SB1172

Regular Session

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

LowStandard timeline

Low Cost

Effective:2025-09-01

Enforcing Agencies

Texas Real Estate Commission (TREC)

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.

Need Help Understanding Implementation?

Our government affairs experts can walk you through this bill's specific impact on your operations.

Schedule Consultation

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.

Legislative Timeline

This bill's path through the Texas Legislature

TopicsBusiness & Commerce Business & Commerce--general Energy Energy--alternative Fuels Occupational Regulation Occupational Regulation--other Trades & Professions Property Interests Property Interests--real Property Texas Real Estate Commission Mines & Mineral Resources Oil & Gas Water Water--rights

Official Analysis

View HRO Analysis View All Bill Documents

BILL ANALYSIS

Senate Research Center	S.B. 1172
89R4494 JCG-F	By: Perry
	Business & Commerce
	3/6/2025
	As Filed

AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

The Real Estate License Act requires individuals to possess a real estate license in order to act on another person's behalf in a real estate transaction. However, there are a few exceptions to that general rule. Currently, a person can sell a mineral or mining interest without a real estate license. However, the law does not address other types of energy transactions like wind, solar, and geothermal energy.

Furthermore, current law specifically exempts individuals from the requirement to have a real estate license if they are buying or selling property on their own behalf. Unfortunately, the Texas Real Estate Commission has interpreted current law to mean that Limited Partnerships (LP) and Limited Liability Companies (LLC) are not able to buy and sell their own property because it would require one partner or member to act on behalf of the LP or LLC.

The proposed legislation would define "mineral" and "other energy source" to ensure that all energy resources can be bought and sold without a real estate license. Additionally, the bill will exempt LPs and LLCs from the requirement to have a real estate license. This change would allow business entities to more efficiently run small businesses without the need to hire a real estate agent to complete their transactions.

As proposed, S.B. 1172 amends current law relating to exempting certain transactions from regulation by the Texas Real Estate Commission.

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 1101.002, Occupations Code, by adding Subdivisions (4-a) and (4-b), to define "mineral" and "other energy source."

SECTION 2. Amends Section 1101.005, Occupations Code, as follows;

Sec. 1101.005. APPLICABILITY OF CHAPTER. Provides that Chapter 1101 (Real Estate Brokers and Sale Agents) does not apply to:

(1)-(7) makes no changes to these subdivisions;

(8) makes a nonsubstantive change to this subdivision;

(9) a transaction involving the sale, lease, or transfer of a real property interest in minerals, mining, or a quarry, water, standing timber or other energy sources, rather than the sale, lease, or transfer of a mineral or mining interest in real property;

(10) the sale, lease, or transfer of real estate for a limited partnership by a general partner of the limited partnership, an employee of a general partner of the limited partnership who negotiates the transaction in the course of employment, or an employee of the limited partnership who negotiates the transaction in the course of employment; or

(11) the sale, lease, or transfer of real estate for a limited liability company by a manager or managing member of the limited liability company, an employee of a manager or managing member of the limited liability company who negotiates the transaction in the course of employment, or an employee or member of the limited liability company who negotiates the transaction in the course of employment.

SECTION 3. Effective date: upon passage or September 1, 2025.

Senate Authors

Sen. Charles PerryRepublican · Primary Author

House Sponsor

Rep. Drew DarbyRepublican · Primary Sponsor

Bill Text(with markup)

