TRECAdvisor

• Governor Appoints Two New Members to Commission
• Inspector Committee Appointments
• Meeting Highlights
• Differences Between Rebate and Referral Fees
• Mortgage Broker Advisory Committee Appointment
• Rules Adopted/Proposed at Meeting
• Disciplinary Actions

Governor Perry Appoints Eckstrum and Mesa to

Texas Real Estate Commission

Gov. Rick Perry has announced the appointment of John D. Eckstrum of Conroe and Tom C. Mesa Jr. of Pasadena to the Texas Real Estate Commission for terms to expire Jan. 31, 2011.

John D. Eckstrum, a native Texan, is a real estate broker and co-owner of First Group, a general real estate service company founded in 1974. He serves as a trustee of the National Association of Realtors for Texas and Louisiana, and served as chairman of the Texas Association of Realtors in 2001. Eckstrum is active with the economic development of the Greater Conroe and Montgomery County chambers of commerce. He is a life member and former vice president of the Montgomery County Fair Association and is active with the April Sound Men’s Golf Association. Mr. Eckstrum replaces Commissioner Lawrence D. Jokl of Brownsville.

Tom C. Mesa, Jr., is an assistant director with the City of Houston, and oversees the Tax Increment Reinvestment Zones administration and focuses on economic development. Mesa has more than 15 years of experience in commercial lending for banks in the Houston area. He serves on the board of directors at the University of St. Thomas in Houston and has served as a board member for several local chambers of commerce in Houston, where he continues to serve in other capacities. Mesa is a deacon of the Arch-Diocese of Galveston/Houston and is a former school board member of the YES College Preparatory School, a comprehensive educational program that prepares low-income students for success in a four-year college. He received a bachelor’s degree in business administration from the University of St. Thomas. Mr. Mesa replaces Commissioner Ramon M. Cantu of Houston.

These appointments are subject to senate confirmation.

INSPECTOR COMMITTEE APPOINTMENT

On January 31, 2007 the term of office for three members of the Texas Real Estate Inspector Committee will expire. Individuals are appointed by the Texas Real Estate Commission for a period of six years.Applicants mustfive years experience as a professional inspector and be actively involved as an inspector at the time of appointment.

It is the intention of the Texas Real Estate Commission to appoint three individuals to these positions at its meeting on February 26, 2007. Individuals wishing to be considered forto the committee should submit a letter requesting consideration along with a resume and any letters of recommendation addressed to:

Chairman, Texas Real Estate Commission

Post Office Box 12188

Austin, TX 78711-2188

Attention: Inspector Committee Appointment

no later than January 31, 2007.All such material submitted will be provided to the Members of the Texas Real Estate Commission for their review and consideration prior to the February 26th meeting.

Meeting Highlights

The Texas Real Estate Commission held its regularly scheduled meeting at the TREC headquarters in Austin, Texas on Monday, December 4, 2006. Chairman John Walton presided.

The Chairman recognized and introduced the two new members attending the meeting, John D. Eckstrum of Conroe and Tom C. Mesa, Jr. of Pasadena. Mr. Eckstrum replaced Commissioner Jokl of Brownsville and Mr. Mesa replaced Commissioner Ramon Cantu of Houston. The Chairman presented a plaque to Commissioner James N. Austin, Jr. for his years of service to the Commission.

John D. Eckstrum was appointed as ad hoc member of the Real Estate Center Advisory Board.

Ms. Hassumani announced that as part of staff reorganization, Karen Alexander had been selected as the new Director of the Staff Services Division and Gwen Jackson had been selected as the Director of the newly formed Education, Licensing and Cashier Division. They would assume their new positions on January 2, 2007.

The Commission voted to pay one claim from the Real Estate Trust Account in the amount of $50,000.

The Commission voted to adopt amendments to 22 TAC Chapter 537 concerning Professional Agreements and Standard Contracts, and voted to propose amendments to 22 TAC §535.223 concerning the standard inspection form.

