CHAPTER 1102. REAL ESTATE INSPECTORS - Texas Statutes

OCCUPATIONS CODE

TITLE 7. PRACTICES AND PROFESSIONS RELATED TO REAL PROPERTY AND

HOUSING

SUBTITLE A. PROFESSIONS RELATED TO REAL ESTATE

CHAPTER 1102. REAL ESTATE INSPECTORS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 1102.001. DEFINITIONS. In this chapter:

(1) "Apprentice inspector" means a person who is in training

under the direct supervision of a professional inspector or a

real estate inspector to become qualified to perform real estate

inspections.

(2) "Broker" has the meaning assigned by Section 1101.002.

(3) "Commission" means the Texas Real Estate Commission.

(4) "Committee" means the Texas Real Estate Inspector Committee.

(5) "Core real estate inspection course" means an educational

course approved by the commission that relates to real estate

inspection, including a course on structural items, electrical

items, mechanical systems, plumbing systems, roofing, business,

law, standards of practice, report writing, appliances, or

ethics.

(6) "Inspector" means a person who holds a license under this

chapter.

(7) "License" means an apprentice inspector license, real estate

inspector license, or professional inspector license.

(8) "Professional inspector" means a person who represents to

the public that the person is trained and qualified to perform a

real estate inspection and who accepts employment to perform a

real estate inspection for a buyer or seller of real property.

(9) "Real estate inspection" means a written or oral opinion as

to the condition of the improvements to real property, including

structural items, electrical items, mechanical systems, plumbing

systems, or equipment.

(10) "Real estate inspector" means a person who represents to

the public that the person is trained and qualified to perform a

real estate inspection under the indirect supervision of a

professional inspector and who accepts employment to perform a

real estate inspection for a buyer or seller of real property.

(11) "Salesperson" has the meaning assigned by Section 1101.002.

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

2003.

Sec. 1102.002. APPLICABILITY OF CHAPTER. (a) This chapter does

not apply to a person who repairs, maintains, or inspects

improvements to real property, including an electrician, plumber,

carpenter, or person in the business of structural pest control

in compliance with Chapter 1951, if the person does not represent

to the public through personal solicitation or public advertising

that the person is in the business of inspecting those

improvements.

(b) This chapter does not prevent a person from performing an

act the person is authorized to perform under a license or

registration issued by this state or a governmental subdivision

of this state under a law other than this chapter.

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

2003.

Sec. 1102.003. RULES; INSPECTION FORMS. The commission by rule

shall prescribe standard forms and require inspectors to use the

forms to reduce discrepancies and create consistency in preparing

reports of real estate inspections.

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

2003.

SUBCHAPTER B. TEXAS REAL ESTATE INSPECTOR COMMITTEE

Sec. 1102.051. COMMITTEE MEMBERSHIP. (a) The Texas Real Estate

Inspector Committee is an advisory committee appointed by the

commission.

(b) Repealed by Acts 2007, 80th Leg., R.S., Ch. 1411, Sec.

59(5), eff. September 1, 2007.

(c) Repealed by Acts 2007, 80th Leg., R.S., Ch. 1411, Sec.

59(5), eff. September 1, 2007.

(d) Repealed by Acts 2007, 80th Leg., R.S., Ch. 1411, Sec.

59(5), 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. 37, eff. September 1, 2007.

Acts 2007, 80th Leg., R.S., Ch.

1411, Sec. 59(5), eff. September 1, 2007.

Sec. 1102.058. GENERAL POWERS AND DUTIES OF COMMITTEE;

RECOMMENDATIONS. (a) Repealed by Acts 2007, 80th Leg., R.S.,

Ch. 1411, Sec. 59(12), eff. September 1, 2007.

(b) The committee shall recommend:

(1) rules for licensing inspectors in this state, including

rules relating to:

(A) education and experience requirements;

(B) any qualifying examination;

(C) continuing education requirements; and

(D) granting or denying a license application;

(2) the form of any required application or other document;

(3) reasonable fees to implement this chapter, including

application fees, examination fees, fees for renewal of a

license, and any other fee required by law;

(4) rules relating to standards of practice for real estate

inspection;

(5) rules establishing a code of professional conduct and ethics

for an inspector; and

(6) any other commission action to provide a high degree of

service to and protection of the public in dealing with an

inspector.

