Texas Register

RULE §535.148Receiving an Undisclosed Commission or Rebate
ISSUE 05/24/2019
ACTION Proposed
Preamble Texas Admin Code Rule

(a)A license holder may not receive a commission, rebate, or fee in a transaction from a person other than the person the license holder represents without first disclosing to the license holder's client that the license holder intends to receive the commission, rebate or fee, and obtaining the consent of the license holder's client. [This subsection does not apply to referral fees paid by one licensed real estate broker or sales agent to another active licensed broker or sales agent.]

(b) - (c)(No change.)

(d)A license holder may not pay or receive a fee or other valuable consideration to or from any other settlement service provider for, but not limited to, the following: [A license holder may not accept a fee or payment for services provided for or on behalf of a service provider to a real estate transaction the payment of which is contingent upon a party to the real estate transaction purchasing a contract or services from the service provider].

   (1)the referral of inspections, lenders, mortgage brokers, or title companies;

   (2)inclusion on a list of inspectors, preferred settlement providers, or similar arrangements; or

   (3)inclusion on lists of inspectors or other settlement providers contingent on other financial agreements.

(e)In this section, "settlement service" means a service provided in connection with a prospective or actual settlement, and "settlement service provider" includes, but is not limited to, any one or more of the following:

  (1)a federally related mortgage loan originator;

  (2)a mortgage broker;

  (3)a lender or other person who provides any service related to the origination, processing or funding of a real estate loan;

  (4)a title service provider;

  (5)an attorney;

  (6)a person who prepares documents, including notarization, delivery, and recordation;

  (7)a person who provides credit report services;

  (8)an appraiser;

  (9)an inspector;

  (10)a settlement agent;

  (11)a person who provides mortgage insurance services;

  (12)a person who provides services involving hazard, flood, or other casualty insurance, homeowner's warranties or residential service contracts;

  (13)a real estate agent or broker; and

  (14)a person who provides any other services for which a settlement service provider requires a borrower or seller to pay.

(f)[(e)] A license holder must use TREC No. RSC-2, Disclosure of Relationship with Residential Service Company, to disclose to a party to a real estate transaction in which the license holder represents one or both of the parties any payments received for services provided for or on behalf of a residential service company licensed under Texas Occupations Code Chapter 1303.

(g)[(f)] The Texas Real Estate Commission adopts by reference TREC No. RSC-2, Disclosure of Relationship with Residential Service Company, approved by the Commission for use by license holders to disclose payments received from a residential service company. This document is published by and available from the Texas Real Estate Commission, P.O. Box 12188, Austin, Texas 78711-2188, www.trec.texas.gov.

(h)This section does not prohibit:

  (1)normal promotional or educational activity that is not conditioned on the referral of business and that does not involve the defraying of expenses that otherwise would be incurred;

  (2)a payment at market rates to any person for goods actually furnished or for services actually performed; or

  (3)a payment pursuant to a cooperative brokerage or referral arrangement or agreement between active licensed real estate agents and real estate brokers.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on May 8, 2019


Chelsea Buchholtz

General Counsel

Texas Real Estate Commission

Earliest possible date of adoption: June 23, 2019

For further information, please call: (512) 936-3177

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