Can a brokerage’s in-house counsel draft a form?

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04/23/2015 | Author: Editorial Staff

My client is involved in a transaction for which no TREC-promulgated form exists. Can my brokerage’s in-house attorney draft a form for the transaction?

Yes. TREC rules allow a licensed attorney to draft a form for a particular kind of transaction when a TREC-promulgated form does not exist. This would include in-house counsel for a brokerage.

As a licensee, you can’t provide legal advice to your client regarding the legal effect of that form. If your clients have questions about their legal obligations contained in the form, they need to talk to an attorney who can represent their interest—not an attorney who represents your firm’s interest.

Remember that as a Texas REALTOR®, you also have access to more than a hundred forms for various types of real estate transactions that are not covered by TREC-promulgated forms. These include both residential and commercial forms.

Get more answers to your legal questions on texasrealestate.com.

Categories: Forms, Legal
Tags: legal faq, contracts, trec rules


Comments

Daniel Mahoney on 05/04/2015

Any principal to a transaction can draw their own contract or modify any form contract either by himself or in conjunction with his attorney (not yours) and can insist that you offer that to the other principal’s agent.  You can elect to not do so and resign your representation or give the document to the other agent and suggest that it been mentioned that you requested a promulgated form be used and your principal refused.

Gayle Rosenthal on 04/30/2015

REO addenda prepared by the seller’s council should be used with caution.  Often REO listings are owned by large bank portfolios and the addenda they try to insist that agents use addenda which are one-sided and/or abrogate duties of fairness and cooperation that are imposed upon us by our associations or licensing authority.  In many instances REO addenda even violate RESPA regulations on their face.  A listing broker should refuse to use such addenda just as a broker should refuse to use practices that violate anti-discrimination or fair housing laws.

Joe on 04/30/2015

Additionally, (in my opinion) the answer was in response to the specific question about what to do if a form didn’t exist. I don’t believe the answer can be read without first reading the question, otherwise it’s easy to misinterpret the information provided.

Joe on 04/30/2015

George Ann,  No.. You don’t need to insist they use TREC forms. Ever represented a client purchase of REO properties? Sales contracts and forms can come in all forms. You as a Texas real estate professional are not allowed give legal advice and are certainly not allowed to write your own forms. You should use promulgated forms and not write details in special provisions when there’s a form that exists that covers the info that you’re considering entering in special provisions.

George Ann Held on 04/30/2015

I agree that if a form does not exist, then an attorney must draw it up for the client and at the client’s expense.  However, am I to understand that if a TREC form exist and my client is possibly an attorney or wants an attorney to draw up the forms, at their expense, I must insist that a TREC form be used?


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The material provided here is for informational purposes only and is not intended and should not be considered as legal advice for your particular matter. You should contact your attorney to obtain advice with respect to any particular issue or problem. Applicability of the legal principles discussed in this material may differ substantially in individual situations.

While the Texas Association of REALTORS® has used reasonable efforts in collecting and preparing materials included here, due to the rapidly changing nature of the real estate marketplace and the law, and our reliance on information provided by outside sources, the Texas Association of REALTORS® makes no representation, warranty, or guarantee of the accuracy or reliability of any information provided here or elsewhere on texasrealestate.com. Any legal or other information found here, on texasrealestate.com, or at other sites to which we link, should be verified before it is relied upon.

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