The Texas Real Estate Commission met November 10 to consider several important issues. Meeting details and materials can be found at TREC’s website.
As anticipated, the commission approved changes to promulgated contract forms. These changes are expected to be effective on a voluntary basis as of February 16, 2021, and mandatory April 1, 2021. Not every contract received the same update, so check TREC’s website for specifics.
Updated Consumer Protection Notice
There was an amendment to the Consumer Information form to alert consumers that inspectors are required to carry E&O insurance. If your website or communications directly link to the Consumer Protection Notice on TREC’s website, no action is necessary. However, if you have saved a copy of the form on your website, you will need to update to the new version before February 1, 2021.
Updates to the One to Four Family Residential Contract (Resale)
- Paragraph 2C: The definition of Controls was updated to include both software and applications used to access and control accessories along with dedicated hardware solely used for the accessory.
- Paragraph 4: This paragraph now contains lease information, including references to the new residential and fixture lease addenda as well as information on natural resource leases to which seller is a party.
- Paragraph 5: The revised section combines payment of earnest money and termination option in a single provision and calls for payment of the termination option fee to the escrow agent.
- Paragraph 8: The previously proposed version removed the language stating the brokers’ fees obligations. This language was added back in.
- Paragraph 10: A Smart Devices section was added to clarify that those devices get transferred with the sale of the property.
- Paragraph 21: The notice information changed to allow for more email addresses by updating the email to read Email/Fax.
- Paragraph 23: This paragraph was deleted to follow the changes to Paragraph 5.
- The Broker Information page now contains additional space for team names.
- Disclosure language at the bottom of the Broker Information page was updated regarding broker compensation.
The commission will hold a special meeting to propose updating forms previously omitted from consideration. This meeting will ensure conformity with changes to Paragraphs 5 and 23, so that all forms will be ready for the March 1 effective date.
The new Residential Lease Addendum was approved with changes from the previously proposed version. Language was added to Section A to notify the parties that use of the addendum does not terminate an existing lease. Additionally, Section B3 was reworded to require sellers to disclose information to the best of their knowledge rather than make affirmative representations.
The new Fixture Lease Addendum was also approved with clarifying changes. Notably, the addendum makes clear that all rights to leased fixtures—such as propane tanks and solar panels—are governed by the fixture leases. New sections were also added to clarify whether the buyer is assuming the fixture lease or if the seller will remove the fixtures.
Texas REALTORS® Appointed to TREC Committees
Three Texas REALTORS® members were appointed to important TREC committees: Kelea Youngblood (Austin) and Mike Crowley (San Antonio) will serve on the Education Standards Advisory Committee, and Bob Baker (Collin County) will serve on the Broker Responsibility Working Group.