CHAPTER 1101. REAL ESTATE BROKERS AND SALESPERSONS - Texas Statutes

OCCUPATIONS CODETITLE 7. PRACTICES AND PROFESSIONS RELATED TO REAL PROPERTY AND HOUSINGSUBTITLE A. PROFESSIONS RELATED TO REAL ESTATECHAPTER 1101. REAL ESTATE BROKERS AND SALESPERSONSSUBCHAPTER A. GENERAL PROVISIONSSec. 1101.001. SHORT TITLE. This chapter may be cited as The Real Estate License Act.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 2, eff. June 1, 2003.

Sec. 1101.002. DEFINITIONS. In this chapter:(1) "Broker":(A) means a person who, in exchange for a commission or other valuable consideration or with the expectation of receiving a commission or other valuable consideration, performs for another person one of the following acts:(i) sells, exchanges, purchases, or leases real estate;(ii) offers to sell, exchange, purchase, or lease real estate;(iii) negotiates or attempts to negotiate the listing, sale, exchange, purchase, or lease of real estate;(iv) lists or offers, attempts, or agrees to list real estate for sale, lease, or exchange;(v) appraises or offers, attempts, or agrees to appraise real estate;(vi) auctions or offers, attempts, or agrees to auction real estate;(vii) deals in options on real estate, including buying, selling, or offering to buy or sell options on real estate;(viii) aids or offers or attempts to aid in locating or obtaining real estate for purchase or lease;(ix) procures or assists in procuring a prospect to effect the sale, exchange, or lease of real estate; or(x) procures or assists in procuring property to effect the sale, exchange, or lease of real estate; and(B) includes a person who:(i) is employed by or for an owner of real estate to sell any portion of the real estate; or(ii) engages in the business of charging an advance fee or contracting to collect a fee under a contract that requires the person primarily to promote the sale of real estate by:(a) listing the real estate in a publication primarily used for listing real estate; or(b) referring information about the real estate to brokers.(2) "Certificate holder" means a person registered under Subchapter K.(3) "Commission" means the Texas Real Estate Commission.(4) "License holder" means a broker or salesperson licensed under this chapter.(5) "Real estate" means any interest in real property, including a leasehold, located in or outside this state. The term does not include an interest given as security for the performance of an obligation.(6) "Residential rental locator" means a person who offers for consideration to locate a unit in an apartment complex for lease to a prospective tenant. The term does not include an owner who offers to locate a unit in the owner's complex.(7) "Salesperson" means a person who is associated with a licensed broker for the purpose of performing an act described by Subdivision (1).(8) "Subagent" means a license holder who:(A) represents a principal through cooperation with and the consent of a broker representing the principal; and(B) is not sponsored by or associated with the principal's broker.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 2, eff. June 1, 2003. Amended by Acts 2003, 78th Leg., ch. 1276, Sec. 14A.151, eff. Sept. 1, 2003.

Sec. 1101.003. CORE REAL ESTATE COURSES. (a) For purposes of this chapter, "core real estate courses" include:(1) agency law, which includes the following topics:(A) the relationship between a principal and an agent;(B) an agent's authority;(C) the termination of an agent's authority;(D) an agent's duties, including fiduciary duties;(E) employment law;(F) deceptive trade practices;(G) listing or buying representation procedures; and(H) the disclosure of agency;(2) contract law, which includes the following topics:(A) elements of a contract;(B) offer and acceptance;(C) statute of frauds;(D) remedies for breach, including specific performance;(E) unauthorized practice of law;(F) commission rules relating to use of adopted forms; and(G) owner disclosure requirements;(3) principles of real estate, which includes:(A) an overview of:(i) licensing as a broker or salesperson;(ii) ethics of practice as a license holder;(iii) titles to and conveyance of real estate;(iv) legal descriptions;(v) deeds, encumbrances, and liens;(vi) distinctions between personal and real property;(vii) appraisal;(viii) finance and regulations;(ix) closing procedures; and(x) real estate mathematics; and(B) at least three hours of classroom instruction on federal, state, and local laws relating to housing discrimination, housing credit discrimination, and community reinvestment;(4) property management, which includes the following topics:(A) the role of a property manager;(B) landlord policies;(C) operational guidelines;(D) leases;(E) lease negotiations;(F) tenant relations;(G) maintenance;(H) reports;(I) habitability laws; and(J) the Fair Housing Act (42 U.S.C. Section 3601 et seq.);(5) real estate appraisal, which includes the following topics:(A) the central purposes and functions of an appraisal;(B) social and economic determinants of the value of real estate;(C) appraisal case studies;(D) cost, market data, and income approaches to value estimates of real estate;(E) final correlations; and(F) reporting;(6) real estate brokerage, which includes the following topics:(A) agency law;(B) planning and organization;(C) operational policies and procedures;(D) recruitment, selection, and training of personnel;(E) records and control; and(F) real estate firm analysis and expansion criteria;(7) real estate finance, which includes the following topics:(A) monetary systems;(B) primary and secondary money markets;(C) sources of mortgage loans;(D) federal government programs;(E) loan applications, processes, and procedures;(F) closing costs;(G) alternative financial instruments;(H) equal credit opportunity laws;(I) community reinvestment laws, including the Community Reinvestment Act of 1977 (12 U.S.C. Section 2901 et seq.); and(J) state housing agencies, including the Texas Department of Housing and Community Affairs;(8) real estate investment, which includes the following topics:(A) real estate investment characteristics;(B) techniques of investment analysis;(C) the time value of money;(D) discounted and nondiscounted investment criteria;(E) leverage;(F) tax shelters depreciation; and(G) applications to property tax;(9) real estate law, which includes the following topics:(A) legal concepts of real estate;(B) land description;(C) real property rights and estates in land;(D) contracts;(E) conveyances;(F) encumbrances;(G) foreclosures;(H) recording procedures; and(I) evidence of titles;(10) real estate marketing, which includes the following topics:(A) real estate professionalism and ethics;(B) characteristics of successful salespersons;(C) time management;(D) psychology of marketing;(E) listing procedures;(F) advertising;(G) negotiating and closing;(H) financing; and(I) Subchapter E, Chapter 17, Business & Commerce Code; and(11) real estate mathematics, which includes the following topics:(A) basic arithmetic skills and review of mathematical logic;(B) percentages;(C) interest;(D) the time value of money;(E) depreciation;(F) amortization;(G) proration; and(H) estimation of closing statements.(b) The commission may designate a course as an equivalent of a course listed in Subsection (a).(c) The commission by rule may prescribe:(1) the content of the core real estate courses listed in Subsection (a); and(2) the title and content of additional core real estate courses.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 2, eff. June 1, 2003. Amended by Acts 2003, 78th Leg., ch. 1276, Sec. 14A.152(a), eff. Sept. 1, 2003.