The Commission voted to appoint a task force to aid in the selection of an appointee to the Mortgage Broker Advisory Committee and to extend the time to make the appointment to the February meeting.

The Commission voted to appoint a task force to aid in the selection of three appointees to the Inspector Committee to replace John Cahill, T.J. Rowles and Shavauna Morgenroth whose terms expire on February 1, 2007.

The next meetings of the Commission are scheduled for February 26, 2007 and April 23, 2007 in Austin.

• Part of a licensee’s commission that a licensee gives to a principal to a transaction in which the licensee is representing one of the parties.
• Commission Rule 535.147(c) requires a licensee to obtain the consent of the party the licensee is representing before the licensee can pay a rebate to a party to the transaction.
• The rebate can be cash or anything of value, such as an appliance or a trip.
• There is no limit on the amount of a rebate to a principal.
• A licensee commits a violation by attempting to ‘hide’ a rebate.
• Cash rebates to a buyer should be made with the consent of the buyer's lender.

• Part of a licensee’s commission that a licensee pays to another person for sending a client (“business”) to a licensee.
• If a person wants to be paid for a referral, the person must have an active real estate license at the time a referral is made. See Section 1101.002(1)(A)(ix) of the License Act.
• Exception: Commission Rule 535.20(a) permits a licensee to give an unlicensed person a gift or gift certificate worth $50 or less for a referral.
• A licensee who pays an unlicensed person any amount of cash or gives the unlicensed person a gift or gift certificate worth more than $50, rent bonuses and discounts for a referral commits a violation.

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Enforcement Questions and Answers

Enforcement questions and answers (FAQs) may be found on TREC's web site at
http://www.trec.state.tx.us/questions/faq-enf.asp

Disciplinary Actions

September 2006- October 2006

Hearn, Jack Howard
(Addison); license #457077
Revocation of salesperson license, effective September 7, 2006; failing within a reasonable time to provide information to the Commission in response to Commission's request for same in connection with an application for renewal of real estate salesperson license, in violation of 22 TAC §535.91(c) of the Rules of the Texas Real Estate Commission

Spann, Bryan Keith
(Houston); license #516723
Agreed reprimand of salesperson license, entered September 7, 2006; Agreed administrative penalty of $250, entered September 7, 2006; failing to complete mandatory continuing education hours and pay the $200 fee within the 60-day period provided by 22 TAC §535.92(f) of the Rules of the Texas Real Estate Commission

Hearn, Karen Annette
(Oak Leaf); license #382492
Revocation of salesperson license, effective September 8, 2006; failing to complete mandatory continuing education hours and pay the $200 fee within the 60-day period provided by 22 TAC §535.92(f) of the Rules of the Texas Real Estate Commission

Pastuch, Candyce Mary
(Angleton); license #462048
Agreed reprimand of salesperson license, entered September 11, 2006; Agreed administrative penalty of $250, entered September 11, 2006; failing to complete mandatory continuing education hours and pay the $200 fee within the 60-day period provided by 22 TAC §535.92(f) of the Rules of the Texas Real Estate Commission

Bevineau, Gracie Nilda
(Mesquite); license #511757
Revocation of salesperson license, effective September 20, 2006; failing within a reasonable time to make good a check issued to the Commission and pay the processing fee, in violation of §1101.652(a)(4) of the Texas Occupations Code; failing to pay a check processing fee within 15 days after the Commission has mailed a request for payment, violation of 22 TAC §534.2(a) of the Rules of the Texas Real Estate Commission

Fair, Kyle T.
(Plano); license #432467
Revocation of salesperson license, effective September 20, 2006; failing to complete mandatory continuing education hours and pay the $200 fee within the 60-day period provided by 22 TAC §535.92(f) of the Rules of the Texas Real Estate Commission

Swerdlin, Nathan Frank
(Kemah); license #492232
Revocation of salesperson license, effective September 21, 2006; failing to complete mandatory continuing education hours and pay the $200 fee within the 60-day period provided by 22 TAC §535.92(f) of the Rules of the Texas Real Estate Commission

