TREC Legal Updates and the Commercial Real Estate Market
The Texas Real Estate Commission (TREC) oversees real estate operations in the Lone Star State. For example CXRE is a TREC Corporate Broker (CXRE LLC, License #9004453). In order to remain in good standing, we and other firms must stay on top of legal updates. Otherwise, failing to do so could jeopardize your business.
Creating and Enforcing Regulation
As the Lone Star State’s governing body for commercial real estate, TREC makes and enforces regulations on:
- Professional Ethics and Conduct — Covers issues such as broker integrity and competency, consumer information, discriminatory practices, and information about brokerage services
- Practice and Procedure — Governs adjudicative proceedings, either instituted by TREC or by some other application, complaint, claim, or another pleading
- General Administration — Covers things such as employee training and education, bid opening and calculation, and negotiation and mediation of certain contract disputes
- General Provisions — Cover issue relating to the Licensure Requirements
Recently Adopted and Proposed Updates to TREC Rules
Below are recent and proposed updates to be aware of, taken from the TREC Rules and Laws sections.
Recently Adopted Rules
- 22 TAC §535.155, Advertisements: Clarifies that a directional sign (for sale or lease) isn’t considered an advertisement. In brief, this rule applies if the sign only contains directional arrows or arrows and the broker’s logo or name only. In addition, the word “realty” is no longer a prohibited term and this word can be used in a brokerage team’s name.
- 22 TAC §535.201, Definitions: Adds a definition for the term ‘client’. It also removes unused definitions of ‘trade association’ and ‘code organization.’
- 22 TAC §537.57, Standard Contract Form TREC No. 50-0: Revises contract forms adopted by reference under the rules set out in Chapter 537. This change addresses issues since the last round of contract revisions.
- 22 TAC §535.53, Business Entity; Designated Broker: Proposed amendments to Subchapter E which would delete or revise outdated or misplaced definitions. On top of that, these amendments would and correct references to the Commission’s Real Estate Recovery Trust Accounts and subchapter references.
- 22 TAC §535.101, Fees: Would reduce the fee paid by a broker or sales agent from $20 to $10 when a sales agent changes or establishes sponsorship.
- 22 TAC §537.45, Standard Contract Form TREC No. 38-5: Would revise to the Notice of Buyer’s Termination of Contract that would add a requirement to include lender’s written notice. In general the revisions would lay out the reasons Property Approval was not obtained when terminating a contract for that specific reason. Additionally, the revision would add a new and an existing item granting buyer termination rights under contracts or addenda along with updated notice language.
- 22 TAC §537.56, Standard Contract Form TREC No. 49-0: Would revise the Addendum Concerning Right to Terminate Due to Lender’s Appraisal. The purpose of this amendment is to improve understanding and use of this form.
Stay Up-To-Date on TREC Regulations
Commercial real investment brokers and investors alike should be aware of modifications to the Texas Real Estate Commission’s regulation. For the most up-to-date regulations, consult the TREC Rules and Laws sections.