. 

The Attorney General of Texas 

December 6, 1978 

JOHN L. HILL 

Attorney General 

Honorable Tom Creighton 

Chairman 

Senate Economic Development 

Committee 

State Capitol 

Austin, Texas 767U 

Opinion No. Ii- 1271 

Re: Whether telephone solicitors for resort developments 

must have a real estate license. 

Dear Senator Creighton: 

You ask whether the Real Estate License Act, article 6573a, V.T.C.S., 

requires the licensing of telephone solicitors employed by resort developers. 

These employees call persons from a list given them and read a statement 

offering a visit to the development. If the person called wishes to receive 

additional information or visit the development, the telephone solicitor 

arranges a meeting between him and the real estate agent representing the 

development. He receives ~JI hourly salary for this work. 

Article 6573a, section l(b), requires that any person acting as a real 

estate broker must be licensed by the Real Estate Commission. “Broker” is 

defined expansively to include persons engaging in any of a number of 

activities: 

Sec. 2. As used in this Act: 

. . . . 

(2) ‘Real estate broker’ means a person who, for 

another person and for a fee, commission, or other 

valuable consideration, or with the intention~or in the 

expectation or on the promise of receiving or collecting a fee, commission, or other valuaP!e consideration 

from another person: 

. . . . 

(I) procures or assists ifi the procuring of prospects 

for the purpose of effecting the sale, exchange, lease, 

or rental of real estate. . . . 

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Honorable Tom Creighton - Page 2 (RL1271) 

Section 4 provides as follows: 

A person who, directly or indirectly for another, with the 

intention or on the promise of receiving any valuable 

consideration, offers, attempts, or agrees to perform, or 

performs, .a single act defined in Subdivisions 2 and 3, 

Section 2 of this Act, whether as a part of a transaction, or 

as an entire transaction, is deemed to be acting as a real 

estate broker or salesman within the meaning of this Act. 

The commission of a single such act by a person required to 

be licensed, under this Act and not so licensed shall 

constitute a violation of this Act. 

A Florida court in construing a similar statute determined that teleohone 

solicitors took part in the procuring of prospects for a real estate sales pro&am. 

Alligood v. Florida Real Estate Comm’n, 156 So.2d 705 (Fla. Dist. Ct. App. 1963). 

The efforts of the telephone solicitors determined who was at least interested in 

the project and bonstituted a first and very important step in the endeavor. The 

Florida court found it a material factor that the solicitors received a bonus for 

each prospect who agreed to visit the development. A New Jersey court, relying in 

part on the Florida decision, determined that a similar licensing statute ‘applied to 

salaried telephone solicitors even though they received no commissions. Boise 

Cascade Home & Land Corp. v. Division of the New Jersey Real Estate Comm’n, 

296 A.2d 545 (N.J. Surer. Ct. Ch. Div. 1972). The New Jersev court stated that the 

telephone callers played a significant part in the sales pro&am and were, the first 

to make direct contact with the public. It not only agreed with the Florida court 

that such employees assisted in the procuring of prospects, but also determined 

that they were employed “to sell” lots, construing that term to include any act 

intended to lead to completion of the transaction. The Texas Real Estate 

Commission has also concluded that telephone solicitors must be licensed under the 

Act. Texas Real Estate Commission, Declaratory Ruling (Jcne 25, 1976). Corn are 

Texas Real Estate Commission Rules 402.03.02.005, S 2(2)(c) 6 and 7 e-- clermal 

employees who answer telephone and do work of a secretarial nature are not 

required to be licensed when they engage in no solicitation work). We believe that 

a Texas court would agree with the conclusion reached by the two courts that have 

considered this matter and by the agency that administers the Act. 

You next ask whether the legislature may constitutionally prohibit such 

telephone solicitations by persons who are not licensed under article 6573a. The 

state may, in exercise of its police power, regulate a private business such as the 

real estate business, which affects the public interest. Hall v. Hard, 335 S.W.2d 

584 (Tex. 1960); Gregory v. Roedenbeck, 174 S.W.2d 585 (Tex. 1943). The legislature 

has considerable discretion to determine what the public interest requires and what 

measures are necessary for its protection. State v. Richards, 301 S.W.2d 597, 602 

(Tex. 1957). Where no suspect categories are involved, a statute is unconstitutional 

as an invalid exercise of the police power only when it arbitrarily interferes with 

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Honorable Tom Creighton - Page 3 (H-1271) 

legitimate activities in a manner that has no reasonable relation to the .public 

welfare. State v. Spartan’s Industries, Inc., 447 S.W.2d 407, 414 (Tex. 1969), appeal 

m, 397 U.S. 590 (1970). In enacting the original Real Estate License Act in 

1939, the legislature expressed the purpose of preventing fraud in the sale of real 

estate. Acts 1939, 46th Leg., S 24, at 576. In a more recent version of the statute, 

it noted that the complexities of real estate transactions require that only licensed 

persons act as real estate brokers. Acts 1967, 60th Leg., ch. 272, S 8, at 602. We 

cannot say that the licensing requirements have no reasonable relation to the public 

interest as applied to telephone solicitors who contact people and attempt to 

interest them in the purchase of land. In Gregory v. Roedenbeck, the Supreme 

Court determined the predecessor of the Rex Estate License Act to be a valid 

exercise of the police power and found its licensing requirements applicable to 

someone who performed a single act in connection with the procurement of a 

prospect. In our opinion, the statute may also be constitutionally applied to the 

telephone solicitors. 

