1. (a) A person desiring to offer educational programs or courses of study under approval of the Texas Real Estate Commission pursuant to Texas Civil Statutes, Article 6573a (the Act), §7(f), shall file an application on forms adopted by the commission accompanied by the fee prescribed pursuant to §11(9) of the Act.

2. (b) The Texas Real Estate Commission adopts by reference the following forms approved by the commission. These documents are published by and available from the Texas Real Estate Commission, P.O. Box 12188, Austin, Texas 78711-2188:

   1. (1) Form SCH 1-0, Proprietary School Application;
   2. (2) Form SCH 2-0, Principal Information Form;
   3. (3) Form SCH 3-0, Course Application;
   4. (4) Form SCH 3A-0, Course Application Supplement;
   5. (5) Form SCH 4-0, Instructor Application;
   6. (6) Form SCH 4A-0, Instructor Application Supplement;
   7. (7) Form SCH 5-0, Real Estate School Bond; and
   8. (8) Instructor and Course Evaluation Form, Form SCH 6-0.

3. (c) In considering an application, special attention will be given to management, instructorship, physical plant, financial base, and curriculum.

   1. (1) An entity filing an application for approval of a proprietary real estate school in Texas shall submit material for no less than 180 hours of core real estate courses with the original application for approval.
   2. (2) Professional or trade organizations or schools approved and regulated by an agency of this state may submit real estate or real estate related courses for approval limited to their areas of specialization.
4. (d) The commission may request additional information from an applicant which the commission deems to be relevant and material to the consideration of an application.
5. (e) The commission shall notify the applicant in writing of the approval or disapproval of the application. The notice will be sent by certified mail to the address provided by the applicant in the application. If the application is disapproved, the notice shall contain the reason for the decision.
6. (f) An applicant may appeal a disapproval by filing with the commission a written request for a hearing within ten days after the receipt of the notice of disapproval. Following the hearing, the commission may sustain or withdraw the disapproval or establish conditions for the approval of a provider, course or instructor. Proceedings involving applications will be conducted in accordance with the Administrative Procedure Act, Title 10, Government Code, Chapter 2001. Venue for any hearing conducted under this section shall be in Travis County.
7. (g) Proposed change(s) in and of a program including, but not limited to, ownership, location of main office and any other locations where courses are offered, management, instructorship, and formats shall be approved by the commission in advance of being instituted. Requests for approval of changes in ownership shall include a resume of proposed new owner(s); the proportion of ownership of each new owner; and if a purchase of a school, a financial statement of the new owner(s) and a statement of any proposed changes in the operation or location of the school.
8. (h) No school may be accredited or operate under commission approval for the sole purpose of offering courses of instruction designed to prepare its students for the state examination for any license issued by the commission. Schools approved by the commission may offer examination preparation courses on a non-credit basis. Before being presented, any such courses must be submitted to and approved by the commission in the same manner as courses accepted for licensure requirements. Schools shall ensure that at the beginning of each examination preparation course, the instructor reads aloud to all students the provisions of §535.61(hh) of this title (relating to Examinations).
9. (i) All commission-accredited schools must be open to the public, and may not offer courses of instruction to businesses or organizations with a closed membership, unless such courses are publicly advertised in such a manner as to encourage an open enrollment. Courses may not be held in the offices of brokerage firms or real estate franchise organizations.
10. (j) Directors of commission-accredited programs are responsible to the commission for the conduct and administration of each course presentation, and are responsible for punctuality of classroom sessions, student attendance records, instructor performance and attendance, examination administration, proper student certification, and certification of records. Instructors must teach a course in substantially the same manner represented to the commission in the instructor's manual or other documents filed with the application for course approval. Directors or their staff shall establish business hours during which they shall be available for public inquiry and assistance.
11. (k) Schools accredited by the commission shall select each instructor on the basis of expertise in the subject area of instruction and ability as an instructor. Except as provided by this section, schools may not utilize instructors who have not been approved by the commission. Schools shall require specialized training or work experience for instructors for specialized subjects such as law, appraisal, investments, or taxation. Guest speakers or other persons who have not been approved as instructors by the commission may not be used for more than three hours of instruction in a course.
12. (l) Schools shall provide instructor evaluation forms for completion by students in every class and establish procedures for instructional review. Student instructor evaluation reports must be tabulated and summarized by the school's director, and any comments by the school's management relevant to such reports must be filed in the school records. On demand by the commission the school shall produce student instructor evaluation forms for inspection.
13. (m) Instructors who are deemed inadequate by the school's administration or who do not satisfy the school's standards of quality may not be used as instructors by the school. The school shall report to the commission the identity of any instructor no longer being used.

