Can you write a contingency into the Special Provisions Paragraph?

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07/21/2015 | Author: Editorial Staff

My client wants to purchase a property and make that contract contingent on the sale of his current home. Do I have to use the Addendum for Sale of Other Property by Buyer, or can I just write this language in the Special Provisions Paragraph of the One to Four Family Residential Contract (Resale)?

You must provide the addendum. TREC rules require a license holder to provide the Addendum for Sale of Other Property by Buyer to a buyer who wants to make a contract contingent on the sale of another property. License holders are not allowed to write language into the Special Provisions Paragraph for situations that are covered by a TREC promulgated form, such as the contingency addendum. If your client doesn’t want to use the addendum, you should advise him to consult his attorney to draft language that will reflect his intention.

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Categories: Legal
Tags: legal faq, legal, contracts, contingency


Mary Ann Lipsey on 09/07/2016

Today on the front page of TREC Advisor, this very issue is addressed.  Go to their website and pull up the most recent issue
“Issues with agents inserting wording regarding appraisals, etc”

A Keller Williams agent argued w/me all morning that their “legal team” said it was perfectly fine to write wording in special provisions regarding appraisal,  and I didn’t know what I was talking about & then today, it appears.  Love it!

David Davis on 09/07/2016

@ mary ann lipsey
The language is already in the Third Party Financing Addendum.  For one it is redundant. Secondly it makes no sense. Thirdly, the special provisions part of the contract specifically tells you what it is for, this isn’t it! Fourth wait till a lawyer gets ahold of this in court.  Who put that language in the contract?  Was it a party, or the Agent (practicing law without a license), etc…. need I continue?

mary ann lipsey on 09/07/2016

I see a lot of agents w/2 particular agencies, writing in special provisions “if the property doesn’t appraise,  etc”  - where can I find the wording that covers “not doing this” to send to them the next time I see it in 1 of my contracts when co-oping with them.

Rick DeVoss on 08/12/2015

I can’t believe this question was asked by a licensed agent…
How do you get through the licensing courses without learning that ALL forms promulgated by TREC are required for agents to use if they fit the scenario….?
Q:  Why do we even have a TAR form that duplicates a TREC form?

Generally speaking, if you think you are about to write something in Special Provisions,  you may be about to make a huge mistake.  Call your favorite title company attorney, and ask for their opinion.

Ken Smith on 07/23/2015

Bill Cross. YES.  Checking box (a) in section 4.A.(2) is absolutely a contingency. Third party Financing addendum is required in this case. Qualified buyers should consider checking box (b) which removes the contingency, negates the need for the third party finance addendum and makes their offer much stronger.

Bill Cross on 07/23/2015

Is the Third Party Financing Condition considered a contingency?  I thought it was not, yet many many agents are listing homes as Contingent for financing.

Chris C on 07/23/2015

Why would anyone want to try to explain anything in Special Provisions when an addendum will serve the purpose? Let the promulgated forms do the work. It makes your job so much easier and the terms of the deal are much clearer to both parties.

David Davis on 07/23/2015

In fact special provisions is the very last place you would put such a contingency.

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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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