New TREC broker succession rule explained

AUSTIN – The Texas Real Estate Commission has adopted new rule 535.124, Death of a Designated Broker, to detail agency practice and provide better guidance in the event of the death of a designated broker who is sponsoring a sales agent.

Under TREC rules, the death of a sponsoring or designated broker will cause any sponsored sales agent’s license to become inactive, meaning the sales agent cannot perform any real estate services that require a license, even if the agent is in the middle of a transaction. This is true regardless of whether the agents are sponsored by an individual broker or a business entity broker.

The new rule, which takes effect Sept. 11, gives business entities and sponsored sales agents 14 days from the broker’s death before their licenses go inactive, so they have time to designate a new broker that satisfies the requirements without having to go inactive and disrupting business.