspector shall:
- manually test the installed and accessible smoke and carbon monoxide alarms;
- report the type of branch circuit conductors; and
- report as Deficient:
- the absence of ground-fault circuit interrupter protection in all:
- bathroom receptacles;
- garage and accessory building receptacles;
- outdoor receptacles;
- crawl space receptacles and lighting outlets;
- basement receptacles;
- receptacles that serve kitchen countertops;
- receptacles that are located within six feet of the outside edge of a sink, shower, or bathtub;
- laundry area receptacles;
- indoor damp and wet location receptacles;
- kitchen dishwasher receptacle; and
- electrically heated floors;
- the absence of arc-fault protection in the following locations:
- kitchens;
- family rooms;
- dining rooms;
- living rooms;
- parlors;
- libraries;
- dens;
- bedrooms;
- sunrooms;
- recreation rooms;
- closets;
- hallways; and
- laundry area;
- the failure of operation of ground-fault circuit interrupter protection devices;
- missing or damaged receptacle, switch or junction box covers;
- the absence of:
- equipment disconnects; and
- appropriate connections, such as copper/aluminum approved devices, if branch circuit aluminum conductors are discovered in the main or sub-panel based on a random sampling of accessible receptacles and switches;
- receptacles less than five and a half feet above the floor that are not tamper resistant;
- deficiencies in 125 volt receptacles by determining the:
- presence of power;
- correct polarity; and
- presence of grounding;
- deficiencies in 250 volt receptacles by determining the presence of power;
- deficiencies in
- switches;
- bonding or grounding;
- wiring, wiring terminations, junction boxes, devices, and fixtures, including improper location;
- doorbell and chime components; and
- smoke and carbon monoxide alarms;
- improper use of extension cords;
- deficiencies in or absences of conduit, where applicable;
- the absence of smoke alarms:
- in each sleeping room;
- outside each separate sleeping area in the immediate vicinity of the sleeping rooms; and
- in the living space of each story of the dwelling; and
- the absence of carbon monoxide alarms outside each separate sleeping area in the immediate vicinity of the sleeping rooms when either of the following conditions exist:
- fuel fired appliance are installed in the dwelling; or
- an attached garage with an opening into the dwelling unit.
- the absence of ground-fault circuit interrupter protection in all:
- The inspector is not required to:
- inspect low voltage wiring;
- disassemble mechanical appliances;
- verify the effectiveness of smoke alarms;
- verify interconnectivity of smoke alarms;
- activate smoke or carbon monoxide alarms that are or may be monitored or require the use of codes;
- verify that smoke alarms are suitable for the hearing-impaired;
- remove the covers of junction, fixture, receptacle or switch boxes unless specifically required by these standards; or
- test arc-fault circuit interrupter devices when the property is occupied or damage to personal property may result, in the inspector's reasonable judgment.
- The inspector shall:
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§535.230 Standards of Practice: Minimum Inspection Requirements for Heating, Ventilation, and Air Conditioning Systems
- Heating equipment.
- General requirements. The inspector shall:
- report:
- the type of heating systems; and
- the energy sources; and
- report as Deficient:
- inoperative units;
- deficiencies in the thermostats;
- inappropriate location;
- the lack of protection from physical damage;
- burners, burner ignition devices or heating elements, switches, and thermostats that are not a minimum of 18 inches above the lowest garage floor elevation, unless the unit is listed for garage floor installation;
- the absence of an opening that would allow access to equipment for inspection, service, repair or replacement without removing permanent construction or building finish;
- when applicable; a floored passageway and service platform that would allow access for equipment inspection, service, repair or replacement; and
- deficiencies in mounting and performance of window and wall units.
- report:
- Requirements for electric units. The inspector shall report deficiencies in:
- performance of heat pumps;
- performance of heating elements; and
- condition of conductors; and
- Requirements for gas units. The inspector shall report as Deficient:
- gas leaks in the heating equipment not associated with the gas distribution system;
- flame impingement, uplifting flame, improper flame color, or excessive scale buildup; and
- deficiencies in:
- combustion, and dilution air; and
- the vent pipe, draft hood, draft, proximity to combustibles, and vent termination point and clearances.
- General requirements. The inspector shall:
- Cooling equipment.
- Requirements for cooling units other than evaporative coolers.
- the inspector shall:
- report the type of systems;
- measure and report the temperature difference between the supply air and the returned air or report industry-accepted method used to determine performance; and
- generally report extraneous factors or conditions, present on the day of the inspection, that would adversely impact the temperature differential of an otherwise performing unit; and
- the inspector shall report as Deficient:
- inoperative units;
- deficiencies in the performance of the cooling system that:
- fails to achieve a 15 degrees Fahrenheit to 22 degrees Fahrenheit temperature differential; or
- fails to cool adequately as determined by other industry-accepted methods;
- the absence of an opening that would allow access to equipment for inspection, service, repair or replacement without removing permanent construction or building finish;
- when applicable; a floored passageway and service platform that would allow access for equipment inspection, service, repair or replacement;
- noticeable vibration of blowers or fans;
- water in the auxiliary/secondary drain pan;
- a primary drain pipe that discharges in a sewer vent;
- missing or deficient refrigerant pipe insulation;
- dirty coils, where accessible;
- condensing units lacking adequate clearances or air circulation or that has deficiencies in the fins, location, levelness, or elevation above grade surfaces; and
- deficiencies in:
- the condensate drain and auxiliary/secondary pan and drain system;
- mounting and performance of window or wall units; and
- thermostats.
- the inspector shall:
- Requirements for evaporative coolers.
- the inspector shall report:
- type of systems; and
- the type of water supply line; and
- the inspector shall report as Deficient:
- inoperative units;
- inadequate access and clearances;
- deficiencies in performance or mounting;
- missing or damaged components;
- the presence of active water leaks; and
- the absence of backflow prevention.
- the inspector shall report:
- Requirements for cooling units other than evaporative coolers.
- Duct systems, chases, and vents.
- the inspector shall report as Deficient:
- damaged duct systems or improper material;
- damaged or missing duct insulation;
- the absence of air flow at accessible supply registers;
- the presence of gas piping and sewer vents concealed in ducts, plenums and chases;
- ducts or plenums in contact with earth; and
- deficiencies in:
- filters;
- grills or registers; and
- the location of return air openings.
- the inspector shall report as Deficient:
- For heating, ventilation, and air conditioning systems inspected under this section, the inspector is not required to perform the following actions:
- program digital thermostats or controls;
- inspect:
- for pressure of the system refrigerant, type of refrigerant, or refrigerant leaks;
- winterized or decommissioned equipment; or
- duct fans, humidifiers, dehumidifiers, air purifiers, motorized dampers, electronic air filters, multi-stage controllers, sequencers, heat reclaimers, wood burning stoves, boilers, oil-fired units, supplemental heating appliances, de-icing provisions, or reversing valves;
- operate:
- setback features on thermostats or controls;
- radiant heaters, steam heat systems, or unvented gas-fired heating appliances; or
- cooling or heating systems when weather conditions or other circumstances may cause equipment damage, including:
- cooling equipment when the outdoor temperature is less than 60 degrees Fahrenheit; and
- heat pumps, in the heat pump mode, when the outdoor temperature is above 70 degrees Fahrenheit;
- verify:
- compatibility of components;
- tonnage and manufacturer match of indoor coils and outside coils or condensing units;
- the accuracy of thermostats; or
- the integrity of the heat exchanger; or
- determine:
- sizing, efficiency, or adequacy of the system;
- balanced air flow of the conditioned air to the various parts of the building; or
- types of materials contained in insulation.