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. 59(12), eff. September 1, 2007.

Sec. 1102.060. CONSIDERATION OF COMMITTEE RECOMMENDATIONS. The

commission shall consider the committee's recommendations

relating to qualifications and licensing of inspectors to assure

the public of a quality professional inspection system in real

estate transactions in this state.

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

2003.

SUBCHAPTER C. LICENSE REQUIREMENTS

Sec. 1102.101. APPRENTICE INSPECTOR LICENSE REQUIRED. A person

may not act or attempt to act as an apprentice inspector in this

state for a buyer or seller of real property unless the person:

(1) holds an apprentice inspector license under this chapter;

and

(2) is under the direct supervision of a real estate inspector

or professional inspector.

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

2003.

Sec. 1102.102. REAL ESTATE INSPECTOR LICENSE REQUIRED. A person

may not act or attempt to act as a real estate inspector in this

state for a buyer or seller of real property unless the person:

(1) holds a real estate inspector license under this chapter;

and

(2) is under the indirect supervision of a professional

inspector.

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

2003.

Sec. 1102.103. PROFESSIONAL INSPECTOR LICENSE REQUIRED. A

person may not act as a professional inspector in this state for

a buyer or seller of real property unless the person holds a

professional inspector license under this chapter.

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

2003.

Sec. 1102.104. SUPERVISION. For the purposes of this chapter, a

person performing a real estate inspection or preparing a report

of a real estate inspection is under:

(1) direct supervision if the person is instructed and

controlled by a professional inspector or real estate inspector

who is:

(A) responsible for the actions of the person;

(B) available if needed to consult with or assist the person;

and

(C) physically present at the time and place of the inspection;

and

(2) indirect supervision if the person is instructed and

controlled by a professional inspector who is:

(A) responsible for the actions of the person; and

(B) available if needed to consult with or assist the person.

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

2003.

Sec. 1102.105. APPLICATION. An applicant for a license under

this chapter must file with the commission an application on a

form prescribed by the commission.

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

2003.

Sec. 1102.106. MORAL CHARACTER DETERMINATION. As prescribed by

Section 1101.353, the commission shall determine, on request,

whether a person's moral character complies with the commission's

moral character requirements for licensing under this chapter and

may conduct a supplemental moral character determination of the

person.

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

2003.

Sec. 1102.107. ELIGIBILITY FOR APPRENTICE INSPECTOR LICENSE. To

be eligible for an apprentice inspector license, an applicant

must:

(1) at the time of application be:

(A) at least 18 years of age;

(B) a citizen of the United States or a lawfully admitted alien;

and

(C) a resident of this state;

(2) be sponsored by a professional inspector; and

(3) satisfy the commission as to the applicant's honesty,

trustworthiness, and integrity.

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

2003.

Sec. 1102.108. ELIGIBILITY FOR REAL ESTATE INSPECTOR LICENSE.

(a) To be eligible for a real estate inspector license, an

applicant must:

(1) at the time of application have:

(A) held an apprentice inspector license for at least three

months; and

(B) performed at least 25 real estate inspections under direct

supervision;

(2) submit evidence satisfactory to the commission of successful

completion of at least 90 classroom hours of core real estate

inspection courses;

(3) demonstrate competence based on the examination under

Subchapter D;

(4) be sponsored by a professional inspector; and

(5) satisfy the commission as to the applicant's honesty,

trustworthiness, integrity, and competence.

(b) The commission by rule may specify the length and content of

the courses required by Subsection (a)(2).

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

2003.

Sec. 1102.109. ELIGIBILITY FOR PROFESSIONAL INSPECTOR LICENSE.

To be eligible for a professional inspector license, an applicant

must:

(1) at the time of application have:

(A) held a real estate inspector license for at least 12 months;

and

(B) performed at least 175 real estate inspections under

indirect supervision;

(2) submit evidence satisfactory to the commission of successful

completion of at least 30 classroom hours of core real estate

inspection courses, in addition to the hours required by Section

1102.108, and at least eight classroom hours related to the study

of standards of practice, legal issues, or ethics related to the

practice of real estate inspecting;

(3) demonstrate competence based on the examination under

Subchapter D; and

(4) satisfy the commission as to the applicant's honesty,

trustworthiness, integrity, and competence.

