                             ATTORNEY GENERAL OF TEXAS
                                          GREG        ABBOTT




                                           November 24, 2009



Mr. Douglas Oldmixon                                Opinion No. GA-0748
Administrator
Texas Real Estate Commission                        Re: Whether under chapter 1102 of the Occupations
Post Office Box 12188                               Code, the Texas Real Estate Commission has
Austin, Texas 78711-2188                            jurisdiction to take disciplinary action against a
                                                    licensed inspector who performs a real estate
                                                    inspection for a person who is not a buyer or seller of
                                                    real property (RQ-0804-GA)

Dear Mr. Oldmixon:

       Chapter 1102 of the Occupations Code addresses the licensing and regulation of real estate
inspectors. TEx. Occ. CODE ANN. §§ 1102.001-.408 (Vernon 2004 & Supp. 2009). Your
predecessor asked several questions regarding the Texas Real Estate Commission's (the
"Commission") scope of authority under chapter 1102. 1

       In resolving those questions, your predecessor asked that we assume the following facts:

               An inspector licensed under [chapter 1102 of] the Code was engaged
               by a person who purchased a home from a builder who constructed
               the home. The licensee was engaged after the closing on the sale to
               inspect the property to give his opinion on construction defects
               alleged by the person who purchased the property. After the inspector
               provided his opinion, the builder filed a complaint against the
               inspector with the Commission, but Commission staff closed the
               complaint based on its long-standing interpretation of the agency's
               jurisdiction.

Request Letter at 1-2.

       In relation to these facts, we are asked the following:

               1. Does the Commission have jurisdiction under [chapter 1102 of]
                  th~ Code to take disciplinary action against a person licensed



       lRequest Letter at 1-2 (available at http://www.texasattomeygeneral.gov).
Mr. Douglas Oldmixon - Page 2                          (GA-0748)




                      under [chapter 1102 of] the Code if the person inspects real
                      property for a person who is not a buyer or seller or potential
                      buyer or seller as described above?                  .

                  2. Given the Commission's long-standing interpretation that it does
                     not have jurisdiction, if the Commission does in fact have
                     jurisdiction over a licensee in such case, may it open a complaint
                     against the licensee based on an inspection performed prior to the
                     issuance of the Attorney General's opinion on this matter?

                  3. If the answer to question number one is no, does an offer by legal
                     counsel for the person who purchased the property to settle the
                     matter if the builder were to, among other things, purchase the
                     property back from the person, cause that person to be a seller for
                     jurisdictional purposes under [chapter 1102 of] the Code?

Request Letter at 2; see also id at 1 (indicating that the questions relate to the Commission's
jurisdiction under chapter 1102 to take disciplinary action as to a person licensed under chapter
1102).

        In answering the first question, we begin by examining the term "disciplinary action."
Though the term "disciplinary action" is used in chapter 11022 and the Commission's rules,3 we do
not find a definition for the term and your predecessor does not explain what she means by the term.
We note, however, that section 1102.401 is entitled "Disciplinary Powers of Commission." TEx.
Occ. CODE ANN. § 1102.401 (Vernon 2004). We assume for purposes of this opinion that the first
question relates to action taken by the Commission pursuant to section 1102.401 and our analysis
is limited accordingly.4

        Section 1102.401 provides, in relevant part, that "[t]he commission may investigate an action
of an inspector and, after notice and hearing ... , reprimand the inspector, place the inspector's
license on probation, or suspend or revoke the inspector's license for a violation of this chapter or
a commission rule." ld. § 11 02.40 1(a)(emphasis added). By its express terms, section 11 02.40 1(a)


         2See, e.g., TEX. OCC. CODE ANN. § 11 02.362(a) (Vernon 2004) (providing that subchapter H, related to the real
estate inspection recovery fund, "does not limit the commission's authority to take disciplinary action against an
inspector for a violation of' chapter 11 02) (emphasis added).

         3See, e.g., 22 TEx. ADMIN. CODE § 535.227(c) (2009) (Tex. Real Estate Comm'n, Standards of Practice:
General Provisions) ("Failure to comply with the standards of practice [for real estate inspectors] is grounds for
disciplinary action as prescribed by Chapter 1102.") (emphasis added).