Sec. 1101.004. ACTING AS BROKER OR SALESPERSON. A person acts as a broker or salesperson under this chapter if the person, with the expectation of receiving valuable consideration, directly or indirectly performs or offers, attempts, or agrees to perform for another person any act described by Section 1101.002(1), as a part of a transaction or as an entire transaction.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 2, eff. June 1, 2003. Amended by Acts 2003, 78th Leg., ch. 1276, Sec. 14A.153, eff. Sept. 1, 2003.

Sec. 1101.005. APPLICABILITY OF CHAPTER. This chapter does not apply to:(1) an attorney licensed in any state;(2) an attorney-in-fact authorized under a power of attorney to conduct a real estate transaction;(3) a public official while engaged in official duties;(4) an auctioneer licensed under Chapter 1802 while conducting the sale of real estate by auction if the auctioneer does not perform another act of a broker or salesperson;(5) a person conducting a real estate transaction under a court order or the authority of a will or written trust instrument;(6) a person employed by an owner in the sale of structures and land on which structures are located if the structures are erected by the owner in the course of the owner's business;(7) an on-site manager of an apartment complex;(8) an owner or the owner's employee who leases the owner's improved or unimproved real estate;(9) a partnership or limited liability partnership acting as a broker or salesperson through a partner who is a licensed broker; or(10) a transaction involving:(A) the sale, lease, or transfer of a mineral or mining interest in real property;(B) the sale, lease, or transfer of a cemetery lot;(C) the lease or management of a hotel or motel; or(D) the sale of real property under a power of sale conferred by a deed of trust or other contract lien.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 2, eff. June 1, 2003.Amended by: Acts 2005, 79th Leg., Ch. 62, Sec. 1, eff. May 17, 2005.Acts 2007, 80th Leg., R.S., Ch. 297, Sec. 1, eff. September 1, 2007.

Sec. 1101.0055. NONAPPLICABILITY OF LAW GOVERNING CANCELLATION OF CERTAIN TRANSACTIONS. A service contract that a license holder enters into for services governed by this chapter is not a good or service governed by Chapter 601, Business & Commerce Code.

Added by Acts 2003, 78th Leg., ch. 1276, Sec. 14A.154(a), eff. Sept. 1, 2003.Amended by: Acts 2007, 80th Leg., R.S., Ch. 885, Sec. 2.27, eff. April 1, 2009.

Sec. 1101.006. APPLICATION OF SUNSET ACT. The Texas Real Estate Commission is subject to Chapter 325, Government Code (Texas Sunset Act). Unless continued in existence as provided by that chapter, the commission is abolished and this chapter, Chapter 1102, and Chapter 1303 of this code and Chapter 221, Property Code, expire September 1, 2019.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 2, eff. June 1, 2003. Amended by Acts 2003, 78th Leg., ch. 1276, Sec. 14A.155(a), eff. Sept. 1, 2003.Amended by: Acts 2007, 80th Leg., R.S., Ch. 1411, Sec. 1, eff. September 1, 2007.

SUBCHAPTER B. TEXAS REAL ESTATE COMMISSIONSec. 1101.051. COMMISSION MEMBERSHIP. (a) The Texas Real Estate Commission consists of nine members appointed by the governor with the advice and consent of the senate as follows:(1) six members who have been engaged in the brokerage business as licensed brokers as their major occupation for the five years preceding appointment; and(2) three members who represent the public.(b) Each member of the commission must be a qualified voter.(c) Appointments to the commission shall be made without regard to the race, color, disability, sex, religion, age, or national origin of the appointee.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 2, eff. June 1, 2003.

Sec. 1101.052. PUBLIC MEMBER ELIGIBILITY. A person is not eligible for appointment as a public member of the commission if the person or the person's spouse:(1) is registered, certified, or licensed by an occupational regulatory agency in the real estate industry;(2) is employed by or participates in the management of a business entity or other organization regulated by the commission or receiving funds from the commission;(3) owns or controls, directly or indirectly, more than a 10 percent interest in a business entity or other organization regulated by the commission or receiving funds from the commission; or(4) uses or receives a substantial amount of tangible goods, services, or funds from the commission, other than compensation or reimbursement authorized by law for commission membership, attendance, or expenses.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 2, eff. June 1, 2003.

Sec. 1101.053. MEMBERSHIP AND EMPLOYEE RESTRICTIONS. (a) In this section, "Texas trade association" means a cooperative and voluntarily joined statewide association of business or professional competitors in this state designed to assist its members and its industry or profession in dealing with mutual business or professional problems and in promoting their common interest.(b) A person may not be a member of the commission and may not be a commission employee employed in a "bona fide executive, administrative, or professional capacity," as that phrase is used for purposes of establishing an exemption to the overtime provisions of the federal Fair Labor Standards Act of 1938 (29 U.S.C. Section 201 et seq.) if:(1) the person is an officer, employee, or paid consultant of a Texas trade association in the real estate industry; or(2) the person's spouse is an officer, manager, or paid consultant of a Texas trade association in the real estate industry.(c) A person may not serve as a commission member or act as the general counsel to the commission if the person is required to register as a lobbyist under Chapter 305, Government Code, because of the person's activities for compensation on behalf of a profession related to the operation of the commission.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 2, eff. June 1, 2003.Amended by: Acts 2007, 80th Leg., R.S., Ch. 1411, Sec. 3, eff. September 1, 2007.

Sec. 1101.054. OFFICIAL OATH. Not later than the 15th day after the date of appointment, each appointee must take the constitutional oath of office.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 2, eff. June 1, 2003. Amended by Acts 2003, 78th Leg., ch. 285, Sec. 27, eff. Sept. 1, 2003.

Sec. 1101.055. TERMS; VACANCY. (a) Commission members serve staggered six-year terms, with the terms of three members expiring January 31 of each odd-numbered year.(b) If a vacancy occurs during a member's term, the governor shall appoint a person to fill the unexpired term.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 2, eff. June 1, 2003.

Sec. 1101.056. OFFICERS. (a) The governor shall designate a commission member who is a licensed broker as presiding officer. The presiding officer serves in that capacity at the pleasure of the governor.(b) At a regular meeting in February of each year, the commission shall elect an assistant presiding officer and secretary from its membership.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 2, eff. June 1, 2003.

