The Texas Real Estate Commission (TREC) adopts amendments to §535.212, concerning Education and Experience Requirements for a License; §535.213, concerning Approval of Courses in Real Estate Inspection; §535.214, concerning Providers of Real Estate Inspection Courses; and §535.218, concerning Continuing Education. Sections 535.212, 535.213 and 535.218 are adopted with changes to the proposed text as published in the August 30, 2013, issue of the Texas Register (38 TexReg 5670). Section 535.214 is adopted without changes to the proposed text and will not be republished.

The difference between the sections as published and as adopted and comments received on each section are described below. All of the comments received were reviewed by the Texas Real Estate Inspector Committee and all of the changes to the language published in the Texas Register were recommended by the Texas Real Estate Inspector Committee.

Most of the amendments are adopted to implement the relevant provisions of House Bill (HB) 2911, 83rd Session, Texas Legislature, Regular Session (2013). The effective date of the relevant provisions of HB 2911 is September 1, 2013. In relevant part, HB 2911 amended Texas Occupations Code, Chapter 1102, regarding education and experience requirements, course and provider approval and continuing education. Many of the same amendments were adopted on an emergency basis because of the September 1, 2013 effective date. Other amendments were made pursuant to the recommendation of the Texas Real Estate Inspector Committee to implement required field work for substitute experience requirements for a license and a more comprehensive continuing education program for inspectors.

The amendments to §535.212 increase the number of hours required for education for a professional inspector license by two hours and change the specific requirements for substitute experience requirements for real estate and professional inspectors to apply new statutory requirements. The amendments also correct and clarify the language of the rule to increase comprehension. The difference between the rule as published and as adopted are: subsections (f) and (g) were restructured to combine the interactive experience training classroom hours proposed under (f)(1)(A) and (g)(1)(A) with the proposed required field work hours under (f)(1)(B)(i) and (g)(1)(B)(i) respectively; current provisions allowing an option for all interactive experience training modules with no field work under subsections (f)(1)(B)(ii) and (g)(1)(B)(ii) were reinstated; and new subsections (f)(3) and (g)(3) which accept the substitute experience under reinstated subsections (f)(1)(B)(ii) and (g)(1)(B)(ii) if completed prior to May 1, 2014 were added.

Twelve comments were received on the proposal, ten opposed and two in favor. Additionally, two comments were received from legislators expressing concern about the need to study the cost, benefits and burden of requiring the maximum hours of ride along experience and requested that more time be given to fully investigate alternatives. The main reasons given by commenters for opposition to the proposed changes were that there will not be enough instructors available to teach the required ride along portion and that the new requirement could reduce the number of people entering the industry. Other comments given by those opposed were that it was too onerous, would create greater costs, would be a difficult option for those in rural areas, and choosing the maximum number of hours permitted by the legislature for field work was not following the legislative intent. One of the commenters in favor of requiring ride along field work stated that there was great value in ride alongs and her school was working toward incorporating that requirement and thought it could be provided at a reasonable cost. The Texas Real Estate Inspector Committee reviewed the comments and recommended that the Commission keep the proposed 20 hour ride along requirement for substitute experience requirement for a real estate inspector license and 40 hours for a professional inspector's license, because it is critical to consumer protection that an applicant get hands on experience before becoming licensed. Given the extensive nature of the standards of practice (SOPs) that a new inspector has to apply and the fact that examples of issues under the SOPs will be different in every house, the Committee did not feel that 20/40 hours of ride along experience was excessive. The Committee also noted that current interactive training modules do not adequately address Texas specific SOPs in a comparable manner to a ride along session. However, based on some of the concerns raised by the commenters, the Committee also recommended reinstating the provision allowing all substitute experience hours to be completed through interactive experience training modules until May 1, 2014. This will allow time to adjust to and implement the change, to study and present viable alternatives and to develop a larger pool of ride along instructors. The Commission adopted the amendments with the Committee's changes based on comments received. The Commission stressed at the meeting that it wanted all options investigated promptly, giving them time to consider additional options and make any further adjustments to the requirements on or before their April 28, 2014 Commission meeting.

