A typical homeowners-insurance policy covers loss to the dwelling and its contents as a result of external forces, such as fire, hurricane, hail, or vandalism. The policy excludes loss due to mechanical failure or normal wear and tear.

Conversely, a residential service contract—also known as a home warranty—covers many losses due to mechanical failure and wear and tear. It covers major appliances and systems that are in proper operating condition at the time of closing and usually carries a one-year service agreement. It is an agreement on the part of the issuer (the residential service company) to repair or replace certain named components or systems within a home that fail due to normal wear and tear during the contract term.

All necessary provisions to implement board of choice across state lines were included in the March 1996 Model Board Bylaws. A complimentary copy of the Model Bylaws was distributed to all boards and associations on or around April 1, 1996. There are no amendments required to the state association's bylaws since membership originates at the local level.

Based on the board of choice policies approved by the Board of Directors, a firm comprised of REALTOR® principals which has multiple office locations in the same state must operate each office as a "REALTOR®-office." Each office must have a designated REALTOR® and each designated REALTOR® must have a primary board affiliation (though the same designated REALTOR® may be responsible for more than one office). The primary board affiliation for branch offices may or may not be the same as the board chosen by the firm's principal office.

Under previous jurisdictional policies of NAR, REALTORS® were required to join the board where their principal place of business is located, prior to joining any other board. The board-of-choice concept allows REALTORS® to choose the board to which they want to belong on the basis of the factors they decide are most important rather than being limited by office location or jurisdictional boundaries. At the same time, services of other boards are available without the necessity of holding membership in those boards.

Complaints alleging violations of the Code of Ethics and requests for arbitration may be filed in any board where the REALTOR® holds membership or participates in the board's MLS.

Discipline that may be imposed may be the same as but shall not exceed the discipline that may be imposed on members except that direct suspension or termination of MLS rights and privileges may also be utilized. If such individuals are found in violation of the Code of Ethics, they may be assessed an administrative processing fee not to exceed $500, which may be in addition to any other discipline, including fines, that may be imposed.

Membership is available in a secondary board on terms and conditions no more stringent than the requirements established in the board's Bylaws for REALTOR® and REALTOR®-Associate® (where applicable) membership. Similarly, the rights and privileges of secondary members are the same. For example, a licensee who qualifies for REALTOR® membership in a secondary board would have the same rights and privileges of any other REALTOR® member (including the right to vote and hold office). Similarly, a licensee who only qualifies for REALTOR®-Associate® membership in a secondary board (even though he/she may hold REALTOR® membership in their primary board) would only be entitled to the privileges and obligations that are granted to REALTOR®-Associate®s in the secondary board (which may or may not include the right to vote and hold office).

Yes. The Real Estate License Act and TREC rules permit a broker to charge a fee for providing a broker price opinion (BPO) or a comparative market analysis (CMA). A sales agent may provide a BPO or CMA as well, but they must be submitted in a broker's name. The broker is responsible for a BPO or CMA submitted by a sales agent.

BPOs and CMAs are not appraisals. Appraisals may only be completed by someone who is licensed or certified as an appraiser. Therefore, TREC rules require that BPOs and CMAs contain the following statement verbatim in at least 12-point font:

"This represents an estimated sale price for this property. It is not the same as the opinion of value in an appraisal developed by a licensed appraiser under the Uniform Standards of Professional Appraisal Practice."

A residential service contract or home warranty is usually purchased when a house sells in the resale market. A home under warranty may be more attractive to prospective buyers. It covers major appliances and systems which are in proper operating condition at the time of closing and usually carries a one-year service agreement. It is an agreement on the part of the issuer (the residential service company) to repair or replace certain named components or systems within a home that fail due to normal wear and tear during the contract term. A service fee (a deductible ranging from $35 to $125) may be charged for each service call, and the homeowner is protected against the costly expense of a major breakdown or multiple breakdowns which can occur when a change of ownership and lifestyle subject the equipment to different usage.

