Can my client choose an attorney’s contract over TREC’s?

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04/09/2015 | Author: Editorial Staff

My client wants to sell his house using a contract drafted by his attorney instead of the TREC-promulgated form. Is that OK?

Yes. While licensees are required by law to use a TREC-promulgated form when one exists for a particular transaction, there is an exception when your client, a principal to the transaction, requires you to use a contract prepared by his attorney. This exception only applies if the contract has been prepared by an attorney and at the request of the principal. You should document that your client has made this requirement, and remind him to direct any questions he may have about the contract to his attorney.

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Categories: Forms, Legal
Tags: legal faq, trec forms


Mike on 07/16/2015

The TREC and TAR forms are excellent documents and they are extremely well balanced

Deanna R. Jones on 07/16/2015

Thanks for posting this! I’ve been given a TREC-promulgated form to fill out to sell my house. I can see why this lawyer’s client would want to have their lawyer draft a contract instead. That seems like a good way to have a contract to sign that’s designed with the homeowner’s interests in mind. I’m selling my house soon, so I should ask a lawyer to draft a contract for me since it’s okay.

mark eberwine on 04/14/2015

Is the author of the article going to issue a retraction, or, give a more precise and accurate answer to the ‘question’?
Obviously, the answer given to the question is not complete, therefore, not accurate.

Barbara St. Aubrey on 04/10/2015

Sure they can however, as a buyer’s agent would you advise a buyer to sign without an attorney review - are you secure enough with the contract offered that you will be protected from a future law suite. Will TREC come to your assistance if you are not using a promulgated contract?  Do you know what protection, if any, a buyer is loosing when signing a builder’s contract. Do you alert the buyer to those loses or cross your fingers and hope for the best.

Robert Latham on 04/10/2015

“(a)(3) transactions for which a contract form has been prepared by a principal to the transaction OR [emph. added] prepared by an attorney and required by a principal to the transaction; or . . . “

So a principal may, wisely or not, prepare their own contract even if not an attorney.  A builder, as principal, may require the use of his own or the GHBA/TAB contract (provided he is a dues paying member of GHBA and the council that provides access to said form, otherwise he violating copyright law).

Editorial Staff on 04/10/2015

@Mark: The answer for this question comes from TREC Rule 537.11, Use of Standard Contract Forms. You can read it here (page 106):

Mike McEwen on 04/10/2015

You do not have to have a real estate license to know real estate law.

Mike McEwen on 04/10/2015

Mr. Eberwine is correct.

Richard Weeks on 04/10/2015

Mr. Bruce Owens,
You need to do a search of licensed inspectors, and that is where you will find Mr. Eberwine.

Barbara St. Aubrey on 04/09/2015

One thing writing a clause in special provisions and another replacing a Texas promulgated contract leaving buyer and both brokers and their agents at risk. Brokers working with residential contracts are not working the same as a commercial Broker where it is expected both buyer and seller have their attorney representation with a contract drawn up for the particular sale by the attorneys. It is because we do not practice law that we depend on attorney written contract that residential agent take many classes to be sure not only that they understand the contract and its ramification but well enough to explain it to our client - replacing a TREC promulgated contract leaves the other party and their agent the responsibility to hire their own attorney to explain and make any adjustments to the seller/attorney contract - agents would be practicing law to make any adjustment to or add a clause to the contract and a buyer would be a fool to attempt to make their own adjustments or additions.

Mark Eberwine on 04/09/2015

Me too, Bruce.  Me too.

Bruce Owens on 04/09/2015

I don’t know who you are Mr. Eberwine, but I am sure glad you don’t work under my Broker’s license.  You do not show up under a licensee search of the TREC website, so what makes you the expert on this question?  Are you a Real Estate attorney?