Sec. 1101.057. GROUNDS FOR REMOVAL. (a) It is a ground for removal from the commission that a member:(1) does not have at the time of appointment the qualifications required by Section 1101.051(a) or (b) or 1101.052;(2) does not maintain during service on the commission the qualifications required by Section 1101.051(a) or (b) or 1101.052;(3) is ineligible for membership under Section 1101.053;(4) cannot discharge the member's duties for a substantial part of the member's term; or(5) is absent from more than half of the regularly scheduled commission meetings that the member is eligible to attend during each calendar year, unless the absence is excused by majority vote of the commission.(b) The validity of an action of the commission is not affected by the fact that it is taken when a ground for removal of a commission member exists.(c) If the administrator has knowledge that a potential ground for removal exists, the administrator shall notify the presiding officer of the commission of the potential ground. The presiding officer shall then notify the governor and the attorney general that a potential ground for removal exists. If the potential ground for removal involves the presiding officer, the administrator shall notify the next highest ranking officer of the commission, who shall then notify the governor and the attorney general that a potential ground for removal exists.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 2, eff. June 1, 2003.Amended by: Acts 2007, 80th Leg., R.S., Ch. 297, Sec. 2, eff. September 1, 2007.Acts 2007, 80th Leg., R.S., Ch. 1411, Sec. 4, eff. September 1, 2007.

Sec. 1101.058. PER DIEM; REIMBURSEMENT. A commission member is entitled to receive:(1) $75 for each day the member performs the member's official duties; and(2) reimbursement for actual and necessary expenses incurred in performing the member's official duties.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 2, eff. June 1, 2003.

Sec. 1101.059. TRAINING. (a) A person who is appointed to and qualifies for office as a member of the commission may not vote, deliberate, or be counted as a member in attendance at a meeting of the commission until the person completes a training program that complies with this section.(b) The training program must provide the person with information regarding:(1) this chapter and other laws regulated by the commission;(2) the programs, functions, rules, and budget of the commission;(3) the results of the most recent formal audit of the commission;(4) the requirements of laws relating to open meetings, public information, administrative procedure, and conflicts of interest; and(5) any applicable ethics policies adopted by the commission or the Texas Ethics Commission.(c) A person appointed to the commission is entitled to reimbursement, as provided by the General Appropriations Act, for the travel expenses incurred in attending the training program regardless of whether the attendance at the program occurs before or after the person qualifies for office.

Added by Acts 2007, 80th Leg., R.S., Ch. 1411, Sec. 5, eff. September 1, 2007.

SUBCHAPTER C. ADMINISTRATOR AND OTHER COMMISSION PERSONNELSec. 1101.101. ADMINISTRATOR AND OTHER PERSONNEL. (a) The commission shall appoint an administrator.(b) The commission may designate a subordinate officer as assistant administrator to act for the administrator in the administrator's absence.(c) The commission may employ other subordinate officers and employees necessary to administer and enforce this chapter and Chapter 1102, including a general counsel, attorneys, investigators, and support staff.(d) The commission shall determine the salaries of the administrator, officers, and employees of the commission. The amounts of the salaries may not exceed the amounts specified by the General Appropriations Act.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 2, eff. June 1, 2003.Amended by: Acts 2007, 80th Leg., R.S., Ch. 1411, Sec. 6, eff. September 1, 2007.

Sec. 1101.102. DIVISION OF RESPONSIBILITIES. The commission shall develop and implement policies that clearly separate the policymaking responsibilities of the commission and the management responsibilities of the administrator and the staff of the commission.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 2, eff. June 1, 2003.Amended by: Acts 2007, 80th Leg., R.S., Ch. 1411, Sec. 7, eff. September 1, 2007.

Sec. 1101.103. CODE OF ETHICS; STANDARDS OF CONDUCT. Each member, officer, employee, and agent of the commission is subject to the code of ethics and standards of conduct imposed by Chapter 572, Government Code.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 2, eff. June 1, 2003.

Sec. 1101.104. QUALIFICATIONS AND STANDARDS OF CONDUCT INFORMATION. The commission shall provide, as often as necessary, to its members and employees information regarding their:(1) qualifications for office or employment under this chapter and Chapter 1102; and(2) responsibilities under applicable laws relating to standards of conduct for state officers or employees.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 2, eff. June 1, 2003.

Sec. 1101.105. CAREER LADDER PROGRAM; PERFORMANCE EVALUATIONS. (a) The administrator or the administrator's designee shall develop an intra-agency career ladder program. The program must require intra-agency postings of all nonentry level positions concurrently with any public posting.(b) The administrator or the administrator's designee shall develop a system of annual performance evaluations. All merit pay for commission employees must be based on the system established under this subsection.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 2, eff. June 1, 2003.

Sec. 1101.106. EQUAL EMPLOYMENT OPPORTUNITY POLICY; REPORT. (a) The administrator or the administrator's designee shall prepare and maintain a written policy statement to ensure implementation of an equal employment opportunity program under which all personnel transactions are made without regard to race, color, disability, sex, religion, age, or national origin. The policy statement must include:(1) personnel policies, including policies relating to recruitment, evaluation, selection, appointment, training, and promotion of personnel;(2) a comprehensive analysis of the commission workforce that meets federal and state guidelines;(3) procedures by which a determination can be made of significant underuse in the commission workforce of all persons for whom federal or state guidelines encourage a more equitable balance; and(4) reasonable methods to appropriately address those areas of underuse.(b) A policy statement prepared under Subsection (a) must:(1) cover an annual period;(2) be updated at least annually; and(3) be filed with the governor.(c) The governor shall deliver a biennial report to the legislature based on the information received under Subsection (b). The report may be made separately or as a part of other biennial reports made to the legislature.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 2, eff. June 1, 2003.

SUBCHAPTER D. COMMISSION POWERS AND DUTIESSec. 1101.151. GENERAL POWERS AND DUTIES OF COMMISSION. (a) The commission shall:(1) administer this chapter and Chapter 1102;(2) adopt rules and establish standards relating to permissible forms of advertising by a license holder acting as a residential rental locator;(3) maintain a registry of certificate holders; and(4) design and adopt a seal.(b) The commission may:(1) adopt and enforce rules necessary to administer this chapter and Chapter 1102; and(2) establish standards of conduct and ethics for persons licensed under this chapter and Chapter 1102 to:(A) fulfill the purposes of this chapter and Chapter 1102; and(B) ensure compliance with this chapter and Chapter 1102.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 2, eff. June 1, 2003.Amended by: Acts 2007, 80th Leg., R.S., Ch. 1411, Sec. 8, eff. September 1, 2007.