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

2003. Amended by Acts 2003, 78th Leg., ch. 15, Sec. 10, eff.

Sept. 1, 2003.

Sec. 1102.110. ELIGIBILITY OF PREVIOUS LICENSE HOLDERS. (a)

Notwithstanding Section 1102.108, an applicant is eligible for

and has satisfied all requirements for a real estate inspector

license if the applicant:

(1) held a real estate inspector license during the 24-month

period preceding the date the application is filed;

(2) is sponsored by a professional inspector; and

(3) satisfies the commission as to the applicant's honesty,

trustworthiness, and integrity.

(b) Notwithstanding Section 1102.109, an applicant is eligible

for and has satisfied all requirements for a professional

inspector license if the applicant:

(1) held a professional inspector license during the 24-month

period preceding the date the application is filed; and

(2) satisfies the commission as to the applicant's honesty,

trustworthiness, and integrity.

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

2003.

Sec. 1102.111. SUBSTITUTE REQUIREMENTS. (a) The commission by

rule shall provide for substitution of relevant experience and

additional education in place of:

(1) the number of real estate inspections required for

licensing; and

(2) the requirement that an applicant be:

(A) licensed as an apprentice inspector before being licensed as

a real estate inspector; or

(B) licensed as a real estate inspector before being licensed as

a professional inspector.

(b) Rules adopted under Subsection (a) may not require an

applicant to:

(1) complete more than 320 additional classroom hours of core

real estate inspection courses; or

(2) have more than seven years of relevant experience.

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

2003. Amended by Acts 2003, 78th Leg., ch. 15, Sec. 11, eff.

Sept. 1, 2003.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

297, Sec. 11, eff. September 1, 2007.

Sec. 1102.112. WAIVER FOR APPLICANT LICENSED IN ANOTHER STATE.

The commission may waive any license requirement for an applicant

who holds a license from another state having license

requirements substantially equivalent to those of this state.

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

2003.

Sec. 1102.113. ELIGIBILITY AS SPONSOR. A professional inspector

may sponsor an apprentice inspector or a real estate inspector

only if the professional inspector provides sufficient proof to

the commission that the professional inspector has completed at

least 200 real estate inspections as a professional inspector.

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

2003.

Sec. 1102.114. ISSUANCE OF LICENSE. The commission shall issue

the appropriate license to an applicant who:

(1) meets the required qualifications;

(2) pays the fee required by Section 1102.352(a); and

(3) offers proof that the applicant carries liability insurance

with a minimum limit of $100,000 per occurrence to protect the

public against a violation of Subchapter G.

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. 38, eff. September 1, 2007.

Sec. 1102.115. DENIAL OF LICENSE. The provisions of Section

1101.364 governing the commission's denial of a license under

that chapter apply to the commission's denial of a license under

this chapter.

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

2003.

Sec. 1102.116. PROBATIONARY LICENSE. The commission may issue a

probationary license under this chapter as prescribed by Section

1101.365.

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

2003.

Sec. 1102.117. INACTIVE LICENSE. The commission by rule may

adopt terms by which:

(1) an inspector may apply for, renew, or place a license on

inactive status; and

(2) an inactive inspector may return to active status.

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

2003.

Sec. 1102.118. CHANGE OF ADDRESS. Not later than the 30th day

after the date an inspector changes the inspector's place of

business, the inspector shall notify the commission and pay the

required fee.

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

2003.

SUBCHAPTER D. LICENSE EXAMINATION

Sec. 1102.151. CONTENT OF EXAMINATION. (a) A license

examination must evaluate competence in the subject matter of

each required core real estate inspection course.

(b) The commission shall:

(1) prescribe each license examination; and

(2) prepare or contract for the examination.

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

2003.

Sec. 1102.152. OFFERING OF EXAMINATION. The commission shall

offer each license examination at least once every two months in

Austin.

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

2003.

Sec. 1102.153. DEADLINE FOR COMPLETION. A license applicant who

does not satisfy the examination requirement within six months

after the date the application is filed must submit a new

application and pay another examination fee to be eligible for

examination.

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

2003.

