During the August quarterly Commission meeting, several rule and form changes were proposed and adopted. See the full agenda and materials on the Commission Meetings and Minutes page. The next Commission meeting is scheduled for November 8, 2021 at 10:00 a.m.

Form Changes

Changes were adopted to the following contract forms on an emergency basis:

• Unimproved Property Contract
• One to Four Family Residential Contract (Resale)
• New Home Contract (Incomplete Construction)
• New Home Contract (Complete Construction)
• Farm and Ranch Contract
• Residential Condominium Contract (Resale)

In addition to changes to the existing forms, a new form—Addendum containing Notice of Obligation to Pay Improvement District Assessment—was also adopted on an emergency basis to comply with the requirements of HB 1543. 

The following is a list of changes made to the contract forms. Changes apply to all contract forms unless specified otherwise. Paragraph numbers referenced below are from the One to Four Family Residential Contract (Resale)).

• Paragraph 6(E)(7) is amended to align the contract language with statutory changes in HB 1543 related to public improvement district notice requirements.
• Paragraph 7(H) is amended to remove the language “licensed by TREC” to conform with the statutory changes in HB 1560, which transfers regulation of residential service companies to the Texas Department of Licensing and Regulation. This change does not apply to the Unimproved Property Contract.
• Paragraph 22 is amended to add a box for the new Addendum containing Notice of Obligation to Pay Improvement District Assessment.

Finally, the Commission also approved changes on an emergency basis to the Disclosure of Relationship with Residential Service Company (RSC-3). These forms are effective September 1, 2021.

The updated contract forms will be for mandatory use beginning September 1; however, the new addendum will be for voluntary use beginning September 1 (this is because some public improvement districts may have their own notice). The forms will be posted to the website soon. Note, however, that because these changes are tied to legislative changes which do not go into effect until September 1, use prior to that date is not authorized.

Proposed Rules

Changes to the following rules were proposed:

• §535.43, Education Standards Advisory Committee. These proposed amendments update the date the committee is abolished to correspond with the revised sunset review date adopted under SB 713 and make conforming changes related to instructors pursuant to SB 624 enacted by the 86th Legislature. Finally, the proposed amendments correct outdated terminology--replacing a reference to “administrator” with “executive director.”
• §535.92, Continuing Education Requirements. This proposed change eliminates subsection (f), which allows license holders to obtain continuing education (CE) credit for a course taken to fulfill a requirement of a professional designation and includes a list of specific professional designations recognized by the Commission for purpose of obtaining CE credit. License holders may still receive CE credit for such courses if providers have submitted and the Commission has approved the course for credit through the usual course approval process.
• §535.148, Receiving an Undisclosed Commission or Rebate. The proposed amendment corrects a statutory reference and updates the Disclosure of Relationship with Residential Service Company form pursuant to HB 1560. This rule was also adopted on an emergency basis.
• §535.201, Definitions. This proposed change corrects a reference to the Standards of Practice in subsection (3).
• §535.206, The Texas Real Estate Inspector Committee. The proposed amendments extend the year the committee is abolished to correspond with SB 713 , which extended the Commission’s sunset review date to 2031.

In addition, the form changes adopted on an emergency basis were also proposed.

Written public comments on proposed rules are accepted for 30 days after publication in the Texas Register. Use the Commission's new online public comment tool to submit comments. Comments can also be sent via email to general.counsel@trec.texas.gov or can be mailed to General Counsel, Texas Real Estate Commission, P.O. Box 12188, Austin, Texas 78711-2188.

Adopted Rules

The following rules were adopted:

• §535.220, Professional Conduct and Ethics. This amendment adds that the consent an inspector must receive from the inspector’s client to receive a fee or other valuable consideration for referring services that are not settlement services or other products to the client, must be in writing. Effective August 30, 2021.
• §535.223, Standard Inspection Report Form. The amendments clarify the requirement when an inspector uses computer software or other means to produce an inspection report to ensure that it complies with established reporting requirements. The form is adopted for voluntary use beginning September 1, 2021 until February 1, 2022, at which time its use will become mandatory.
• §535.227, Standards of Practice: General Provisions. The changes require an inspector to use all reasonable and appropriate tools necessary to comply with the requirements of Standards of Practice and specifies that if an inspector provides services beyond the scope of the Standards of Practice as part of a real estate inspection, they must be competent to provide those services.  Additionally, the amendments clarify that an inspector cannot perform an inspection for a client until they have notified the client of any systems or components the inspector does not routinely inspect that are otherwise required by the Standards of Practice. Finally, the amendments include a new definition for “gas distribution system” to conform to changes made by proposed amendments to §535.231, Standards of Practice: Minimum Inspection Requirements for Plumbing Systems. Effective February 1, 2022.
• §535.228, Standards of Practice: Minimum Inspection Requirements for Structural Systems. These changes update requirements for garage doors to better reflect current building code requirements and clarify reporting requirements for gas fixtures and appliances listed under this section to conform to changes made by amendments to §535.331, Standards of Practice: Minimum Inspection Requirements for Plumbing Systems. Effective February 1, 2022.
• §535.229, Standards of Practice: Minimum Inspection Requirements for Electrical Systems. These changes update the requirements for electrical systems to better reflect current building code requirements. Effective February 1, 2022.
• §535.230, Standards of Practice: Minimum Inspection Requirements for Heating, Ventilation, and Air Conditioning Systems. The amendments clarify what an inspector is required to do and report when determining if an HVAC system is functioning properly. They also clarify reporting requirements for gas fixtures and appliances listed under this section to conform to changes made by proposed amendments to §535.231. Effective February 1, 2022.
• §535.231, Standards of Practice: Minimum Inspection Requirements for Plumbing Systems. The changes require an inspector to report the material used for water supply lines, water drain lines, and the gas distribution system, specify that certain items are required to be reported when only when visible, and require an inspector to report water pressure exceeding 80 PSI. They also move the requirements related to the inspection of a gas distribution system that are currently contained in various other sections of the Standards of Practice to a new subsection (d) of this section and clarify reporting requirements for gas fixtures and appliances listed under this section to conform to the new subsection (d). Effective February 1, 2022.
• §535.232, Standards of Practice: Minimum Inspection Requirements for Appliances. The amendments move the general exception to the requirements of this section to the end of the rule to mirror other sections of the Standards of Practice. The amendments also update the requirements for bathroom ventilation to better reflect current building code requirements, specify that certain items are required to be reported when only when visible, and clarify the reporting requirements for gas fixtures and appliances listed under this section to conform to changes made by proposed amendments to §535.231. Effective February 1, 2022.
• §535.233, Standards of Practice: Minimum Inspection Requirements for Optional Systems. These changes add an optional reporting requirement for built-in appliances, specify that an inspector is not required to report on the performance of an underground zone of a sprinkler system, and clarify that a private sewage system is not limited to a septic system. Effective February 1, 2022.