The TREC has been busy. They have proposed (and published for public comment) numerous changes to their forms, including those related to Professional Agreements and Contracts. In total, TREC has proposed to adopt six revised contract forms, two revised addenda, and one new addendum for use by Texas real estate licensees. Once adopted, these changes will appear in Chapter 537 of Title 22 of the Texas Administrative Code.
The Comment Deadline is OCTOBER 1, 2013.
Here are some of the more important proposed changes:
Standard Contract Form TREC No. 20-11, One to Four Family Residential Contract (Resale). The proposed amendments are as follows.
The definition of “Property” is moved from the end of Paragraph 2 to the beginning of the paragraph.
Paragraph 6.A.(8) is amended to provide that, at buyers’ expense, the exception shall be amended to read “shortages in area” unless the buyer instructs the title company otherwise. The third sentence in
Paragraph 6.B regarding delivery of Commitment and Exception Documents is amended to read “...the time for delivery will be automatically extended up to 15 days or 3 days before the Closing Date, whichever is earlier” to foreclose the delivery of such documents at closing.
Paragraph 7.D is amended to define “As Is” as “the present condition of the Property with any and all defects and without warranty except for the warranties of title and the warranties in this contract.” The notice after paragraph 7.D is moved to the body of the paragraph after the definition of “As Is” and the defined term “As Is” is added to that sentence and subparagraphs (1) and (2) to replace “in its present condition.” The parenthetical at the end of paragraph 7.D is changed to add “and treatments” at the end of the sentence.
The second sentence in Paragraph 7.F is amended to clarify that, if no license is required by law to perform a repair or treatment, all repairs and treatments must be performed by persons “who
are commercially engaged in the trade of providing such repairs or treatments” rather than “authorized by law to provide such repairs or treatments.” Paragraph 7.F is amended to change the number of days in the last sentence from 15 to 5 days regarding the Buyer’s option to extent the Closing Date if Seller fails to complete agreed repairs and treatments prior to closing. Paragraph 9 is amended by adding a new
Paragraph 9.B regarding leases wherein the Seller (1) agrees not to execute any lease or convey any interest in the Property after the effective date without the Buyer’s written consent, and (2) incorporates existing Paragraph 9.B(5) and renumbers existing Paragraph 9B to 9C to contain 9B(1)-(4).
Paragraph 14 is amended to add the clause “or cause to be restored” in the first sentence. Paragraph 16 is amended to remove the mediation check boxes to require mediation to resolve disputes between Buyer and Seller related to the contract. Paragraph 23 is amended to provide that the Seller or Listing Broker must receive the option fee within 3 days after the effective date of the contract rather than Buyer paying Seller the option fee within two days after the effective date of the contract to make it clear that it is not enough that the Buyer puts the option fee in the mail within 2 days after the effective date; the Seller or Listing Broker must receive the option fee within 3 days after the effective date. The last page is amended to clarify that the agents should not sign on the blank lines, they should insert their names only.
Standard Contract Form TREC No. 9- 10, Unimproved Property Contract. The proposed revisions are the same as those proposed for TREC Form No. 20-9 except as follows.
The definition of “Property” in Paragraph 2 is not changed.
Paragraph 7.E(1) is amended to be the same as Paragraph 7.H(1) in Form 25-10, Farm and Ranch Contract.
Paragraph 7.E(3) regarding environmental hazards is amended to change “any environmental hazards or conditions affecting” to “any environmental hazards that materially and adversely affect” the property.
A complete list of the proposed changes is available from TREC on their "Forms" page.
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