Sec. 1102.154. EXAMINATION RESULTS. (a) Not later than the

30th day after the date an examination is administered, the

commission shall notify each examinee of the results of the

examination. If an examination is graded or reviewed by a

national testing service, the commission shall notify each

examinee of the results of the examination not later than the

14th day after the date the commission receives the results from

the testing service.

(b) If the notice of the results of an examination graded or

reviewed by a national testing service will not be given before

the 91st day after the examination date, the commission shall

notify each examinee of the reason for the delay before the 90th

day.

(c) If requested in writing by a person who fails an

examination, the commission shall provide to the person an

analysis of the person's performance on the examination.

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

2003.

Sec. 1102.155. REEXAMINATION. (a) An applicant who fails the

examination may apply for reexamination by filing a request with

the commission and paying another examination fee.

(b) An applicant who fails the examination three consecutive

times in connection with the same application may not apply for

reexamination or submit a new license application before six

months after the date of the third failed examination.

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

2003.

SUBCHAPTER E. LICENSE RENEWAL

Sec. 1102.201. LICENSE TERM AND EXPIRATION. (a) The commission

may issue or renew a license for a period not to exceed 24

months.

(b) A renewal fee for a license under this chapter may not

exceed, calculated on an annual basis, the amount of the fee

established under Section 1102.251.

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

2003. Amended by Acts 2003, 78th Leg., ch. 15, Sec. 12, eff.

Sept. 1, 2003.

Sec. 1102.202. NOTICE OF LICENSE EXPIRATION. Not later than the

31st day before the expiration date of a person's license, the

commission shall send to the person at the person's last known

address according to the commission's records written notice of

the license expiration.

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

2003.

Sec. 1102.203. RENEWAL OF LICENSE. (a) A person may renew an

unexpired license by paying the required renewal fee to the

commission before the expiration date of the license and

providing proof of liability insurance as required by Section

1102.114(3).

(b) If the person's license expires, the person may not renew

the license. The person may obtain a new license by submitting to

reexamination, if required, and complying with the requirements

and procedures for obtaining an original license.

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

2003. Amended by Acts 2003, 78th Leg., ch. 1276, Sec. 14A.163(a),

eff. Sept. 1, 2003.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

1411, Sec. 39, eff. September 1, 2007.

Sec. 1102.205. CONTINUING EDUCATION REQUIREMENTS. (a) The

commission shall approve, recognize, prepare, or administer a

continuing education program for inspectors.

(b) As a prerequisite for renewal of a real estate inspector

license, professional inspector license, or apprentice inspector

license, the inspector must participate in the continuing

education program and submit evidence satisfactory to the

commission of successful completion of at least 16 classroom

hours of core real estate inspection courses or continuing

education courses for each year of the license period preceding

the renewal.

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

2003. Amended by Acts 2003, 78th Leg., ch. 1276, Sec. 14A.164(a),

eff. Sept. 1, 2003.

Amended by:

Acts 2005, 79th Leg., Ch.

825, Sec. 12, eff. September 1, 2005.

Acts 2007, 80th Leg., R.S., Ch.

1411, Sec. 40, eff. September 1, 2007.

SUBCHAPTER F. LICENSE FEES

Sec. 1102.251. FEES. The commission shall charge and collect

reasonable and necessary fees to cover the cost of administering

this chapter for:

(1) filing an original application for an apprentice inspector

license;

(2) filing an original application for a real estate inspector

license;

(3) filing an original application for a professional inspector

license;

(4) renewal of an apprentice inspector license;

(5) renewal of a real estate inspector license;

(6) renewal of a professional inspector license;

(7) a license examination;

(8) a request to change a place of business or to replace a lost

or destroyed license; and

(9) filing a request for issuance of a license because of a

change of name, return to active status, or change in sponsoring

professional inspector.

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

2003. Amended by Acts 2003, 78th Leg., ch. 1276, Sec. 14A.165(a),

eff. Sept. 1, 2003.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

1411, Sec. 41, eff. September 1, 2007.

Sec. 1102.252. PAYMENT. A person may pay a fee by cash, check,

including a cashier's check, or money order.

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

2003.

Sec. 1102.253. REVIEW OF FEE AMOUNTS. The commission annually

shall review the fees under Section 1102.251 and reduce the fees

to the extent that the cost of administering this chapter is

covered by money appropriated to the commission that is

attributable to amounts transferred to the general revenue fund

under Section 1102.353(d).

