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Texas amends laws to hold real estate licensees more accountable

New state laws in Texas

This fall, the Real Estate Commission and Appraiser Licensing and Certification Board proposed rules to implement provisions of two laws passed by the 82nd Texas Legislature, both aiming to “clarify and standardize application procedures,” as well as “provide better protections for consumers and strengthen[ed] license holder education requirements.” Some consumers remain skeptical of real estate professionals given the misdeeds of the few, so any consumer oriented laws pushed by the real estate industry are a long term win.

Changes in effect now

As of this month, property managers for single-family residential units must be licensed, whereas managers not directly engaged in leasing duties were not previously required to hold a real estate license (although people leasing properties did).

Also now in effect, all businesses that engage in any practice legally defined as “brokerage activity,” other than sole proprietorships, must be licensed whereas in the past, certain partnerships had remained exempt.

As a sign of the current economic climate, the law has been updated to acknowledge “broker price opinions” as a common broker activity, separate and distinct from “appraisals,” which require a license from the Appraiser Licensing and Certification Board, and require a great deal of education in industry techniques.

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Changes in effect in 2012

A change to Texas law that is most highly commendable is that beginning in January 2012, real estate salespeople seeking a broker’s license will now need four years of experience, up from the current two year requirement. Also, broker applicants will be required to demonstrate “practical competency by providing a detailed list of brokerage activities engaged in by the applicant during this same period.”

All brokers that renew after September 1, 2012 will be required to complete a new course in “Broker Responsibilities” on top of the current requirement of legal and ethics updates courses.

Laws vary from state to state and more states are reportedly looking to increase accountability of licensees, a move which most industry insiders vocally support.

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Tara Steele is the News Director at The American Genius, covering entrepreneur, real estate, technology news and everything in between. If you'd like to reach Tara with a question, comment, press release or hot news tip, simply click the link below.

16 Comments

16 Comments

  1. Mark Brian

    September 14, 2011 at 6:44 am

    I hope my state does something similar!

  2. Brian Jones

    September 14, 2011 at 9:23 pm

    Can anyone provide data showing fewer consumer complaints, less fraud and higher customer satisfaction in states that have implemented similar laws and/or stricter education requirements. These sorts of things are always done in the name of "consumer protection" but I've yet to hear anything other than anecdotal evidence that it works. Liars, cheats and scammers are what they are no matter how many classes you make them sit through. Incompetence doesn't go away in one extra year.

    The other interesting twist is that these extra regulations and burdens are usually concocted and pushed through by a group of people that otherwise rail against mandates and regulations (REALTOR Associations).

    Right now the elitist leadership of my own state Association (Michigan) are pushing for similar extended education requirements and not one of them can articulate how this will specifically benefit a consumer.

    If REALTORS truly want to stand out, why not raise the bar for membership? I doubt it will actually prevent anything bad from happening, but at least it would create a more significant distinction between agent and REALTOR. I have a pretty good idea why they won't go that route, and it has everything to do with membership numbers.

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