TREC adopts education, contracts changes
11/11/2015 | Author: Editorial Staff
At its November 2 meeting, the Texas Real Estate Commission adopted form revisions and altered education requirements. Here are highlights of the changes, which are all effective January 1.
Visit the Adopted Forms section of texasrealestate.com to see redlines of all the revised TREC forms, which are effective January 1. Four of the changes are discussed below. These will appear on the appropriate forms but may not apply to all TREC contracts:
- Paragraphs 3 & 4
The relationship between credit approval and property approval and when a buyer may terminate has always been a source of confusion. To clear up the confusion, TREC has moved the financing information to a new Third Party Financing Addendum. Because the financing information is on the new addendum, Paragraph 4 was replaced with language regarding when a license holder must disclose his or her interest in a transaction, and Paragraph 3 now contains checkboxes for the addenda related to the transaction’s financing. The name of the form in the addenda section of the contracts will be updated, as well as conforming changes to other forms that reference Paragraph 4 or the old form name.
- Third Party Financing Addendum
The Third Party Financing Addendum replaces the Third Party Financing Addendum for Credit Approval. The new addendum contains the provisions previously listed in the Third Party Financing Addendum for Credit Approval, the third-party financing information previously listed in Paragraph 4, and reverse-mortgage language; the Reverse Mortgage Financing Addendum will be repealed effective January 1 and should no longer be used after that date. The new addendum also provides written permission for lenders and title companies to deliver copies of closing disclosure documents to the REALTOR® listed on the last page of the contract, which was necessitated by the Consumer Financial Protection Bureau’s Truth in Lending-RESPA closing changes effective October 3. This language was taken from the TAR form Authorization to Furnish TILA-RESPA Integrated Disclosures, which will no longer be offered in the TAR forms library effective January 1.
- Paragraph 23
The termination option now ends at 5 p.m. local time where the property is located on the day designated in the contract.
- Broker information
A place for sales associates’ names and license numbers was added to the Broker Information section above the licensed supervisors’ blanks. In addition, the order in which the associate’s and licensed supervisor’s names appear is reversed on the last page of the contract. Scroll to the end of this redline to see what it looks like on the One to Four Family Residential Contract (Resale).
TREC did not adopt changes proposed to Paragraph 9. Those revisions addressed parties’ options for handling delays in closing caused by the new TILA-RESPA integrated disclosure rules, which went into effect October 3.
Many of the modifications to education affect providers and instructors; however, these three changes, effective January 1, affect many license holders:
- Continuing education
The number of hours required to renew your license has increased from 15 to 18. This applies to brokers and agents.
- Legal Update and Ethics
These two courses have been replaced by Legal Update I and Legal Update II, which will still satisfy NAR requirements. Each of the new courses counts for four hours CE.
- Broker Responsibility Course
The rules about who must take this course have changed. A designated broker of a business entity is no longer required to take the Broker Responsibility Course if the entity does not sponsor any salespeople at any time during the current license period.
The Texas Association of REALTORS® will be revising several of its forms due to the TREC changes and other statutory changes. Look for details in the January/February Texas REALTOR® magazine and on this blog.
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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