Several years ago the NAR Professional Standards Committee abolished the policy that allowed local boards as a matter of local option to automatically join a REALTOR® (principal) in any complaint against a REALTOR® (non-principal). Consequently, the salesperson would be the only respondent in the ethics complaint unless the complainant names principal broker B as a co-respondent in the complaint, or if the Grievance Committee believes there is potential culpability on broker B's part.

The legislation, which is effective Sept. 1, 2007, requires one- and two-family dwellings constructed in Texas to have working smoke detectors installed in accordance with the requirements of the building code in effect in the area in which the dwelling is located. This requirement extends to a landlord of a one- or two-family dwelling unit and satisfies the requirements of the current smoke-detector laws applicable to landlords. The law further requires that a permit issued for a home improvement include the installation of smoke detectors in accordance with the local building code if the dwelling for which the permit will be issued does not comply.

Certain purchasers may require the seller to install smoke detectors equipped for hearing-impaired persons prior to the closing date of the sale of the home. In order to impose this requirement on the seller, the purchaser must satisfy a number of requirements: 1. There must be a written contract in place. 2. It must be a sale of single-family dwelling or duplex. 3. The buyer or a member of the buyer's family who will live in the dwelling must be hearing impaired. 4. The buyer must provide written evidence of the hearing impairment signed by a licensed physician. 5. The buyer must submit a written request to the seller to install the smoke detectors. 6. The buyer must specify in the written request where the detectors are to be installed. 7. The buyer must send the written request not later than the 10th day after the effective date of the contract. The bill allows the buyer and seller to agree on the brand and which party will bear the cost of the detectors. The seller must install the detectors no later than the closing date. If the seller fails to install, as may be required, the buyer has the right to terminate the contract.

Property managers should consult the local building code authority to determine the specific requirements for the placement of smoke detectors in the units they manage. Most cities follow some version of the International Residential Code (IRC), and the exact requirements may vary depending on the version adopted locally. Because newer editions of the IRC typically impose more detailed requirements regarding smoke detector placement and installation, it is important for property managers to verify the applicable code and stay current with any updates.

A state law effective September 1, 2025, restricts the acquisition of real property interests in Texas by certain individuals, entities, and governments associated with countries identified by the U.S. director of national intelligence or the Texas governor as a national security threat. (Additional details in this PDF.)

What types of transactions are restricted?

Purchases, acquisitions, and leases of one year or more.

Which countries are currently on the list?

As of August, 18, 2025: China, Russia, Iran, and North Korea.

What types of properties are affected?

A broad range of real property interests, including residential, commercial, industrial, agricultural land and improvements, minerals, mines and quarries, timber, groundwater, and water rights.

Are agents or brokers required to enforce this?

No. Real estate professionals have no additional duties under this law.

Have any forms or notices been updated to inform consumers of this law?

Texas REALTORS® decided to add a statement to the Commercial Buyer/Tenant Representation Agreement (TXR 1502) (updated Sept. 1, 2025) that briefly explains the new law and recommends that clients who believe the restrictions apply to them consult an attorney. Other Texas REALTORS® buyer/tenant representation agreements are under consideration for similar changes.

How is this law enforced?

The Texas attorney general is responsible for enforcing the law.

What happens if a transaction closes or a lease of one year or longer is executed with a prohibited party?

The law does not invalidate a purchase contract; the law does allow divestment of the individual’s or entity’s interest through sale of the interest or, in the case of a lease, termination of the leasehold.

Does this change REALTORS®’ responsibilities related to fair housing or the Code of Ethics?

No.