Gillingwater, Sidney Barry
(Austin); license #133478
Agreed reprimand of broker license, entered September 25, 2006; agreed administrative penalty of $250, entered September 25, 2006; failing to complete mandatory continuing education hours within the 60-day period provided by 22 TAC §535.92(f) of the Rules of the Texas Real Estate Commission

King, Deborah S.
(Forney); license #480507
Agreed reprimand of broker license, entered September 25, 2006; agreed administrative penalty of $500, entered September 25, 2006; failing within a reasonable time to make good a check issued to the Commission and pay the processing fee, in violation of §1101.652(a)(4) of the Texas Occupations Code; failing to pay a check processing fee within 15 days after the Commission has mailed a request for payment, in violation of 22 TAC §534.(s)(a) of the Rules of the Texas Real Estate Commission

Evans, Chantal Diane

(Austin); license #482115
Agreed reprimand of salesperson license, entered September 29, 2006; agreed administrative penalty of $250, entered September 29, 2006; failing to complete mandatory continuing education hours and pay the $200 fee within the 60-day period provided by 22 TAC §535.92(f) of the Rules of the Texas Real Estate Commission

Navarro, Mary Joyce
(Houston); license #206122
Agreed reprimand of broker license, entered September 29, 2006; Agreed administrative penalty of $250, entered September 29, 2006; failing to complete mandatory continuing education hours and pay the $200 fee within the 60-day period provided by 22 TAC §535.92(f) of the Rules of the Texas Real Estate Commission

Squires, Amanda Hopkins
(Austin); license #509933
Agreed reprimand of salesperson license, entered September 29, 2006; Agreed administrative penalty of $250, entered September 29, 2006; failing to complete mandatory continuing education hours and pay the $200 fee within the 60-day period provided by 22 TAC §535.92(f) of the Rules of the Texas Real Estate Commission

Leuschner, Lexie Leigh
(Hewitt); license #533197
Agreed reprimand of salesperson license, entered September 29, 2006; Agreed administrative penalty of $250, entered September 29, 2006; failing to complete mandatary continuing education hours within the 60-day period provided by 22 TAC §535.92(f) of the Rules of the Texas Real Estate Commission

Hadnot, Tavius Jones
(Dallas); license #405819
Agreed revocation of broker license fully probated for 4 years, effective September 29, 2006; payment of $50,000.00 made by the Texas Real Estate Recovery Trust Account toward satisfaction of a judgment against Tavius Jones Hadnot, as provided by §1101.655(a) of the Texas Occupations Code

Matthews, Christopher C.
(Dallas); license #N/A
Assessment of administrative penalty in the amount of $11,000, entered October 6, 2006; acting or representing that he is a broker or salesperson without holding a license issued by the Texas Real Estate Commission by, over a period of several years, holding himself out to be a real estate agent, negotiating and drafting contracts for other persons, for the purchase of real property and discussing the features of real property offered for sale with prospective purchasers, with the expectation of receiving a fee or other valuable consideration, in violation of §1101.351(a)(1) of the Texas Occupations Code

Bapgom, Inc.
(Wichtia Falls); license #457708
Reprimand of broker license, entered October 9, 2006; acting negligently or incompetently in a real estate transaction, in violation of §1101.652(b)(1) of the Texas Occupations Code, as broker, by failing to ensure that a salesperson, for whom broker was responsible, was properly trained and supervised effectively. BAPGOM, Inc, acting through its salesperson, failed to obtain written authorization from a represented purchaser for intermediary brokerage, in violation of §1101.559(a), and failed to provide the prescribed written statement concerning brokerage representation to buyers at the time of the first substantial dialogue regarding a specific property, and instead providing it after an offer was tendered, in violation of §1101.558(c) of The Texas Occupations Code