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§535.231 Standards of Practice: Minimum Inspection Requirements for Plumbing Systems
- Plumbing systems.
- The inspector shall:
- report:
- location of water meter;
- location of homeowners main water supply shutoff valve; and
- static water pressure;
- visible material used for water supply lines and drain lines;
- report as Deficient:
- the presence of active leaks;
- water pressure exceeding 80 PSI;
- the lack of a pressure reducing valve when the water pressure exceeds 80 PSI;
- the lack of a visible expansion tank when a pressure reducing valve, check valve, or backflow preventer is in place at the water supply line/system;
- the absence of:
- fixture shutoff valves;
- dielectric unions, when applicable;
- back-flow devices, anti-siphon devices, or air gaps at the flow end of fixtures; and
- deficiencies in:
- water supply pipes and waste pipes;
- the installation and termination of the vent system;
- the performance of fixtures and faucets not connected to an appliance;
- water supply, as determined by viewing functional flow in two fixtures operated simultaneously;
- fixture drain performance;
- orientation of hot and cold faucets;
- installed mechanical drain stops;
- commodes, fixtures, showers, tubs, and enclosures; and
- the condition of the gas distribution system.
- report:
- The inspector is not required to:
- operate any main, branch, or shut-off valves;
- operate or inspect sump pumps or waste ejector pumps;
- verify the performance of:
- the bathtub overflow;
- clothes washing machine drains or hose bibbs; or
- floor drains;
- inspect:
- any system that has been winterized, shut down or otherwise secured;
- circulating pumps, free-standing appliances, solar water heating systems, water-conditioning equipment, filter systems, water mains, private water supply systems, water wells, pressure tanks, sprinkler systems, swimming pools, or fire sprinkler systems;
- inaccessible gas supply system components for leaks;
- for sewer clean-outs; or
- for the presence or performance of private sewage disposal systems; or
- determine:
- quality, potability, or volume of the water supply; or
- effectiveness of backflow or anti-siphon devices.
- The inspector shall:
- Water heaters.
- General Requirements.
- The inspector shall:
- report:
- the energy source;
- the capacity of the units;
- report as Deficient:
- inoperative units;
- leaking or corroded fittings or tanks;
- damaged or missing components;
- the absence of a cold water shutoff valve;
- if applicable, the absence of a pan or a pan drain system that does not terminate over a waste receptor or to the exterior of the building above the ground surface;
- inappropriate locations;
- the lack of protection from physical damage;
- burners, burner ignition devices or heating elements, switches, or thermostats that are not a minimum of 18 inches above the lowest garage floor elevation, unless the unit is listed for garage floor installation;
- the absence of an opening that would allow access to equipment for inspection, service, repair or replacement without removing permanent construction or building finish;
- when applicable; a floored passageway and service platform that would allow access for equipment inspection, service, repair or replacement;
- the absence of or visible deficiencies in the temperature and pressure relief valve and discharge piping; and
- a temperature and pressure relief valve that failed to operate, when tested manually.
- report:
- The inspector is not required to:
- verify the effectiveness of the temperature and pressure relief valve, discharge piping, or pan drain pipes;
- operate the temperature and pressure relief valve if the operation of the valve may, in the inspector's reasonable judgment, cause damage to persons or property; or
- determine the efficiency or adequacy of the unit.
- The inspector shall:
- Requirements for electric units. The inspector shall report as Deficient deficiencies in:
- performance of heating elements; and
- condition of conductors; and
- Requirements for gas units. The inspector shall report as Deficient:
- gas leaks in water heater not associated with the gas distribution system;
- flame impingement, uplifting flame, improper flame color, or excessive scale build-up; and
- deficiencies in:
- combustion and dilution air; and
- vent pipe, draft hood, draft, proximity to combustibles, and vent termination point and clearances.
- General Requirements.
- Hydro-massage therapy equipment.
- The inspector shall report as Deficient:
- inoperative units;
- the presence of active leaks;
- deficiencies in components and performance;
- missing and damaged components;
- the absence of an opening that would allow access to equipment for inspection, service, repair or replacement without removing permanent construction or building finish; and
- the absence or failure of operation of ground-fault circuit interrupter protection devices.
- The inspector is not required to determine the adequacy of self-draining features of circulation systems.
- The inspector shall report as Deficient:
- Gas distribution systems.
- The inspector shall:
- report:
- location of gas meter; and
- visible material used for gas distribution system;
- report as Deficient:
- noticeable gas leaks;
- the absence of a gas shutoff valve within six feet of the appliance;
- the absence of a gas appliance connector or one that exceeds six feet in length;
- gas appliance connectors that are concealed within or extended through walls, floors, partitions, ceilings or appliance housings;
- deficiencies in:
- gas shutoff valves;
- access to a gas shutoff valves that prohibits full operation;
- gas appliance connector materials; and
- the condition and type of gas distribution lines and fittings;
- lack of visible bonding on gas distribution system, including corrugated stainless steel tubing (CSST); and
- lack of visible sediment traps.
- report:
- Specific limitation for gas lines. The inspector is not required to:
- inspect sacrificial anode bonding or for its existence;
- pressurize or test gas system, drip legs or shutoff valves;
- operate gas line shutoff valves; or
- light or ignite pilot flames.
- The inspector shall:
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§535.232 Standards of Practice: Minimum Inspection Requirements for Appliances
- Dishwashers. The inspector shall report as Deficient:
- inoperative units;
- deficiencies in performance or mounting;
- rusted, missing or damaged components;
- the presence of visible active water leaks; and
- the absence of visible backflow prevention.
- Food waste disposers. The inspector shall report as Deficient:
- inoperative units;
- deficiencies in performance or mounting;
- missing or damaged components; and
- the presence of visible active water leaks.
- Range hoods and exhaust systems. The inspector shall report as Deficient:
- inoperative units;
- deficiencies in performance or mounting;
- missing or damaged components;
- ducts that do not terminate outside the building, if the unit is not of a re-circulating type or configuration; and
- improper duct material.
- Electric or gas ranges, cooktops, and ovens. The inspector shall report as Deficient:
- inoperative units;
- missing or damaged components;
- combustible material within thirty inches above the cook top burners;
- absence of an anti-tip device, if applicable;
- gas leaks in the gas range, cooktops and ovens not associated with the gas distribution system; and
- deficiencies in:
- thermostat accuracy (within 25 degrees Fahrenheit at a setting of 350 degrees Fahrenheit); and
- mounting and performance.
- Microwave ovens. The inspector shall inspect built-in units and report as Deficient:
- inoperative units;
- deficiencies in performance or mounting; and
- missing or damaged components.
- Mechanical exhaust systems and bathroom heaters. The inspector shall report as Deficient:
- the lack of mechanical ventilation in a bathroom if no operable window is present;
- inoperative units;
- deficiencies in performance or mounting;
- missing or damaged components;
- ducts that do not terminate outside the building; and
- a gas heater that is not vented to the exterior of the building unless the unit is listed as an unvented type.
- Garage door operators. The inspector shall report as Deficient:
- inoperative units;
- deficiencies in performance or mounting;
- missing or damaged components;
- installed photoelectric sensors located more than six inches above the garage floor;
- deficiencies in performance or absence of auto reversing mechanisms and manual detachment device; and
- door locks or side ropes that have not been removed or disabled.
