The Texas Real Estate Commission (TREC) adopts amendments to §537.11, Use of Standard Contract Forms, in Chapter 537, Professional Agreements and Standard Contracts, with changes to the rule text, as published in the March 3, 2023, issue of the Texas Register (48 TexReg 1267), and will be republished.

The amendments to §537.11 reorganize and consolidate the rule for clarity, and simplify the language regarding when a license holder is required to use a Commission-approved contract form and what is considered the unauthorized practice of law. Specifically, the proposed changes in subsection (a) align the rule language more closely with the applicable statutory language and simplify the list of exceptions related to contract form use by license holders.

Subsections (b) - (d) provide further guidance to license holders and members of the public on what the Commission considers to be the unauthorized practice of law. Of note, subsection (d)(2) provides that it is not the practice of law to add language to or strike language from a contract form, if specifically instructed in writing by a principal, as long as any change is made conspicuous, including underlining additions, striking through deletions, or employing some other method which clearly indicates the change being made.

Finally, the changes to subsection (h) update the language regarding reproduction of Commission-approved contract forms to better account for changes in technology.

Four comments were received for §537.11. Two comments were against the rule because commenters believe license holders do not understand the implications of the contract forms in the same way as an attorney. One comment was generally in favor of the rule. One comment did not like the change to the term "informational items," stating the term could be loosely interpreted.

The Commission's Unauthorized Practice of Law Working Group discussed the comments received and ultimately disagreed with comments regarding a license holder's understanding of appropriate practice related to contract forms. The group also determined the change to "informational items" was more clear than the prior language related to factual business details. The group declined to make any changes to the rules based on the comments received but did recommend a change to §537.11(b)(6) to clarify what a license holder may not do as it relates to the unauthorized practice of law.

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.