The original model plan developed by the Presidential Advisory Group on board of choice provided that all licensees in a particular office location must join the board selected by the designated REALTOR®. Based on comments received from various state associations after the model plan was distributed the Membership Policy and Board Jurisdiction Committee was asked to consider a modification to this provision to authorize licensees affiliated with a REALTOR® firm to join (as their primary board) any board within the state where the firm maintains a designated REALTOR®. This was a departure from what had been proposed in the PAG's model plan, and the concept ultimately recommended by the Committee is slightly more comprehensive in favor of choice. For example, a firm with 50 licensees in a particular office location may divide its membership between two boards provided the firm has a designated REALTOR® member in both boards. This provides additional flexibility for designated REALTORS® and their sales licensees while maintaining the essential requirement that one of the principals, partners, corporate officers or branch office managers of the firm must be a designated REALTOR® member of the board. The modification was approved by the committee and Board of Directors at the 1994 Midwinter Meetings in San Diego, and was reaffirmed at the 1994 Midyear Meetings in Washington, D.C.

At the 1996 Midwinter Meetings, the NAR Board of Directors approved a Statement of Membership Policy and amendments to NAR's Membership Qualification Criteria to authorize associations (at their discretion) to consider information received from other associations when determining whether an applicant satisfies the association's membership requirements. This would be a file of information that would follow REALTORS® from board to board throughout their professional career and would include information such as prior violations of the Code of Ethics or other membership duties, and information related to unpaid arbitration awards or unpaid financial obligations to other associations or MLSs. Associations are required to share this information with other associations (when so requested), and associations receiving such information may, but are not required to, consider information in such files in determining whether an applicant satisfies the association's membership requirements. This responds to a primary concern of associations under board of choice that some members may shift membership from association to association to avoid accountability under the Code of Ethics and other membership duties.

The Anti-Money Laundering Regulations for Residential Real Estate Transfers Rule also known as the Residential Real Estate Rule requires certain professionals involved in real estate closings and settlements to submit reports to FinCEN regarding certain non-financed transfers of residential real estate to legal entities or trusts.

No, unless they are referring to the value of a property as determined by an appraiser. Only an appraiser can determine a property’s value, according to TREC. Real estate license holders cannot perform an appraisal of or provide an opinion of value for real property unless they are licensed appraisers. License holders may not use the term value when referring to their own market analysis.

Real estate license holders can offer an estimated sale price, listing price, or estimated worth. Sales agents must do so in their sponsoring broker’s name. Any price opinion, market analysis, or estimate must include this written statement verbatim and in at least 12-point font: “This represents an estimated sale price for this property. It is not the same as the opinion of value in an appraisal developed by a licensed appraiser under the Uniform Standards of Professional Appraisal Practice.”

No. While secondary membership in a neighboring association is encouraged so you can receive their communications, network with other Texas REALTORS® in your market, and participate in their consumer-outreach activities, membership is not required to participate in another association’s MLS or to purchase any other services through that association.

The board may require that a REALTOR® be licensed in the state as a condition of MLS participation. Further, one of the conditions of access to a board's MLS is the participant's agreement to submit to ethics hearings and arbitration requests filed with the board in which the REALTORS® obtains MLS access but is not a member.

MLS fees for these participants can be assessed in the same manner that the board assesses MLS fees for board members who participate in the MLS. For example, if MLS fees are assessed based on all licensees in a participating broker's office, this same policy can be applied to REALTORS® who are participants in the MLS but do not hold membership in the board. A board may, at its discretion, waive fees for those licensees that the participant certifies will not be using the MLS information.

As previously indicated, under the "universal access to services" component of board of choice, REALTORS® (irrespective of where they hold their primary membership) are entitled to purchase services of other boards without holding membership in those boards. This includes comparable sold data that is distributed as a service of the board and access to lockbox systems that are operated as activities of boards of REALTORS®. Service fees are determined by the individual boards.

No. States may continue to offer at-large membership to individuals whose offices are located in an area not within the jurisdiction of a local board.