         4This opinion does not, therefore, address whether the Commission has jurisdiction to take action under other
penalty and enforcement provisions of chapter 1102 against a licensee who inspects real property for a person who is
not a buyer or seller. See, e.g., TEX. OCC. CODEANN. § 1102.403 (Vernon 2004)(authorizing the Commission to impose
an administrative penalty on a person who violates the chapter).
Mr. Douglas Oldmixon - Page 3                            (GA-0748)



limits the Commission's authority to investigate and take action against an "inspector" and thus, we
focus on the meaning of that term.

        The term inspector is defined to "mean[] a person who holds a license under" chapter 1102,
and the term "license" "means an apprentice inspector license, real estate inspector license,
or professional inspector license."s Id. § 1102.001(6)-(7); see also TEx. GOV'T CODE ANN.
§ 311. 011 (b) (Vernon 2005) ("Words and phrases that have acquired a technical or particular
meaning, whether by legislative definition or otherwise, shall be construed accordingly."); City of
Rockwall v. Hughes, 246 S.W.3d 621,625 (Tex. 2008) (explaining that when construing a statute
definitions prescribed by the Legislature will be applied). The definitions of the terms "professional
inspector" and "real estate inspector" expressly provide that the inspector is a person "who accepts
employment to perform a real estate inspection for a buyer or seller of real property." TEx.Occ.
CODE ANN. § 1102.001(8), (10) (Vernon 2004).6

         One briefreceived in our office notes that the term "apprentice inspector,,7 does not expressly
provide that the inspector accept employment for a buyer or seller. s The brief argues that the
definition of apprentice inspector is evidence that the Commission's jurisdiction in disciplinary
actions is not limited to only those inspectors who accept employment for a buyer or seller of real
property. See Maizel Brief at 5. However, an apprentice must work under the direct supervision of
a real estate inspector or professional inspector, and thus, must necessarily operate under the same
parameters as the supervising inspector-i.e., work, in the capacity of inspector, for a buyer or seller
of real property. See TEx. Occ. CODE ANN. §§ 1102.001(1) (Vernon 2004) (defining apprentice
inspector to be a person in training under the direct supervision of a professional inspector or real
estate inspector), 1102.1 04( 1) (providing that a person "is under ... direct supervision if the person
is instructed and controlled by a professional inspector or real estate inspector who is" responsible
for the actions of the person, available to consult and assist the person, and physically present during
the inspection); 1102.101 (providing that "[a] person may not act ... as an apprentice inspector in
this state for a buyer or seller of real property unless the person" holds the proper license and is
under the proper supervision) (emphasis added).



         SChapter 1102 provides for only three types oflicensed inspectors: apprentice inspectors, real estate inspectors,
and professional inspectors. See, e.g., id. §§ 1102.101 (requiring a license to act as an apprentice inspector), 1102.102
(requiring a license to act as a real estate inspector), 1102.103 (requiring a license to act as a professional inspector)
(Vernon 2004).

          6"'Professional inspector' means a person who represents to the public that the person is trained and qualified
to perform a real estate inspection and who accepts employment to perform a real estate inspection for a buyer or seller
of real property." Id. § 1102.001 (8). "'Real estate inspector' means a person who represents to the public that the person
is trained and qualified to perform a real estate inspection under the indirect supervision of a professional inspector and
who accepts employment to perform areal estate inspection for a buyer or seller of real property." Id. § 1102.001(10).

         7", Apprentice inspector' means a person who is in training under the direct supervision of a professional
inspector or a real estate inspector to become qualified to perform real estate inspections." Id. § 1102.001(1).

