The Texas Real Estate Commission (TREC) adopts amendments to 22 TAC Chapter 537, §§537.11, 537.20 - 537.23, 537.26 - 537.28, 537.30 - 537.33, 537.35, 537.37, 537.39 - 537.41, 537.43 - 537.48, 537.51, 537.52, and 537.54, concerning Professional Agreements and Standard Contracts. Section 537.11 and §537.51 are adopted with changes to the proposed text as published in the September 5, 2014, issue of the Texas Register (39 TexReg 7033). Sections 537.20 - 537.23, 537.26 - 537.28, 537.30 - 537.33, 537.35, 537.37, 537.39 - 537.41, 537.44 - 537.48, 537.52, and 537.54 are adopted without changes and will not be republished. The proposed amendments to §537.43 were published in the September 26, 2014, issue of the Texas Register (39 TexReg 7712) and are adopted without changes.

The Texas Real Estate Commission (TREC) adopts amendments to §537.11(o)(4) with changes to the text as proposed and one change to the form adopted by reference in §537.51.

The amendments to Chapter 537 are made following a comprehensive quadrennial rule review of Chapter 537 to better reflect current TREC procedures and to simplify and clarify where needed. Throughout the chapter, the amendments capitalize the term "Commission" and replace the term "licensee" with "license holder."

§537.11, Use of Standard Contract Forms, was proposed to be revised to prohibit a computer file or program version of the Standard Contract forms to allow an end user to strike through the text of the promulgated form and to clarify that the blanks may be scalable to the text.

One comment was received from a trade association that requested that strike through capabilities be retained but be limited to verified use only by the client of the license holder. The Commission agreed with this change, provided that a program allowing this activity was pre-approved by the Commission to ensure it could provide such limitations and verifications. The text of the amendment in §537.11(o)(4)(A) was changed to reflect this. The text in §537.11(o)(4)(C) and (D) was combined and revised to reflect that with the addition of scalable blanks, the number of pages and placement of the text on the page does not have to be identical to the promulgated forms.

The revised Addendum for Reservation of Oil, Gas and Other Minerals, which is adopted by reference in §537.51. Standard Contract Form TREC No. 44-1, revises the definitions of "mineral estate" and "surface rights", allows the portion reserved by a seller to be reflected as a percentage or fractional interest, adds an "Important Notice" paragraph alerting the parties about the complex nature of reserving mineral rights, and changes the language regarding "Consult an Attorney" to be consistent with that provision in other TREC contract forms.

One comment was received regarding the form stating there was an error substituting the words "surface minerals" for "surface materials" as the last word of line two and first word of line three in Section C. This was a typographical error made by staff when preparing the form and a change was made returning the word to "materials" as was the original intent.

A comment was also received from a trade association in support of adoption of the revised addendum.

The reasoned justification for the amendments is consistency and greater clarity in the contract forms.

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