The immediate consequence of a board's failure to comply with a policy mandated by NAR Board of Directors is that coverage under the Blanket Errors and Omissions insurance is jeopardized. Subsequent to that, it would be likely that the board would be requested to come before the Executive Committee to explain its refusal to comply with the policy in question. Based on the outcome of that proceeding, the Executive Committee would make a recommendation to the board of directors for action. The ultimate sanction for non-compliance with mandatory policies enacted by the Board of Directors is revocation of charter status.

Boards may, at their discretion, require that all applicants for REALTOR® membership, irrespective of the location of their principal place of business, be licensed in the state as condition of membership in the board.

Professional standards enforcement would be the responsibility of the board through which the REALTOR® obtained participation rights. Participation in a regional MLS is only available through one of the shareholder (or signatory) boards. In other words, a REALTOR® cannot obtain direct access to the MLS through the regional entity. Rather, REALTORS® must sign an MLS participation agreement with one of the shareholder (or signatory) boards which establishes their agreement to submit to ethics and arbitration requests filed with the board from which the REALTOR® obtained MLS access but is not a member.

REALTORS® are authorized to use the marks anywhere in the state in which they hold REALTOR® membership. Boards will continue to protect use of the registered marks within their territorial jurisdiction (i.e., use of the marks by individuals who do not hold REALTOR® membership in any board in the state).

If your board's bylaws permit director approval of bylaw changes then it is not necessary to call a membership meeting for a vote. However, if director approval is not specifically permitted in the bylaws, a general membership meeting must be called and appropriate notice given, per the amendments section of the bylaws. NAR previously revised its model board bylaws to authorize approval of bylaw amendments by the Board of Directors (as opposed to a vote of the general membership) if the bylaw amendments are the result of a mandated NAR policy. If this provision has been adopted by your board and is incorporated in your bylaws, only Board of Directors approval is required.

The original board of choice policies authorized REALTORS® to join any board within the state where their office is located. Based on amendments approved by the Board of Directors and Delegate Body at the 1995 Annual Convention, this policy was expanded to authorize REALTORS® to join a primary board across contiguous state lines. State association membership would be in the state where primary board membership is held.

The associations to which the REALTOR® belongs. If a real estate firm maintains designated REALTORS® in more than one board, each designated REALTOR® shall be responsible (per the certification provision in the board's bylaws) for providing the board(s) where they hold designated REALTOR® membership with a list of names of any non-member licensees affiliated with their office(s) and indicate in which board the licensee will be included for purposes of computing the designated REALTOR® dues. The following are examples of how the dues formula should be administered: 1. A broker (sole proprietor) has a single office located in board A's jurisdiction but chooses board B as his primary board. Designated REALTOR® assessments for nonmember licensees in the office would be paid to board B since this is the only board where the broker (designated REALTOR®) holds membership. Note: This same principle would apply if the broker had multiple office locations in one or more board jurisdictions but chose only one board in which to hold membership. 2. Two brokers are partners in a real estate firm and have a single office located in board A's jurisdiction. Broker one selects board A as his primary board and Broker two selects board B as her primary board. Each broker could be required (per the certification provision in the boards' bylaws) to report the total number of nonmember licensees in the office (i.e., those licensees who haven't joined either board A or board B) and indicate in which board the licensees will be included for purposes of computing the designated REALTOR® dues. All nonmember assessments could be paid to one board or they could be split between the two boards (e.g., four nonmember licensees reported in board A; six nonmember licensees reported in board B). 3. A real estate firm has its principal place of business in board A with branch offices in boards B and C. Each office has a different designated REALTOR® and each designated REALTOR® has selected the board where their office is located as their primary board. Each designated REALTOR® could be required to report the total number of nonmember licensees in his/her office to his/her primary board and indicate in which board (A, B or C) the nonmember licensee(s) will be included for purposes of computing the designated REALTOR® dues. Nonmember assessments could be remitted to any one of the Boards where the firm maintains a designated REALTOR® (A, B or C). In the final analysis, every nonmember licensee affiliated with a real estate firm will be accounted for in one of the boards where the firm maintains a designated REALTOR® presence. Many state associations have indicated plans to assume a leadership role in developing licensee tracking systems and many states already provide this service through lists obtained from state real estate regulatory agencies.