         8See Brieffrom Jay Maizel at 5 (July 3, 2009) (on file with the Opinion Committee) [hereinafter Maizel Brief].
Mr. Douglas Oldmixon - Page 4                           (GA-0748)




        In sum, the Commission's authority under section 1102.401(a) is expressly limited to
investigating and taking action against an inspector, who is defined by statute as a person "who
accepts employment to perform a real estate inspection for a buyer or seller of real property." Id
§ 1102.001(8), (10) (Vernon 2004). Without telling us the meaning the Commission ascribes to the
terms "buyer" or "seller," the first question asks us to assume that the property owner in the factual
scenario presented is not a buyer or seller or potential buyer or seller. See Request Letter at 2; Tex.
Att'y Gen. Op. No. GA-0659 (2008) at 3 n.5 ("To answer a requestor's questions of law ... we
assume that the requestor's description of the facts is correct."). Thus, we conclude that under
section 1102.401(a) the Commission does not have jurisdiction to take disciplinary action against
a licensee if the licensee inspects real property for a person who is not a buyer or seller of real
property. Given our answer to the first question, we do not address the second question.

       The third question inquires whether, under the facts presented, the inspector has accepted
employment to perform a real estate inspection9 for a seller of real property. In other words, the
question asks whether a settlement offer to have the builder purchase the property back from the
person might make that person a seller. Request Letter at 1-2.

        In order to answer this question, one must know the definition of the terms "buyer" and
"seller" as used in this context. Chapter 1102 does not define the terms. See, e.g., TEx. OCC. CODE
ANN. § 1102.001 (Vernon 2004). Likewise, the Commission has not defined the terms buyer
or seller in its regulations or advised us as to the Commission's construction of these terms.1O
See Request Letter at 1; see, e.g., 22 TEX. ADMIN. CODE §§ 535.12-.21 (2009) (Tex. Real
Estate Comm'n, Definitions). "The long-standing policy of this office has been to defer to the
administrative agency charged with the administration and enforcement of a statute .... " Tex. Att'y
Gen. Op. No. GA-0692 (2009) at 2. As the agency (1) charged with administering chapter 1102 and
(2) authorized to establish the standards of conduct and ethics for persons licensed under chapter
1102, the Commission must determine, in the first instance, whether the inspector has accepted
employment to perform a real estate inspection for a seller of real property under the facts presented.
See TEx. OCC. CODE ANN. § 1101.151 (a)( 1) (Vernon 2004) (requiring the Commission to administer
chapter 1102), (b)(1 ) (authorizing the Commission to adopt and enforce rules necessary to administer
chapter 1102), (b)(2) (authorizing the Commission to "establish standards of conduct and ethics for
persons licensed under" chapter 1102 in order to fulfill the purpose of and ensure compliance with
chapter 1102). We decline, in these circumstances, to provide definitions to words that the
Commission, as the regulatory authority, has failed to define in the first instance.



         9"'Real estate inspection' means a written or oral opinion as to the condition of the improvements to real
property,including structural items, electrical items, mechanical systems, plumbing systems, or equipment." TEX.OCC.
CODE ANN. § 1102.001(9) (Vernon 2004).

         lOWhile the Request Letter explains that "[b lased on long-standing agency interpretation ... the TREC
Enforcement Division has not accepted complaints filed against persons licensed under the Code if the person who
engaged them to inspect improvements to real property was not a buyer or seller or potential buyer or seller of the
property at the time of the inspection," it does not explain how the Commission defmes the key terms "buyer" or "seller"
in applying this interpretation. Request Letter at 1.
Mr. Douglas Oldmixon - Page 5                 (GA-0748)



                                       SUMMARY

                      The Texas Real Estate Commission does not have authority
              under section 1l02.401(a), Occupations Code, to take disciplinary
              action against a person licensed under chapter 1102 if the person has
              not accepted employment to perform a real estate inspection for a
              buyer or seller of real property.

                      It is necessary to define the terms "buyer" and "seller" in the
              context of chapter 1102 in order to determine whether a person, in a
              particular factual context, constitutes a buyer or seller of real property
              for which a real estate inspector has accepted employment. As the
              agency charged with administering chapter 1102 and authorized to
              establish the standards of conduct and ethics for persons licensed
              under chapter 1102, the Commission must determine, in the first
              instance, the meaning of these terms.




ANDREW WEBER
First Assistant Attorney General

JONATHAN K. FRELS
Deputy Attorney General for Legal Counsel

NANCY S. FULLER
Chair, Opinion Committee

Christy Drake-Adams
Assistant Attorney General, Opinion Committee