14. (n) The application for original commission approval of an instructor must be filed on forms adopted by the commission. Requests that teaching assignments of previously-approved instructors be extended by the school must be made by letter to the commission. The commission may disapprove an application for approval of an instructor for the same reasons as it may disapprove applications for real estate licensure and may withdraw approval for the same reasons as it may suspend or revoke real estate licenses. Appeals from application disapprovals will be conducted in the manner required by the Act, §10. Proceedings for the withdrawal of instructor approval will be conducted in the manner required by the Act, §17. Each person approved as an instructor must meet the following requirements:

    1. (1) a college degree in the subject area or five years professional experience in the subject area; and
    2. (2) three years experience in teaching or training; or
    3. (3) the equivalent of paragraphs (1) and (2) of this subsection as determined by the commission after due consideration of the applicant's professional experience, research, authorship or other significant endeavors in the subject area.
15. (o) Core real estate courses prescribed by the Act, §7(a), and other standard courses of instruction for licensure credit offered by schools accredited by the commission must be presented in no less than 30 classroom hours of instruction. Courses must be advertised and scheduled for the full clock hours of time for which credit is awarded.

16. (p) Core real estate courses must include, but are not limited to, the statutory subject areas as found in the Act, §7(a). All statutory subject areas must be specifically listed in each core course submitted for approval. An applicant shall submit Form SCH 3-0 the first time approval is sought to offer a course. Once a course has been approved, no further approval is required for another approved provider to offer the same course. Prior to advertising or offering the course, however, the subsequent provider shall complete Form SCH 3A-0, file the form with the commission and receive written or oral acknowledgment from the commission that all necessary documentation has been filed. Providers shall submit an instructor's manual for each proposed course. The commission may require a copy of the previously approved instructor's manual to be submitted for each previously approved course the provider intends to offer. Subsequent providers shall offer the course as originally approved or as revised with the approval of the commission and shall use all materials required in the original or revised course. The commission adopts by reference "Guidelines for Developing an Instructor's Manual for a Proprietary School Course" approved by the commission in 1995; this form is published by and available from the Texas Real Estate Commission, P.O. Box 12188, Austin, Texas 78711-2188. Each manual must contain the following:

