Do Texas real estate inspectors have to carry liability insurance to keep a license?

Plain-English summary

Douglas Oldmixon, the Administrator of the Texas Real Estate Commission, asked the Attorney General about the liability-insurance requirement for licensed real estate inspectors. Two sections of the Occupations Code work together here: section 1102.114(3) tells the Commission to issue an inspector's license to an applicant who, among other things, proves the applicant carries liability insurance to protect the public, and section 1102.203(a) requires the same proof of insurance to renew a license. The Administrator noted that coverage seemed available in Texas at the time but worried it might not be in the future.

His first question was a what-if: would the insurance still be required if every insurer left the Texas market and no policy existed to satisfy the statute? The opinion read the plain text and answered yes. Section 1102.203(a) flatly says the applicant is "required" to carry the insurance described in section 1102.114(3), and the opinion found no statutory language or court decision that would excuse an applicant if the insurance happened to be unavailable. So the requirement would still apply even in that scenario.

The second question asked whether the Commission could waive the requirement if no coverage were available. The opinion said no. A state agency has only the powers the Legislature expressly grants, plus those reasonably necessary to carry out the granted powers. No statute expressly lets the Commission waive the section 1102.114(3) insurance requirement. The Legislature did give the Commission discretion to waive a license requirement in one specific situation, for an applicant who holds a license from another state with substantially equivalent requirements. The opinion treated that narrow, specific grant as a signal that the Legislature did not impliedly hand the Commission a broader power to waive other requirements like the insurance rule. A footnote added the obvious safety valve: the Legislature could amend the statute to make the insurance requirement contingent on availability, but an Attorney General opinion cannot rewrite the statute that way.

Currency note

This opinion was issued in 2012. Subsequent statutory amendments, court decisions, or later Attorney General opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

What the opinion meant for those who asked

The Texas Real Estate Commission (as the opinion described it): The opinion told the Commission that the statute requires an inspector applicant to carry liability insurance even if the coverage were unavailable, and that the Commission lacks authority to waive that requirement.

Real estate inspectors (as the opinion described it): The opinion read sections 1102.114(3) and 1102.203(a) as requiring an inspector to carry the liability insurance to be licensed or to renew, with no statutory exception for unavailability.

Anyone hoping the rule could be relaxed (as the opinion described it): The opinion noted that only the Legislature, not an AG opinion, could make the insurance requirement contingent on the availability of coverage by amending the statute.

Common questions

Must a Texas real estate inspector carry liability insurance to be licensed?
According to the opinion, yes. Sections 1102.114(3) and 1102.203(a) of the Occupations Code require an applicant to prove liability insurance both to obtain and to renew an inspector's license.

What if no insurer offers the coverage anymore?
The opinion concluded the requirement would still apply. It found no statutory language or court decision excusing an applicant when the insurance is unavailable.

Can the Real Estate Commission waive the insurance requirement?
The opinion said no. The Commission has only its expressly granted powers and necessary implied ones, and the Legislature granted waiver authority only for out-of-state applicants with substantially equivalent licenses, not for the insurance requirement.

Could the rule ever be made conditional on insurance being available?
The opinion noted that the Legislature could amend section 1102.114(3) to make the requirement contingent on availability, but an Attorney General opinion cannot add that condition itself.

Background and statutory framework

Section 1102.114(3) of the Occupations Code directs the Texas Real Estate Commission to license an inspector applicant who proves the applicant carries liability insurance to protect the public, and section 1102.203(a) requires the same proof to renew. Tex. Occ. Code Ann. §§ 1102.114(3), 1102.203(a) (West 2012). Reading the plain and common meaning of the text, State v. K.E.W., 315 S.W.3d 16, 21 (Tex. 2010), the opinion found no exception for unavailable insurance, see Brown v. Mem'l Vills. Water Auth., 361 S.W.2d 453, 455 (Tex. Civ. App.-Houston 1962, writ ref'd n.r.e.).

On waiver, an agency has only expressly granted and reasonably necessary implied powers. Pub. Util. Comm'n of Tex. v. City Pub. Serv. Bd. of San Antonio, 53 S.W.3d 310, 315 (Tex. 2001). The Legislature granted the Commission discretion to waive a license requirement only for an applicant holding a substantially equivalent out-of-state license. Tex. Occ. Code Ann. § 1102.112 (West 2012). Under the principle that naming one thing excludes those not named, Jones v. Liberty Mut. Ins. Co., 745 S.W.2d 901, 902 (Tex. 1988), the opinion concluded the Commission lacks discretion to waive the insurance requirement. A footnote observed the Legislature could amend the statute, Tex. Const. art. III, § 1, but an AG opinion cannot, id. art. II, § 1; see Lee v. City of Houston, 807 S.W.2d 290, 294-95 (Tex. 1991).

Citations

Cases:

• State v. K.E.W., 315 S.W.3d 16, 21 (Tex. 2010)
• Brown v. Mem'l Vills. Water Auth., 361 S.W.2d 453, 455 (Tex. Civ. App.-Houston 1962, writ ref'd n.r.e.)
• Pub. Util. Comm'n of Tex. v. City Pub. Serv. Bd. of San Antonio, 53 S.W.3d 310, 315 (Tex. 2001)
• Jones v. Liberty Mut. Ins. Co., 745 S.W.2d 901, 902 (Tex. 1988)
• Lee v. City of Houston, 807 S.W.2d 290, 294-95 (Tex. 1991)

Statutes:

• Tex. Occ. Code Ann. § 1102.114(3) (West 2012)
• Tex. Occ. Code Ann. § 1102.203(a) (West 2012)
• Tex. Occ. Code Ann. § 1102.112 (West 2012)
• Tex. Const. art. III, § 1
• Tex. Const. art. II, § 1

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/greg-abbott/ga-0932
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/2012/ga0932.pdf

Original opinion text

Best-effort transcription from the official PDF. Minor extraction artifacts were corrected; the linked PDF is authoritative.

