Texas Register

RULE §535.148Receiving an Undisclosed Commission or Rebate
ISSUE 03/03/2023
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.

(b)If a party the license holder does not represent agrees to pay a service provider in the transaction, the license holder must also obtain the consent of that party to accept a fee, commission , or rebate from the service provider. As used in this section, the term "service provider" does not include a person acting in the capacity of a real estate broker or sales agent.

(c)A license holder may not enter into a contract or agreement with a service provider to a real estate transaction in which the license holder represents one or both of the parties if, pursuant to the contract or agreement:

  (1)the license holder provides services for or on behalf of the service provider; and

  (2)the contract or agreement prohibits the license holder from offering similar services for or on behalf of a competing service provider.

(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:

  (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)A license holder must use TREC No. RSC-4 [ RSC-3], Disclosure of Relationship with Residential Service Contract Provider or Administrator [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 contract provider or administrator [company] licensed under Texas Occupations Code Chapter 1304.

(g)The Texas Real Estate Commission adopts by reference TREC No. RSC-4 [RSC-3], Disclosure of Relationship with Residential Service Contract Provider or Administrator [ Company], approved by the Commission for use by license holders to disclose payments received from a residential service contract provider or administrator [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 February 15, 2023


Vanessa E. Burgess

General Counsel

Texas Real Estate Commission

Earliest possible date of adoption: April 2, 2023

For further information, please call: (512) 936-3284

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