- Dryer exhaust systems. The inspector shall report as Deficient:
- missing or damaged components;
- the absence of a dryer exhaust system when provisions are present for a dryer;
- ducts that do not terminate to the outside of the building;
- screened terminations; and
- ducts that are not made of metal with a smooth interior finish.
- General provisions. The inspector is not required to:
- operate or determine the condition of other auxiliary components of inspected items;
- test for microwave oven radiation leaks;
- inspect self-cleaning functions;
- disassemble appliances;
- determine the adequacy of venting systems;
- determine proper routing and lengths of duct systems;
- operate or determine the condition of clothes washer, clothes dryer, or refrigerator; or
- operate or determine the condition of other built in appliances, except as provided for under §535.233(h), of this title.
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§535.233 Standards of Practice: Minimum Inspection Requirements for Optional Systems
- An inspector is not required to inspect the components or systems described under this section.
- If an inspector agrees to inspect a component or system described under this section, the general provisions under §535.227 of this title and the provisions and requirements of this section applicable to that component or system apply.
- Landscape irrigation (sprinkler) systems.
- The inspector shall:
- manually operate all zones or stations on the system through the controller;
- report as Deficient:
- the absence of a rain or moisture sensor,
- inoperative zone valves;
- surface water leaks;
- the absence of a backflow prevention device;
- the absence of shutoff valves between the water meter and backflow device;
- deficiencies in the performance and mounting of the controller;
- missing or damaged components; and
- deficiencies in the performance of the water emission devices; such as, sprayer heads, rotary sprinkler heads, bubblers or drip lines.
- The inspector is not required to inspect:
- for effective coverage of the irrigation system;
- the automatic function of the controller;
- the effectiveness of the sensors; such as, rain, moisture, wind, flow or freeze sensors;
- sizing and effectiveness of backflow prevention device; or
- report on the performance of an underground zone.
- The inspector shall:
- Swimming pools, spas, hot tubs, and equipment.
- The inspector shall:
- report the type of construction;
- report as Deficient:
- the presence of a single blockable main drain (potential entrapment hazard);
- a pump motor, blower, or other electrical equipment that lacks bonding;
- the absence of or deficiencies in safety barriers;
- water leaks in above-ground pipes and equipment;
- the absence or failure in performance of ground-fault circuit interrupter protection devices; and
- deficiencies in:
- surfaces;
- tiles, coping, and decks;
- slides, steps, diving boards, handrails, and other equipment;
- drains, skimmers, and valves;
- filters, gauges, pumps, motors, controls, and sweeps;
- lighting fixtures; and
- the pool heater that these standards of practice require to be reported for the heating system.
- The inspector is not required to:
- disassemble filters or dismantle or otherwise open any components or lines;
- operate valves;
- uncover or excavate any lines or concealed components of the system;
- fill the pool, spa, or hot tub with water;
- inspect any system that has been winterized, shut down, or otherwise secured;
- determine the presence of sub-surface water tables;
- determine the effectiveness of entrapment covers;
- determine the presence of pool shell or sub-surface leaks; or
- inspect ancillary equipment such as computer controls, covers, chlorinators or other chemical dispensers, or water ionization devices or conditioners other than required by this section.
- The inspector shall:
- Outbuildings.
- The inspector shall report as Deficient the absence or failure in performance of ground-fault circuit interrupter protection devices in grade-level portions of unfinished accessory buildings used for storage or work areas, boathouses, and boat hoists; and
- The inspector shall report as Deficient deficiencies in the structural, electrical, plumbing, heating, ventilation, and cooling systems that these standards of practice require to be reported for the principal building.
- Private water wells.
- The inspector shall:
- operate at least two fixtures simultaneously;
- recommend or arrange to have performed coliform testing;
- report:
- the type of pump and storage equipment;
- the proximity of any known septic system; and
- report as Deficient deficiencies in:
- water pressure and flow and performance of pressure switches;
- the condition of accessible equipment and components; and
- the well head, including improper site drainage and clearances.
- The inspector is not required to:
- open, uncover, or remove the pump, heads, screens, lines, or other components of the system;
- determine the reliability of the water supply or source; or
- locate or verify underground water leaks.
- The inspector shall:
- Private sewage disposal systems.
- The inspector shall:
- report:
- the type of system;
- the location of the drain or distribution field; and
- the proximity of any known water wells, underground cisterns, water supply lines, bodies of water, sharp slopes or breaks, easement lines, property lines, soil absorption systems, swimming pools, or sprinkler systems; and
- report as Deficient:
- visual or olfactory evidence of effluent seepage or flow at the surface of the ground;
- inoperative aerators or dosing pumps; and
- deficiencies in:
- accessible components;
- functional flow;
- site drainage and clearances around or adjacent to the system; and
- the aerobic discharge system.
- report:
- The inspector is not required to:
- excavate or uncover the system or its components;
- determine the size, adequacy, or efficiency of the system; or
- determine the type of construction used.
- The inspector shall:
- Other built-in appliances. The inspector shall report deficiencies in condition or operation of other built-in appliances not listed under §535.232 of this title.
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§535.240 Proration of Payments from the Real Estate Inspection Recovery Fund
- In the event of multiple and valid pending claims against a license holder or certificate holder in excess of the limitations in §1102.359, the claims are prorated as follows.
- Actual damages shall be allocated first. If the total of the eligible actual damages of all claims exceeds the maximum that may be paid from the Real Estate Inspection Recovery Fund, the actual damages are prorated, and no interest, attorney fees, or court costs are paid.
- If, after allocating the actual damages as provided by paragraph (1) of this section, the limitations in §1102.359 of Chapter 1102, interest on actual damages (pre-judgment and post-judgment) are allocated second. If the total of the interest on eligible actual damages of all claims exceeds the amount remaining to be paid from the Real Estate Inspection Recovery Fund, the interest on eligible actual damages are prorated, and no other interest, attorney fees, or court costs are paid.
- If, after allocating the actual damages and interest thereon as provided by paragraph (1) and (2) of this section, the limitations in §1102.359 of Chapter 1102, are not reached, other interest, attorney fees, and court costs are allocated third. If the total of the other interest, attorney fees, and court costs of all claims exceeds the amount remaining to be paid from the Real Estate Inspection Recovery Fund, the other interest, attorney fees, and court costs are prorated.
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Subchapter S Residential Rental Locators
§535.300 Advertising by Residential Rental Locators
- This section is intended to establish standards relating to permissible forms of advertising by a person licensed as a real estate broker or sales agent and functioning as a residential rental locator ("locator"). For the purposes of this section, the term "residential rental locator" has the meaning provided by §1101.002(6) of the Act. For the purposes of this section, the term "advertisement" has the same meaning provided by §535.155 of this chapter.
- If a locator advertises more than one apartment unit in the same advertisement and lists amenities or features generally without providing the features or amenities available at a specific rent for a specific unit, the advertisement must include a statement having a meaning substantially equivalent to one of the following.
- "Not all units have the advertised features or amenities."
- "The rent is $_____ or more, depending on the features of the unit."
- "The rent quoted is the minimum for a unit which may not have all the features advertised."
- Advertisements in a printed publication comply with subsection (b) of this section if the publication in which an advertisement appears contains this notice at the beginning of the section in which the advertisement appears: Notice: Residential rental locators may advertise apartment units in general terms, and all units may not have the same features. The amount of rent quoted in an advertisement may be the starting rent for a basic unit or for a unit which does not have all advertised features.
