22 TAC §§537.11, 537.20, 537.28-537.32, 537.37, 537.38
The Texas Real Estate Commission (TREC) proposes amendments
to §§537.11, 537.20, 537.28-537.32, 537.37 and 537.38, concerning
standard contract forms. These amendments would adopt by reference eight revised
contract forms to be used by Texas real estate licensees.
Texas real estate licensees are generally required to use forms promulgated
by TREC when negotiating contacts for the sale of real property. These forms
are drafted by the Texas Real Estate Broker-Lawyer Committee, an advisory
body consisting of six attorneys appointed by the President of the State Bar
of Texas and six brokers appointed by TREC. The forms have been revised to
include
verbatim
statutory notices which sellers
may be required to provide to purchasers regarding mandatory membership in
a residential owners' association or the possible annexation of the property
and to correct dates used in the contracts.
The amendment to §537.11 renumbers the revised forms in a list of
forms promulgated by the commission and also clarifies that licensees may
use forms approved by the commission to replace promulgated forms prior to
the time the revised versions become mandatory. A provision to this effect
was inadvertently deleted from the section in a prior amendment.
The amendment to §537.20 adopts by reference a revised form TREC No.
9-3, Unimproved Property Contract. The form has been revised to include a
notice (the "owners' association notice") regarding mandatory membership in
a residential owners' association which will be required by the Texas Property
Code, §5.011, in the sale of property upon which an owners' association
may fix liens for unpaid assessments. A second notice has been added regarding
the possibility of annexation of the property (the "annexation notice") which
will be required by the Texas Property Code, §5.012, in the sale of property
located outside the limits of a municipality. Both notice requirements became
effective January 1, 2000. Failure to provide either notice in an applicable
transaction is a statutory ground for the purchaser to terminate the contract.
The form also has been revised to delete specific date lines and leave blanks
for the parties to insert the appropriate year.
The amendment to §537.28 adopts by reference a revised form TREC No.
20-4, One to Four Family Residential Contract (Resale) All Cash, Assumption,
Third Party Conventional or Seller Financing. The form has been revised to
include the owners' association and annexation notices and to delete specific
date lines.
The amendment to §537.29 adopts by reference revised form TREC No.
21-4, One to Four Family Residential Contract (Resale) FHA Insured or VA Guaranteed
Financing. The form has been revised to include the owners' association and
annexation notices and to delete specific date lines.
The amendment to §537.30 adopts by reference revised form TREC No.
23-3, New Home Contract (Incomplete Construction). The form has been revised
to include the owners' association and annexation notices and to delete specific
date lines.
The amendment to §537.31 adopts by reference revised form TREC No.
24-3, New Home Contract (Completed Construction). The form has been revised
to include the owners' association and annexation notices and to delete specific
date lines.
The amendment to §537.32 adopts by reference revised form TREC No.
25-3, Farm and Ranch Contract. The form has been revised to include only the
annexation notice and to delete specific date lines, since farm or ranch would
likely not be in a residential subdivision subject to the owners' association
notice.
The amendment to §537.37 adopts by reference revised form TREC No.
30-2, Residential Condominium Contract (Resale) All Cash, Assumption, Third
Party Conventional or Seller Financing. The form has been revised to include
only the annexation notice and to delete specific date lines, because condominium
sales are not subject to the notice required by The Texas Property Code, §5.011.
The amendment to §537.38 adopts by reference revised form TREC No.
31-2, Residential Condominium Contract (Resale) FHA Insured or VA Guaranteed
Financing. The form has been revised to include only the annexation notice
and to delete specific date lines, because condominium sales are not subject
to the notice required by The Texas Property Code, §5.011.
Mark A. Moseley, General Counsel, has determined that for the first five-year
period the sections are in effect there will be no fiscal implications for
state or local government as a result of enforcing or administering the sections.
There is no anticipated impact on local or state employment as a result of
implementing the sections.
Mr. Moseley also has determined that for each year of the first five years
the sections as proposed are in effect the public benefit anticipated as a
result of enforcing the sections will be the availability of current standard
contract forms which assist sellers in complying with statutory notice requirements.
There will be no effect on small businesses. There is no anticipated economic
cost to persons who are required to comply with the proposed sections, other
than the costs of obtaining copies of the forms, which would be available
at no charge through the TREC web site, and available from private printers
at an estimated cost of $7.50 per set of 50 copies.
Comments on the proposal may be submitted to Mark A. Moseley, General Counsel,
Texas Real Estate Commission, P.O. Box 12188, Austin, Texas, 78711-2188.