You next ask whether the legislature may constitutionally exempt from 

licensing requirements salespersons who meet certain criteria. Article 6573a, 

section 3, exempts a number of people from licensure, including the following: 

(f) a salesperson employed by an owner in the sale of 

structures and land on which said structures are situated, 

provided such structures are erected by the owner in the due 

course of his business. . . . 

Thus, a salesperson employed by an owner-builder under the circumstances outlined 

in section 3(f) may sell improved lots without a license. The salesperson employed 

by the owner of unimproved lots must be licensed. You wish to know whether this 

discrimination with respect to license requirements is consistent with the 

Constitution. See U. S. Const. amend. 14; Tex. Const. art. 1, S 3. 

- 

When economic legislation is attacked as inconsistent with the equal 

protection clause, it will be upheld unless its classifications have no reasonable 

relation to the promotion of the general welfare. Ex parte Tigner, 132 S.W.2d 885 

(Tex. Crim. App. 19391, eff’d, 310 U.S. 141 (1940). It will be presumed that the 

legislative classifications are reasonable. Board of Insurance Comm’rs v. Great 

Southern Life Insurance Co., 239 S.W.2d 803 (Tex. 1951). If any state of facts can 

reasonably be conceived that would sustain the classification, the existence of such 

facts at the time of enactment will be presumed. Ex parte Tigner, m. Applying 

these standards, we cannot say that the classification you inquire about violates the 

equal protection clause. The legislature might reasonably exempt the sellers of 

improved lots under the circumstances described in section 3(f) on the ground that 

the owner who improves lots has shown greater stability and commitment to the 

project than the owner of unimproved lots, whose sales may be more speculative. 

Since one purpose of licensing is to protect the public from fraud, different facts 

with respect to the possibility of fraud may justify different treatment. 

p. 5029 
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Honorable Tom Creighton - Page 4 (H-1271) 

You also inquire whether the Real Estate Commission may constitutionally 

exempt from licensing telephone solicitors employed as rental agents by the 

property owner, while requiring licensure of telephone solicitors employed in 

connection with the sale of property. Rule 402.03.02.005(5) promulgated by the 

commission provides: 

Real estate licensure is required of rental agents doing all 

solicitations by telephone unless such agents are employees 

of the owner of the property concerned. 

The Real Estate Commission has express rule-making authority. V.T.C.S. art. 

6573, S 5(e). The act exempts from licensure “an owner or his employees in renting 

or leasing his own real estate whether improved or unimproved... . .‘I V.T.C.S. art. 

6573a, S 3(i). We believe that neither the rule nor the exemption it is based on 

creates a constitutionally impermissible classification. The legislature and the 

commission may reasonably exempt rental transactions by owners of the property 

on the grounds that they do not involve the same investment and long term 

commitment by the consumer as does the sale of .real estate, and hence, are less 

likely to injure the general welfare. 

We note that the Florida Supreme Court has held the Florida licensing 

requirement unconstitutional on equal protection grounds as applied to the salaried 

employees of a corporation, where the requirement was particularly burdensome. 

Florida Real Estate Comm’n v. McGregor, 288 So.2d 529 (Fla. 1972). We believe 

this decision is inapplicable to the present question for a number of reasons. First, 

the Florida court objected to a provision exempting from licensure one officer of 

any corporation engaged in the sale of real estate. There is no comparable 

provision in article 6573a. Second, the court felt the statute was designed to 

protect consumers from injury by independent brokers, since the consumer would 

generally have no recourse against the broker’s principal. A consumer who dealt 

with a broker employed by a corporation would have recourse against the 

corporation, and thus, there was no need for the Real Estate Commission to 

regulate that broker. The Texas statute, however, has the broader purpose of 

protecting the public from fraud and incompetence, and we feel we should defer to 

the legislative judgment as to the scope of protection needed by the public. See 

Board of Insurance Comm’rs v. Great Southern Life Insurance Co., m, at 812. 

Finally, from the language used by the Florida Supreme Court and the authorities it 

cited, it appears that it may have applied the “compelling state interest” test 

against which classifications involving a fundamental right or suspect category are 

tested, ,or in any event, a stricter test than the one applied by the Texas courts to 

economic legislation. See Ex parte Tigner, e. 

SUMMARY 

We believe Texas courts will hold that, telephone solicitors 

employed by resort developers to call people and offer visits 

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Honorable Tom Creighton - Page 5 (H-1271) 

to the development must be licensed under the Real Estate 

License Act, that application of licensing requirements to 

such persons is within the police power of the state, and that 

exemptions from licensing for salespersons employed by the 

owner-builder of improved real property and for telephone 

solicitors employed as rental agents by the property owner 

do not violate the equal protection clause. 

ey General of Texas 

DAVID M. KENDALL, First Assistant 

C. ROBERT HEATH, Chairman 

Opinion Committee 

p. 5031