Chandler, James C.
(Wichita Falls); license #202341
Reprimand of broker license, entered October 9, 2006; acting negligently or incompetently in a real estate transaction, in violation of §1101.652(b)(1) of the Texas Occupations Code, as designated officer, by failing to ensure that a salesperson, for whom broker was responsible, was properly trained and supervised effectively. BAPGOM, Inc, acting through its salesperson, failed to obtain written authorization from a represented purchaser for intermediary brokerage, in violation of §1101.559(a), and failed to provide the prescribed written statement concerning brokerage representation to buyers at the time of the first substantial dialogue regarding a specific property, and instead providing it after an offer was tendered, in violation of §1101.558(c) of The Texas Occupations Code

Ligon, Tami Witherspoon
(Wichita Falls); license #457762
Reprimand of salesperson license, entered October 9, 2006; acting negligently or incompetently in a real estate transaction by failing to provide the prescribed written statement concerning brokerage representation to prospective purchasers at the time of the first substantive dialogue regarding the property, and instead presenting it for the first time after an offer was tendered, in violation of §1101.652(b)(1) and §1101.558(c) of the Texas Occupations Code; failing to make clear to all parties in a real estate transaction the party for whom she was acting in violation of §1101.652(b)(7) of the Texas Occupations Code, and failing to comply with the provisions for establishment of an intermediary relationship by neglecting to have the purchasers authorize intermediary relationship in writing, in violation of §1101.559(a) of the Texas Occupations Code

Horton, John E.
(Austin); license #312788
Agreed administrative penalty of $1,000 assessed against broker license, entered October 10, 2006; conducting brokerage business in association with and through an unlicensed LLC, in violation of §1101.652(b)(26) of the Texas Occupations Code; and, paying a commission or fees to an unlicensed LLC for compensation for services as a real estate licensee, in violation of §1101.652(b)(11) of the Texas Occupations Code

Heeray, Harvender
(Dallas); license #N/A
Agreed administrative penalty of $1,000, entered October 18, 2006; acting or representing that he is a broker or salesperson without holding a license issued by the Texas Real Estate Commission by assisting in the negotiation of the sale of a business which included the sale of real property, with the expectation of receiving a fee or other valuable consideration, in violation of §1101.351(a)(1) of the Texas Occupations Code

Open Door Residential Realtors, LLC
(Frisco); license #N/A
Agreed administrative penalty of $500 entered, October 19, 2006; acting in the capacity of the business of a real estate broker or salesperson without first obtaining a license by executing, through its manager, Carol Louise Johnson, a licensed Texas real estate broker, a buyer’s representation agreement, agreeing to list a property for sale, and for accepting a commission for brokerage services, in violation of §1101.351 of the Texas Occupations Code

Johnson, Carol Louise
(Frsico); license #441189
Agreed reprimand of broker license, entered October 19, 2006; acting negligently and incompetently when she conducted her real estate brokerage through business entities not duly licensed as a real estate broker and split fees with these unlicensed entities, in violation of §1101.652(b)(1) of the Texas Occupations Code.

O.D. REI, Inc.
(Frisco); license #N/A
Agreed administrative penalty of $500, entered October 19, 2006; acting in the capacity of the business of a real estate broker or salesperson without first obtaining a license, by negotiating, through its owner, Carol Louise Johnson, a licensed Texas real estate broker, a real estate contract, assisting in the negotiation for the purchase of real estate, and accepting a commission for performing brokerage services for another person, in violation of §1101.351 of the Texas Occupations Code

Adkins, Ray Anthony
(Tyler); license #N/A
Agreed administrative penalty of $3,000, entered October 20, 2006; acting in the capacity of, engaging in the business of, or advertising or holding himself out as engaging in or conducting the business of an apprentice real estate inspector, a real estate inspector or professional real estate inspector within the state without first obtaining an apprentice real estate inspector license, real estate inspector or professional real estate inspector license by accepting employment from a purchaser of real property, and inspecting and submitting written opinions as to the condition of improvements to the real property, including structural items, electrical items, mechanical systems, plumbing systems or equipment, in violation of §1102.101, §1102.102 and §1102.103 of the Texas Occupations Code

