(a)Application for approval.
(1)Unless otherwise exempt under subsection (b) of
this section, a person desiring to be approved by the Commission to
offer real estate or real estate inspection qualifying courses shall:
(A)file an application on the appropriate form approved
by the Commission, with all required documentation;
(B)submit the required fee under §535.101 or §535.210
of this title (relating to Fees);
(C)submit the statutory bond or other security acceptable
to the Commission under §1101.302 of the Act; and
(D)maintain a fixed office in the state of Texas or
designate a resident of this state as attorney-in-fact to accept service
of process and act as custodian of any records in Texas which the
provider is required to maintain by this Subchapter.
(2)The Commission may:
(A)request additional information be provided to the
Commission relating to an application; and
(B)terminate an application without further notice
if the applicant fails to provide the additional information not later
than the 60th day after the Commission mails the request.
(3)An approved provider is permitted to offer courses
in both real estate and real estate inspection that have been approved
by the Commission.
(1)The following persons may submit real estate qualifying
courses for approval for credit in §535.62(i) of this subchapter
(relating to Approval of Qualifying Courses) without becoming an approved
provider of qualifying courses:
(A)a person approved by a real estate regulatory agency
to offer qualifying real estate courses in another state that has
approval requirements for providers that are substantially equivalent
to the requirements for approval in this state;
(B)an accredited college or university in accordance
with §535.66 of this subchapter (relating to Credit for Courses
Offered by Accredited Colleges or Universities) where courses are
offered in accordance with national or regional accreditation standards;
(C)a post-secondary educational institution established
in and offering qualifying real estate courses in another state;
(D)a United States armed forces institute; and
(E)a nationally recognized professional designation
institute or council in the real estate industry.
(2)The following persons may submit real estate inspector
qualifying courses for approval for credit under §535.62(i) of
this subchapter without becoming an approved provider of qualifying
(A)a provider approved by an inspector regulatory
agency of another state that has approval requirements for providers
that are substantially equivalent to the requirements for approval
in this state;
(B)an accredited college or university in accordance
with §535.66 of this subchapter where courses are offered in
accordance with national or regional accreditation standards;
(C)a United States armed forces institute;
(D)a unit of federal, state or local government;
(E)a nationally recognized building, electrical, plumbing,
mechanical or fire code organization;
(F)a professional trade association in the inspection
field or in a related technical field; or
(G)an entity whose courses are approved and regulated
by an agency of this state.
(c)Standards for approval. To be approved as a provider
by the Commission, the applicant must meet the following standards:
(1)the applicant must satisfy the Commission as to
the applicant's ability to administer courses with competency, honesty,
trustworthiness and integrity. If the applicant proposes to employ
another person to manage the operation of the applicant, that person
must meet this standard as if that person were the applicant;
(2)the applicant must demonstrate that the applicant
has sufficient financial resources to conduct its proposed operations
on a continuing basis without risk of loss to students taking courses;
(3)that any proposed facilities will be adequate and
safe for conducting courses.
(d)Financial review. An applicant shall provide the
following information to enable the Commission to determine if an
applicant has sufficient financial resources to conduct its proposed
(1)business financial statements prepared in accordance
with generally accepted accounting principles, which shall include
a current income statement and balance sheet;
(2)a proposed budget for the first year of operation;
(3)a market survey indicating the anticipated enrollment
for the first year of operation.
(e)Insufficient financial condition. The existence
of any of the following conditions shall constitute prima facie evidence
that an applicant's financial condition is insufficient:
(1)nonpayment of a liability when due, if the balance
due is greater than 5% of the approved provider's current assets in
the current or prior accounting period;
(2)nonpayment of three or more liabilities when due,
in the current or prior accounting period, regardless of the balance
due for each liability;
(3)a pattern of nonpayment of liabilities when due,
in two or more accounting periods, even if the liabilities ultimately
(4)a current ratio of less than 1.75 for the current
or prior accounting period, this ratio being total current assets
divided by total current liabilities;
(5)a quick ratio of less than 1.60 for the current
or prior accounting period, this ratio being the sum of all cash equivalents,
marketable securities, and net receivables divided by total current
(6)a cash ratio of less than 1.40 for the current
or prior accounting period, this ratio being the sum of cash equivalents
and marketable securities divided by total current liabilities;
(7)a debt ratio of more than .40 for the current or
prior accounting period, this ratio being total liabilities divided
by total assets;
(8)a debt-to-equity ratio of greater than .60 for
the current or prior accounting period, this ratio being total liabilities
divided by owners' or shareholders' equity;
(9)a final judgment obtained against the approved
provider for nonpayment of a liability which remains unpaid more than
30 days after becoming final; or
(10)the execution of a writ of garnishment on any
of the assets of the approved provider.