- An advertisement by a locator of an apartment unit by general terms is misleading unless at the time the advertisement is placed at least one unit meeting the description of the unit contained in the advertisement is available through the locator at the lowest rent stated in the advertisement within either a time stated in the advertisement or not later than the 30th day after the date the advertisement is submitted for publication if no time is stated. Before offering a unit for rent or lease, the locator must also obtain the consent of the unit's owner or of the owner's authorized agent.
- Advertising by locators must comply with §1101.652(b)(23) of the Act and §535.154 and §535.155 of this chapter.
- Failure to comply with this section is grounds for the Commission to reprimand a license holder, to suspend or revoke a license, to take other disciplinary action, and to impose an administrative penalty in accordance with §1101.701 of the Act.
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Subchapter T Easement or Right-of-way Agents
§535.400 Registration of Easement or Right-of-Way Agents
- A person who intends to be registered by the Commission as an easement or right-of-way agent must:
- file an application for the registration:
- through the online process approved by the Commission; or
- on the form prescribed by the Commission for that purpose; and
- submit the required fee under §535.404 of this subchapter.
- The Commission will reject an application submitted without a sufficient filing fee.
- The Commission may request additional information be provided to the Commission relating to an application.
- file an application for the registration:
- To be eligible for registration, an applicant must:
- meet the following requirements at the time of the application:
- be 18 years of age;
- be a citizen of the United States or a lawfully admitted alien;
- comply with the fingerprinting and education requirements of the Act;
- meet the honesty, trustworthiness, and integrity requirements under the Act; and
- If the applicant is a business entity, the applicant must designate one of its managing officers who is registered under this title as agent for the business entity.
- meet the following requirements at the time of the application:
- Texas residents who enter military service and resume their Texas residence immediately upon separation from the military are not considered to have lost their Texas residence unless they have affirmatively established legal residence elsewhere.
- The fact that an individual has had disabilities of minority removed does not affect the requirement that an applicant be 18 years of age to be eligible for a license.
- The Commission will assign a registration number to each registrant and provide each registrant with a certificate of registration. Each registration issued by the Commission is valid until the last day of the month two years after the date the registration was issued.
- Termination of application. An application is terminated and is subject to no further evaluation or processing if the applicant fails to satisfy the requirements of subsection (b)(1) of this section within one year from the date the application is filed.
- The Commission may disapprove an application for registration with written notice to the applicant if the applicant has been convicted of a criminal offense which is grounds for disapproval of an application under §541.1 of this title or the applicant has engaged in conduct prohibited by the Act. Provided a timely written request for a hearing is made by the applicant in accordance with the Act, an applicant whose application for registration has been disapproved is entitled to a hearing. The hearing on the application will be conducted in accordance with §1101.364 of the Act and Chapter 533 of this title.
- If the Commission determines that issuance of a probationary certificate is appropriate, the order entered by the Commission with regard to the application must set forth the terms and conditions for the probationary certificate. Terms for a probationary certificate may include any of the following:
- that the probationary certificate holder comply with the Act and with the rules of the Commission;
- that the probationary certificate holder fully cooperate with the Commission in the investigation of any complaint filed against the certificate holder;
- that the probationary certificate holder attend a prescribed number of classroom hours in specific areas of study during the probationary period;
- that the probationary certificate holder limit acts as an easement or right-of-way agent as prescribed in the order;
- that the probationary certificate holder report regularly to the Commission on any matter which is the basis of the probationary certificate;
- that the probationary certificate holder comply with any other terms contained in the order which have been found to be reasonable and appropriate by the Commission after consideration of the circumstances involved in the particular application; or
- that the probationary certificate holder comply with any other terms contained in an order from any other court or administrative agency under which the probationary certificate holder is bound.
- Unless the order granting a probationary certificate specifies otherwise, a probationary certificate holder may renew the certificate after the probationary period by satisfying the requirements under §535.403.
- Each registrant shall display the certificate of registration issued by the Commission in a prominent location in the registrant's place of business, as required by §1101.507 of the Act. If the registrant maintains more than one place of business, the registrant shall display either the certificate or a copy of the certificate in each place of business.
- Each registrant shall provide a mailing address, phone number, and email address used in business, if available, to the Commission and shall report all subsequent changes not later than the 10th day after the date of a change of any of the listed contact information. If a registrant fails to update the contact information, the last known contact information provided to the Commission is the registrant's contact information.
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§535.401 Required Notices
- The Commission adopts by reference TREC No. ERW 4-1, Notice Regarding Easements and Rights-of-Way, which is published by and available from the Commission, P.O. Box 12188, Austin, Texas 78711-2188.
- Each registrant shall, before a party in a transaction other than the party the registrant represents is obligated to sell, buy, lease, or transfer a right-of-way or easement, provide to the party a copy of TREC No. ERW 4-1 completed by the registrant.
- Each registrant shall provide the consumer notice adopted under §531.18 of this title by:
- displaying it in a readily noticeable location in each place of business the registrant maintains; and
- providing a link to it labeled "Texas Real Estate Commission Consumer Protection Notice", in at least a 10 point font, in a readily noticeable place on the homepage of the business website of the registrant.
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§535.402 Complaints, Disciplinary Action and Appeals
- The investigation of complaints and disciplinary action by the Commission against registrants will be conducted in accordance with the Act and §535.141 of this title (relating to Initiation of Investigation; Order Requirements). In addition to the grounds for revoking or suspending a registration listed in the Act, the Commission may revoke or suspend the registration of a registrant on the following grounds:
- procuring or attempting to procure a registration by fraud, misrepresentation or deceit, or by making a material misstatement of fact in an application;
- failing or refusing on demand to produce a document, book, or record in the registrant's possession concerning an easement or right-of-way transaction involving the registrant for examination by the Commission or its authorized agent; and
- failing to provide information requested by the Commission or its authorized agent in course of an investigation of a complaint by the 14th day after the date of the request.
- Appeals from disciplinary orders against a registrant are governed by §1101.658 of the Act and by Chapter 533 of this title.
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§535.403 Renewal of Registration
- Renewal application.
- A registration expires on the date shown on the face of the registration issued to the license holder.
- If a license holder intends to renew an unexpired registration, the license holder must, on or before the expiration date of the current registration:
- file a renewal application through the online process on the Commission's website or on the applicable form approved by the Commission;
- submit the appropriate fee required by §535.404 of this title (relating to Fees); and
- comply with the fingerprinting and education requirements under the Act.
- Failure to provide information requested by the Commission in connection with a renewal application is grounds for disciplinary action under §1101.653 of the Act.
- A registrant who fails to timely renew must apply for and receive a new registration in order to act as an easement or right-of-way agent.
- The Commission will deliver a registration renewal notice to a license holder three months before the expiration of the license holder's current registration. Failure to receive the certificate renewal notice does not relieve a certificate holder of the obligation to renew a certificate.
- The Commission is not required to notify a business entity such as a corporation, limited liability company, or partnership that has failed to designate an officer, manager, or general partner who meets the requirements of §1101.502 of the Act. The Commission may not renew a registration issued to a business entity that has not designated an officer, manager, or general partner who meets the requirements of the Act.
