When did SB 1968 take effect?

January 1, 2026. The bill was passed by the 89th Texas Legislature in 2025, and the operative changes — removal of subagency, non-representation status, written-agreement requirement, and the new IABS 1-2 form — all became effective on that date.

Do I still need to provide the IABS at the first substantive communication?

Yes. The requirement to provide the IABS under §1101.558 is unchanged — license holders must provide the IABS at the first substantive communication with a prospective party about a specific real property. What changed is the form itself (IABS 1-2 replaces IABS 1-1) and what comes after — a written agreement is now required before showing a residential property or preparing an offer for a residential buyer.

What's the difference between the IABS and a representation agreement?

The IABS is a one-page disclosure that explains the brokerage relationships available under Texas law. It is informational. A representation agreement is a contract between a license holder (through their broker) and a buyer or tenant that creates a brokerage relationship and the corresponding duties. The IABS by itself creates no obligations; the written agreement does.

Can a buyer refuse to sign the required written agreement?

Yes, but the consequence is that the license holder cannot show the property or prepare an offer for that buyer. The agreement is mandatory before those activities — TREC has been explicit that a buyer who refuses to sign cannot be shown property by the agent. The buyer can decline representation (and sign a non-representation agreement instead), but cannot decline the entire written-agreement requirement.

How long can a non-representation agreement last?

Under the new framework, a non-representation agreement must be non-exclusive and cannot exceed 14 days in duration. This is intended for short-term scenarios like showing a property or running through a few open houses, not for long-term arrangements that should properly be representation agreements.

What happens if a license holder shows a property without the required written agreement?

The license holder is in violation of TRELA §1101.563 and may face disciplinary action by TREC, including fines, suspension, or revocation. The complaint against a sponsored sales agent is also a complaint against the sponsoring broker under Rule 535.141(c)–(d), so both can be exposed to discipline. For the full broker supervision framework that determines how complaints are handled, see the dedicated article.

Texas IABS 2026 Update — SB 1968, Non-Representation, and Written Agreements

TL;DR

Senate Bill 1968 took effect January 1, 2026 and changed three things Texas real estate license holders need to know cold: it removed all references to subagency from the Texas Real Estate License Act, it created a new "non-representation" status for license holders showing property without representing the prospective buyer, and it requires a written agreement before a license holder shows a residential property to a buyer or prepares an offer. TREC released the updated IABS form (IABS 1-2) effective the same date — the prior IABS 1-1 should not be used after December 31, 2025. The agency cluster on the Texas real estate exam tests these changes directly, and candidates studying from materials published before late 2025 will see the wrong rules.

What SB 1968 Actually Changed

Senate Bill 1968 was passed by the 89th Texas Legislature in 2025 and took effect January 1, 2026. TREC has called it a "housekeeping bill", but several of the changes materially affect how brokerage relationships are formed and disclosed in Texas. The three changes most likely to appear on the exam:

Subagency removed from TRELA. Before SB 1968, subagency was a recognized brokerage relationship under Texas law — a sales agent could technically act as a subagent of the listing broker when working with a buyer, with fiduciary duties flowing to the seller. SB 1968 repealed all references to subagency in the Texas Real Estate License Act. The framework is gone from the statute.
Non-representation status created. SB 1968 introduced a new category, codified at TRELA §1101.562, for situations where a license holder interacts with a prospective buyer or tenant without representing them — for example, showing property at an open house. Under §1101.562, a license holder may show property (including residential, farm and ranch, and commercial) to a buyer or tenant without representing the buyer or tenant, subject to specific conditions. The non-representation framework is now in the IABS notice and is also reflected in TREC-approved non-representation agreements.
Written agreement required before showing or offer. The most operationally significant change. Under TRELA §1101.563, a license holder who performs brokerage acts for a prospective buyer of residential real property must enter into a written agreement before showing residential real property to that buyer or, if no property will be shown, before preparing or submitting an offer to purchase residential real property on the buyer's behalf. This is a buyer-only rule — §1101.563 does not impose a parallel written-agreement requirement for showing property to a prospective tenant. The requirement runs parallel to the Tex. Occ. Code §1101.806(c) commission-writing requirement that has been the Texas real estate statute of frauds provision for years.