Gilbert, Patricia King
(Austin); license #N/A
Assessment of administrative penalty in the amount of $1,000 entered, October 25, 2006; acting as or representing that she is a real estate broker without first obtaining a license from the Texas Real Estate Commission by agreeing to procure prospects to effect the sale and/or lease of real property for that property’s owner, drafting a lease agreement, drafting a purchase and sale agreement, all with the expectation of receiving a fee for her services as a broker, in violation of §1101.351(a)(1) of the Texas Occupations Code

Edward, J. Pape III
(Hurst); license #463197
Agreed reprimand of broker license, entered October 27, 2006; acting negligently and incompetently when he acted as both a real estate broker and mortgage broker and under his business entity, also a real estate broker, executed a buyer's representation agreement with a client. Simultaneous to the agreement, the buyer remitted fees for a retainer, loan application and credit report. Later, the client demanded a refund of the fee and although there was no written agreement for the fees to be non-refundable, Mr. Pape initially refused to refund the funds, in violation of §1101.652(b)(1) of the Texas Occupations Code.

Choice Realty, LLC
(Hurst); license #537975
Agreed reprimand of broker license, entered October 27, 2006; acting negligently and incompetently when it acted as a real estate broker through its designated manager, Edward J. Pape III, a real estate broker and mortgage broker, and executed a buyer's representation agreement with a client. Simultaneous to the agreement, the buyer remitted fees for a retainer, loan application and credit report. Later, the client demanded a refund of the fee and although there was no written agreement for the fees to be non-refundable, Choice Realty, LLC through its designated manager initially refused to refund the funds, in violation of §1101.652(b)(1) of Texas Occupations Code.

Patton, Gary Michael
(Portland); license #6380
Revocation of professional inspector license, effective October 31, 2006; acting as a professional real estate inspector in Texas for over 200 buyers and sellers of real property without holding a professional inspector license issued by the Texas Real Estate Commission in violation of Section 1102.103 of the Texas Occupations Code; attempting to procure a license by fraud, misrepresentation or deceit by misrepresenting his work history in an application for professional real estate inspector license and failing to admit that he had performed real estate inspections during the time periods in which he had not been licensed, in violation of 22 TAC §535.208(f) of the Rules of the Texas Real Estate Commission and § 1102.305 of the Texas Occupations Code.

Wright, Ted L.
(Weatherford); license #453576
Agreed reprimand of broker license, entered October 5, 2006; Agreed administrative penalty of $250, entered October 5, 2006; failing to complete mandatory continuing education hours and pay the $200 fee within the 60-day period provided by 22 TAC §535.92(f) of the Rules of the Texas Real Estate Commission

Corely, Sharon A.
(Coppell); license #518276
Agreed reprimand of salesperson license, entered October 6, 2006; Agreed administrative penalty of $250, entered October 6, 2006; failing to complete mandatory continuing education hours and pay the $200 fee within the 60-day period provided by 22 TAC §535.92(f) of the Rules of the Texas Real Estate Commission

Creaven, Joyce Caroline
(Katy); license #492113
Agreed reprimand of salesperson license, entered October 16, 2006; Agreed administrative penalty of $250, entered October 16, 2006; failing to complete mandatory continuing education hours and pay the $200 fee within the 60-day period provided by 22 TAC §5353.92(f) of the Rules of the Texas Real Estate Commission

Hunt, Frank James
(Houston); license #353100
Agreed reprimand of broker license, entered October 20, 2006; Agreed administrative penalty of $250, entered October 20, 2006; failing to complete mandatory continuing education hours and pay the $200 fee within the 60-day period provided by 22 TAC §535.92(f) of the Rules of the Texas Real Estate Commission

