Sep 8 • John G. George, Jr.

SB 1968: Is Subagency Dead . . . or Just Playing Hide-and-Seek?

Does SB 1968 completely eliminate subagency—or is the truth more complex?

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.

The Open House Example

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.

Moving Forward

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.

Disclaimer

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.