TREC released an updated IABS form, IABS 1-2, effective January 1, 2026, to reflect these changes. The prior IABS 1-1 should not be used after December 31, 2025. The new IABS removes subagency language, adds non-representation status as an option, and clarifies the written-agreement requirement.

The Written-Agreement Requirement in Practice

Under SB 1968, the written-agreement requirement is the most likely source of exam questions and the most common source of real-world compliance failures. The rule, in plain terms: a license holder may not show a residential property to a prospective buyer or prepare or submit an offer on the buyer's behalf without a written agreement in place.

The agreement does not have to establish a representation relationship. A license holder can use one of three written-agreement options with a prospective residential buyer:

Buyer representation agreement — establishes a full representation relationship; the license holder owes the buyer the fiduciary duties of an agent. The agreement should contain the terms required by §1101.563 (services, termination date, exclusivity/non-exclusivity, representation status, compensation, and disclosure that compensation is negotiable).
Non-representation agreement — used when the license holder is showing property without representing the buyer under §1101.562. Under the new framework, this agreement must be non-exclusive and cannot exceed 14 days in duration. It allows the license holder to show property without creating an agency relationship.
Other written brokerage agreement — for example, an intermediary appointment in a transaction where the broker is acting as intermediary and the buyer is one of the parties. Whether such an agreement satisfies §1101.563 depends on whether it contains the specific terms the section requires; license holders relying on a non-standard form should confirm those terms are present.

For an open house, the new rule has practical consequences: a buyer who refuses to sign any written agreement cannot be shown the property by the open-house host. The TREC guidance is explicit — if a buyer refuses to enter into the required written agreement, the license holder cannot show the property. License holders face disciplinary action under TRELA §1101.563 for failing to comply. For license holders involved in residential property management, the §1101.563 written-agreement rule does not apply to showings to prospective tenants — but §1101.562's non-representation framework and the IABS disclosure rules still affect how tenant showings are documented and disclosed.

What the New IABS Form Looks Like

The IABS form is, and has always been, a disclosure — not a contract. It explains the types of brokerage relationships available in Texas and is required to be provided at the first substantive communication with a prospective party. The new IABS 1-2 keeps that core function but reflects SB 1968:

All references to subagency are removed.
A new section explains when a written agreement is required (before showing a residential property or preparing or submitting an offer).
A new section explains the non-representation option — how a license holder can show property to a buyer or tenant without representing them.
The License Holder Contact Information section is revised to describe the parties consistently with the new framework.

The IABS itself does not create any brokerage relationship. The written agreement that the IABS now references is what creates (or, in the non-representation case, explicitly disclaims) the relationship. Exam questions that ask whether the IABS "establishes" or "creates" agency are still wrong — that's the representation agreement's job.

Beyond the IABS — Other SB 1968 Changes

SB 1968 included several other changes that may surface on the exam in supporting roles:

Broker experience points raised from 360 to 720. TREC adopted Broker Responsibility Advisory Committee (BRAC) recommendations to raise the minimum experience point requirement for a broker license from 360 to 720 points, effective January 1, 2026. The cap on real estate-related education credit for a bachelor's degree is set at 300 hours.
Associated brokers must provide affiliation information to TREC. A new requirement to keep TREC's records current.
Broker Responsibility Course requirement for new broker applicants. Brokers applying for licensure after January 1, 2026 must complete the 6-hour Broker Responsibility Course before receiving the license.

What This Means for Exam Candidates

Candidates studying from materials published before late 2025 will see content that no longer reflects current Texas law. The most common stale facts that appear on the exam in misleading ways:

References to subagency as a recognized Texas brokerage relationship — gone.
Questions implying that the IABS form by itself creates an agency relationship — it never did, but the new IABS makes the written-agreement requirement explicit.
Scenarios where a sales agent shows property at an open house without any written agreement — that's now a TRELA violation.
References to the IABS 1-1 form by version number — should be IABS 1-2 for any current exam scenario.

