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New Real Estate Regulations in Texas: What Brokers and Agents Must Know

Recent legislative and regulatory updates by the Texas Real Estate Commission (TREC), alongside national settlements and ongoing developments in consumer protection and data privacy regulations, have significantly reshaped the real estate landscape in Texas. Brokers and agents must understand and adapt to these new rules to maintain compliance, avoid costly enforcement actions, and protect their licenses to operate.

1. Mandatory Written Buyer Representation Agreements (SB 1968)

Effective January 1, 2026

Under Texas Senate Bill 1968, agents must now have a formal, written buyer representation agreement before showing any residential property or submitting offers.

Key Requirements:

  • Clearly define services provided by the agent.
  • Specify compensation, explicitly noting it is fully negotiable and not set by law.
  • State termination terms and a definite expiration date.
  • Clarify the representation relationship (exclusive or non-exclusive).

Compliance Risk:

Failure to obtain these signed agreements exposes agents and brokers to severe consequences:

  • TREC Administrative Penalties up to $5,000 per violation
  • Potential license suspension or revocation
  • Increased exposure to consumer lawsuits under the Texas Deceptive Trade Practices Act (DTPA) for failure to adequately disclose agency terms and compensation.

2. Real Estate Agent Compensation and MLS Listing Changes (NAR Settlement)

Effective August 17, 2024

A national settlement involving the National Association of REALTORS® (NAR) substantially revises compensation disclosures and MLS listings.

Key Changes:

  • Real estate agents must disclose in writing that agent compensation is fully negotiable and not dictated by law.
  • MLS listings can no longer publicly display buyer agent compensation offers. All compensation discussions must be explicit and directly communicated between brokers and their clients.

Compliance Risk and DTPA Exposure:

Failing to provide explicit compensation disclosures exposes brokers to consumer claims under DTPA. Misleading or unclear disclosures can trigger costly consumer lawsuits and enforcement actions.

3. Expanded Definitions of Solicitation and Communication (SB 140)

September 1, 2025

Texas Senate Bill 140 significantly expands “telephone solicitation” to include voice calls, SMS texts, multimedia messages, and electronic communication encouraging real estate transactions.

Key Compliance Requirements:

  • Obtain written explicit consent from consumers prior to sending promotional messages.
  • Clearly and conspicuously provide an opt-out mechanism in every message.
  • Registration with the Texas Secretary of State as a solicitor is mandatory if engaging in broad-based consumer outreach (registration fee: $200, plus a $10,000 bond or letter of credit).

Real Consequences for Non-Compliance:

SB 140 explicitly classifies violations as deceptive trade practices under DTPA. Noncompliance may result in lawsuits seeking actual damages, attorney’s fees, or even triple damages for repeated violations.

4. Texas Data Privacy and Security Act (TDPSA)

Effective July 1, 2024

Real estate professionals must also fully comply with the new Texas Data Privacy and Security Act (TDPSA), requiring robust consumer privacy protections.

Key Requirements:

  • Obtain explicit consumer consent before collecting, sharing, or selling personal data.
  • Provide transparent, detailed disclosures about how consumer data is used and protected.
  • Implement and enforce strict data security protocols.
  • Offer consumers a clear right to opt-out of data sharing and sales.

DTPA and TDPSA Exposure:

Non-compliance with TDPSA’s stringent data requirements can lead to substantial penalties enforced by the Texas Attorney General, alongside additional claims under DTPA for deceptive or misleading data practices.

5. Broker Responsibility: Rule §535.2

Effective September 3, 2025, TREC Rule §535.2, concerning Broker Responsibility, is being updated to reflect technological improvements. Brokers are now required to manage information about their agents electronically via TREC’s online license management system rather than using paper forms. This adjustment aims to streamline reporting and reduce paperwork, but it also emphasizes the importance of accurate, timely digital record-keeping.

Real-World Impact:

Brokers must transition to the electronic system or risk noncompliance. Failure to report or timely update critical brokerage information online can result in administrative penalties or disciplinary actions, including license suspension.

6. Information About Brokerage Services (IABS) Notice: 22 TAC §531.20

A major update effective January 1, 2026, is tied to Texas Senate Bill 1968. This statute expands the mandatory content of the Information About Brokerage Services (IABS) notice that brokers must provide consumers. Brokers will now need to disclose additional details about their basic obligations to parties involved in transactions, even if they do not represent those parties directly. Brokers should promptly review and update their disclosure forms to ensure compliance by the implementation date.