Sec. 1101.152. FEES. (a) The commission shall adopt rules to charge and collect fees in amounts reasonable and necessary to cover the costs of administering this chapter, including a fee for:(1) filing an original application for a broker license;(2) annual renewal of a broker license;(3) filing an original application for a salesperson license;(4) annual renewal of a salesperson license;(5) annual registration;(6) filing an application for a license examination;(7) filing a request for a branch office license;(8) filing a request for a change of place of business, change of name, return to active status, or change of sponsoring broker;(9) filing a request to replace a lost or destroyed license or certificate of registration;(10) filing an application for approval of an education program under Subchapter G;(11) annual operation of an education program under Subchapter G;(12) filing an application for approval of an instructor of core real estate courses;(13) transcript evaluation;(14) preparing a license or registration history;(15) filing an application for a moral character determination; and(16) conducting a criminal history check for issuing or renewing a license.(b) The commission shall adopt rules to set and collect fees in amounts reasonable and necessary to cover the costs of implementing the continuing education requirements for license holders, including a fee for:(1) an application for approval of a continuing education provider;(2) an application for approval of a continuing education course of study;(3) an application for approval of an instructor of continuing education courses; and(4) attendance at a program to train instructors of a continuing education course prescribed under Section 1101.455.(c) Notwithstanding Subsection (a), if the commission issues an original inactive salesperson license under Section 1101.363(b) to a salesperson who is not sponsored by a licensed broker and the salesperson is subsequently sponsored by a licensed broker, the commission may not charge:(1) the salesperson a fee for filing a request to place the salesperson license on active status; or(2) the broker a fee for filing a request to sponsor the salesperson.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 2, eff. June 1, 2003. Amended by Acts 2003, 78th Leg., ch. 15, Sec. 1, 2, eff. Sept. 1, 2003.Amended by: Acts 2005, 79th Leg., Ch. 825, Sec. 1, eff. September 1, 2005.Acts 2007, 80th Leg., R.S., Ch. 297, Sec. 3, eff. September 1, 2007.Acts 2007, 80th Leg., R.S., Ch. 1411, Sec. 9, eff. September 1, 2007.Acts 2009, 81st Leg., R.S., Ch. 23, Sec. 1, eff. May 12, 2009.Acts 2009, 81st Leg., R.S., Ch. 23, Sec. 2, eff. May 12, 2009.

Sec. 1101.153. FEE INCREASE. (a) The fee for filing an original application for an individual broker license and the fee for annual renewal of an individual broker license is the amount of the fee set by the commission under Section 1101.152 and a fee increase of $200.Text of subsection effective until September 01, 2011(b) Of each fee increase collected under Subsection (a), $50 shall be deposited to the credit of the foundation school fund and $150 shall be deposited to the credit of the general revenue fund.Text of subsection effective on September 01, 2011(b) Of each fee increase collected under Subsection (a):(1) $50 shall be transmitted to Texas A&M University for deposit in a separate banking account that may be appropriated only to support, maintain, and carry out the purposes, objectives, and duties of the Texas Real Estate Research Center;(2) $50 shall be deposited to the credit of the foundation school fund; and(3) $100 shall be deposited to the credit of the general revenue fund.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 2, eff. June 1, 2003.Amended by: Acts 2009, 81st Leg., R.S., Ch. 23, Sec. 3, eff. September 1, 2011.

Sec. 1101.154. ADDITIONAL FEE: TEXAS REAL ESTATE RESEARCH CENTER. (a) The fee for the issuance or renewal of a:(1) broker license is the amount of the fee set under Sections 1101.152 and 1101.153 and an additional $20 fee;(2) salesperson license is the amount of the fee set under Section 1101.152 and an additional $20 fee; and(3) certificate of registration is the amount of the fee set under Section 1101.152 and an additional $20 fee.(b) The commission shall transmit quarterly the additional fees collected under Subsection (a) to Texas A&M University for deposit in a separate banking account that may be appropriated only to support, maintain, and carry out the purposes, objectives, and duties of the Texas Real Estate Research Center.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 2, eff. June 1, 2003.Amended by: Acts 2009, 81st Leg., R.S., Ch. 23, Sec. 4, eff. May 12, 2009.

Sec. 1101.155. RULES RELATING TO CONTRACT FORMS. (a) The commission may adopt rules in the public's best interest that require license holders to use contract forms prepared by the Texas Real Estate Broker-Lawyer Committee and adopted by the commission.(b) The commission may not prohibit a license holder from using for the sale, exchange, option, or lease of an interest in real property a contract form that is:(1) prepared by the property owner; or(2) prepared by an attorney and required by the property owner.(c) A listing contract form adopted by the commission that relates to the contractual obligations between a seller of real estate and a license holder acting as an agent for the seller must include:(1) a provision informing the parties to the contract that real estate commissions are negotiable; and(2) a provision explaining the availability of Texas coastal natural hazards information important to coastal residents, if that information is appropriate.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 2, eff. June 1, 2003.

Sec. 1101.156. RULES RESTRICTING ADVERTISING OR COMPETITIVE BIDDING. (a) The commission may not adopt a rule restricting advertising or competitive bidding by a person regulated by the commission except to prohibit a false, misleading, or deceptive practice by the person.(b) The commission may not include in rules to prohibit false, misleading, or deceptive practices by a person regulated by the commission a rule that:(1) restricts the use of any advertising medium;(2) restricts the person's personal appearance or use of the person's voice in an advertisement;(3) relates to the size or duration of an advertisement used by the person; or(4) restricts the person's advertisement under a trade name.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 2, eff. June 1, 2003.

Sec. 1101.157. SUBPOENA AUTHORITY. (a) The commission may request and, if necessary, compel by subpoena:(1) the attendance of witnesses for examination under oath; and(2) the production for inspection and copying of records, documents, and other evidence relevant to the investigation of an alleged violation of this chapter.(b) A subpoena may be issued throughout the state and may be served by any person designated by the commission.(c) If a person fails to comply with a subpoena issued under this section, the commission, acting through the attorney general, may file suit to enforce the subpoena in a district court in Travis County or in the county in which a hearing conducted by the commission may be held.(d) The court shall order compliance with the subpoena if the court finds that good cause exists to issue the subpoena.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 2, eff. June 1, 2003.

Sec. 1101.158. ADVISORY COMMITTEES. (a) The commission may appoint advisory committees to perform the advisory functions assigned to the committees by the commission. An advisory committee under this section is subject to Section 2110, Government Code.(b) A member of an advisory committee who is not a member of the commission may not receive compensation for service on the committee. The member may receive reimbursement for actual and necessary expenses incurred in performing committee functions as provided by Section 2110.004, Government Code.(c) A member of an advisory committee serves at the will of the commission.(d) An advisory committee may hold a meeting by telephone conference call or other video or broadcast technology.(e) Advisory committee meetings are subject to Chapter 551, Government Code.

Added by Acts 2007, 80th Leg., R.S., Ch. 1411, Sec. 10, eff. September 1, 2007.

Sec. 1101.159. USE OF TECHNOLOGY. The commission shall implement a policy requiring the commission to use appropriate technological solutions to improve the commission's ability to perform its functions. The policy must ensure that the public is able to interact with the commission on the Internet.

Added by Acts 2007, 80th Leg., R.S., Ch. 1411, Sec. 10, eff. September 1, 2007.