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

2003.

SUBCHAPTER G. PROHIBITED ACTS

Sec. 1102.301. NEGLIGENCE OR INCOMPETENCE. An inspector may not

perform a real estate inspection in a negligent or incompetent

manner.

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

2003.

Sec. 1102.302. AGREEMENT FOR SPECIFIC REPORT; DISHONESTY. An

inspector may not:

(1) accept an assignment for real estate inspection if the

employment or a fee is contingent on the reporting of:

(A) a specific, predetermined condition of the improvements to

real property; or

(B) specific findings other than those that the inspector knows

to be true when the assignment is accepted; or

(2) act in a manner or engage in a practice that:

(A) is dishonest or fraudulent; or

(B) involves deceit or misrepresentation.

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

2003.

Sec. 1102.303. ACTING IN CONFLICTING CAPACITIES. An inspector

may not act in a transaction in the dual capacity of inspector

and:

(1) undisclosed principal; or

(2) broker or salesperson.

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

2003.

Sec. 1102.304. REPAIRS AND MAINTENANCE. An inspector may not

perform or agree to perform repairs or maintenance in connection

with a real estate inspection under an earnest money contract,

lease, or exchange of real property.

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

2003.

Sec. 1102.305. VIOLATION OF LAW. An inspector may not violate

this chapter or a rule adopted by the commission.

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

2003.

SUBCHAPTER H. REAL ESTATE INSPECTION RECOVERY FUND

Sec. 1102.351. REAL ESTATE INSPECTION RECOVERY FUND. The

commission shall maintain a real estate inspection recovery fund

to reimburse aggrieved persons who suffer actual damages from an

inspector's act in violation of Subchapter G. The inspector must

have held a license at the time the act was committed.

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

2003.

Sec. 1102.352. PAYMENTS INTO FUND. (a) In addition to any

other fees required by this chapter, a person who passes a

license examination must pay a fee not to exceed $200. The

commission shall deposit the fee to the credit of the fund before

issuing the license.

(b) If the balance in the fund at any time is less than

$300,000, each inspector at the next license renewal must pay, in

addition to the renewal fee, a fee that is equal to the lesser of

$75 or a pro rata share of the amount necessary to obtain a

balance in the fund of $450,000. The commission shall deposit the

additional fee to the credit of the fund.

(c) To ensure the availability of a sufficient amount to pay

anticipated claims on the fund, the commission by rule may

provide for the collection of assessments at different times and

under conditions other than those specified by this chapter.

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

2003. Amended by Acts 2003, 78th Leg., ch. 1276, Sec. 14A.166(a),

eff. Sept. 1, 2003.

Sec. 1102.353. MANAGEMENT OF FUND. (a) The commission shall

hold money credited to the fund in trust to carry out the purpose

of the fund.

(b) Money credited to the fund may be invested in the same

manner as money of the Employees Retirement System of Texas,

except that an investment may not be made that would impair the

liquidity necessary to make payments from the fund as required by

this subchapter.

(c) Interest from the investments shall be deposited to the

credit of the fund.

(d) If the balance in the fund on December 31 of a year is more

than $600,000, the commission shall transfer the amount in excess

of $600,000 to the credit of the general revenue fund.

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

2003.

Sec. 1102.354. DEADLINE FOR ACTION; NOTICE TO COMMISSION. (a)

An action for a judgment that may result in an order for payment

from the fund may not be brought after the second anniversary of

the date the cause of action accrues.

(b) When an aggrieved person brings an action for a judgment

that may result in an order for payment from the fund, the

inspector against whom the action is brought shall notify the

commission in writing of the action.

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

2003.

Sec. 1102.355. CLAIM FOR PAYMENT FROM FUND. (a) An aggrieved

person who obtains a court judgment against an inspector for a

violation of Subchapter G may, after final judgment is entered,

execution returned nulla bona, and a judgment lien perfected,

file a verified claim in the court that entered the judgment.

(b) After the 20th day after the date the aggrieved person gives

written notice to the commission and judgment debtor, the person

may apply to the court that entered the judgment for an order for

payment from the fund of the amount unpaid on the judgment. The

court shall proceed promptly on the application.

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

2003.