- If the registration expires on a Saturday, Sunday or any other day on which the Commission is not open for business, a renewal application is considered to be timely filed when the application is received or postmarked no later than the first business day after the expiration date of the registration.
- Denial of Renewal. The Commission may deny an application for renewal of a registration if the registrant is in violation of the terms of a Commission order.
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§535.404 Fees
- The Commission shall charge and collect the following fees:
- a fee of $200 for the application or renewal of a registration for a two-year period; and
- a fee of $50 for deposit into the real estate recovery trust account upon the filing of an original or renewal application for a certificate of registration.
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§535.405 Employee of Owner or Purchaser
- An easement or right of way registration is not required for an individual employed by an owner or purchaser for the purpose of selling, buying, leasing or transferring an easement or right-of-way for the owner. A person is considered to be an owner if it holds an interest in or wishes to acquire an easement or right-of-way or has an equitable title or right acquired by contract with the record title holder.
- An easement or right of way agent employed by an owner or purchaser means a person employed and directly compensated by an owner or purchaser. An independent contractor is not an employee.
- Withholding income taxes and Federal Insurance Contributions Act (F.I.C.A.) taxes from wages paid to another person is considered evidence of employment.
- An employee of a business easement or right-of-way registrant is required to have an individual easement or right-of-way registration to sell, buy, lease, or transfer an easement or right-of-way.
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Chapter 537 Professional Agreements and Standard Contracts
§537.11 Use of Standard Contract Forms
- When negotiating contracts binding the sale, exchange, option, lease or rental of any interest in real property, a real estate license holder shall use only those contract forms approved for mandatory use by the Texas Real Estate Commission (the Commission) for that type of transaction with the following exceptions:
- transactions in which the license holder is functioning solely as a principal, not as an agent;
- transactions in which an agency of the United States government requires a different form to be used;
- transactions for which a contract form, or addendum to a contract form, has been prepared by a property owner or prepared by a lawyer and required by a property owner; or
- transactions for which no mandatory contract form or addendum has been approved by the Commission, and the license holder uses a form:
- prepared by a lawyer licensed by this state, or a trade association in consultation with one or more lawyers licensed by this state, for the particular type of transactions involved that contains:
- the name of the lawyer or trade association who prepared the form;
- the name of the broker or trade association for whom the form was prepared;
- the type of transaction for which the lawyer or trade association has approved the use of the form;
- any restrictions on the use of the form; and
- if it is an addendum that changes the rights, obligations or remedies of a party under a contract or addendum form approved by the Commission for mandatory use, the form must also include:
- a statement about how the addendum changes the rights, obligations or remedies of a party, with a reference to the relevant paragraph number in the mandatory use form;
- a statement that the form is not a mandatory Texas Real Estate Commission form; and
- a statement that Commission rules prohibit real estate license holders from giving legal advice; or
- prepared by the Texas Real Estate Broker-Lawyer Committee (the committee) and approved by the Commission for voluntary use by license holders.
- prepared by a lawyer licensed by this state, or a trade association in consultation with one or more lawyers licensed by this state, for the particular type of transactions involved that contains:
- A license holder may not:
- practice law;
- directly or indirectly offer, give or attempt to give legal advice;
- give advice or opinions as to the legal effect of any contracts or other such instruments which may affect the title to real estate;
- give opinions concerning the status or validity of title to real estate;
- draft language defining or affecting the rights, obligations or remedies of the principals of a real estate transaction, including escalation, appraisal or other contingency clauses;
- add factual statements or business details to a form approved by the Commission if the Commission has approved a form or addendum for mandatory use for that purpose;
- attempt to prevent or in any manner whatsoever discourage any principal to a real estate transaction from employing a lawyer; or
- employ or pay for the services of a lawyer, directly or indirectly, to represent a principal to a real estate transaction in which the license holder is acting as an agent.
- This section does not limit a license holder's fiduciary obligation to disclose to the license holder's principals all pertinent facts that are within the knowledge of the license holder, including such facts which might affect the status of or title to real estate.
- It is not the practice of law for a license holder to fill in the blanks in a contract form authorized for use by this section. A license holder shall only add factual statements and business details or shall strike text as directed in writing by the principals.
- This section does not prevent the license holder from explaining to the principals the meaning of the alternative choices, factual statements and business details contained in an instrument so long as the license holder does not offer or give legal advice.
- When a transaction involves unusual matters that should be reviewed by a lawyer before an instrument is executed, or if the instrument must be acknowledged and filed of record, the license holder shall advise the principals that each should consult a lawyer of the principal's choice before executing the instrument.
- A license holder may employ and pay for the services of a lawyer to represent only the license holder in a real estate transaction.
- A license holder shall advise the principals that the instrument they are about to execute is binding on them.
- Forms approved by the Commission may be reproduced only from the following sources:
- electronically reproduced from the files available on the Commission's website;
- printed copies made from copies obtained from the Commission;
- legible photocopies made from such copies; or
- computer-driven printers following these guidelines:
- The computer file or program containing the form text must not allow the end user direct access to the text of the form and may only permit the user to insert language in blanks in the forms. Blanks may be scalable to accommodate the inserted language. The Commission may approve the use of a computer file or program that permits a principal of a license holder to strike through language of the form text. The program must be:
- limited to use only by a principal of a transaction; and
- in a format and authenticated in manner acceptable to the Commission.
- Typefaces or fonts must appear to be identical to those used by the Commission in printed copies of the particular form.
- The text and order of the text must be identical to that used by the Commission in printed copies of the particular form.
- The name and address of the person or firm responsible for developing the software program must be legibly printed below the border at the bottom of each page in no less than six point type and in no larger than 10 point type.
- The computer file or program containing the form text must not allow the end user direct access to the text of the form and may only permit the user to insert language in blanks in the forms. Blanks may be scalable to accommodate the inserted language. The Commission may approve the use of a computer file or program that permits a principal of a license holder to strike through language of the form text. The program must be:
- Forms approved or promulgated by the Commission must be reproduced on the same size of paper used by the Commission with the following changes or additions only:
- The business name or logo of a broker, organization or printer may appear at the top of a form outside the border.
- The broker's name may be inserted in any blank provided for that purpose.
- Standard Contract Forms adopted by the Commission are published by and available from the Commission at P.O. Box 12188, Austin, Texas 78711-2188 or www.trec.texas.gov.
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§537.20 Standard Contract Form TREC No. 9-15
- The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. 9-15 approved by the Commission in 2021 for use in the sale of unimproved property where intended use is for one to four family residences.
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§537.21 Standard Contract Form TREC No. 10-6, Addendum for Sale of Other Property by Buyer
- The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. 10-6 approved by the Commission in 2012 for mandatory use as an addendum concerning sale of other property by a buyer to be attached to promulgated forms of contracts.
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§537.22 Standard Contract Form TREC No. 11-7, Addendum for "Back-Up" Contract
- The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. 11-7 approved by the Commission in 2012 for mandatory use as an addendum to be attached to promulgated forms of contracts which are second or "back-up" contracts.
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§537.23 Standard Contract Form TREC No. 12-3, Addendum for Release of Liability on Assumed Loan and/or Restoration of Seller's VA Entitlement
- The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. 12-3 approved by the Commission in 2012 for mandatory use as an addendum to be attached to promulgated forms of contracts where there is a Veterans Administration release of liability or restoration entitlement.
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§537.26 Standard Contract Form TREC No. 15-6, Seller's Temporary Residential Lease
- The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. 15-6 approved by the Commission in 2022 for mandatory use as a residential lease when a seller temporarily occupies property after closing.
