Part 23. TEXAS REAL ESTATE COMMISSION

Chapter 539. PROVISIONS OF THE RESIDENTIAL SERVICE COMPANY ACT

Subchapter H. MISCELLANEOUS FORMS

22 TAC §539.71

The Texas Real Estate Commission (TREC) adopts new §539.71, concerning miscellaneous forms used by a residential service company, without changes to the proposed text as published in the January 26, 2001, issue of the Texas Register (26 TexReg 873). The new section adopts by reference an approved surety bond providing protection for contract holders and an application form relating to approval of a change in the evidence of coverage or schedule of charges used by the company. Adoption of the new section is necessary to provide the companies with uniform documents for complying with Texas Civil Statutes, Article 6573b.

No comments were received regarding the proposal.

The new section is adopted under Texas Civil Statutes, Article 6573b, §5, which authorize the Texas Real Estate Commission to adopt and enforce rules and regulations necessary to effectuate the intent and provisions of that law.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on April 24, 2001.

TRD-200102386

Mark A. Moseley

General Counsel

Texas Real Estate Commission

Effective date: May 14, 2001

Proposal publication date: January 26, 2001

For further information, please call: (512) 465-3900

22 TAC §539.91

The Texas Real Estate Commission (TREC) adopts an amendment to §539.91, concerning annual reports filed by a residential service company, without changes to the proposed text as published in the January 26, 2001, issue of the Texas Register (26 TexReg 873).

Residential service companies issue contracts providing for the repair or replacement of the appliances and systems typically found in a residence, such as plumbing and electrical systems. Under Texas Civil Statutes, Article 6573b, these companies must file an annual report with TREC detailing the business activities of the companies for the preceding calendar year. The amendment adopts by reference a revised annual report form. The form has been modified to move an instruction relating to use of either audited or reviewed financial statements from a flyer to the text of the report. On the suggestion of staff, the commission modified the final version of the annual report form to permit a company to file a statutory form of financial statement if the company is licensed or registered in another state and files a required financial statement in the other state. Nonsubstantive changes are also made in the language used in the report. Adoption of the new amendment is necessary to provide guidelines for the companies in complying with Article 6573b.

No comments were received regarding the proposal.

The amendment is adopted under Texas Civil Statutes, Article 6573b, §5, which authorize the Texas Real Estate Commission to adopt and enforce rules and regulations necessary to effectuate the intent and provisions of that law.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on April 24, 2001.

TRD-200102387

Mark A. Moseley

General Counsel

Texas Real Estate Commission

Effective date: May 14, 2001

Proposal publication date: January 26, 2001

For further information, please call: (512) 465-3900

22 TAC §539.231

The Texas Real Estate Commission (TREC) adopts an amendment to §539.231, concerning fees paid by a residential service company, without changes to the proposed text as published in the January 26, 2001, issue of the Texas Register (26 TexReg 874). The amendment reduces the fees paid by the companies when obtaining approval to use a modified evidence of coverage or schedule of charges. TREC has determined that the fees should be reduced from $500 to $250 for the fee to more closely reflect the amount of staff time spent on the filings.

No written comments were received on the proposal, but representatives of the industry have commented favorably on the proposal in public hearings before the commission.

The amendment is adopted under Texas Civil Statutes, Article 6573b, §5, which authorize the Texas Real Estate Commission to adopt and enforce rules and regulations necessary to effectuate the intent and provisions of that law.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on April 24, 2001.

TRD-200102388

Mark A. Moseley

General Counsel

Texas Real Estate Commission

Effective date: May 14, 2001

Proposal publication date: January 26, 2001

For further information, please call: (512) 465-3900

22 TAC §542.1

The Texas Real Estate Commission (TREC) adopts the repeal of §542.1, concerning notices to applicants, processing times and appeals, without changes to the proposed text as published in the January 26, 2001, issue of the Texas Register (26 TexReg 874).

The repealed section implemented §2005.003, Texas Government Code, which requires state agencies issuing permits to adopt procedural rules. The section provided time periods for the issuance of real estate school accreditations and timeshare registrations after an application is complete and permits the applicant to appeal to the administrator of the commission any dispute arising from a violation of the time periods specified in the section. TREC has determined that repeal of §542.1 is appropriate, because the accreditation and registrations which are described in the section are licenses of a continuing nature and not the kind of permits addressed by §2005.003.

No comments were received regarding the proposal.

The repeal is adopted under Texas Civil Statutes, Article 6573a, §5(h), which authorize the Texas Real Estate Commission to make and enforce all rules and regulations necessary for the performance of its duties.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on April 24, 2001.

