Leading trade associations and many professionals imply subagency is gone. Dead. Buried.
Some legal experts say, not so fast—SB 1968 simply
deleted a couple of references in TRELA. It didn’t outlaw the practice or
change it in a substantive way, at least on the seller’s side.
The truth is, the answer isn’t as
straightforward as it may seem. Whether you love it, hate it, don’t understand
it, or just heard about it, every Texas real estate professional has a duty to
wrestle with its implications now. Doing so will minimize the confusion and
potential consumer harm that could arise once the bill takes effect.
Understandably, many will conclude
that SB 1968 eliminates subagency outright—especially given the official
statement of intent drafted by the bill’s author, Senator Schwertner, which
states in part: “S.B. 1968 repeals imbalances created through subagency.”
Texas REALTORS®, the bill’s
principal backer and drafter, has promoted similar language. Its published guidance explains:
“WHAT DOES THIS BILL DO?
Eliminate subagency in all real estate transactions. That
includes residential, commercial, vacant land, farm & ranch—every type of
real estate transaction. Subagency created confusion for consumers and agents
alike. This change gives consumers greater clarity regarding their relationship
with agents and makes agent-client responsibilities more transparent.”
(See Texas REALTORS® “New laws
from the 89th Texas Legislature,” last updated August 14, 2025, here).
While these concerns are
legitimate—especially given issues raised by the Department of Justice and
plaintiffs in lawsuits nationwide—the messaging likely overstates the bill’s
actual impact. Many associations, professionals, and educators have repeated the
same line: SB 1968 killed subagency. Even we at Special Provisions have
occasionally fallen into that trap in social posts, though our classes explore
the nuances.
But in reality, legal experts
point out that SB 1968 merely removed two references to subagency in TRELA
(Sections 1101.002(8) and 1101.805(f)). One defined subagency, the other
limited liability for a subagent’s misrepresentation or concealment of material
facts.
The bill did add new notice and written
agreement requirements for showings and buyer representation, but nowhere does
it expressly prohibit subagency. And the “statement of intent” is not binding
law.
To illustrate the uncertainty, consider a common scenario: An agent with Broker A hosts an open house for Broker B’s listing. Historically, that agent was by default a “subagent” for the seller, even though their primary motivation was usually to find buyer leads. This status existed because the agent with Broker A had no direct agreement with the seller—the only direct agreement was between the seller and Broker B.
Now that SB 1968 has removed “subagency” from TRELA, questions arise:
1. Can listing brokers still
use outside agents to hold open houses as subagents?
Most signs point to yes, despite contrary messaging.
2. Do listing brokers now
need express permission from sellers to use subagents, or is permission still
implied?
No one knows until a court decides. One camp argues implied authority remains
unchanged since subagency wasn’t expressly banned. The other believes the bill
and evolving practice standards eliminate implied authority. Both camps agree
best practice is to get express, written authorization—or better yet, a direct
agreement between the seller and the agent—to provide absolute clarity, comply
with fiduciary obligations, and potentially avoid exposure to additional
liability and loss of E&O coverage.
3. Can listing brokers add
language to listing agreements authorizing subagents?
Likely yes. If association forms do not include an option for subagency, license holders may draft their own listing agreements with seller consent language. This should always be done in consultation with the broker’s legal counsel.
SB 1968 leaves us with more questions than answers. The practice of subagency has not been expressly prohibited, yet its future remains cloudy. What’s clear is the need for ongoing discussion.
Consensus on how the practice must evolve is unlikely. But clarity is achievable if we engage in open, honest, and civil debate. More focused presentations and conversations on the impact of SB 1968 are needed. Broad, high-level discussions are useful, but they must be supplemented with detailed exploration of subagency’s fate.
This post is for informational purposes only and does not constitute legal advice. The opinions expressed are solely those of the author and should not be attributed to any agency, association, organization, or employer. Readers should consult with qualified legal counsel regarding their specific circumstances.
John G. George, Jr. is a real estate attorney, instructor, speaker, and expert witness with deep roots in the Texas real estate community.
For more than 18 years, John has been a trusted advisor to leading real estate professionals and principals, known for blending legal expertise with practical, real-world guidance.
John currently serves as Co-Chair of the Texas Real Estate Commission Broker-Lawyer Committee, where he was twice appointed by the President of the State Bar of Texas to six-year terms (2017–2023 and 2023–2029). His fellow committee members elected him Co-Chair in 2022. He also serves as a subject matter expert for the mandatory TREC Broker Responsibility and Legal Update continuing education courses, and is one of only two TREC instructors who currently teach the instructor courses.
In addition to teaching, John is a frequent speaker at industry conferences, broker events, and continuing education programs. He is also the founder of Special Provisions, LLC, a company dedicated to elevating the profession by offering in-depth analysis of real estate contracts and legal issues, risk management resources for brokers and agents, and continuing education programs.
John began his legal career handling complex jury and bench trials in state, federal, and bankruptcy courts nationwide, representing clients ranging from individuals to Fortune 50 companies. Over time, his passion for real estate led him to focus on advising brokers, agents, buyers, sellers, lenders, and title companies across a variety of legal and business matters. In 2019, he co-founded Hometown Title, serving as Chief Operating Officer and General Counsel until successfully divesting his interest in 2023.
John is Managing Member of George PLLC and also serves clients as Of Counsel at Simple Law TX, a firm that helps individuals and businesses with real estate, probate, estate planning, and business matters.
