The Texas Real Estate Commission (TREC) proposes an amendment to §535.148, concerning a real estate licensee's receiving an undisclosed commission or rebate. The purpose of the proposed amendment is to simplify disclosure requirements for licensees, while ensuring material disclosures are made to the appropriate persons. The amendment would require a licensee to obtain the consent of the licensee's client when the licensee receives a fee, commission, or rebate from a person other than the licensee's client. The current section requires the licensee to disclose to both parties in the transaction the intention of being paid by a person other than the licensee's client and to obtain the consent of both parties. The amendment also addresses situations in which a licensee is receiving a payment for referring a service provider who is being paid by a party the licensee does not represent. In those situations, the amendment would require the licensee to obtain the consent of the other party to receive the payment. The effect of the amendment would be to require the consent of the other party only when the receipt of payment by the licensee would be material to the other party, as when a seller is paying for repairs, and the service provider making the repairs is being referred by the buyer's broker. Otherwise, the acceptance of a fee from someone other than the licensee's client would tend to be material only to the licensee's client. For example, if the contract of sale for the transaction calls for the buyer to pay for lender-required repairs, the acceptance of a fee by the buyer's broker from a repair company for referring the buyer to the company would typically not be material to the seller, while it could be material to the buyer in determining whether to use the services of the repair company.

Mark A. Moseley, general counsel, has determined that for the first five-year period the section is 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 section. There is no anticipated impact on small businesses, micro businesses or local or state employment as a result of implementing the section.

Mr. Moseley also has determined that for each year of the first five years the section as proposed is in effect the public benefit anticipated as a result of enforcing the section will clarification of disclosure requirements by licensees. There is no anticipated economic cost to persons who are required to comply with the proposed section.

Comments on the proposal may be submitted to Mark A. Moseley, General Counsel, Texas Real Estate Commission, P.O. Box 12188, Austin, Texas 78711-2188.

The amendment is proposed under Texas Civil Statutes, Article 6573a, §5(h), which authorizes the Texas Real Estate Commission to make and enforce all rules and regulations necessary for the performance of its duties. The statute which is affected by this proposal is Texas Civil Statutes, Article 6573a.