(f)Approval notice. An applicant shall not act as
or represent itself to be an approved provider until the applicant
has received written notice of approval from the Commission.
(g)Period of initial approval. The initial approval
of a provider of qualifying courses is valid for four years.
(h)Statutory bond or other security. An approved provider
whose statutory bond or other security has been cancelled will be
placed on inactive status until the bond or security is reinstated.
(i)Payment of an annual operation fee.
(1)An approved provider shall submit the Commission
approved form and pay an annual operation fee prescribed by §535.101
of this title no later than the last day of the month of each anniversary
date of the provider's approval.
(2)An approved provider who fails to pay the annual
operation fee as prescribed shall be placed on inactive status and
notified in writing by the Commission.
(3)The approved provider will remain on inactive status
and unable to offer courses until the annual fee is paid.
(4)The Commission will not give credit for courses
offered by a provider on inactive status.
(j)Disapproval of application.
(1)If the Commission determines that an applicant
does not meet the standards for approval, the Commission will provide
written notice of disapproval to the applicant.
(2)The disapproval notice, applicant's request for
a hearing on the disapproval, and any hearing are governed by the
Administrative Procedure Act, Texas Government Code, Chapter 2001,
and Chapter 533 of this title (relating to Practice and Procedure).
Venue for any hearing conducted under this section shall be in Travis
(1)A provider may not enroll a student in a course
during the 60-day period immediately before the expiration of the
provider's current approval unless the provider has submitted an application
for subsequent approval for another four year period not later than
the 60th day before the date of expiration of its current approval.
(2)Approval or disapproval of a subsequent application
shall be subject to:
(A)the standards for initial applications for approval
set out in this section; and
(B)whether the approved provider has met or exceeded
the exam passage rate benchmark established by the Commission under
subsection (l) of this section.
(3)The Commission will not require a financial review
for subsequent approval if the applicant has provided a statutory
bond or other security acceptable to the Commission under §1101.302
of the Act, and there are no unsatisfied final money judgments against
(l)Exam passage rates and benchmark.
(1)The exam passage rate for an approved provider
(A)calculated for each license category for which
the provider offers courses; and
(B)displayed on the Commission website by license
(2)A student is affiliated with a provider under this
subsection if the student took the majority of his or her qualifying
education with the provider in the two year period prior to taking
the exam for the first time.
(3)The Commission will calculate the exam passage
rate of an approved provider on a monthly basis, rounded to two decimal
places on the final calculated figure, by:
(A)determining the number of students affiliated with
that approved provider who passed the examination on their first attempt
in the two-year period ending on the last day of the previous month;
(B)dividing that number by the total number of students
affiliated with that provider who took the exam for the first time
during that same period.
(4)For purposes of approving a subsequent application
under subsection (j), the established exam passage rate benchmark
for each license category is 80% of the average percentage of the
total examinees for that license category who passed the examination
on the first attempt in the two year period ending on the last day
of the previous month.
(5)If at the time the Commission receives a subsequent
application from the provider requesting approval for another four
year term, the provider's exam passage rate does not meet the established
benchmark for a license category the provider will be:
(A)denied approval to continue offering courses for
that license category if the provider's exam passage rate is less
than 50% of the average percentage of the total examinees for that
license category who passed the examination on the first attempt in
the two year period ending on the last day of the previous month;
(B)placed on probation by the Commission if the provider's
exam passage rate is greater than 50% but less than 80% of the average
percentage of the total examinees for that license category who passed
the examination on the first attempt in the two year period ending
on the last day of the previous month.
(6)The exam passage rate of a provider on probation
will be reviewed annually at the time the annual operating fee is
due to determine if the provider can be removed from probation, remain
on probation or have its license revoked, based on the criteria set
out in paragraph (5) of this subsection.
The agency certifies that legal counsel
has reviewed the adoption and found it to be a valid exercise of the
agency's legal authority.
Filed with the Office
of the Secretary of State on August 13, 2019
Texas Real Estate
Effective date: September 2, 2019
Proposal publication date: May 24, 2019
For further information, please call: (512) 936-3177