Sec. 1101.160. NEGOTIATED RULEMAKING AND ALTERNATIVE DISPUTE RESOLUTION PROCEDURES. (a) The commission shall develop and implement a policy to encourage the use of:(1) negotiated rulemaking procedures under Chapter 2008, Government Code, for the adoption of commission rules; and(2) appropriate alternative dispute resolution procedures under Chapter 2009, Government Code, to assist in the resolution of internal and external disputes under the commission's jurisdiction.(b) The commission's procedures relating to alternative dispute resolution must conform, to the extent possible, to any model guidelines issued by the State Office of Administrative Hearings for the use of alternative dispute resolution by state agencies.(c) The commission shall designate a trained person to:(1) coordinate the implementation of the policy adopted under Subsection (a);(2) serve as a resource for any training needed to implement the procedures for negotiated rulemaking or alternative dispute resolution; and(3) collect data concerning the effectiveness of those procedures, as implemented by the commission.

Added by Acts 2007, 80th Leg., R.S., Ch. 1411, Sec. 10, eff. September 1, 2007.

SUBCHAPTER E. PUBLIC INTEREST INFORMATION AND COMPLAINT PROCEDURESSec. 1101.201. PUBLIC INTEREST INFORMATION. (a) The commission shall prepare information of public interest describing the functions of the commission.(b) The commission shall make the information available to the public and appropriate state agencies.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 2, eff. June 1, 2003.Amended by: Acts 2007, 80th Leg., R.S., Ch. 1411, Sec. 11, eff. September 1, 2007.

Sec. 1101.202. COMPLAINTS. (a) The commission by rule shall establish methods by which consumers and service recipients are notified of the name, mailing address, and telephone number of the commission for the purpose of directing a complaint to the commission. The commission may provide for that notice:(1) on each application for a license or certificate of registration or written contract for services of a person regulated under this chapter or Chapter 1102;(2) on a sign prominently displayed in the place of business of each person regulated under this chapter or Chapter 1102;(3) in a bill for services provided by a person regulated under this chapter or Chapter 1102;(4) in conjunction with the notice required by Section 1101.615; or(5) to be prominently displayed on the Internet website of a person regulated under this chapter or Chapter 1102.(b) The commission shall provide to a person who files a complaint with the commission relating to a license holder and to the license holder against whom the complaint is filed:(1) an explanation of the remedies that are available to the person under this chapter; and(2) information about appropriate state or local agencies or officials with whom the person may file a complaint.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 2, eff. June 1, 2003; Amended by Acts 2003, 78th Leg., ch. 15, Sec. 3, eff. Sept. 1, 2003.

Sec. 1101.203. COMPLAINT INFORMATION. (a) The commission shall maintain a system to promptly and efficiently act on complaints filed with the commission. The commission shall maintain a file on each complaint. The file must include:(1) information relating to the parties to the complaint;(2) the subject matter of the complaint;(3) a summary of the results of the review or investigation of the complaint; and(4) the disposition of the complaint.(b) The commission shall make information available describing its procedures for complaint investigation and resolution.(c) The commission shall periodically notify the parties to the complaint of the status of the complaint until final disposition, unless the notice would jeopardize an undercover investigation authorized under Section 1101.204.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 2, eff. June 1, 2003.Amended by: Acts 2007, 80th Leg., R.S., Ch. 1411, Sec. 12, eff. September 1, 2007.

Sec. 1101.204. COMPLAINT INVESTIGATION AND DISPOSITION. (a) The commission or commission staff may file a complaint and conduct an investigation as necessary to enforce this chapter, Chapter 1102, or a rule adopted under those chapters.(b) The commission shall investigate the actions and records of a license holder if:(1) a person submits a signed, written complaint; and(2) the complaint and any evidence presented with the complaint provide reasonable cause for an investigation.(c) The commission may not conduct an investigation of a person licensed under this chapter or Chapter 1102 in connection with a complaint submitted later than the fourth anniversary of the date of the incident that is the subject of the complaint.(d) The commission shall promptly provide a written notice to a person licensed under this chapter or Chapter 1102 who is the subject of an investigation unless after deliberation the commission decides against notification.(e) Notwithstanding any other provision of this chapter, an undercover or covert investigation may not be conducted unless the commission expressly authorizes the investigation after considering the circumstances and determining that the investigation is necessary to implement this chapter.(f) An investigation or other action against a person licensed under this chapter or Chapter 1102 may not be initiated on the basis of an anonymous complaint.(g) Repealed by Acts 2007, 80th Leg., R.S., Ch. 1411, Sec. 59(1), eff. September 1, 2007.(h) The commission shall ensure that the commission gives priority to the investigation of a complaint filed by a consumer and an enforcement case resulting from the consumer complaint. The commission shall assign priorities and investigate complaints using a risk-based approach based on the:(1) degree of potential harm to a consumer;(2) potential for immediate harm to a consumer;(3) overall severity of the allegations in the complaint;(4) number of license holders potentially involved in the complaint;(5) previous complaint history of the license holder; and(6) number of potential violations in the complaint.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 2, eff. June 1, 2003. Amended by Acts 2003, 78th Leg., ch. 1276, Sec. 14A.154(b), 14A.157(a), eff. Sept. 1, 2003.Amended by: Acts 2005, 79th Leg., Ch. 825, Sec. 2, eff. September 1, 2005.Acts 2007, 80th Leg., R.S., Ch. 1411, Sec. 13, eff. September 1, 2007.Acts 2007, 80th Leg., R.S., Ch. 1411, Sec. 59(1), eff. September 1, 2007.

Sec. 1101.205. COMPLAINT INVESTIGATION OF CERTIFICATE HOLDER. The commission shall investigate a signed complaint received by the commission that relates to an act of a certificate holder or a person required to hold a certificate under Subchapter K.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 2, eff. June 1, 2003.

Sec. 1101.206. PUBLIC PARTICIPATION. (a) The commission shall develop and implement policies that provide the public with a reasonable opportunity to appear before the commission and to speak on any issue under the commission's jurisdiction.(b) The commission shall prepare and maintain a written plan that describes how a person who does not speak English or who has a physical, mental, or developmental disability may be provided reasonable access to the commission's programs.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 2, eff. June 1, 2003.

SUBCHAPTER F. TEXAS REAL ESTATE BROKER-LAWYER COMMITTEESec. 1101.251. DEFINITION OF COMMITTEE. In this subchapter, "committee" means the Texas Real Estate Broker-Lawyer Committee.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 2, eff. June 1, 2003.

Sec. 1101.252. COMMITTEE MEMBERSHIP. (a) The Texas Real Estate Broker-Lawyer Committee consists of 13 members appointed as follows:(1) six members appointed by the commission;(2) six members of the State Bar of Texas appointed by the president of the state bar; and(3) one public member appointed by the governor.(b) Appointments to the committee shall be made without regard to the race, creed, sex, religion, or national origin of the appointee.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 2, eff. June 1, 2003. Amended by Acts 2003, 78th Leg., ch. 1170, Sec. 38.01, eff. Sept. 1, 2003.