    1. (1) course description;
    2. (2) learning objectives;
    3. (3) evaluation techniques;
    4. (4) outline of the subject matter;
    5. (5) instructional strategies in addition to lecture (at least three for each course);
    6. (6) course participant handouts; and
    7. (7) bibliography or source of updated subject matter.
17. (q) Each course of instruction must utilize examinations approved by the commission as a component of measurement for determination of successful completion of a course of study. In the event of failure of a course final examination, no re-examination is authorized unless the student has repeated the entire course. If a school permits a student to complete the final course examination prior to completing all makeup time to satisfy attendance requirements, the school shall require the student to sign a statement acknowledging the student's awareness of the requirement that should the student fail the final examination the student will be required to repeat the entire course before testing again for credit for the course. If a school permits a student who cannot complete the final course examination at the originally scheduled time to arrange for a makeup examination, the procedure for taking a makeup examination, any time limit on makeup exams, and any added fee the school may charge for this process must be disclosed in the enrollment agreement the student signs prior to the start of the class. Makeup final examinations must be completed within 90 days of the termination of the original class or the student must be considered dropped from the class with no credit.
18. (r) The weight of examinations as the determination of successful completion of a course, and the criteria for passing of examinations, may be developed by each school based on each school's educational concepts. The commission may, however, direct alterations in examination procedures, criteria for passing, and administration. Each school shall furnish the commission with copies of its examinations with each new course submitted for approval and at any time subsequent changes are made to previously approved examinations. Schools shall revise final course examinations for active courses at least annually, and shall furnish the commission copies of all revisions. Each of the subjects required by statute for each core course must be covered in the exam of that course. An examination proctor, either school staff or faculty, must be present with the class during all regularly scheduled final course examinations.
19. (s) Schools shall update course materials during the period of time a course may be given to ensure that current and accurate information is provided to students. Updated course materials and revisions of the course outline must be filed with the commission prior to implementation, and the commission may direct a school to revise the materials further or cease use of materials. The commission may direct that the school withdraw texts.
20. (t) The school shall provide each student with copies for the students' permanent use of any printed material which is the basis for a significant portion of the course. Ample space must be provided on handouts for notetaking or completion of any written exercises.
21. (u) Schools may give one hour of credit for 50 clock minutes of actual classroom session time. Schools may allow a ten-minute break for every 50 minutes of classroom session time, but a break must be given at least every two hours, using all accumulated break time.
22. (v) Intermediate courses and advanced courses may be developed by schools accredited by the commission and submitted to the commission for approval.
23. (w) A school that is planning the development of a complete program of study should base its program on the core real estate courses as prescribed in the Act, §7(a). Additional courses may be developed in subjects such as construction; ethics; taxation; office management; advertising; earnest money contracts; exchanging; real estate counseling; syndication; condominium conversions; farm and land brokerage; and other subjects approved by the commission.
24. (x) Each accredited school shall maintain a separate fixed office in the State of Texas. The office must be large enough for maintenance of all records, office equipment, files, telephone equipment, and office space for customer service.
25. (y) Classroom facilities and changes in classroom facilities are subject to the approval of the commission.
26. (z) Schools may not use classroom facilities at a trade or proprietary school not accredited by the commission unless prior approval is obtained from the commission.
27. (aa) As a part of routine audits of courses conducted by commission employees, reports will be filed concerning the adequacy of classroom facilities, and the commission may direct that the use of a facility be discontinued.
28. (bb) Schools may offer a course using an alternative delivery method such as computers if the course satisfies the requirements of such a course contained in §535.71 of this title (relating to Mandatory Continuing Education).
29. (cc) Printed bulletins or other promotional information must be specific with respect to the purpose of each course of instruction, curricula, classroom hours (or other units), content of the course, tuition, and criteria for successful completion of the course. All advertising and promotional materials must contain the school name. No promotional activities of any school accredited by the commission may state or imply that the school's program of instruction is the sole vehicle by which the educational requirements for licensing can be attained, nor may any promotional activity state or imply that individuals should refrain from or not seek evaluation of previous educational experience by the commission as a basis for meeting educational requirements for licensing.
30. (dd) A school may not promote educational programs in such a manner as to convey a false impression of the school's size, importance, location, equipment, or facilities.
31. (ee) A school may not promote itself in such a manner as to state or imply that the school's programs excel any other course of instruction.
32. (ff) A school may not promote itself in such a manner as to state or imply that its students will achieve earning potential as a result of participation in the school's educational program. Except as provided by this section, no school may promote itself directly or indirectly as a job placement agency. A school participating in a job retraining program recognized by federal, state, or local government may, however, provide job placement services to the extent the services are required by the program and may advertise its participation in the program. Schools are responsible to the commission for ensuring that instructors or other persons do not recruit or solicit prospective salespersons in a classroom during class time.
33. (gg) The commission may require a school to furnish proof of any of its advertising claims and, if cause is shown for retraction of a claim, may require the school to publish the retraction in the same manner as the advertising claim was published.
34. (hh) If a school charges fees for supplies, material, or books needed in course work, the fees must be itemized in a written statement provided to each student by the school. Any written advertisement by the school which contains a fee charged by the school must display all fees for the course in the same place in the advertisement and with the same degree of prominence.
35. (ii) Tuition fees must be stated in an agreement signed by the school and the student. The agreement must contain the school's policy regarding the return of fees when a student is dismissed or withdraws voluntarily. The school shall inform the commission when a student requests a refund because of a withdrawal due to the student's dissatisfaction with the quality of the course.
36. (jj) Each school shall notify the commission in writing of the school's tuition refund policy. The commission may direct changes to achieve an equitable refund policy.

