Surety Bond Encyclopedia

Real Estate School ($20,000) Bond - Statewide in Texas

Brief Summary

The $20,000 bond goes in with every application to become a TREC-approved provider of qualifying real estate courses, and it has to stay in force for as long as the school operates. A school whose bond is cancelled is put on inactive status until it is reinstated. A surety bond meets the requirement for a premium instead of tying up $20,000 in other security with the Commission.

Texas Occupations Code 1101.302 requires a school authorized by the Texas Real Estate Commission to offer a real estate or real estate inspection educational program to maintain a $20,000 corporate surety bond, or other security the Commission accepts, payable to the Commission. Accredited colleges and universities are excluded. The bond is for the benefit of anyone damaged when the school fails to fulfill obligations related to its TREC approval.

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How to Apply for a Real Estate School ($20,000) Bond:

Confirm the school is not an exempt provider under 22 TAC 535.61, such as an accredited college or university.
Use the school's legal name exactly as it appears on the TREC provider application.
Provide the owner or principal name, address and Social Security number for the surety's credit review.
Complete the bond application and review the quoted premium.
Receive the executed $20,000 bond payable to the Texas Real Estate Commission.
Submit the bond with the provider application and the $400 qualifying program application fee.
Keep the bond in force and pay the $200 annual operation fee to avoid inactive status.

Detailed Information About the Texas Real Estate School ($20,000) Bond:

Which schools post it

The bond belongs to the school, not the instructor. Section 1101.302 of the Texas Occupations Code applies to any school, other than an accredited college or university, that TREC authorizes to offer a real estate or real estate inspection educational program or course of study. TREC's provider rule, 22 Texas Administrative Code 535.61, makes the statutory bond or other acceptable security part of the application to become an approved provider of qualifying courses.

Who is exempt

Rule 535.61 lists exempt providers that can offer qualifying courses without becoming approved providers. For real estate courses these include accredited colleges, United States armed forces institutes, a person approved by another state's real estate regulator to offer qualifying courses, and a nationally recognized professional designation institute or council in the real estate industry. Exemptions for inspector courses are wider and include government units, code organizations and professional trade associations in the inspection field. A provider that offers only continuing education is approved under rule 535.71, which does not mention a bond.

What the bond covers

The bond is payable to the Commission for the benefit of any party who suffers damages caused by the school's failure to fulfill obligations related to its TREC approval.

Keeping approval active

If the bond or security is cancelled, the provider is placed on inactive status until it is reinstated. Initial provider approval is valid for four years. The renewal application is due no later than the 60th day before the current approval expires, and renewal also depends on whether the provider met the exam passage rate benchmark set by the Commission. Under rule 535.101 the application fee for a qualifying education program is $400 for four years, the program pays a $200 annual operation fee, and each qualifying course carries its own per classroom hour review fees.

Eligibility and Requirements for a Texas Real Estate School ($20,000) Bond:

Corporate surety bond of $20,000, or other security acceptable to the Commission.
Texas Real Estate Commission named as obligee.
Coverage for any party damaged by the school's failure to fulfill obligations related to its TREC approval.
Four-year provider approval, with the renewal application filed no later than 60 days before expiration.
$200 annual operation fee for the qualifying program.

Texas Real Estate School ($20,000) Bond FAQs:

Our program runs through an accredited college. Do we need the bond?

No. Section 1101.302 excludes accredited colleges and universities from the definition of an educational institution, and rule 535.61 lists accredited colleges among the exempt providers.

We only teach continuing education. Is the bond required?

The bond requirement appears in TREC's rule for providers of qualifying courses, 535.61. CE providers are approved for two years under a separate rule, 535.71, which does not mention a bond. Check with TREC before filing if you plan to add any qualifying course.

What happens if the surety cancels our bond?

Rule 535.61 places the provider on inactive status until the bond or other security is reinstated. Have a replacement bond in place before the cancellation takes effect.

Can we put up something other than a surety bond?

The statute allows a corporate surety bond or other security acceptable to the Commission. TREC decides what other security it will accept, so ask before you plan around an alternative.

How long does provider approval last?

Four years. File the renewal no later than the 60th day before expiration. Renewal is judged on the standards for initial applications and on whether the provider met the Commission's exam passage rate benchmark.