Real-World Impact:

Neglecting to use the revised IABS form could trigger severe TREC enforcement actions and civil penalties for failing to provide statutory disclosures to consumers.

7. Updated TREC Educational and Licensing Requirements (Effective January 1, 2026) (Rule §535.56)

Effective January 1, 2026, significant updates to broker licensing include increased experience requirements and stricter educational criteria.

What’s New:

  • Applicants seeking a broker’s license must now accrue a minimum of 720 experience points (up from 360), reflecting deeper practical involvement in real estate transactions.
  • Bachelor’s degrees can now substitute for only 300 hours of real estate-related education—down from previously substituting the entire 630-hour requirement.
  • Brokers, regardless of whether they sponsor agents, must complete the mandatory Broker Responsibility Course before licensure.

Real-World Impact:

These changes significantly raise the bar for broker licensing. Applicants now face a more rigorous licensing process. Existing license holders must ensure compliance with these new rules upon license renewal or risk license denial.

8. Mandatory Contract Disclosures and New TREC Forms (Rule §537.28)

Effective November 3, 2025

Key updates to standard TREC contract forms—such as the One to Four Family Residential Contract (Resale) and various other TREC-approved forms—are effective September 2025. These revisions include clarifications on the definition of terms like “Legal Holiday,” mandatory disclosures regarding groundwater and surface water rights, and revised standards for broker compensation disclosures. Brokers and agents should ensure they are familiar with these updates and use only the revised, approved forms in transactions to avoid compliance issues.

What’s New:

  • Water Rights Disclosure: Contracts must explicitly disclose water rights (groundwater and surface water rights) associated with the property.
  • Updated Broker Information Page: Eliminated the concept of “subagency,” now reflecting current brokerage relationship structures clearly.
  • Additional disclosures regarding compensation transparency and groundwater rights to prevent confusion and future disputes.

Risks of Noncompliance:

Agents must immediately familiarize themselves with and use these updated contracts. Using outdated forms can lead to consumer complaints, TREC enforcement actions, or liability under DTPA for failure to disclose required information.

9. Advertising and Brokerage Transparency Requirements (Rule §535.154)

Effective September 3, 2025

What’s New:

New standards clarify brokerage identification and advertising transparency. From September 3, 2025, TREC clarified rules around advertising, assumed business names, and broker identification.

Key Points:

  • All advertisements must clearly disclose the responsible broker.
  • Electronic submission of brokerage advertising information is mandatory through TREC’s online system.

Compliance Risks:

Brokers failing to comply with transparent advertising practices risk TREC enforcement actions and consumer claims under DTPA for deceptive advertising.

Real Consequences of Non-Compliance

TREC is serious about enforcing these regulatory updates. Brokers and agents failing to comply may face:

  • Administrative penalties of up to $5,000 per violation, per day.
  • License suspension or revocation, effectively stopping your ability to legally conduct real estate business.
  • Reputational harm impacting client trust and brokerage credibility.

How to Ensure Compliance and Protect Your Brokerage

To proactively avoid regulatory trouble and protect your license and brokerage:

  • Audit your current business practices immediately. Identify all agreements, advertisements, data policies, compensation disclosures, and marketing communications needing updates.
  • Immediately implement updated contracts and disclosures into all real estate transactions.
  • Educate and train all licensed staff and associates to ensure everyone understands and complies with the new TREC educational requirements, agency responsibilities, solicitation rules, and data privacy standards.
  • Train your brokerage team thoroughly on new IABS requirements, advertising rules, broker responsibility guidelines, and education criteria.
  • Review and revise your communication protocols, including texts, phone calls, and electronic marketing, to comply with SB 140 and TDPSA regulations.
  • Engage experienced legal counsel or compliance experts to ensure your brokerage is fully aligned with these complex regulations and protected from DTPA or TDPSA claims.

How to Ensure Compliance and Protect Your Brokerage

Texas isn’t just tightening rules—it’s redefining what it means to operate ethically, transparently, and responsibly in real estate. The new regulations from TREC, coupled with enforcement under the Texas Deceptive Trade Practices Act (DTPA) and the Texas Data Privacy and Security Act (TDPSA), are not optional checkboxes—they are the terms of keeping your license, your reputation, and your business.

Brokers and agents who adapt early—by embracing transparency, documenting every representation, safeguarding consumer data, and aligning internal policies with external mandates—won’t just survive regulatory change; they’ll lead in a market where compliance itself has become a mark of professionalism.

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