TRD-200102389

Mark A. Moseley

General Counsel

Texas Real Estate Commission

Effective date: May 14, 2001

Proposal publication date: January 26, 2001

For further information, please call: (512) 465-3900

22 TAC §§543.1 - 543.6

The Texas Real Estate Commission (TREC) adopts an amendment to §543.2, concerning timeshare registration amendments, with changes to the proposed text as published in the January 26, 2001, issue of the Texas Register (26 TexReg 875). TREC adopts amendments to §543.1 and §§543.3-543.6, concerning timeshare registration and regulation, without changes to the proposed text.

The amendments are necessary to bring the sections into conformity with the language used in other TREC rules, update statutory citations, and adopt by reference revised forms to be used by timeshare developers when registering a timeshare property or amending a registration.

The amendments to §543.1 and §543.2 revise language to be consistent with that used in other TREC rules and up-date a citation to the Texas Administrative Procedure Act, Texas Government Code, §2001. A comment suggested §543.2 needed language to clarify that registrants were only obligated to report a material or adverse change in the information provided with the original registration after the change had occurred. TREC concurred, but because many registrants file their amendments before a change occurs, TREC added language to clarify that a registrant may file the amendment before the change occurs. The amendment to §543.3 clarifies that fees may also be paid in the form of a check, not only by a cashier's check or money order. The amendment to §543.4 adopts by reference revised application forms for the registration and amendment of registration of a timeshare property. The amendments to §543.5 and §543.6 make the language used consistent with the language used in other TREC rules and updates statutory citations.

A comment suggested that the application to register a project should be modified to renumber the questions referring to corporations and limited liability companies and to clarify the photograph requirements for incomplete projects. The commission concurred and made the requested changes. Language was added to permit the applicant to submit artist's drawings or plans for an incomplete project if the applicant determined that the submitted materials would be adequate to depict the project fairly. A comment noted that a question relating to future development of the project could be reworded to clarify whether the project instruments permit further development. The commission concurred and made the requested change. Another comment urged the commission to modify §543.2 and the application to amend a registration to increase the amount of the change in assessments from 10% to 15% before the registrant was required to report the change, following the approach taken in Florida. The commission concurred and made the requested change to §543.2 and to the amendment application form. A comment also suggested changes in the application to register a project to permit the certificate from the secretary of state to be more than 30 days old, to clarify that a question relating to management only applies to properties located in Texas and that language regarding condominiums and similar developments could be rewritten for clarity. The commission determined that the questions were written appropriately and clearly and declined to make the requested changes; the application forms are intended to be used by registrants from many different states, and the questions must be written broadly to encompass variations in the laws affecting the timeshare developments.

The amendments are adopted under the Texas Government Code, §221.024, which authorizes the Texas Real Estate Commission to prescribe and publish forms and adopt rules necessary to carry out the provisions of The Texas Timeshare Act.

§543.2.Amendments.

(a)

A person who wishes to amend the registration of a timeshare property shall submit an application to amend the registration using forms prepared by the commission. A person may file an application to amend the registration prior to the occurrence of the change. The commission may not accept for filing an application submitted without a completed application form or the appropriate filing fee.

(b)

For the purposes of Section 221.023 of the Texas Timeshare Act, "promptly" means within 30 days after the occurrence of a material and adverse change in any document contained in a registration.

(c)

An increase in the number of timeshare interests to be offered for sale is deemed a material and adverse change if it exceeds by more than 10% of the number of interests which existed or were proposed in the original registration.

(d)

An increase in the dues, assessments, fees or charges paid or to be paid by purchasers for the use of accommodations or amenities or for any other purpose is deemed a material and adverse change if it exceeds by more than 15% the amounts set forth in the original registration.

(e)

If the commission determines that a registration, if amended in the manner indicated in an application to amend a registration, would continue to satisfy all requirements for registration, the commission shall promptly notify the applicant in writing that the registration has been amended, specifying the effective date of the amendment.

(f)

If the commission determines that a registration, if amended in the manner indicated in an application to amend a registration, would fail to satisfy a requirement for registration, the commission shall notify the applicant of any deficiency. The commission may require the applicant to revise and resubmit written documents filed with the application or to provide additional information if the commission determines that the application or written material filed with the application is incomplete or inaccurate. Upon submission by an applicant of a response sufficient in the opinion of the commission to cure any deficiency in the application, the commission shall promptly notify the applicant that the registration has been amended, specifying the effective date of the amendment.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on April 24, 2001.

TRD-200102390

Mark A. Moseley

General Counsel

Texas Real Estate Commission

Effective date: May 14, 2001

Proposal publication date: January 26, 2001

For further information, please call: (512) 465-3900