Agenda Item 17: Discussion and possible action to propose amendments to 22 TAC §535.5, License Not Required and new §535.6, Equitable Interests in Real Property Summary: The proposed amendments removes the provision regarding selling and buying equitable interests in property from the “license not required” rule and creates a new rule dealing with equitable interest in property, disclosures, and the circumstances under which buying and selling equitable interests will and will not require a real estate license. Staff Recommendation: Propose amendments as presented. Recommended Motion: MOVED, that staff is authorized, on behalf of this Commission, to submit the proposed amendments to 22 TAC §535.5, License Not Required and new §535.6, Equitable Interests in Real Property, as presented, along with any technical or non‐substantive changes required for proposal, to the Texas Register, for publication and public comment. Page 433 of 504
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AGENDA ITEM 17
PROPOSED RULE ACTION FROM THE FEBRUARY 13, 2017, MEETING OF THE COMMISSION
CHAPTER 535 GENERAL PROVISIONS
Subchapter B. General Provisions Relating to the Requirements of Licensure
§535.5, License Not Required and NEW §535.6, Equitable Interests in Real Property
§535.5. License Not Required (a) (No change.) [(b) A person may acquire an option or contract to purchase real estate and then sell the option or contract, or offer to sell the option or contract, without having a real estate license provided the person does not use the options or contracts to purchase to engage in the real estate brokerage business;] (c) – (g) (No change.) §535.6. Equitable Interests in Real Property (a) A person may acquire an option or enter into a contract to purchase real property and then sell or offer to sell the option or assign or offer to assign the interest in the contract without having a real estate license if the person: (1) does not use the option or contract to purchase to engage in real estate brokerage ; and (2) discloses the nature of their equitable interest to any potential buyer. (b) A person selling or offering to sell an option or assigning or offering to assign an interest in a contract to purchase real property without disclosing the nature of that interest to a potential buyer is engaging in real estate brokerage. (c) A license holder who is engaging in real estate brokerage by selling or buying or offering to sell or buy an option or assigning or offering to assign an interest in a contract to purchase real property must disclose to any potential seller or buyer that the principal is selling or buying an option or assigning an interest in a contract and does not have legal title to the real property. (d) A license holder acting on his or her own behalf or in a capacity described by Section 535.144(a) who is selling an option or assigning an interest in a contract to purchase real property must disclose to any potential buyer that the license holder is selling an option or assigning an interest in a contract and that the license holder does not have legal title to the real property. Page 1 of 1
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