37. (kk) Within ten days following the completion of a course, each school shall provide the commission with a class roster in a format approved by the commission. The listing of students must be numbered and in alphabetical order, and must show after each student's name the final grade of either passed, failed, incomplete, or dropped, in language or symbols that can be correlated with these categories. Any other grade must be explained concisely but clearly.

    1. (1) Passed must be limited to those students who attended all of the scheduled classes or completed acceptable makeup and who successfully passed the final course examination based on passing standards approved by the commission.
    2. (2) Failed must be limited to those students who had acceptable classroom attendance but failed the final course examination.
    3. (3) Incomplete must be limited to those students who met the attendance requirements, but did not take the final course examination; those who attended at least two-thirds of the scheduled course hours and took the final course examination but did not complete acceptable makeup; or those who attended at least two-thirds of the scheduled course hours, but did not complete acceptable makeup and did not take the final course examination. If a student is reported incomplete and later completes acceptable makeup and/or the final examination, a supplemental report must be provided to the commission using the same format and course data as the original class report, giving the student's name and final grade report. A separate supplemental report must be furnished for each individual class, but more than one student may be on the report if all were in the same original class.
    4. (4) Dropped must be limited to those students who missed more than two-thirds of the scheduled class in which originally enrolled; those who voluntarily terminated their enrollment; or those whose enrollment was terminated for cause by a school director.
38. (ll) Each school shall issue to the students successfully completing a course of instruction an official certificate which reflects the school's name, branch, course title, course numbers, and the number of classroom hours (or other recognized educational unit) involved in the course. All core course certificates must show the statutory core course title or other identification as prescribed by the commission. Certificates also must show the date of issuance and be signed by an official of the school, or if the certificate is computer printed, the school logo may be substituted for the signature. Originals or copies of the certificates may be presented to the commission as evidence of successful completion of the course of instruction. Letters or other official communications also may be provided to students for submission to the commission as evidence of satisfactory completion of the course. Such letters must fully reflect the school name, the course title and number, educational units, and be dated and signed by an official of the school, or if the letter is computer printed, the school logo may be substituted for the signature. Each school shall maintain adequate security for completion certificates and letters. Compliance with this requirement will be determined by the commission during all school audits. A school may withhold a student's certificate of completion of a course until the student has fulfilled the student's financial obligation to the school.
39. (mm) Each accredited school shall maintain records of each student enrolled in any course for a minimum of five years. The full class file and student enrollment agreements must be retained for at least 12 months following completion of the class. In the event that a school should cease operation for any reason, the school shall be responsible for maintaining the records or providing a custodian for the records acceptable to the commission. In no circumstances will the commission take custody of the records. Record custodians must be notaries who will make copies of course completion certificates available to the students at the fee in effect for duplicate transcripts at the time the school ceased operation.
40. (nn) Each school accredited by the commission shall maintain financial records sufficient to reflect at any time the financial condition of the school. A school's financial statement and balance sheets must be available for audit by commission personnel, and the commission may require presentation of financial statements or other financial records.
41. (oo) The commission may place on probation, suspend operation, or withdraw the accreditation of a school should it be determined that the school's financial condition is insufficient for continuing operation.
42. (pp) A student who attends at least two-thirds of a scheduled course may complete makeup work to complete attendance requirements. Acceptable makeup procedures are the attendance in the corresponding class sessions in a subsequent offering of the same course; the supervised presentation by audio or video tape of the class sessions actually missed; or specific reading of textbook material on the missed subject(s) and a substantial written report on those subjects. Records of all makeup and any required written work must be made a part of the class file to be retained for 12 months. All class makeup sessions must be completed within 90 days of the completion of the original course or the student must be considered dropped with no credit for the course. Makeup procedure must be subject to the approval of a school staff member. A student attending less than two-thirds of the originally scheduled course must automatically be dropped from the course without credit and reported as dropped. Dropped status may not be changed by makeup sessions, and any hours accumulated may not be transferred to any other course. Schools may develop policies to retain an administrative fee up to $25 and to prorate the balance of tuition fees based on the hours of classroom attendance. Attendance requirements, acceptable makeup procedures, fees that may be charged for makeup sessions, time limits for makeup sessions, and the refund policy of the school shall be clearly specified in the course enrollment agreement signed by the student prior to the start of the class.
43. (qq) Any commission-approved course of instruction is subject to audit by personnel authorized by the commission. Audits will be conducted without prior notice to the school, and commission employees may enroll and attend a course without identifying themselves as employees of the commission. Commission employees also may evaluate the effectiveness of course materials or instructors through surveys of students. The commission may require schools to furnish students with an evaluation form approved by the commission and to request that the students complete and return the form directly to the licensing and education division of the commission. An audit report or evaluation indicating noncompliance with these sections will be treated as a written complaint against the school or instructor concerned and will be referred to the enforcement division of the commission for appropriate resolution. Commission employees may file written complaints against providers or instructors if course completion rosters or other documents filed with the commission provide reasonable cause to believe a violation of these sections has occurred.
44. (rr) Each accredited school shall pay the fee prescribed by the Act, §11(10), and by §535.101 of this title (relating to Fees) no later than December 31 of each year. Prior to December 31 of each year, the commission shall send a written notice to each school to pay the fee, but the school's obligation to pay the fee is not affected by any failure to receive the notice.