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§537.27 Standard Contract Form TREC No. 16-6, Buyer's Temporary Residential Lease
- The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. 16-6 approved by the Commission in 2022 for mandatory use as a residential lease when a buyer temporarily occupies property before closing.
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§537.28 Standard Contract Form TREC No. 20-16
- The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. 20-16 approved by the Commission in 2021 for use in the resale of residential real estate.
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§537.30 Standard Contract Form TREC No. 23-17
- The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. 23-17 approved by the Commission in 2021 for use in the sale of a new home where construction is incomplete.
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§537.31 Standard Contract Form TREC No. 24-17
- The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. 24-17 approved by the Commission in 2021 for use in the sale of a new home where construction is completed.
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§537.32 Standard Contract Form TREC No. 25-14
- The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. 25-14 approved by the Commission in 2021 for use in the sale of a farm or ranch.
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§537.33 Standard Contract Form TREC No. 26-7
- The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. 26-7 approved by the Commission in 2015 for use as an addendum concerning seller financing.
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§537.35 Standard Contract Form TREC No. 28-2, Environmental Assessment, Threatened of Endangered Species, and Wetlands Addendum
- The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. 28-2 approved by the Commission in 2012 for mandatory use as an addendum to be attached to promulgated forms of contracts where reports are to be obtained relating to environmental assessments, threatened or endangered species, or wetlands.
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§537.37 Standard Contract Form TREC No. 30-15
- The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. 30-15 approved by the Commission in 2021 for use in the resale of a residential condominium unit.
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§537.39 Standard Contract Form TREC No. 32-4, Condominium Resale Certificate
- The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. 32-4 approved by the Commission in 2015 for voluntary use as a condominium resale certificate.
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§537.40 Standard Contract Form TREC No. 33-2, Addendum for Coastal Area Property
- The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. 33-2 approved by the Commission in 2012 for mandatory use as an addendum to be added to promulgated forms of contracts in the sale of property adjoining and sharing a common boundary with the tidally influenced submerged lands of the state.
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§537.41 Standard Contract Form TREC No. 34-4, Addendum for Property Located Seaward of the Gulf Intercoastal Waterway
- The Texas Real Estate Commission (Commission) adopts by reference standard contract form, TREC No. 34-4 approved by the Commission in 2012 for mandatory use as an addendum to be added to promulgated forms of contracts in the sale of property located seaward of the Gulf Intracoastal Waterway.
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§537.43 Standard Contract Form TREC No. 36-9
- The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. 36-9 approved by the Commission in 2020 for use as an addendum to be added to promulgated forms in the sale of property subject to mandatory membership in an owners' association.
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§537.44 Standard Contract Form TREC No. 37-5, Subdivision Information, Including Resale Certificate for Property Subject to Mandatory Membership in a Property Owners' Association
- The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. 37-5 approved by the Commission in 2014 for voluntary use as a resale certificate when the property is subject to mandatory membership in an owners' association.
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§537.45 Standard Contract Form TREC No. 38-7, Notice of Buyer's Termination of Contract
- The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. 38-7 approved by the Commission in 2021 for mandatory use as a buyer's notice of termination of contract.
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§537.46 Standard Contract Form TREC No. 39-8
- The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. 39-8 approved by the Commission in 2015 for use as an amendment to promulgated forms of contracts.
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§537.47 Standard Contract Form TREC No. 40-9
- The Texas Real Estate Commission (Commission) adopts by reference standard contract form, TREC No. 40-9 approved by the Commission in 2019 for use as an addendum to be added to promulgated forms of contracts when there is a condition for third party financing.
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§537.48 Standard Contract Form TREC No. 41-2
- The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. 41-2 approved by the Commission in 2012 for use as an addendum to be added to promulgated forms of contracts when there is an assumption of a loan.
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§537.51 Standard Contract Form TREC No. 44-2
- The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. 44-2 approved by the Commission in 2014 for use as an addendum to be added to promulgated forms of contacts for the reservation of oil, gas, and other minerals.
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§537.52 Standard Contract Form TREC No. 45-2, Short Sale Addendum
- The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. 45-2 approved by the Commission in 2021 for mandatory use as an addendum to be added to promulgated forms of contracts in the short sale of property.
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§537.54 Standard Contract Form TREC No. 47-0, Addendum for Property in a Propane Gas System Service Area
- The Texas Real Estate Commission (Commission) adopts by reference standard contract Form TREC No. 47-0 approved by the Commission in 2014 for mandatory use when a property is located in a propane gas system service area.
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§537.55 Standard Contract Form TREC No. 48-1, Addendum for Authorizing Hydrostatic Testing
- The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. 48-1 approved by the Commission in 2019 for mandatory use as an addendum to be added to promulgated forms if the parties agree to hydrostatic testing.
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§537.56 Standard Contract Form TREC No. 49-1, Addendum Concerning Right to Terminate Due to Lender's Appraisal
- The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. 49-1 approved by the Commission in 2018 for mandatory use as an addendum to be added to promulgated forms concerning the right to terminate due to lender's appraisal.
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§537.57 Standard Contract Form TREC No. 50-0, Seller's Notice of Termination of Contract
- The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. 50-0 approved by the Commission in 2018 for mandatory use as a seller's notice of termination of contract.
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§537.58 Standard Contract Form TREC No. 51-0
- The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. 51-0 approved by the Commission in 2020 for use as an addendum to be added to promulgated forms of contracts as related to lease agreements.
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§537.59 Standard Contract Form TREC No. 52-0
- The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. 52-0 approved by the Commission in 2020 for use as an addendum to be added to promulgated forms as related to fixture leases.
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§537.60 Standard Contract Form TREC No. 53-0, Addendum containing Notice of Obligation to Pay Improvement District Assessment
- The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. 53-0 approved by the Commission in 2021 for voluntary use when the property is located in a public improvement district.
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§537.61 Standard Contract Form TREC No. 54-0, Landlord's Floodplain and Flood Notice
- The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. 54-0 approved by the Commission in 2022 for voluntary use as an addendum to be added to a residential lease, including a promulgated temporary residential lease form, to fulfill the disclosure requirements of §92.0135, Texas Property Code.
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§537.62 Standard Contract Form TREC No. OP-H, Seller's Disclosure Notice
- The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. OP-H approved by the Commission in 2019 for voluntary use to fulfill the disclosure requirements of Texas Property Code § 5.008.
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§537.63 Standard Contract Form TREC No. OP-L, Addendum for Seller's Disclosure of Information on Lead-Based Paint and Lead-Based Paint Hazards as Required by Federal Law
- The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. OP-L approved by the Commission in 2011 for voluntary use to comply with federal regulation to furnish a lead paint disclosure in properties constructed prior to 1978.
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§537.64 Standard Contract Form TREC No. OP-M, Non-Realty Items Addendum
- The Texas Real Estate Commission (Commission) adopts by reference standard contract form TREC No. OP-M approved by the Commission in 2011 for voluntary use when the parties need to convey items of personal property not already listed in Paragraph 2, Property, of the contracts.