Based on the board of choice policies approved by the Board of Directors, REALTORS® are entitled to purchase services from boards other than their primary board without the necessity of holding membership in those boards. Service fees are determined by the individual boards except that fees for MLS services may not exceed those for members of the board. Note: The issue of whether boards can charge higher MLS fees for REALTORS® who are not members of the board is currently being reviewed by the National Association's Multiple Listing Policy Committee.

No. Secondary membership may be granted to non-principal licensees who hold REALTOR® or REALTOR®-Associate® membership in their primary board without any requirement that the designated REALTOR® they are licensed or affiliated with hold membership in the secondary board. However, MLS services are only available to secondary members if their office participates in the MLS.

No. The jurisdictional lines are still in effect. Neither the PAG or the policy committees felt there was a compelling need to eliminate jurisdictional territories.

An individual is a primary member of a board if that board remits state and national dues based on that member. An individual is a secondary member if state and national dues are remitted through another board. Since national dues are only paid once, there is only one primary board.

A board is free to make potential members aware of the products and services it offers. Members can then determine the board provider of products and services that is best for their business operation.

Yes, so long as the discounts are made known and available to all brokers with firms of similar size. There cannot be a different scale for brokers with the same size firm. Offering these types of discounts is completely a matter for judgment and determination by each local board, and is not governed by NAR policy.

Certain residential real estate purchases have been used to launder money, which can be a disadvantage to legitimate buyers. The requirement is intended to increase transparency and deter money laundering.

Transfers that meet all four of the following conditions will require that a report be filed:

• The property is residential.
• The transfer is not financed.
• The property is transferred to a specific type of entity or trust.
• An exception does not apply.

It is any property located in the United States and the property either:

• Contains a structure designed for occupancy by one to four families
• Is land on which the buyer intends to build a structure designed primarily for occupancy by one to four families
• Is a unit designed principally for occupancy by one to four families within a structure on land
• Is comprised of shares in a cooperative housing corporation.

It is a transfer of residential real property that does not involve an extension of credit to all buyers buying the property that is both secured by the property being purchased and extended by a financial institution subject to anti-money laundering program requirements and suspicious activity report obligations. Please note though that even if a transaction is financed, but the lender extending credit is not a financial institution subject to the anti-money laundering laws or suspicious activity report obligations, a report still may be required.

An entity subject to the reporting requirements if the other conditions are met include any corporation, partnership, estate, association or limited liability company, and a statutory trust, which is created or authorized under the Uniform Statutory Trust Entity Act or as enacted by the state. It also includes any legal arrangement where a grantor or settler places assets under the control of a trustee for the benefit of one or more beneficiaries also known as a trust, whether formed under US law or the law of a foreign country as well as any legal arrangements that are similar in either structure or function to trusts. There are several entities and trusts that are exempt and they can be found here: Exceptions Fact Sheet.

In most cases, the person required to file a report is a closing or settlement agent or another real estate professional. This generally does not include real estate license holders who represent either the buyer or seller in the transaction. For more information on who is the correct person to file the report, please visit Am I a Reporting Person?

The report must identify the property being transferred, each legal entity or trust receiving the property, each beneficial owner of the legal entity or trust, each individual who is signing, each individual, legal entity or trust that is transferring the property and any payments made for the property.

Any closings on or after March 1, 2026, are affected by these requirements. It's possible that your clients may be subject to the reporting requirements due to the nature of their transactiona (a non-financed purchase of residential real property by an entity or trust that is subject to the reporting requirements). Title companies may delay closing if the parties do not provide the required information to complete the reports and may charge additional fees for the preparation and filing of such reports. These are things that your client should be made aware of prior to closing.