ATTORNEY GENERAL OF TEXAS
GREG ABBOTT

May 18, 2012

Mr. Douglas E. Oldmixon Opinion No. GA-0932
Administrator
Texas Real Estate Commission Re: Whether section 1102.114 of the Texas Occupations
Post Office Box 12188 Code, which requires licensed real estate inspectors to
Austin, Texas 78711-2188 carry liability insurance, would be effective if no such
coverage were available (RQ-1015-GA)

Dear Mr. Oldmixon:

You ask two questions about sections 1102.114(3) and 1102.203(a) of the Texas Occupations Code.[1] Section 1102.114(3) requires the Texas Real Estate Commission to issue a real estate inspector's license to an applicant who, among other things, "offers proof that the applicant carries liability insurance ... to protect the public." TEX. OCC. CODE ANN. § 1102.114(3) (West 2012). Section 1102.203(a) provides that a "person may renew an unexpired license by ... providing proof of liability insurance as required by Section 1102.114(3)." Id. § 1102.203(a). You explain that "there appear to be sufficient providers of [such coverage] in Texas today," but "a concern exists that there may not be access to such coverage in the future." Request Letter at 1.

Your first question is, "Would the insurance described above still be required if every insurance provider left the Texas market and no policy was available to satisfy the requirements of Sections 1102.114 and 1102.203(a) ... ?" Id. at 2. We begin our answer by reviewing the plain and common meaning of the statute's text. State v. K.E.W., 315 S.W.3d 16, 21 (Tex. 2010). Section 1102.203(a) states that an applicant is "required" to carry the insurance that section "1102.114(3)" describes. TEX. OCC. CODE ANN. § 1102.203(a) (West 2012). We neither found nor received briefing purporting to find any statutory language or Texas court decisions that would exempt an applicant from carrying such insurance if it were unavailable. Therefore, sections 1102.114(3) and 1102.203(a) require an applicant for a real estate inspector's license to carry the insurance that section 1102.114(3) describes even if such insurance were unavailable. See Brown v. Mem'l Vills. Water Auth., 361 S.W.2d 453, 455 (Tex. Civ. App.-Houston 1962, writ ref'd n.r.e.) ("In determining the legislative intent it is to be presumed the Legislature was acquainted with the conditions affecting the area to be affected by the legislation.").[2]

Your second question is, "Does the Commission have the discretion to waive this requirement if no such insurance coverage is available in Texas?" Request Letter at 2. We begin our answer by noting that a state agency like the Commission has only those powers that the Legislature expressly grants it, along with implied powers that are reasonably necessary to exercise the expressly granted powers. Pub. Util. Comm'n of Tex. v. City Pub. Serv. Bd. of San Antonio, 53 S.W.3d 310, 315 (Tex. 2001). We neither found nor received briefing purporting to find a statute expressly granting the Commission discretion to waive the section 1102.114(3) insurance requirement. Instead, we found a statute granting the Commission discretion to "waive any license requirement for an applicant who holds a license from another state having license requirements substantially equivalent to those of this state." TEX. OCC. CODE ANN. § 1102.112 (West 2012). This specific grant of authority to waive certain license requirements indicates that the Legislature has not impliedly granted the Commission discretion to waive other license requirements, such as the section 1102.114(3) insurance requirement. See Jones v. Liberty Mut. Ins. Co., 745 S.W.2d 901, 902 (Tex. 1988) (explaining that the Legislature's naming of one thing generally excludes things not named and that a court may not add words to a statute that are not implied in the statute's language). Because the Legislature neither expressly nor impliedly granted the Commission the power to waive the section 1102.114(3) liability insurance requirement, the Commission lacks discretion to waive that requirement.

SUMMARY

Sections 1102.114(3) and 1102.203(a) require an applicant for a real estate inspector's license to carry liability insurance. The Texas Real Estate Commission lacks authority to waive that requirement.

Very truly yours,

DANIEL T. HODGE
First Assistant Attorney General

JAMES D. BLACKLOCK
Deputy Attorney General for Legal Counsel

JASON BOATRIGHT
Chair, Opinion Committee

Jason Boatright
Assistant Attorney General, Opinion Committee

[1] Letter from Douglas E. Oldmixon, Adm'r, Tex. Real Estate Comm'n, to the Honorable Greg Abbott, Tex. Att'y Gen. at 2 (Oct. 11, 2011), http://www.texasattorneygeneral.gov/opin ("Request Letter").

[2] Of course, the Legislature may amend section 1102.114(3) to make the insurance requirement contingent on the availability of the required insurance. TEX. CONST. art. III, § 1. An opinion of this office, however, cannot. Id. art. II, § 1. See also Tex. Att'y Gen. Op. No. GA-0781 (2010) at 3 (explaining that "we will not add words that are not implicitly contained in the language of a statute") (citing Lee v. City of Houston, 807 S.W.2d 290, 294-95 (Tex. 1991)).