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Chapter 541 Rules Relating to the Provisions of Texas Occupations Code, Chapter 53
§541.1 Criminal Offense Guidelines
- For the purposes of Chapter 53, Texas Occupations Code, the Texas Real Estate Commission (the Commission) considers that a deferred adjudication deemed a conviction under §53.021 or a conviction of the following criminal offenses directly relates to the duties and responsibilities of a real estate broker and real estate sales agent because committing these offenses tends to demonstrate a person's inability to represent the interest of another with honesty, trustworthiness, and integrity:
- offenses involving fraud or misrepresentation;
- offenses involving forgery, falsification of records, or perjury;
- offenses involving the offering, paying, or taking of bribes, kickbacks, or other illegal compensation;
- offenses against real or personal property belonging to another;
- offenses against the person;
- offenses against public administration;
- offenses involving the sale or other disposition of real or personal property belonging to another without authorization of law;
- offenses involving moral turpitude;
- offenses in violation of Chapter 21, Texas Penal Code (sexual offenses);
- offenses for which the person has been required to register as a sex offender under Chapter 62, Texas Code of Criminal Procedure;
- felonies involving the manufacture, delivery, or intent to deliver controlled substances;
- offenses of attempting or conspiring to commit any of the foregoing offenses;
- offenses involving aiding and abetting the commission of an offense listed in this section;
- repeated violations of one criminal statute or multiple violations of different criminal statutes; and
- felonies involving driving while intoxicated (DWI) or driving under the influence (DUI).
- For the purposes of Chapter 53, Texas Occupations Code, the Commission considers that a deferred adjudication deemed a conviction under §53.021, or a conviction of the following criminal offenses, directly relate to the duties and responsibilities of a professional inspector, real estate inspector, apprentice inspector, and easement or right-of-way agent for the reason that the commission of the offenses tends to demonstrate the person's inability to represent the interest of another with honesty, trustworthiness, and integrity:
- offenses involving fraud or misrepresentation;
- offenses involving forgery, falsification of records, or perjury;
- offenses involving the offering, paying, or taking of bribes, kickbacks, or other illegal compensation;
- offenses against real or personal property belonging to another;
- offenses against the person;
- offenses against public administration;
- offenses involving the sale or other disposition of real or personal property belonging to another without authorization of law;
- offenses involving moral turpitude;
- offenses in violation of Chapter 21, Texas Penal Code (sexual offenses);
- offenses for which the person has been required to register as a sex offender under Chapter 62, Texas Code of Criminal Procedure;
- felonies involving the manufacture, delivery, or intent to deliver controlled substances;
- offenses of attempting or conspiring to commit any of the foregoing offenses;
- offenses involving aiding and abetting the commission of an offense listed in this section; and
- repeated violations of one criminal statute or multiple violations of different criminal statutes.
- In determining whether a criminal offense not listed in subsections (a) and (b) of this section is directly related to an occupation regulated by the Commission, the Commission shall consider:
- the nature and seriousness of the crime;
- the relationship of the crime to the purposes for requiring a license to engage in the occupation;
- the extent to which a license might offer an opportunity to engage in further criminal activity of the same type as that in which the person previously had been involved;
- the relationship of the crime to the ability, capacity, or fitness required to perform the duties and discharge the responsibilities of the licensed occupation; and
- any correlation between the elements of the crime and the duties and responsibilities of the licensed occupation.
- When determining a person's present fitness for a license, the Commission shall also consider:
- the extent and nature of the person's past criminal activity;
- the age of the person when the crime was committed;
- the amount of time that has elapsed since the person's last criminal activity;
- the conduct and work activity of the person before and after the criminal activity;
- evidence of the person's rehabilitation or rehabilitative effort while incarcerated or after release;
- evidence of the person's compliance with any conditions of community supervision, parole, or mandatory supervision; and
- other evidence of the person's present fitness, including letters of recommendation.
- It is the applicant's or license holder's responsibility, to the extent possible, to obtain and provide the recommendations described in subsection (d)(7) of this section.
- When determining a person's fitness to perform the duties and discharge the responsibilities of a licensed occupation regulated by the Commission, the Commission does not consider an arrest that did not result in a conviction or placement on deferred adjudication community supervision.
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§541.2 Criminal History Evaluation Letters/Determination of Fitness
- Pursuant to Texas Occupations Code, Chapter 53, Subchapter D and §1101.353, a person may request that the Texas Real Estate Commission (the Commission) evaluate the person's eligibility for a specific occupational license regulated by the Commission by:
- submitting a request on a form approved by the Commission for that purpose; and
- paying the required fee.
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Chapter 543 Rules Relating to the Provisions of the Texas Timeshare Act
§543.1 Definitions
- The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise.
- Commission–The Texas Real Estate Commission.
- Texas Timeshare Act - Chapter 221, Texas Property Code
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§543.2 Registration
- A developer who wishes to register a timeshare plan shall submit an application for registration using forms approved by the Commission. The Commission may not accept for filing an application submitted without a completed application form and the appropriate filing fee.
- If the Commission determines that an application for registration of a timeshare plan satisfies all requirements for registration, the Commission shall promptly register the timeshare plan. The Commission shall notify the applicant in writing that the timeshare plan has been registered, specifying the anniversary date of the registration and shall assign a registration number to the timeshare plan.
- If the Commission determines that an application for registration of a timeshare plan fails to satisfy any requirement for registration, the Commission shall promptly notify the applicant of any deficiency in writing. The Commission may require an applicant to revise and resubmit written documents filed with the application or to provide additional information if the Commission determines that the application is incomplete or inaccurate. Upon submission by an applicant of a response sufficient in the opinion of the Commission to cure any deficiency in the application, the Commission shall promptly register the timeshare plan and provide the applicant with the written notice required by these rules. An application will be terminated and the Commission shall take no further action if the applicant fails to submit a response to the Commission within three months after the Commission mails a request to the applicant for curative action.
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§543.3 Amendments
- A person who wishes to amend the registration of a timeshare plan shall submit an application to amend the registration using forms approved by the Commission. A developer may file an application to amend a registration before the occurrence of the change. The Commission may not accept for filing an application submitted without a completed application form and the appropriate filing fee.
- For the purposes of §221.023 and subsections (b)(26), (c)(9) and (d)(32) of §221.032 of the Texas Timeshare Act, a developer shall file amendments to the registration reporting to the Commission any material or materially adverse change in any document contained in a registration.
- "Material" includes, but is not limited to:
- a change of developer;
- a change of exchange company or association with an additional exchange company;
- an increase in assessments of 15% or more;
- any substantial change in the accommodations that are part of the timeshare plan;
- an increase or decrease in the number of timeshare interests in the timeshare plan registered by the Commission;
- a change of escrow agent or type of escrow or other financial assurance;
- if applicable, an increase of more than 20% in an original alternative assurance as defined by §221.063(a) of the Texas Timeshare Act;
- a change to a substantive provision of the escrow agreement between the escrow agent and the developer;
- a change of management company; or
- a change to a substantive provision of the management agreement.
- "Materially adverse" means any material change to the timeshare plan that substantially reduces the benefits or increases the costs to purchasers.
- Material or materially adverse does not include the correction of any typographical or other nonsubstantive changes.
- If the Commission determines that a registration, if amended in the manner indicated in an application to amend a registration, would continue to satisfy all requirements for registration, the Commission shall promptly notify the applicant in writing that the registration has been amended, specifying the effective date of the amendment.
