The Texas Real Estate Commission (TREC) proposes amendments to 22 TAC §537.26. Standard Contract Form TREC No. 15-5; §537.27. Standard Contract Form TREC No. 16-5; and new §537.61, Standard Contract Form TREC No. 54-0, Landlord's Floodplain and Flood Notice in Chapter 537, Professional Agreements and Standard Contracts.

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 proposal 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 Texas Real Estate Broker-Lawyer Committee recommended revisions to the contract forms adopted by reference under the proposed amendments and new rule to Chapter 537 to comply with statutory changes enacted by the 87th Legislature in HB 531.

HB 531 requires a landlord to disclose, in certain situations, whether the landlord is aware that the dwelling is located in a 100-year floodplain or that the dwelling has flooded within the last five years. Because landlords of temporary residential leases are not exempted, the proposed changes create a new flood disclosure notice form and add a new paragraph referencing the notice in the Seller's Temporary Residential Lease (TREC No. 15-5) and the Buyer's Temporary Residential Lease (TREC No. 1605).

Additionally, the proposed amendments to §537.26, Standard Contract Form TREC No. 15-5, and §537.27, Standard Contract Form TREC No. 16-5, contain proposed changes made as a result of the Commission's quadrennial rule review. Those changes add the corresponding standard contract form title to the rule title and add clarifying language to specify that both of the forms adopted by reference in these rules are for mandatory use by license holders.

Abby Lee, Deputy 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 adverse economic effect anticipated for small businesses, micro-businesses, rural communities, or local or state employment as a result of implementing the proposed amendments. There is no significant economic cost anticipated for persons who are required to comply with the proposed amendments. Accordingly, no Economic Impact Statement or Regulatory Flexibility Analysis is required.

Ms. Lee also has determined that for each year of the first five years the sections as proposed are in effect, the public benefits anticipated as a result of enforcing the sections as proposed will improved clarity and greater transparency for members of the public, as well as requirements that are consistent with the statute.

Except as noted below, for each year of the first five years the proposed amendments and new rule are in effect the amendments will not:

--create or eliminate a government program;

--require the creation of new employee positions or the elimination of existing employee positions;

--require an increase or decrease in future legislative appropriations to the agency;

--require an increase or decrease in fees paid to the agency;

--create a new regulation;

--expand, limit or repeal an existing regulation;

--increase or decrease the number of individuals subject to the rule's applicability; or

--positively or adversely affect the state's economy.

Proposed new §537.61 will create a new regulation as a result of the requirements of HB 531.

Comments on the proposal may be submitted through the online comment submission form at https://www.trec.texas.gov/rules-and-laws/comment-on-proposed-rules, to Abby Lee, Deputy 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 and new rules are proposed 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 amendments and new rules are also proposed under Texas Occupations Code, §1101.155, which authorizes the Texas Real Estate Commission to adopt rules in the public's best interest that require license holders to use contract forms prepared by the Texas Real Estate Broker-Lawyer Committee and adopted by the Commission.

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