S.B. No. 1172

View bill text in multiple formats on Texas Legislature website

Fiscal NoteView Original

	AN ACT
	relating to exempting certain transactions from regulation by the
	Texas Real Estate Commission.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1. Section 1101.002, Occupations Code, is amended
	by adding Subdivisions (4-a), (4-b), and (9) to read as follows:
	(4-a) "Mineral" has the meaning assigned by Section
	75.001, Property Code. The term includes oil, gas, related
	hydrocarbons, coal, lignite, uranium, and substances classified as
	base, industrial, precious, or strategic minerals.
	(4-b) "Other energy source" means a natural resource
	other than water or a mineral that is necessary to produce energy,
	including geothermal, nuclear, solar, and wind energy.
	(9) "Water" means:
	(A) diffused surface water;
	(B) groundwater, as defined by Section 36.001,
	Water Code; or
	(C) state water, as described by Section
	11.021(a), Water Code.
	SECTION 2. Section 1101.005, Occupations Code, is amended
	to read as follows:
	Sec. 1101.005. APPLICABILITY OF CHAPTER. This chapter does
	not apply to:
	(1) an attorney licensed in this state;
	(2) an attorney-in-fact authorized under a power of
	attorney to conduct not more than three real estate transactions
	annually;
	(3) a public official while engaged in official
	duties;
	(4) an auctioneer licensed under Chapter 1802 while
	conducting the sale of real estate by auction if the auctioneer does
	not perform another act of a broker;
	(5) a person conducting a real estate transaction
	under a court order or the authority of a will or written trust
	instrument;
	(6) a person employed by an owner in the sale of
	structures and land on which structures are located if the
	structures are erected by the owner in the course of the owner's
	business;
	(7) an on-site manager of an apartment complex;
	(8) an owner or the owner's employee who leases the
	owner's improved or unimproved real estate; [or]
	(9) a transaction involving:
	(A) the sale, lease, or transfer of a real
	property interest in:
	(i) minerals, mining, or a quarry;
	(ii) standing timber; or
	(iii) other energy sources [~~mineral or~~
	~~mining interest in real property~~];
	(B) the sale, lease, or transfer of a cemetery
	lot;
	(C) the lease or management of a hotel or motel;
	or
	(D) the sale of real property under a power of
	sale conferred by a deed of trust or other contract lien;
	(10) the sale, lease, or transfer of real estate owned
	or leased by or being acquired by or leased to a limited partnership
	by:
	(A) a general partner of the limited partnership;
	(B) an employee of a general partner of the
	limited partnership who negotiates the transaction in the course of
	employment; or
	(C) an employee of the limited partnership who
	negotiates the transaction in the course of employment;
	(11) the sale, lease, or transfer of real estate owned
	or leased by or being acquired by or leased to a limited liability
	company by:
	(A) a manager or managing member of the limited
	liability company;
	(B) an employee of a manager or managing member
	of the limited liability company who negotiates the transaction in
	the course of employment; or
	(C) an employee or member of the limited
	liability company who negotiates the transaction in the course of
	employment; or
	(12) a person conducting a real estate transaction on
	behalf of a commercial signage entity.
	SECTION 3. This Act takes effect immediately if it receives
	a vote of two-thirds of all the members elected to each house, as
	provided by Section 39, Article III, Texas Constitution. If this
	Act does not receive the vote necessary for immediate effect, this
	Act takes effect September 1, 2025.

LEGISLATIVE BUDGET BOARD
Austin, Texas

FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION


March 10, 2025

TO:	Honorable Charles Schwertner, Chair, Senate Committee on Business & Commerce

FROM:	Jerry McGinty, Director, Legislative Budget Board

IN RE:	SB1172 by Perry (Relating to exempting certain transactions from regulation by the Texas Real Estate Commission.), As Introduced

No significant fiscal implication to the State is anticipated.

The Texas Real Estate Commission is a self-directed, semi-independent agency that is responsible for its costs of operations, prohibited from causing the General Revenue Fund to incur any cost, and not subject to the legislative budgeting process.

Local Government Impact

No significant fiscal implication to units of local government is anticipated.

Source Agencies:

329 Real Estate Commission

LBB Staff:

JMc, RStu, GDZ, DPE

Related Legislation

Explore more bills from this author and on related topics

Frequently Asked Questions

Common questions about SB1172

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).

Who authored SB1172?

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

When was SB1172 signed into law?

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

Which agencies enforce SB1172?

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

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.

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.

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

Need Strategic Guidance on This Bill?

Need help with Government Relations, Lobbying, or compliance? JD Key Consulting has the expertise you're looking for.