Sec. 1102.356. ISSUES AT HEARING. At the hearing on the

application for payment from the fund, the aggrieved person must

show:

(1) that the judgment is based on facts allowing recovery under

this subchapter;

(2) that the person is not:

(A) the spouse of the judgment debtor or the personal

representative of the spouse; or

(B) an inspector;

(3) that, according to the best information available, the

judgment debtor does not have sufficient attachable assets in

this or another state to satisfy the judgment;

(4) the amount that may be realized from the sale of assets

liable to be sold or applied to satisfy the judgment; and

(5) the balance remaining due on the judgment after application

of the amount under Subdivision (4).

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

2003. Amended by Acts 2003, 78th Leg., ch. 1276, Sec. 14A.166(b),

eff. Sept. 1, 2003.

Sec. 1102.357. COMMISSION RESPONSE. (a) On receipt of notice

under Section 1102.355, the commission may notify the attorney

general of the commission's desire to enter an appearance, file a

response, appear at the hearing, defend the action, or take any

other action the commission considers appropriate.

(b) The commission and the attorney general may act under

Subsection (a) only to:

(1) protect the fund from spurious or unjust claims; or

(2) ensure compliance with the requirements for recovery under

this subchapter.

(c) The commission may relitigate in the hearing any material

and relevant issue that was determined in the action that

resulted in the judgment in favor of the aggrieved person.

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

2003.

Sec. 1102.358. COURT ORDER FOR PAYMENT. The court shall order

the commission to pay from the fund the amount the court finds

payable on the claim under this subchapter if at the hearing the

court is satisfied:

(1) of the truth of each matter the aggrieved person is required

by Section 1102.356 to show; and

(2) that the aggrieved person has satisfied each requirement of

Sections 1102.355 and 1102.356.

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

2003.

Sec. 1102.359. PAYMENT LIMITS; ATTORNEY'S FEES. (a) Payments

from the fund for claims, including attorney's fees, interest,

and court costs, arising out of a single transaction may not

exceed a total of $12,500, regardless of the number of claimants.

(b) Payments from the fund for claims based on judgments against

a single inspector may not exceed a total of $30,000 until the

inspector has reimbursed the fund for all amounts paid.

(c) If the court finds that the total amount of claims against

an inspector exceeds the limitations contained in this section,

the court shall proportionally reduce the amount payable on each

claim.

(d) A person receiving payment from the fund is entitled to

reasonable attorney's fees in the amount determined by the court,

subject to the limitation prescribed by 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.166(c),

eff. Sept. 1, 2003.

Sec. 1102.360. APPLICATION OF JUDGMENT RECOVERY. An aggrieved

person who receives a recovery on a judgment against a single

defendant before receiving a payment from the fund must apply the

recovery first to actual damages.

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

2003.

Sec. 1102.361. SUBROGATION. (a) The commission is subrogated

to all rights of a judgment creditor to the extent of an amount

paid from the fund, and the judgment creditor shall assign to the

commission all right, title, and interest in the judgment up to

that amount.

(b) The commission has priority for repayment from any

subsequent recovery on the judgment.

(c) The commission shall deposit any amount recovered on the

judgment to the credit of the fund.

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

2003.

Sec. 1102.362. EFFECT ON DISCIPLINARY PROCEEDINGS. (a) This

subchapter does not limit the commission's authority to take

disciplinary action against an inspector for a violation of this

chapter or a commission rule.

(b) An inspector's repayment of all amounts owed to the fund

does not affect another disciplinary proceeding brought under

this chapter.

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

2003.

Sec. 1102.363. WAIVER OF RIGHTS. An aggrieved person who does

not comply with this subchapter waives the person's rights under

this subchapter.

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

2003.

Sec. 1102.364. NOTICE TO CONSUMERS AND SERVICE RECIPIENTS. (a)

Each inspector shall provide notice to consumers and service

recipients of the availability of payment from the fund for

aggrieved persons:

(1) on a written contract for the inspector's services;

(2) on a brochure that the inspector distributes;

(3) on a sign prominently displayed in the inspector's place of

business;

(4) in a bill or receipt for the inspector's services; or

(5) in a prominent display on the Internet website of a person

regulated under this chapter.

(b) The notice must include:

(1) the commission's name, mailing address, and telephone

number; and

(2) any other information required by commission rule.

