The Texas Real Estate Commission (TREC) adopts new §535.223 concerning standard inspection report forms without changes to the proposed text as published in the September 5, 2008, issue of the Texas Register (33 TexReg 7403), which will not be republished. The new rule, effective February 1, 2009, adopts by reference a revised standard inspection report form and clarifies when the form is required and how it may be modified by licensees. TREC has a statutory duty to adopt standard inspection report forms and to adopt rules requiring licensed inspectors to use the report forms under Senate Bill Number 1100, 75th Legislature (1997).

The new §535.223 has been recommended by the Texas Real Estate Inspector Committee, an advisory committee of six professional inspectors and three public members appointed by TREC, to correspond to proposed revisions to the inspector standards of practice that are otherwise explained in this issue of the Texas Register.

The reasoned justification for the new §535.223 is increased clarity for inspectors and consumers alike regarding the use of the standard inspection report form and an improved form that corresponds with improvements to the standards of practice (22 TAC §§535.227 - 535.233).

The TREC received eleven comments during the notice and comment period regarding adoption of the new rule.

Comment: Six commenters suggested adding an exception to the standard form requirement for relocation inspections so that inspections performed for relocation companies could be reported on a different form, such as an industry form, with appropriate language notifying the public that the inspection was not performed in accordance with the TREC standards of practice.

Response: The Commission respectfully disagrees with the comment because such an exception existed in §535.223 until August 2006 and was repealed because the required notice was rarely, if ever, used. While the matter may be discussed further in the future, the Commission does not deem it appropriate to allow the exception at this time.

Comment: One commenter suggested adding a separate category to the standard form for driveways and sidewalks.

Response: The Commission respectfully disagrees with the comment because deficiencies in these components are generally either related to structural performance/water retention and should be reported in the appropriate structural section, or cosmetic. Cosmetic defects are not required to be reported but may be reported in the optional section of the form.

Comment: One commenter expressed general dissatisfaction with the proposed inspection report form but did not indicate any specific issues other than implying a preference for the current form (REI 7A-0) because he purchased reporting software for that form.

Response: The Commission respectfully disagrees with the comment because the new form incorporates substantial improvements over the old form, and the cost of new reporting software is minimal.

Comment: One commenter raised a number of questions about use of the report form and made several stylistic suggestions, including moving the "Comments" heading below the section headings for consistency throughout the report; removing the coliform notice from the water well section due to concerns that it is confusing; and deleting the serial of "Oxford" comma from lists of three or more items on the report.

Response: The Commission respectfully disagrees with the comments, as the "Comments" heading is consistently below the section heading when there are other subheadings and to the right of the heading (to save space on the form) when there are not; the Commission is unaware of the same coliform notice leading to confusion in the past; and while it is acceptable to use or omit the serial comma, most authorities on American English recommend its use.

Comment: One commenter suggested adding the following notice to the informational text on the front of the standard report form: "At virtually every inspection, there are items that are not able to be inspected or operated due to accessibility, inspector safety occupant needs or health, temperatures, and other weather conditions. The inspector is not required to re-visit the property to inspect the item or items."

Response: The Commission respectfully disagrees because the informational text on the standard report form already addresses the limitations of the inspection.

Comment: One commenter suggested changing the term "Deficiency" to "Deficient" in the heading on the report form to conform with the requirements throughout the Standards of Practice that issues be reported as "Deficient."

Response: The Commission respectfully disagrees because, while either term would be appropriate, consumers reviewing their inspection reports will likely think in terms of "deficiencies," rather than "deficient systems" or "deficient components," and the definitions section of 22 TAC §535.227 explains the relationship between the terms "deficient" and "deficiency."

The new section is adopted under Texas Occupations Code, §1101.151, which authorizes the Texas Real Estate Commission to make and enforce all rules and regulations necessary for the performance of its duties and to establish standards of conduct and ethics for its licensees in keeping with the purpose and intent of the Act to ensure compliance with the provisions of the Act.