45. (ss) Complaints, investigations, and hearings involving schools accredited by the commission shall be governed or conducted in the manner required by the provisions of §535.73 of this title (relating to Compliance and Enforcement). The commission may reprimand, place on probation or suspend or withdraw accreditation of a school or course offered by a school or other person approved to offer courses when it has been determined that the school or person has been guilty of:

    1. (1) procuring or attempting to procure approval for a school, course or instructor by fraud, misrepresentation or deceit, or by making a material misrepresentation of fact in an application filed with the commission;
    2. (2) making a false representation to the commission, either intentionally or negligently, that a person had attended a course or a portion of a course for which credit was awarded, that a person had completed an examination, or that the person had completed any other requirement for course credit;
    3. (3) aiding or abetting a person to circumvent the requirements for attendance established by these sections, the completion of any examination, or any other requirement for course credit;
    4. (4) failing to provide within 15 days information requested by the commission as a result of a complaint which would indicate a violation of these sections;
    5. (5) making a materially false statement to the commission in response to a request from the commission for information relating to a complaint against the school or instructor; or
    6. (6) disregarding or violating a provision of these sections or of the Act.

Source Note:The provisions of this §535.66 adopted to be effective January 1, 1976; amended to be effective November 14, 1979, 4 TexReg 4000; amended to be effective December 25, 1980, 5 TexReg 4909; amended to be effective August 27, 1981, 6 TexReg 3004; amended to be effective March 30, 1987, 12 TexReg 824; amended to be effective July 14, 1987, 12 TexReg 2146; amended to be effective October 2, 1991, 16 TexReg 5210; amended to be effective September 24, 1993, 18 TexReg 6215; amended to be effective May 4, 1995, 20 TexReg 3015; amended to be effective September 7, 1995, 20 TexReg 6653; amended to be effective April 10, 1997, 22 TexReg 3230; amended to be effective October 21, 1997, 22 TexReg 10316; amended to be effective April 14, 1998, 23 TexReg 3682; amended to be effective October 5, 1998, 23 TexReg 9980.