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SB1172

Regular Session

Relating to exempting certain transactions from regulation by the Texas Real Estate Commission.

Low
Low Cost
Effective:2025-09-01
SB1172
Low
Relating to exempting certain transactions from regulation by the Texas Real Estate Commission.
Low Compliance Urgency
Requires routine attention
Cost Impact
Low
Effective
2025-09-01
Enforcing Agencies
TREC
Primary Author: Sen. Charles Perry
89th Texas Legislature
jdkey.com
01

Compliance Analysis

Key implementation requirements and action items for compliance with this legislation

Implementation Timeline

  • Effective Date: September 1, 2025 (Pending final vote counts; assume this date for planning).
  • Compliance Deadline: September 1, 2025. (Deregulation takes immediate effect; enforcement jurisdiction ceases on this date).
  • Agency Rulemaking: TREC must update enforcement protocols to dismiss pending investigations regarding unlicensed activity in these specific sectors. Expect a "regulatory gray zone" regarding "Water" rights until TREC issues clarification or guidance, likely in Q4 2025.

Immediate Action Plan

  • 1. Audit Workforce: Identify all W-2 employees currently holding licenses solely for internal asset management or renewable land acquisition and determine if they can lapse.
  • 2. Update Insurance: Contact your broker to confirm your Errors & Omissions (E&O) policy covers employees negotiating real property who are *no longer licensed*.
  • 3. Revise MSAs: Strike licensure warranties from vendor contracts regarding renewable energy land acquisition.
  • 4. Isolate Water Deals: Segregate any water rights negotiations from general energy land acquisition teams to ensure licensed professionals handle the water components.

Operational Changes Required

Contracts

  • Master Service Agreements (MSAs): Review agreements with land service brokerages. You must remove clauses requiring all right-of-way agents or landmen to hold active real estate licenses if they are deployed strictly for solar, wind, or mineral projects.
  • Employment Agreements: For internal asset managers (LP/LLC employees), restructure compensation. Ensure "performance bonuses" are tied to employment metrics rather than "commission splits," which are terminology legally reserved for licensed brokers.

Hiring/Training

  • Job Descriptions: Update qualifications for "Renewable Energy Land Agents" and "Corporate Asset Managers." Remove "Active Texas Real Estate License" from *Required* qualifications; move to *Preferred* if you value the educational background.
  • Verification: Shift vetting focus from license verification to competency and background checks, as you can no longer rely on TREC’s background screening for these roles.

Reporting & Record-Keeping

  • Proof of Employment (LP/LLC Exemption): The law strictly exempts *employees*. You must maintain clear W-2 records linking the individual directly to the General Partner or Manager entity. Independent contractors (1099s) generally do not qualify for the corporate asset exemption and may still require licensure.
  • Transaction Scope: For energy transactions, file documentation proving the deal specifically concerned a "mineral," "standing timber," or "other energy source" (wind/solar). If a transaction expands to include general surface land sales unrelated to energy, the exemption is void.

Fees & Costs

  • Cost Reduction: Elimination of licensure fees and Continuing Education (CE) costs for staff in these specific roles.
  • Insurance Adjustment: Potential premium adjustments for Professional Liability/E&O insurance to cover "unlicensed professional services."

Strategic Ambiguities & Considerations

  • The "Water" Trap: The bill defines "Water" but fails to explicitly list water transactions in the new exemption categories. Furthermore, "Other energy source" is defined as a resource "other than water." Business Logic: Assume water rights brokers and transactions still require a TREC license until the agency explicitly rules otherwise.
  • "Commercial Signage": This term is undefined. It is intended for billboard operators, not general retailers. If you are a retailer acquiring land for a store and erecting a sign, do not assume you are exempt.
  • Surface Use Creep: Solar leases often involve significant surface use agreements (hunting, grazing). If a lease bundles substantial non-energy surface rights, TREC may assert jurisdiction. Keep contracts strictly focused on energy production to maintain the exemption.

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Information presented is for general knowledge only and is provided without warranty, express or implied. Consult qualified government affairs professionals and legal counsel before making compliance decisions.

02

Legislative Timeline

This bill's path through the Texas Legislature

Filed
Feb 7, 2025
Passed Senate
Apr 10, 2025
Passed House
May 5, 2025
Signed
May 24, 2025
TopicsBusiness & CommerceBusiness & Commerce--generalEnergyEnergy--alternative FuelsOccupational RegulationOccupational Regulation--other Trades & ProfessionsProperty InterestsProperty Interests--real PropertyTexas Real Estate CommissionMines & Mineral ResourcesOil & GasWaterWater--rights
03

Senate Authors

Sen. Charles PerryRepublican · Primary Author

House Sponsor

Rep. Drew DarbyRepublican · Primary Sponsor

Bill Text(with markup)

View bill text in multiple formats on Texas Legislature website

Fiscal NoteView Original

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Quick Reference

Frequently Asked Questions

Common questions about SB1172

Q

What does Texas SB1172 do?

SB1172 eliminates the requirement for a Texas Real Estate Commission (TREC) license for professionals negotiating transactions in the renewable energy, timber, and commercial signage sectors, effectively validating the "landman" model for wind and solar. Furthermore, it explicitly exempts employees of Limited Partnerships (LPs) and Limited Liability Companies (LLCs) from licensure when selling or leasing property owned by their employing entity, resolving a long-standing regulatory gray area for internal asset managers. Implementation Timeline Effective Date: September 1, 2025 (Pending final vote counts; assume this date for planning).

Q

Who authored SB1172?

SB1172 was authored by Texas Senator Charles Perry during the Regular Session.

Q

When was SB1172 signed into law?

SB1172 was signed into law by Governor Greg Abbott on May 24, 2025.

Q

Which agencies enforce SB1172?

SB1172 is enforced by Texas Real Estate Commission (TREC).

Q

How urgent is compliance with SB1172?

The compliance urgency for SB1172 is rated as "low". Businesses and organizations should review the requirements and timeline to ensure timely compliance.

Q

What is the cost impact of SB1172?

The cost impact of SB1172 is estimated as "low". This may vary based on industry and implementation requirements.

Q

What topics does SB1172 address?

SB1172 addresses topics including business & commerce, business & commerce--general, energy, energy--alternative fuels and occupational regulation.

Legislative data provided by LegiScanLast updated: November 25, 2025

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