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

2003. Amended by Acts 2003, 78th Leg., ch. 15, Sec. 13, eff.

Sept. 1, 2003.

SUBCHAPTER I. DISCIPLINARY PROCEEDINGS, PENALTIES, AND

ENFORCEMENT PROVISIONS

Sec. 1102.401. DISCIPLINARY POWERS OF COMMISSION. (a) The

commission may investigate an action of an inspector and, after

notice and hearing as provided by Section 1101.657, reprimand the

inspector, place the inspector's license on probation, or suspend

or revoke the inspector's license for a violation of this chapter

or a commission rule.

(b) An inspector whose license is revoked under this section may

not apply to the commission for a new license until after the

first anniversary of the date of the revocation.

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

2003.

Sec. 1102.402. LICENSE REVOCATION FOR CLAIM ON FUND. (a) The

commission may revoke a license issued under this chapter or a

license, approval, or registration issued under Chapter 1101 if

the commission makes a payment from the real estate inspection

recovery fund to satisfy all or part of a judgment against the

person issued the license, approval, or registration.

(b) The commission may probate an order revoking a license.

(c) A person is not eligible for a license until the person has

repaid in full the amount paid from the fund on the person's

account, plus interest at the legal rate.

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. 12, eff. September 1, 2007.

Sec. 1102.403. ADMINISTRATIVE PENALTY. (a) The commission may

impose an administrative penalty as provided by Subchapter O,

Chapter 1101, on a person who violates this chapter or a rule

adopted or order issued by the commission under this chapter or

Chapter 1101.

(b) An administrative penalty collected under this section for a

violation by an inspector shall be deposited to the credit of the

real estate inspection recovery fund. A penalty collected under

this section for a violation by a person who is not licensed

under this chapter or Chapter 1101 shall be deposited to the

credit of the real estate recovery trust account or the real

estate inspection recovery fund, as determined by the commission.

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

2003. Amended by Acts 2003, 78th Leg., ch. 1276, Sec. 14A.160(g),

eff. Sept. 1, 2003.

Sec. 1102.404. INJUNCTIVE RELIEF. The commission, the attorney

general, a county attorney, or a district attorney, as

applicable, may bring an action to enforce this chapter or to

abate or enjoin a violation of this chapter or a rule adopted

under this chapter as prescribed by Sections 1101.751 and

1101.752.

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

2003.

Sec. 1102.405. APPEAL BOND EXEMPTION. The commission is not

required to give an appeal bond in an action to enforce this

chapter.

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

2003.

Sec. 1102.406. GENERAL CRIMINAL PENALTY. (a) A person commits

an offense if the person wilfully violates or fails to comply

with this chapter or a commission order.

(b) An offense under this section is a Class A misdemeanor.

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

2003.

Sec. 1102.407. CRIMINAL PENALTY FOR PRACTICING WITHOUT LICENSE.

(a) A person commits an offense if the person does not hold a

license under this chapter and knowingly engages in the business

of real estate inspecting, including performing an inspection

while the person's license is revoked or suspended.

(b) An offense under this section is a Class A misdemeanor.

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

2003. Amended by Acts 2003, 78th Leg., ch. 1276, Sec. 14A.167(a),

eff. Sept. 1, 2003.

Sec. 1102.408. TEMPORARY SUSPENSION. (a) The presiding officer

of the commission shall appoint a disciplinary panel consisting

of three commission members to determine whether a person's

license to practice under this chapter should be temporarily

suspended.

(b) If the disciplinary panel determines from the information

presented to the panel that a person licensed to practice under

this chapter would, by the person's continued practice,

constitute a continuing threat to the public welfare, the panel

shall temporarily suspend the license of that person.

(c) A license may be suspended under this section without notice

or hearing on the complaint if:

(1) institution of proceedings for a hearing before the

commission is initiated simultaneously with the temporary

suspension; and

(2) a hearing is held under Chapter 2001, Government Code, and

this chapter as soon as possible.

(d) Notwithstanding Chapter 551, Government Code, the

disciplinary panel may hold a meeting by telephone conference

call if immediate action is required and convening the panel at

one location is inconvenient for any member of the panel.

Added by Acts 2007, 80th Leg., R.S., Ch.

1411, Sec. 43, eff. September 1, 2007.