If your exam prep materials don't mention SB 1968, non-representation status, or the IABS 1-2 form, treat the agency-cluster content as out of date and supplement with current TREC guidance.

Common Misconceptions

"Subagency still exists in Texas, it's just rare." No — SB 1968 removed all references to subagency from TRELA. The framework is no longer recognized by Texas statute.
"Non-representation means the license holder owes the buyer no duties at all." Not quite — a license holder in a non-representation role still owes statutory duties of honesty and fair dealing, must not discriminate, and remains subject to TREC rules generally. The license holder just doesn't owe fiduciary duties.
"The written agreement requirement only applies to representation." No — the requirement is to have some written agreement before showing a residential property or preparing an offer, whether that agreement is representation, non-representation, or an intermediary appointment.
"The IABS form satisfies the written-agreement requirement." No — the IABS is a disclosure, not an agreement. The written agreement is a separate document.
"The new rules don't apply outside residential buyer showings." Not quite. The §1101.563 written-agreement requirement specifically targets prospective buyers of residential real property, but the IABS disclosure framework and §1101.562 non-representation concepts can matter more broadly across sale and lease transactions.

Frequently Asked Questions

When did SB 1968 take effect?: January 1, 2026. The bill was passed by the 89th Texas Legislature in 2025, and the operative changes — removal of subagency, non-representation status, written-agreement requirement, and the new IABS 1-2 form — all became effective on that date.
Do I still need to provide the IABS at the first substantive communication?: Yes. The requirement to provide the IABS under §1101.558 is unchanged — license holders must provide the IABS at the first substantive communication with a prospective party about a specific real property. What changed is the form itself (IABS 1-2 replaces IABS 1-1) and what comes after — a written agreement is now required before showing a residential property or preparing an offer for a residential buyer.
What's the difference between the IABS and a representation agreement?: The IABS is a one-page disclosure that explains the brokerage relationships available under Texas law. It is informational. A representation agreement is a contract between a license holder (through their broker) and a buyer or tenant that creates a brokerage relationship and the corresponding duties. The IABS by itself creates no obligations; the written agreement does.
Can a buyer refuse to sign the required written agreement?: Yes, but the consequence is that the license holder cannot show the property or prepare an offer for that buyer. The agreement is mandatory before those activities — TREC has been explicit that a buyer who refuses to sign cannot be shown property by the agent. The buyer can decline representation (and sign a non-representation agreement instead), but cannot decline the entire written-agreement requirement.
How long can a non-representation agreement last?: Under the new framework, a non-representation agreement must be non-exclusive and cannot exceed 14 days in duration. This is intended for short-term scenarios like showing a property or running through a few open houses, not for long-term arrangements that should properly be representation agreements.
What happens if a license holder shows a property without the required written agreement?: The license holder is in violation of TRELA §1101.563 and may face disciplinary action by TREC, including fines, suspension, or revocation. The complaint against a sponsored sales agent is also a complaint against the sponsoring broker under Rule 535.141(c)–(d), so both can be exposed to discipline. For the full broker supervision framework that determines how complaints are handled, see the dedicated article.

Bottom Line

SB 1968 is the most significant change to Texas agency law in years, and it took effect just five months ago. The three test-relevant facts to lock in: subagency was removed from TRELA; a new non-representation status exists for license holders showing property without representing the buyer; and a written agreement is required before a license holder shows a residential property or prepares an offer. The IABS 1-2 form, effective January 1, 2026, replaced IABS 1-1 and reflects these changes. Candidates whose prep materials predate late 2025 should update before exam day. For the full agency-cluster blueprint and the other Texas-specific topics you'll need to know, see our Texas real estate agency hub.

Source: Senate Bill 1968, 89th Texas Legislature · Texas Occupations Code Chapter 1101 (TRELA) · TREC SB 1968 consumer guidance