Sec. 1101.253. TERMS; VACANCIES. (a) Committee members serve staggered six-year terms, with the terms of two commission appointees and two State Bar of Texas appointees expiring every two years and the term of the public member expiring every six years.(b) A committee member shall hold office until the member's successor is appointed.(c) If a vacancy occurs during a member's term, the entity making the original appointment shall appoint a person to fill the unexpired term.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 2, eff. June 1, 2003. Amended by Acts 2003, 78th Leg., ch. 1170, Sec. 38.02, eff. Sept. 1, 2003.

Sec. 1101.254. POWERS AND DUTIES. (a) In addition to other delegated powers and duties, the committee shall draft and revise contract forms that are capable of being standardized to expedite real estate transactions and minimize controversy.(b) The contract forms must contain safeguards adequate to protect the principals in the transaction.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 2, eff. June 1, 2003.

SUBCHAPTER G. ACCREDITATION AND APPROVAL OF REAL ESTATE EDUCATIONAL PROGRAMS AND COURSES OF STUDYSec. 1101.301. ACCREDITATION OF PROGRAMS AND COURSES OF STUDY. (a) The commission, as necessary for the administration of this chapter and Chapter 1102, may:(1) establish standards for the accreditation of educational programs or courses of study in real estate and real estate inspection conducted in this state, excluding programs and courses offered by accredited colleges and universities;(2) establish by rule reasonable criteria for the approval of real estate and real estate inspection courses; and(3) inspect and accredit real estate and real estate inspection educational programs or courses of study.(b) The commission shall determine whether a real estate or real estate inspection course satisfies the requirements of this chapter and Chapter 1102.(c) In establishing accreditation standards for an educational program under Subsection (a), the commission shall adopt rules that require a program to establish that at least 55 percent of the program's graduates have passed a licensing exam the first time the exam has been taken by the graduates before the commission may renew the program's accreditation.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 2, eff. June 1, 2003.Amended by: Acts 2007, 80th Leg., R.S., Ch. 1411, Sec. 14, eff. September 1, 2007.

Sec. 1101.302. BOND REQUIRED. (a) In this section, "educational institution" means a school, excluding an accredited college or university, authorized by the commission under this chapter to offer a real estate or real estate inspection educational program or course of study.(b) An educational institution shall maintain a corporate surety bond or other security acceptable to the commission that is:(1) in the amount of $20,000;(2) payable to the commission; and(3) for the benefit of a party who suffers damages caused by the failure of the institution to fulfill obligations related to the commission's approval.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 2, eff. June 1, 2003.Amended by: Acts 2007, 80th Leg., R.S., Ch. 297, Sec. 4, eff. September 1, 2007.

Sec. 1101.303. APPROVAL OF CONTINUING EDUCATION PROVIDER OR COURSE OF STUDY. (a) If the commission determines that an applicant for approval as a continuing education provider satisfies the requirements of this subchapter or Section 1102.205 and any rule adopted under this subchapter or Section 1102.205, the commission may authorize the applicant to offer continuing education for a two-year period.(b) If the commission determines that an applicant for approval of a continuing education course of study satisfies the requirements of this subchapter or Section 1102.205 and any rule adopted under this subchapter or Section 1102.205, the commission may authorize the applicant to offer the course of study for a two-year period.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 2, eff. June 1, 2003.Amended by: Acts 2007, 80th Leg., R.S., Ch. 1411, Sec. 15, eff. September 1, 2007.

Sec. 1101.304. EXAMINATION PASSAGE RATE DATA. (a) The commission shall adopt rules regarding the collection and publication of data relating to examination passage rates for graduates of accredited educational programs.(b) Rules adopted under this section must provide for a method to:(1) calculate the examination passage rate;(2) collect the relevant data from the examination administrator or the accredited program; and(3) post the examination passage rate data on the commission's Internet website, in a manner aggregated by educational program and by license group.(c) In determining the educational program a graduate is affiliated with for purposes of this section, the educational program is the program the graduate last attended.

Added by Acts 2007, 80th Leg., R.S., Ch. 1411, Sec. 16, eff. September 1, 2007.

Sec. 1101.305. REVIEW COMMITTEE. (a) The commission may appoint a committee to review the performance of an educational program performing below the standards set by the commission under Section 1101.301. The committee shall consist of:(1) at least one commission member;(2) at least one member of the commission staff;(3) individuals licensed under this chapter or Chapter 1102; and(4) a representative from the Texas Real Estate Research Center.(b) A committee formed under this section shall review and evaluate any factor causing an educational program's poor performance and report findings and recommendations to improve performance to the program and to the commission.(c) A committee formed under this section may not revoke the accreditation of an educational program. The commission may temporarily suspend a program in the same manner as a license under Subchapter N.

Added by Acts 2007, 80th Leg., R.S., Ch. 1411, Sec. 16, eff. September 1, 2007.

SUBCHAPTER H. LICENSE REQUIREMENTSSec. 1101.351. LICENSE REQUIRED. (a) Unless a person holds a license issued under this chapter, the person may not:(1) act as or represent that the person is a broker or salesperson; or(2) act as a residential rental locator.(b) An applicant for a broker or salesperson license may not act as a broker or salesperson until the person receives the license evidencing that authority.(c) A licensed salesperson may not act or attempt to act as a broker or salesperson unless the salesperson is associated with a licensed broker and is acting for that broker.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 2, eff. June 1, 2003.

Sec. 1101.352. LICENSE APPLICATION. (a) Each applicant for a broker or salesperson license must submit an application on a form prescribed by the commission.(b) Each applicant for a broker or salesperson license must disclose in the license application whether the applicant has:(1) entered a plea of guilty or nolo contendere to a felony; or(2) been convicted of a felony and the time for appeal has elapsed or the judgment or conviction has been affirmed on appeal.(c) The disclosure under Subsection (b) must be provided even if an order has granted community supervision suspending the imposition of the sentence.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 2, eff. June 1, 2003; Amended by Acts 2003, 78th Leg., ch. 15, Sec. 4, eff. Sept. 1, 2003; Acts 2003, 78th Leg., ch. 1276, Sec. 14A.158(a), eff. Sept. 1, 2003.

Sec. 1101.3521. CRIMINAL HISTORY RECORD INFORMATION REQUIREMENT FOR LICENSE. (a) The commission shall require that an applicant for a license or renewal of an unexpired license submit a complete and legible set of fingerprints, on a form prescribed by the commission, to the commission or to the Department of Public Safety for the purpose of obtaining criminal history record information from the Department of Public Safety and the Federal Bureau of Investigation.(b) The commission shall refuse to issue a license to or renew the license of a person who does not comply with the requirement of Subsection (a).(c) The commission shall conduct a criminal history check of each applicant for a license or renewal of a license using information:(1) provided by the individual under this section; and(2) made available to the commission by the Department of Public Safety, the Federal Bureau of Investigation, and any other criminal justice agency under Chapter 411, Government Code.(d) The commission may:(1) enter into an agreement with the Department of Public Safety to administer a criminal history check required under this section; and(2) authorize the Department of Public Safety to collect from each applicant the costs incurred by the department in conducting the criminal history check.