The amendments are proposed under Texas Civil Statutes, Article
6573a, §5(h), which authorize the Texas Real Estate Commission to make
and enforce all rules and regulations necessary for the performance of its
duties.
The statute that is affected by these sections is Texas Civil Statutes,
Article 6573a.
§537.11.Use of Standard Contract Forms.
(a)
Standard Contract Form TREC No.
9-4
[
9-3
] is promulgated for use in the sale of unimproved property where intended
use is for one to four family residences. Standard Contract Form TREC No.
10-3 is promulgated for use as an addendum concerning sale of other property
by a buyer to be attached to promulgated forms of contracts. Standard Contract
Form TREC No. 11-3 is promulgated for use as an addendum to be attached to
promulgated forms of contracts which are second or "back-up" contracts. Standard
Contract Form TREC No. 12-1 is promulgated for use as an addendum to be attached
to promulgated forms of contracts where there is a Veterans Administration
release of liability or restoration entitlement. Standard Contract Form TREC
No. 13-1 is promulgated for use as an addendum concerning new home insulation
to be attached to promulgated forms of contracts. Standard Contract Form TREC
No. 15-2 is promulgated for use as a residential lease when a seller temporarily
occupies property after closing. Standard Contract Form TREC No. 16-2 is promulgated
for use as a residential lease when a buyer temporarily occupies property
prior to closing. Standard Contract Form
20-4
[
20-3
]
is promulgated for use in the resale of residential real estate where there
is all cash or owner financing, an assumption of an existing loan, or a conventional
loan. Standard Contract Form TREC No.
21-4
[
21-3
] is
promulgated for use in the resale of residential real estate where there is
a Veterans Administration guaranteed loan or a Federal Housing Administration
insured loan. Standard Contract Form TREC No.
23-3
[
23-2
]
is promulgated for use in the sale of a new home where construction is incomplete.
Standard Contract Form TREC No.
24-3
[
24-2
] is promulgated
for use in the sale of a new home where construction is completed. Standard
Contract Form TREC No.
25-3
[
25-2
] is promulgated for
use in the sale of a farm or ranch. Standard Contract Form TREC No. 26-2 is
promulgated for use as an addendum concerning seller financing. Standard Contract
Form TREC No. 28-0 is promulgated for use as an addendum to be attached to
promulgated forms of contracts where reports are to be obtained relating to
environmental assessments, threatened or endangered species, or wetlands.
Standard Contract Form TREC No. 29-1 is promulgated for use as an addendum
to be attached to promulgated forms of contracts where an abstract of title
is to be furnished. Standard Contract Form TREC No.
30-2
[
30-1
] is promulgated for use in the resale of a residential condominium
unit where there is all cash or seller financing, an assumption of an existing
loan, or a conventional loan. Standard Contract Form TREC No.
31-2
[
31-1
] is promulgated for use in the resale of a residential condominium
unit where there is a Veterans Administration guaranteed loan or a Federal
Housing Administration insured loan. Standard Contract Form TREC No. 32-0
is promulgated for use as a condominium resale certificate. Standard Contract
Form TREC No. 33-0 is promulgated for use as an addendum to be added to promulgated
forms of contracts in the sale of property adjoining and sharing a common
boundary with the tidally influenced submerged lands of the state. Standard
Contract Form TREC Form No. 34-0 is promulgated for use as an addendum to
be added to promulgated forms of contracts in the sale of property located
seaward of the Gulf Intracoastal Waterway. Standard Contract Form TREC No.
35-1 is promulgated for use as an addendum to be added to promulgated forms
of contracts as an agreement for mediation. Standard Contract Form TREC Form
No. 36-1 is promulgated for use as an addendum to be added to promulgated
forms in the sale of property subject to mandatory membership in an owners'
association. Standard Contract Form TREC Form No. 37-1 is promulgated for
use as a resale certificate when the property is subject to mandatory membership
in an owners' association. Standard Contract Form TREC Form No. 38-0 is promulgated
for use as a notice of termination of contract. Standard Contract Form TREC
Form No. 39-1 is promulgated for use as an amendment to promulgated forms
of contracts.
(b)-(c)
(No change.)
(d)
A licensee may not undertake to draw or prepare documents
fixing and defining the legal rights of the principals to a transaction. In
negotiating real estate transactions, the licensee may fill in forms for such
transactions, using exclusively forms which have been approved and promulgated
by the Texas Real Estate Commission or such forms as are otherwise permitted
by these rules. When filling in such a form, the licensee may only fill in
the blanks provided and may not add to or strike matter from such form, except
that licensees shall add factual statements and business details desired by
the principals and shall strike only such matter as is desired by the principals
and as is necessary to conform the instrument to the intent of the parties.
