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OCCUPATIONS CODE

TITLE 7. PRACTICES AND PROFESSIONS RELATED TO REAL PROPERTY AND

HOUSING

SUBTITLE A. PROFESSIONS RELATED TO REAL ESTATE

CHAPTER 1101. REAL ESTATE BROKERS AND SALESPERSONS

SUBCHAPTER A. GENERAL PROVISIONS

§ 1101.001. SHORT TITLE. This chapter may be cited as

The Real Estate License Act.

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

§ 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, § 2, eff. June 1, 2003.

Amended by Acts 2003, 78th Leg., ch. 1276, § 14A.151, eff. Sept.

1, 2003.

§ 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;

(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;

(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;

(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;

(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;

(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;

(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;

(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;

(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;

(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;

(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).

(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, § 2, eff. June 1, 2003.

Amended by Acts 2003, 78th Leg., ch. 1276, § 14A.152(a), eff.

Sept. 1, 2003.

§ 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, § 2, eff. June 1, 2003.

Amended by Acts 2003, 78th Leg., ch. 1276, § 14A.153, eff. Sept.

1, 2003.

§ 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