Added by Acts 2007, 80th Leg., R.S., Ch. 297, Sec. 5, eff. September 1, 2007.

Sec. 1101.353. MORAL CHARACTER DETERMINATION. (a) If before applying for a license under this chapter a person requests that the commission determine whether the person's moral character complies with the commission's moral character requirements for licensing under this chapter and pays the fee prescribed by Section 1101.152, the commission shall make its determination of the person's moral character.(b) Not later than the 30th day after the date the commission makes its determination, the commission shall notify the person of the determination.(c) If a person applies for a license after receiving notice of a determination, the commission may conduct a supplemental moral character determination of the person. The supplemental determination may cover only the period after the date the person requests a moral character determination under this section.(d) The commission may issue a provisional moral character determination. The commission by rule shall adopt reasonable terms for issuing a provisional moral character determination.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 2, eff. June 1, 2003.Amended by: Acts 2005, 79th Leg., Ch. 825, Sec. 3, eff. September 1, 2005.

Sec. 1101.354. GENERAL ELIGIBILITY REQUIREMENTS. To be eligible to receive a license under this chapter, a person must:(1) at the time of application:(A) be at least 18 years of age;(B) be a citizen of the United States or a lawfully admitted alien; and(C) be a resident of this state;(2) satisfy the commission as to the applicant's honesty, trustworthiness, and integrity;(3) demonstrate competence based on an examination under Subchapter I;(4) complete the required courses of study, including any required core real estate courses prescribed under this chapter; and(5) complete at least:(A) three classroom hours of course work on federal, state, and local laws governing housing discrimination, housing credit discrimination, and community reinvestment; or(B) three semester hours of course work on constitutional law.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 2, eff. June 1, 2003.

Sec. 1101.355. ADDITIONAL GENERAL ELIGIBILITY REQUIREMENTS FOR CERTAIN BUSINESS ENTITIES. (a) To be eligible for a license under this chapter:(1) a corporation must designate one of its officers as its agent for purposes of this chapter; and(2) a limited liability company must designate one of its managers as its agent for purposes of this chapter.(b) A corporation or limited liability company may not act as a broker unless the entity's designated agent is a licensed broker according to the commission's records.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 2, eff. June 1, 2003.

Sec. 1101.356. BROKER LICENSE: EXPERIENCE AND EDUCATION REQUIREMENTS. (a) An applicant for a broker license must provide to the commission satisfactory evidence that the applicant:(1) has had at least two years of active experience in this state as a license holder during the 36 months preceding the date the application is filed; and(2) has successfully completed at least 60 semester hours, or equivalent classroom hours, of postsecondary education, including:(A) at least 18 semester hours or equivalent classroom hours of core real estate courses, two semester hours of which must be real estate brokerage; and(B) at least 42 hours of core real estate courses or related courses accepted by the commission.(b) Subsection (a) does not apply to an applicant who, at the time of application, is licensed as a real estate broker by another state that has license requirements comparable to the requirements of this state.(c) An applicant for a broker license who is licensed as a salesperson and is subject to the annual education requirements prescribed by Section 1101.454 must provide to the commission satisfactory evidence that the applicant has satisfied the requirements of that section. The hours completed under Section 1101.454 shall be applied to the number of hours required of the applicant under Subsection (a)(2) of this section.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 2, eff. June 1, 2003. Amended by Acts 2003, 78th Leg., ch. 1276, Sec. 14A.152(b), eff. Sept. 1, 2003.Amended by: Acts 2007, 80th Leg., R.S., Ch. 297, Sec. 6, eff. September 1, 2007.

Sec. 1101.357. BROKER LICENSE: ALTERNATE EXPERIENCE REQUIREMENTS FOR CERTAIN APPLICANTS. An applicant for a broker license who does not satisfy the experience requirements of Section 1101.356 must provide to the commission satisfactory evidence that:(1) the applicant:(A) is a licensed real estate broker in another state;(B) has had at least two years of active experience in that state as a licensed real estate broker or salesperson during the 36 months preceding the date the application is filed; and(C) has satisfied the educational requirements prescribed by Section 1101.356; or(2) the applicant was licensed in this state as a broker in the year preceding the date the application is filed.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 2, eff. June 1, 2003.

Sec. 1101.358. SALESPERSON LICENSE: EDUCATION REQUIREMENTS. (a) An applicant for a salesperson license must provide to the commission satisfactory evidence that the applicant has completed at least 14 semester hours, or equivalent classroom hours, of postsecondary education, including:(1) at least four semester hours of core real estate courses on principles of real estate;(2) at least two semester hours of each of the following core real estate courses:(A) agency law;(B) contract law; and(C) one additional core real estate course; and(3) at least four semester hours of core real estate courses or related courses.(b) The commission shall waive the education requirements of Subsection (a) if the applicant has been licensed in this state as a broker or salesperson within the year preceding the date the application is filed.(c) If an applicant for a salesperson license was licensed as a salesperson within the year preceding the date the application is filed and the license was issued under the conditions prescribed by Section 1101.454, the commission shall require the applicant to provide the evidence of successful completion of education requirements that would have been required if the license had been maintained without interruption during the preceding year.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 2, eff. June 1, 2003. Amended by Acts 2003, 78th Leg., ch. 1276, Sec. 14A.152(c), eff. Sept. 1, 2003.Amended by: Acts 2005, 79th Leg., Ch. 825, Sec. 4, eff. September 1, 2005.

Sec. 1101.359. ALTERNATE EDUCATION REQUIREMENTS FOR CERTAIN LICENSE HOLDERS. An applicant for a broker license who is not subject to the education requirements of Section 1101.356(a)(2) and an applicant for a salesperson license who is not subject to the education requirements of Section 1101.358 or 1101.454 must provide to the commission satisfactory evidence that the applicant has completed the number of classroom hours of continuing education that would have been required for a timely renewal under Section 1101.455 during the two years preceding the date the application is filed.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 2, eff. June 1, 2003.