A licensee may not add to a promulgated earnest money contract form factual
statements or business details for which a contract addendum, lease or other
form has been promulgated by the commission for mandatory use. Nothing herein
shall be deemed to prevent the licensee from explaining to the principals
the meaning of the factual statements and business details contained in the
said instrument so long as the licensee does not offer or give legal advice.
It is not the practice of law as defined in this Act for a real estate licensee
to complete a contract form which is either promulgated by the Texas Real
Estate Commission or prepared by the Texas Real Estate Broker-Lawyer Committee
and made available for trial use by licensees with the consent of the Texas
Real Estate Commission. Contract forms prepared by the Texas Real Estate Broker-Lawyer
Committee for trial use may be used on a voluntary basis after being approved
by the commission.
Contract forms prepared by the Texas Real Estate Broker-Lawyer
Committee and approved by the commission to replace previously promulgated
forms may be used by licensees on a voluntary basis prior to the effective
date of rules requiring use of the replacement forms.
(e)-(j)
(No change.)
§537.20.Standard Contract Form TREC No. 9-4 [ 9-3 ].
The Texas Real Estate Commission adopts by reference standard contract
form TREC No.
9-4
[
9-3
] approved by the Texas Real Estate
Commission in
1999
[
1997
]. This document is published
by and available from the Texas Real Estate Commission, P.O. Box 12188, Austin,
Texas 78711-2188.
§537.28.Standard Contract Form TREC No. 20-4 [ 20-3 ].
The Texas Real Estate Commission adopts by reference standard contract
form TREC No.
20-4
[
20-3
] approved by the Texas Real
Estate Commission in
1999
[
1997
]. This document is published
by and available from the Texas Real Estate Commission, P.O. Box 12188, Austin,
Texas 78711-2188.
§537.29.Standard Contract Form TREC No. 21-4 [ 21-3 ].
The Texas Real Estate Commission adopts by reference standard contract
form TREC No.
21-4
[
21-3
] approved by the Texas Real
Estate Commission in
1999
[
1997
]. This document is published
by and available from the Texas Real Estate Commission, P.O. Box 12188, Austin,
Texas 78711-2188.
§537.30.Standard Contract Form TREC No. 23-3 [ 23-2 ].
The Texas Real Estate Commission adopts by reference standard contract
form TREC No.
23-3
[
23-2
] approved by the Texas Real
Estate Commission in
1999
[
1997
]. This document is published
by and available from the Texas Real Estate Commission, P.O. Box 12188, Austin,
Texas 78711-2188.
§537.31.Standard Contract Form TREC No. 24-3 [ 24-2 ].
The Texas Real Estate Commission adopts by reference standard contract
form TREC No.
24-3
[
24-2
] approved by the Texas Real
Estate Commission in
1999
[
1997
]. This document is published
by and available from the Texas Real Estate Commission, P.O. Box 12188, Austin,
Texas 78711-2188.
§537.32.Standard Contract Form TREC No. 25-3 [ 25-2 ].
The Texas Real Estate Commission adopts by reference standard contract
form TREC No.
25-3
[
25-2
] approved by the Texas Real
Estate Commission in
1999
[
1997
]. This document is published
by and available from the Texas Real Estate Commission, P.O. Box 12188, Austin,
Texas 78711-2188.
§537.37.Standard Contract Form TREC No. 30-2 [ 30-1 ].
The Texas Real Estate Commission adopts by reference standard contract
form TREC No.
30-2
[
30-1
] approved by the Texas Real
Estate Commission in
1999
[
1997
]. This document is published
by and available from the Texas Real Estate Commission, P.O. Box 12188, Austin,
Texas 78711-2188.
§537.38.Standard Contract Form TREC No. 31-2 [ 31-1 ].
The Texas Real Estate Commission adopts by reference standard contract
form TREC No.
31-2
[
31-1
] approved by the Texas Real
Estate Commission in
1999
[
1997
]. This document is published
by and available from the Texas Real Estate Commission, P.O. Box 12188, Austin,
Texas 78711-2188.
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of the Secretary of State, on
January 4, 2000.
TRD-200000011
Mark A. Moseley
General Counsel
Texas Real Estate Commission
Earliest possible date of adoption: February 20, 2000
For further information, please call: (512) 465-3900