- If the Commission determines that a registration, if amended in the manner indicated in an application to amend a registration, would fail to satisfy a requirement for registration, the Commission shall promptly notify the applicant of any deficiency. The Commission may require the applicant to revise and resubmit written documents filed with the application or to provide additional information if the Commission determines that the application or written material filed with the application is incomplete or inaccurate. Upon submission by an applicant of a response sufficient in the opinion of the Commission to cure any deficiency in the application, the Commission shall promptly notify the applicant that the registration has been amended, specifying the effective date of the amendment.
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§543.4 Fees
- An applicant for registration of a timeshare plan or an applicant for abbreviated registration of a timeshare plan shall pay a filing fee of $2.00 for each seven days of annual use availability in each accommodation that is a part of the timeshare plan, provided however, that the Commission shall charge and collect a minimum filing fee of $500.00 and that no registration filing fee shall exceed $3,500.00.
- An applicant for amendment of the registration of a timeshare plan shall pay a minimum filing fee of $100.00, provided however, that the filing fee for an amendment that increases the number of timeshare interests to be sold from the number that existed or were proposed for sale in the original registration shall be $2.00 for each seven days of annual use availability in each timeshare unit that is being added to the timeshare plan and that no filing fee shall exceed $2,000.00.
- An applicant for pre-sale authorization shall pay a filing fee of $100.00 in addition to the filing fee due under subsection (a) of this section.
- A filing fee is not refundable once an application is accepted for filing by the Commission.
- A developer of a registered timeshare plan shall pay a fee of $100 to renew a registration.
- To reinstate an expired registration of the timeshare plan, a developer shall pay, in addition to the fee of $100 to renew a timeshare plan, an additional fee of $25 for each month the registration has been expired.
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§543.5 Forms
- The Commission adopts by reference the following forms to be used in connection with the registration, amendment, or renewal of a timeshare plan:
- Application to Register a Timeshare Plan, Form TSR 1-6;
- Application to Amend a Timeshare Registration, Form TSR 2-6;
- Application for Abbreviated Registration of a Timeshare Plan, Form TSR 3-4;
- Application for Pre-sale Authorization, Form TSR 4-0;
- Escrow Surety Bond, Form TSR 5-1;
- Construction Surety Bond, Form TSR 6-1;
- Consent to Service of Process, Form TSR 7-0; and
- Application to Renew the Registration of a Timeshare Plan, Form TSR 8-2.
- Forms approved or promulgated by the Commission must be submitted on copies obtained from the Commission, whether in printed format or electronically completed from the forms available on the Commission's website.
- Forms adopted by reference in this section are published by and available from the Texas Real Estate Commission at P.O. Box 12188, Austin, Texas 78711-2188, or www.trec.texas.gov.
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§543.6 Violations
- It is a material violation of the Texas Timeshare Act for a person to engage in any of the acts described in §221.071(a) of the Texas Timeshare Act.
- It is a material violation of the Texas Timeshare Act for a developer to represent to a potential purchaser of a timeshare interest by advertising or any other means that a timeshare plan has been approved by the State of Texas or the Commission or to represent that the State of Texas or the Commission has passed upon the merits of a timeshare plan. It is not a material violation of the Texas Timeshare Act for a registrant to represent that a timeshare plan has been registered if the registrant discloses at the same time and in the same manner that the State of Texas and the Commission have not approved the timeshare plan or passed upon the merits of the timeshare plan.
- It is a material violation of the Texas Timeshare Act for a developer to fail to file an application to amend a registration within one month of the occurrence of a material or materially adverse change in any document contained in the registration or to fail to submit a response together with any related material in a good faith effort to cure a deficient application to amend a registration within three months after the Commission has mailed to the applicant a request for curative action.
- It is a material violation of the Texas Timeshare Act for a person to procure or attempt to procure a registration or amendment to a registration by fraud, misrepresentation, or deceit or by making a material misstatement of fact in an application filed with the Commission.
- It is a material violation of the Texas Timeshare Act for a person to disregard or violate a rule of the Commission.
- It is a material violation of the Texas Timeshare Act for a developer to fail to make good a check issued to the Commission one month after the Commission has mailed a request for payment by certified mail to the developer's last known mailing address as reflected by the Commission's records.
- It is a material violation of the Texas Timeshare Act for a developer to fail, not later than the 14th day after the date of a request, to provide information or documents requested by the Commission or a Commission representative in the course of the investigation of a complaint.
- It is a material violation of the Texas Timeshare Act for a developer to fail to properly file an assumed name as required by §221.037(b) of the Texas Timeshare Act or to fail to give the Commission timely written notice of the developer's use of an assumed name.
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§543.7 Complaints and Disciplinary Proceedings
- Complaints regarding registered timeshare plans shall be in writing and signed by the person filing the complaint.
- The Commission shall not investigate a complaint submitted more than four years after the date of the transaction that is the subject of the complaint.
- Disciplinary proceedings, including appeals, shall be conducted in accordance with the provisions of §221.024 of the Texas Timeshare Act, Chapter 533 of this title and the Administrative Procedure Act, Chapter 2001, Government Code.
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§543.8 Contract Requirements
- For purposes of §221.043(a) of the Texas Timeshare Act, "conspicuous manner" means that:
- The type of the upper and lower case letters used shall be two point sizes larger than the largest non-conspicuous type, exclusive of heading, on the page on which it appears but in at least 10-point type; or
- Where the use of 10-point type would be impractical or impossible, a different style of type or print may be used, so long as the print remains conspicuous under the circumstances.
- For purposes of subsection (a) of this section, any conspicuous type utilized shall be separated on all sides from other type and print and may be utilized only where required by the Texas Timeshare Act or authorized by the Commission.
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§543.9 Disclosure Requirement
- A developer may provide the disclosures required by §221.032 and §221.033 of the Texas Timeshare Act in an alternate format with the written agreement of the purchaser, provided the developer obtains a signed receipt evidencing that consent from the purchaser.
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§543.10 Exemptions
- For purposes of §221.034(b) of the Texas Timeshare Act, the term "developer" shall include any entity in which the developer, or any affiliate of the developer, has at least a 25% interest.
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§543.11 Escrow Requirements
- For purposes of §221.063(a) of the Texas Timeshare Act, the alternative financial assurance from another state or jurisdiction must be for the same timeshare plan as the timeshare plan being registered or registration being amended.
- A timeshare developer shall, not later than the 10th day after the date of the change, provide the Commission with written notice of any increase or decrease in the original surety bond as provided for in §221.063(a) of the Texas Timeshare Act.
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§543.12 Maintenance of Registration
- A developer shall give the Commission written notice of a change of the developer's mailing address not later than the 10th day after the date of the change.
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§543.13 Renewal of Registration
- The registration of a timeshare plan expires on the last day of the month two years after the date the plan was registered.
- A developer of a timeshare plan may renew the registration for a two-year period by completing an Application to Renew the Registration of a Timeshare Plan, Form TSR 8-2, and paying the appropriate filing fee.
- Three months before the expiration of a registration, the Commission shall mail a renewal application form to the developer's last known mailing address as shown in the Commission's records.
- An application to renew a timeshare plan is considered void and is subject to no further evaluation or processing when the developer fails to provide information or documentation within two months after the Commission makes written request for correct or additional information or documentation.
- Denial of Renewal. The Commission may deny an application for renewal of a registration if the developer of a timeshare plan is in violation of the terms of a Commission order.
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§543.14 Assumed Names
- A developer who uses an assumed name under §221.037(b) of the Texas Timeshare Act instead of using the full name of the developer shall notify the Commission in writing at least 10 days before using the assumed name.
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