Sec. 1101.360. ELIGIBILITY REQUIREMENTS FOR CERTAIN NONRESIDENT APPLICANTS. (a) A resident of another state who is not a licensed real estate broker and who was formerly licensed in this state as a broker or salesperson may apply for a license under this chapter not later than the first anniversary of the date of the expiration of the former license.(b) A nonresident applicant is subject to the same license requirements as a resident. The commission may refuse to issue a license to a nonresident applicant for the same reasons that it may refuse to issue a license to a resident applicant.(c) A nonresident applicant must submit with the application an irrevocable consent to a legal action against the applicant in the court of any county in this state in which a cause of action may arise or in which the plaintiff may reside. The action may be commenced by service of process or pleading authorized by the laws of this state or by delivery of process on the administrator or assistant administrator of the commission. The consent must:(1) stipulate that the service of process or pleading is valid and binding in all courts as if personal service had been made on the nonresident in this state;(2) be acknowledged; and(3) if made by a corporation, be authenticated by its seal.(d) A service of process or pleading served on the commission under this section shall be by duplicate copies. One copy shall be filed in the commission's office, and the other copy shall be forwarded by registered mail to the last known principal address recorded in the commission's records for the nonresident against whom the process or pleading is directed. (e) A default judgment in an action commenced as provided by this section may not be granted:(1) unless the commission certifies that a copy of the process or pleading was mailed to the defendant as provided by Subsection (d); and(2) until the 21st day after the date the process or pleading is mailed to the defendant.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 2, eff. June 1, 2003.

Sec. 1101.361. ADDITIONAL ELIGIBILITY REQUIREMENTS FOR CERTAIN NONRESIDENT APPLICANTS. (a) Notwithstanding Section 1101.360, a nonresident applicant for a license who resides in a municipality whose boundary is contiguous at any point with the boundary of a municipality in this state is eligible to be licensed under this chapter in the same manner as a resident of this state if the nonresident has been a resident of that municipality for at least the 60 days preceding the date the application is filed.(b) A person licensed under this section shall maintain at all times a place of business in the municipality in which the person resides or in the municipality in this state that is contiguous to the municipality in which the person resides. The place of business must meet all the requirements of Section 1101.552. A place of business located in the municipality in which the person resides is considered to be in this state.(c) A person licensed under this section may not maintain a place of business at another location in this state unless the person complies with Section 1101.356 or 1101.357.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 2, eff. June 1, 2003.

Sec. 1101.362. WAIVER OF LICENSE REQUIREMENTS: PREVIOUS LICENSE HOLDERS. The commission by rule may waive some or all of the requirements for a license under this chapter for an applicant who was licensed under this chapter within the six years preceding the date the application is filed.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 2, eff. June 1, 2003.

Sec. 1101.363. ISSUANCE OF LICENSE. (a) The commission shall issue an appropriate license to an applicant who meets the requirements for a license. (b) The commission may issue an inactive salesperson license to a person who applies for a salesperson license and satisfies all requirements for the license. The person may not act as a salesperson unless the person is sponsored by a licensed broker who has notified the commission as required by Section 1101.367(b). Notwithstanding Section 1101.367(b), the licensed broker is not required to pay the fee required by that subsection.(c) A license remains in effect for the period prescribed by the commission if the license holder complies with this chapter and pays the appropriate renewal fees.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 2, eff. June 1, 2003. Amended by Acts 2003, 78th Leg., ch. 15, Sec. 5, eff. Sept. 1, 2003; Acts 2003, 78th Leg., ch. 1276, Sec. 14A.158(b), eff. Sept. 1, 2003.

Sec. 1101.364. DENIAL OF LICENSE. (a) The commission shall immediately give written notice to the applicant of the commission's denial of a license. (b) A person whose license application is denied under this section is entitled to a hearing under Section 1101.657.(c) Repealed by Acts 2007, 80th Leg., R.S., Ch. 1411, Sec. 59(2), eff. September 1, 2007.(d) Repealed by Acts 2007, 80th Leg., R.S., Ch. 1411, Sec. 59(2), eff. September 1, 2007.(e) Repealed by Acts 2007, 80th Leg., R.S., Ch. 1411, Sec. 59(2), eff. September 1, 2007.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 2, eff. June 1, 2003.Amended by: Acts 2007, 80th Leg., R.S., Ch. 1411, Sec. 17, eff. September 1, 2007.Acts 2007, 80th Leg., R.S., Ch. 1411, Sec. 59(2), eff. September 1, 2007.

Sec. 1101.365. PROBATIONARY LICENSE. (a) The commission may issue a probationary license.(b) The commission by rule shall adopt reasonable terms for issuing a probationary license.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 2, eff. June 1, 2003.

Sec. 1101.366. INACTIVE LICENSE: BROKER. (a) The commission may place on inactive status the license of a broker if the broker:(1) is not acting as a broker;(2) is not sponsoring a salesperson; and(3) submits a written application to the commission before the expiration date of the broker's license.(b) The commission may place on inactive status the license of a broker whose license has expired if the broker applies for inactive status on a form prescribed by the commission not later than the first anniversary of the expiration date of the broker's license.(c) A broker applying for inactive status shall terminate the broker's association with each salesperson sponsored by the broker by giving written notice to each salesperson before the 30th day preceding the date the broker applies for inactive status.(d) A broker on inactive status:(1) may not perform any activity regulated under this chapter; and(2) must pay annual renewal fees.(e) The commission shall maintain a list of each broker whose license is on inactive status.(f) The commission shall remove a broker's license from inactive status if the broker:(1) submits an application to the commission;(2) pays the required fee; and(3) submits proof of attending at least 15 classroom hours of continuing education as specified by Section 1101.455 during the two years preceding the date the application under Subdivision (1) is filed.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 2, eff. June 1, 2003.

Sec. 1101.367. INACTIVE LICENSE: SALESPERSON. (a) When the association of a salesperson with the salesperson's sponsoring broker terminates, the broker shall immediately return the salesperson license to the commission. A salesperson license returned under this subsection is inactive.(b) The commission may remove a salesperson license from inactive status under Subsection (a) if, before the expiration date of the salesperson license, a licensed broker files a request with the commission advising the commission that the broker assumes sponsorship of the salesperson, accompanied by the appropriate fee.(c) As a condition of returning to active status, an inactive salesperson whose license is not subject to the annual education requirements of Section 1101.454 must provide to the commission proof of attending at least 15 hours of continuing education as specified by Section 1101.455 during the two years preceding the date the application to return to active status is filed.

Added by Acts 2001, 77th Leg., ch. 1421, Sec. 2, eff. June 1, 2003. Amended by Acts 2003, 78th Leg., ch. 15, Sec. 6, eff. Sept. 1, 2003; Acts 2003, 78th Leg., ch. 1276, Sec. 14A.158(c), eff. Sept. 1, 2003.

SUBCHAPTER I. EXAMINATIONSSec. 1101.401. EXAMINATION REQUIRED. (a) The competency requirement prescribed under Section 1101.354(3) shall be established by an examination prepared or contracted for by the commission.(b) The commission shall determine the time and place in the state for offering the examination.(c) The examination must be of sufficient scope in the judgment of the commission to determine whether a person is competent to act as a broker or salesperson in a manner that will protect the public.(d) Th