The Texas Real Estate Commission (TREC) proposes amendments to 22 TAC §537.11, Use of Standard Contract Forms in Chapter 537, Professional Agreements and Standard Contracts.

The proposed amendments to §537.11 clarifies when a license holder can hire an attorney to prepare a form for use by the license holder' s clients and the specific disclosures such a form must contain. It further clarifies that a license holder cannot have an attorney draft a form that changes any rights remedies or responsibilities of a party contained in a mandatory use standard contract form or addendum. Those types of changes can only be made by a party to the transaction or an attorney that represents a party to the transaction. The remaining amendments to the rule consolidate and update how a license holder can use the standard contract forms approve by the Commission and what is considered the unauthorized practice of law.

Texas real estate license holders are generally required to use forms promulgated by TREC when negotiating contacts for the sale of real property. These forms are drafted and recommended for adoption by the Texas Real Estate Broker-Lawyer Committee, an advisory body consisting of six attorneys appointed by the President of the State Bar of Texas, six brokers appointed by TREC, and one public member appointed by the governor.

The Broker-Lawyer Committee supports proposal of the recommended amendments.

Kerri Lewis, General Counsel, has determined that for the first five-year period the proposed amendments are in effect there will be no fiscal implications for the state or for units of local government as a result of enforcing or administering the sections. There is no anticipated impact on small businesses, micro-businesses or local or state employment as a result of implementing the sections. There is no anticipated significant economic cost to persons who are required to comply with the proposed amendments.

Ms. Lewis also has determined that for each year of the first five years the sections as proposed are in effect, the public benefit anticipated as a result of enforcing the sections will be greater clarity in the rule and greater consumer protection.

Comments on the proposal may be submitted to Kerri Lewis, General Counsel, Texas Real Estate Commission, P.O. Box 12188, Austin, Texas 78711-2188 or via email to general.counsel@trec.texas.gov. The deadline for comments is 30 days after publication in the Texas Register.

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 license holders 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.