A significant shift in Texas real estate law is approaching, aimed at providing consumers with much-needed clarity regarding their relationship with real estate professionals. Starting January 1, 2026, a new law—established by Senate Bill 1968—will officially eliminate subagency in all real estate transactions across the state.
What is Subagency?
In traditional real estate terms, subagency typically occurs when a license holder helps a buyer but does not actually represent them. In this scenario the agent is considered a subagent of the seller. This means their fiduciary duties are owed to the seller, not the person they are showing the property to, which often leads to confusion for consumers who assume the person helping them is their agent.
Why the Change Matters for Consumers
The primary goal of making subagency illegal is to ensure that every consumer has a clear understanding of who represents their interests. By repealing the concept of subagency from the Texas Occupations Code § 1101.002(8), the law removed a default relationship that often left buyers without true representation. This change is intended to help consumers get better representation by making agent-client responsibilities transparent from the very beginning of a transaction.
New Requirements for Written Agreements
Under the new legal framework provided by SB 1968, license holders will be required to enter into a written agreement before performing certain brokerage acts for a prospective buyer.
- Written Agreements: A broker or sales agent must have a written agreement in place before showing residential property or making an offer on behalf of a buyer.
- Showing Without Representation: The law does allow for a dating phase where an agent can show a property without representing the party, provided they do not give advice or opinions and remain clear that they do not represent that party.
- Transparency: These mandatory written agreements must clearly state the services provided, the termination date, and whether the representation is exclusive.