Besides your broker, where do you turn for trustworthy information about real estate transactions? Every year, thousands of Texas REALTORS® reach out to the association’s Legal Hotline at 512-480-8200. The Legal Hotline is a popular member benefit exclusively for Texas REALTORS®—and the premiere source for legal information about Texas real estate law.
Here, the six staff attorneys answering hotline calls share some of the most common questions they’re asked and provide their answers.
Is the contract automatically terminated if the closing date has passed?
No. Generally, once the closing date has passed, there are two ways to formally terminate the One to Four Family Residential Contract (Resale) (TAR 1601, TREC 20-14):
- The parties can agree to terminate and sign a document like Release of Earnest Money (TAR 1904) that releases both parties from further obligations under the contract.
- A judge can order a contract termination.
I offered 2.5% in the MLS, but the buyer’s agent put 3% on page 9. What amount do I have to pay the buyer’s broker at closing?
The MLS offer of compensation will control. Page 9 of the One to Four Family Residential Contract (Resale) (TAR 1601, TREC 20-14) is an information page that should reflect the previously agreed-upon commission.
According to MLS rules, listing brokers must specify the compensation being offered to cooperating MLS participants. These offers are unconditional unilateral offers. The unilateral offer becomes an enforceable agreement between the brokers when a seller and a buyer execute a purchase contract and the cooperating broker is the procuring cause of that sale.
Although the brokers can mutually agree to modify the cooperating compensation, neither broker can unilaterally change the compensation as stated in the MLS once the buyer’s agent submits an offer.
In addition, Standard of Practice 16-16 under Article 16 of the REALTOR® Code of Ethics states that a REALTOR® acting as a buyer’s representative may not use the terms of an offer to attempt to modify the listing broker’s offer of compensation or make the submission of an offer contingent on the listing broker agreeing to modify the compensation.
If a tenant breaks the lease early, can I keep the security deposit?
Before you call the hotline, see if your question has already been answered in the Legal FAQs available at texasrealestate.com. There are more than 400 questions and answers addressing all types of legal and ethical issues surrounding your real estate business.
The landlord can’t automatically keep the security deposit due to a tenant breaking her lease. The landlord must comply with the security deposit accounting and refund requirements of the Texas Property Code.
As part of the property code, a landlord may deduct damages and charges for which the tenant is legally liable under the lease or as a result of breaching the lease. This may include delinquent rent in addition to damages above ordinary wear and tear. Further, the landlord is required to mitigate his damages through reasonable attempts to re-lease the property and reduce the tenant’s liability accordingly.
If only a partial amount of the security deposit is needed for the landlord’s damages after mitigation, the remaining amount of the security deposit must be refunded to the tenant with a written description and itemized list of all deductions. Paragraph 10D of the Residential Lease (TAR 2001) describes what reasonable charges the landlord may deduct from a tenant’s security deposit.
The refrigerator was listed in the MLS. Does it convey with the property if it wasn’t included in the written contract?
Staff attorneys field more than 100 hotline calls a day, and they work hard to reduce your wait times. Here are a few tips to prepare for your call.
- Provide the best call-back number to eliminate missed calls and phone tag.
- Prepare notes and have contracts or documents readily available.
- Summarize your scenario or question. Attorneys will ask follow-up questions, so you don’t need to cover every detail. The more concise you are, the faster they can give you information.
No. Texas REALTORS® should attach the Non-Realty Items Addendum (TAR 1924, TREC OP-M) to the contract or advise their client to consult with an attorney when appropriate (like when a lender prohibits the use of this addendum).
When a buyer wants a household item conveyed that is neither listed in Paragraph 2, nor permanently installed, such as a washer or dryer, it should be listed on the addendum.
My client’s contract to sell his home fell through. He’s in an unresolved earnest money dispute with the buyer, but he asked me to market the property as active. Can I?
The seller’s primary goal should be a formal termination of the contract. That ensures he can put the property back on the market and sell it to someone else without risking a lawsuit that could stop a subsequent sale of the property.
Tell your seller to get advice from his or her attorney concerning the risks of proceeding with a subsequent sale of the property in this situation.
Remember that Texas Real Estate Commission contracts require buyers and sellers to participate in mandatory mediation to resolve disputes before
going to court.
I manage a pet-free property. Does the landlord have to make an exception for a tenant’s assistance/emotional support animal?
Texas REALTORS® have exclusive access to the association’s Legal Hotline. Staff attorneys are available Monday through Friday to provide information about real estate law and related matters. Your call will be returned in the order in which it came, usually the same day you called.
All Texas REALTORS® may use the hotline. The designated REALTOR® from your office will be notified via email whenever you call the hotline. The designated REALTOR® is the person responsible for all contact with the association and is named as the designated REALTOR® in the association’s records. Often, this is the broker of your firm.
It depends. Tenants and applicants with disabilities may request a reasonable accommodation for an assistance animal, including an emotional support animal. Generally, a landlord must grant the request if the tenant has a disability and a disability-related need for the assistance animal. The landlord may be able to ask for additional information, such as documentation from a medical health professional, if the person’s disability and need for an assistance animal is not readily apparent or known.
Also, landlords can’t charge a pet deposit for assistance animals, and cannot impose restrictions on assistance animals based on breed, size, or weight.
Consider giving your client General Information for Landlord Regarding Assistance Animals (TAR 2226). This form contains helpful information about assistance animals and the Fair Housing Act. A landlord may also use Response to Request for Assistance Animal (TAR 2225) after a tenant makes a reasonable accommodation request.