The amendments to §535.213 clarify that the rule applies to core courses, define certain terms, and clarify the qualifications for correspondence courses. The difference between the proposal as published and the rule as adopted is that the proposed increase in the time frame that an applicant cannot receive repeat credit for a course was dropped in response to comments received. Comments were received on the proposal from two trade associations. The trade associations requested that the timeframe that an applicant cannot receive repeat credit for a course be left at two years to be consistent with the renewal cycle to avoid confusion and allow repetition of courses where an inspector might be weak. The Committee and the Commission agreed to make this change.

The amendment to §535.214 clarifies that the rule applies to providers of core education courses. No comments were received on this proposal and no changes were made to the amendments as published.

The amendments to §535.218 provide a process and requirements for approval of real estate inspector courses, providers and instructors and set out requirements for the Texas Standards of Practice/Legal/Ethics Update course and a ride along inspection course. The differences between the proposal as published and the rule as adopted are: the rule was restructured for greater clarity, including moving subsection (d) into subsection (b) and rearranging a portion of subsection (e); references to §535.213(e)(11) and (12) were added since they were inadvertently left out of the proposal; in subsection (b) the number of hours allowed in any one single subject was increased from eight to twelve and the word "topic" was changed to "subject" to track the terminology used in §535.213(e). In subsection (e), the following sentence was added to the beginning of the section "Subsections (k) - (n) of §535.71 of this title do not apply to course approval or instructors of non-elective courses for inspectors" since it is currently not applicable. The word "substantially" before "the same course" was deleted from subsection (g); and the proposed increase in the time frame that an applicant cannot receive repeat credit for a course was dropped in response to comments received.

Two trade groups and two individuals commented on the proposal. One individual felt that there were not going to be enough ride along instructors and that the cost would be too much. The Texas Real Estate Inspector Committee reviewed the comments. The Committee's response is that the ride along course for continuing education is an optional course and not required and that more inspectors will likely agree to teach the course now that it will be available for credit for the trainee and the trainer. The trade associations and one individual were opposed to approval of all continuing education courses or instructors by the Commission. The Committee made no recommended changes based on these comments since approval of instructors and courses were proposed to be the same as is currently required for all other license types regulated by the Commission and no good reason for a different application exists. The one exception to this is the non-elective course for inspectors, which was excluded from these provisions in subsection (e) since there is not currently one single Commission approved course. The trade associations and one individual requested that the timeframe that an applicant cannot receive repeat credit for a course be left at two years to be consistent with the renewal cycle to avoid confusion and allow repetition of courses where an inspector might be weak. The Committee and the Commission agreed to make this change. The trade associations also requested that there be no limitation on the number of hours an inspector could take in any give subject because they might be weak in one area and need additional education in that area. The Committee stated that the reason for putting in the limitation of no more than 8 hours in any single subject was to ensure that inspectors got a well-rounded education for their continuing education. Taking all of your biannual education in only one of the 12 subject areas does not keep the inspector up to date in all of the necessary systems. However, in consideration of this concern, the Committee did agree to increase the limitation to no more than 12 hours. The Commission agreed with changes made by the Committee to the proposed rule.

The reasoned justification for the amendments to the rules is compliance with amendments to Texas Occupations Code, Chapter 1102, regarding examinations, education and experience requirements, in House Bill (HB) 2911, 83rd Session, Texas Legislature, Regular Session (2013); and to provide a more robust substitute experience requirement and continuing education program for inspectors that will provide better educated inspectors resulting in greater consumer protection.

The amendments are adopted under Texas Occupations Code, §1101.151, which authorizes the Texas Real Estate Commission to adopt and enforce rules necessary to administer Chapters 1101 and 1102; and to establish standards of conduct and ethics for its licensees to fulfill the purposes of Chapters 1101 and 1102 and ensure compliance with Chapters 1101 and 1102.

The statutes affected by the amendments are Texas Occupations Code, Chapters 1101 and 1102. No other statute, code or article is affected by the amendments.