Ukenye, Ann Chinyere
(Laredo); license #515831
Revocation of salesperson license, effective October 20, 2006; failing within a reasonable time to provide information to the Commission in response to Commission's request for same in connection with an application for renewal of real estate salesperson license, in violation of 22 TAC §535.91(c) of the Rules of the Texas Real Estate Commission

King, Deborah S.
(Forney); license #480507
Revocation of broker license, effective October 20, 2006; failing within a reasonable time to make good a check issued to the Commission and pay the processing fee, in violation of §1101.652(a)(4) of the Texas Occupations Code; failing to pay a check processing fee within the 15 days after the Commission has mailed a request for payment, in violation of §534.2(a) of the Rules of the Texas Real Estate Commission

Hipps, Christopher Marion
(Dallas); license #326345
Agreed reprimand of salesperson license, entered October 26, 2006; Agreed administrative penalty of $500, entered October 26, 2006; failing to complete mandatory continuing education hours and pay the $200 fee within the 60-day period provided by 22 TAC §535.92(f) of the Rules of the Texas Real Estate Commission

Funk, Lynn Lewis
(Cypress); license #450723
Revocation of salesperson license, entered October 26, 2006; failing within a reasonable time to provide information to the Commission in response to Commission's request for same in connection with an application for renewal of real estate salesperson license, in violation of 22 TAC §535.91(c) of the Rules of the Texas Real Estate Commission

Louletta, Margaret I.
(Houston); license #352017
Revocation of salesperson license, effective October 26, 2006; failing within a reasonable time to provide information to the Commission in response to Commission request for same in connection with an application for renewal of real estate salesperson license, in violation of 22 TAC §535.91(c) of the Rules of the Texas Real Estate Commission

Clark, Gregory Franklin
(Kyle); license #475455
Agreed reprimand of salesperson license, entered October 30, 2006; Agreed administrative penalty of $250, entered October 30, 2006; failing to complete mandatory continuing education hours and pay the $200 fee within the 60-day period provided by 22 TAC §535.92(f) of the Rules of the Texas Real Estate Commission

Renew your broker, salesperson or inspector license online at http://www.trec.state.tx.us/licenses

DON’T FORGET: You must still renew your license even if you choose to be inactive.

Got A Question About A Relocation Company?
Through a link maintained on the TREC web site, licensees may directly access
The Real Estate Coalition for Cooperative Business Practices (the Coalition) of the
Employee Relocation Council
by clicking on “The Interchange” on the Coalition’s website at
http://coalition.erc.org
Licensees may raise concerns about their dealings with a relocation company and send a message to the appropriate company for response.

Calendar of Events

Commission
Meetings:February 26, 2007 and April 23, 2007

Broker-Lawyer
Committee Meetings: None scheduled at this time

Inspector Committee Meetings: January 19, 2007

Web site: http://www.trec.state.tx.us

Phone: (800) 250-TREC (8732) or (512) 459-6544

Official publication of the

Texas Real Estate Commission
Volume 17, Number 6
December 2006

Rick Perry
Governor

Commission Members:

TREC Administrator
Wayne Thorburn

Desktop Publisher
Patricia Holder

The TRECAdvisor (ISSN 1047-4579) is published by the Texas Real Estate Commission (TREC) as an educational service to licensees in the state of Texas. The purpose of the newsletter is to promote a better understanding of the Real Estate License Act and to inform all licensees of changes affecting laws and practices in the real estate industry. The TRECAdvisor is funded through legislative appropriations and subscriptions collected from TREC licensees. The official text of TREC rules is filed with the Office of the Secretary of State, Texas Register. TREC encourages reproduction of this newsletter with the appropriate acknowledgments. Subscriptions are available for $4.00 for two years. Single issues are $1.00. To order a subscription or a single issue write to TRECAdvisor, Texas Real Estate Commission, P.O. Box 12188, Austin, Texas 78711-2188. For information regarding TREC, contact:

Texas Real Estate Commission
P.O. Box 12188
Austin, Texas 78711-2188
(512) 459-6544 or (800) 250-TREC
http://www.trec.state.tx.us