Mark Eberwine on 04/09/2015

Can TAR show me the statutory language that requires licensees to utilize the promulgated contracts when their client dictates use of another contract, any contract, not necessarily a contract prepared by the client’s attorney?
It sounds to me like TAR is trying to convince TREC licensees they can’t do squat unless TARTREC says they can.
I would like to remind all agents that if your client insists you utilize a particular contract, if your client insists that you write certain clauses into a contract, you are not practicing law, you are following your client’s wishes/mandate.  As long as it is not an illegal clause or contract, you have a fiduciary responsibility to follow your client’s demands.

Ray Faragher on 04/09/2015

Yeah, good luck getting a buyer to sign a contract that was prepared by the sellers attorney, sounds like a lot of unnecessary road blocks to me…

Bruce Owens on 04/09/2015

I think if I were put in this position, I would attempt to refer that client to another agent “that had more expertise with that type of transaction”. Failing that, I would run away!

Virgil Eaves on 04/09/2015

Absent a statement from TREC, I believe that use of the GHBA contract is contrary to TREC rules.  I’d like to see legal council from TREC rule on this before I’d agree to use anything other than TREC promulgated contracts.

Barbara St. Aubrey on 04/09/2015

Wouldn’t the seller/attorney be requiring the buyer to have an attorney therefore, an extra expense to the buyer - where as our promulgated contracts are prepared by attorneys and backed by TAR and TREC offering the principles in the contract legal protection with an option to hire at additional cost a personal attorney -  How does a buyer off-set that additional expense and is it a tax write-off?

Mike McEwen on 04/09/2015

I do not believe there is any prohibition relating to your use of the GHBA contract form.

Natascah on 04/09/2015

One of my clients is a builder who wants me to start using the GHBA (Greater Houston Builder Association) contracts from now on. Would this fall under the category of being “written y an attorney” and does anyone have an experience with this?

Dao Vo on 04/09/2015

Very good learn/case…..the seller use an attorney contract, why ? They are want sell easy their home or they want strictly buyers before sale….? Not understand why ?
Buyer use an attorney contract is acceptable…. Some one can share yr experience ?

Lucky Rittiluechai on 04/09/2015

I’m married to an attorney and I have helped many attorneys. It happens to me all the time and when it does I only give advice on what my expertise is. Stay away from reading, interpreting or explaining the terms of the contract. Recommend the side without an attorney to get an attorney’s advice.

Mary Goudreault on 04/09/2015

In this particular situation if you are representing the buyer,  how would you advise the buyer?  Also, is there a promulgated form that you should give to the buyer letting them know they should have an attorney review the document and releasing the brokerage from liability?  I tend to think if an attorney prepared a contract for a seller, the buyer may not be protected as much as they should be.

Virgil Eaves on 04/09/2015

Good article, but it leaves out some important details.  I was taught to make sure the required language is included in the contract or in a signed/dated attachment that advises the Buyer to have an abstract of title examined by an attorney of his/her choice or to obtain a policy of title insurance.  I’ve dealt with several attorneys over the years and more than one left out this statutory information before being reminded.  There may be other pitfalls, but I believe this is one.

Ann Runnels on 04/09/2015

I had a transaction in my office a few years ago like this. The buyer was an attorney and insisted on drawing his own contract. My agent asked if ok. I pointed out that as a principal, TREC allows him to do it and as attorney he could write a contract; however, I told my agent that he needed to suggest to his seller client that they take the contract to their attorney as we could not give advice on the possible consequences of this contract. The buyer had negated every term that gave any protection to the seller.  The seller refused. We had him put in writing that we advised him to seek legal advice and then went forward on the contract at his direction. Sure enough the buyer kept the house off the market for 3 months of the peak season the canceled the contract. There was no consequence since he wrote his own contract and took all that verbage out. The agent eventually sold the house. Lots of lessons learned.

Linda Boggess on 04/09/2015

I could refuse to work with that seller right? If this happened to me I would want to have the contact reviewed by my own attorney. This whole situation could great very complicated and expensive!!

Randy Smith on 04/09/2015

Or a builder or a bank; also fall under Owner.

Mike on 04/09/2015

Correct me if I am wrong but I believe the client could also draw up his own contract,  However, it would be a very bad idea.

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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.

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