| (a) When negotiating contracts binding the sale, exchange,
option, lease or rental of any interest in real property, a real estate
licensee shall use only those contract forms promulgated by the Texas
Real Estate Commission (the Commission) for that kind of transaction
with the following exceptions:
(1) transactions in which the license holder is functioning
solely as a principal, not as an agent;
(2) transactions in which an agency of the United States
government requires a different form to be used;
(3) transactions for which a contract form has been
prepared by a principal to the transaction or prepared by an attorney
and required by a principal to the transaction; or
(4) transactions for which no standard contract form
has been promulgated by the Commission, and the license holder uses
a form prepared by an attorney at law licensed by this state and approved
by the attorney for the particular kind of transactions involved or
prepared by the Texas Real Estate Broker-Lawyer Committee (the committee)
and made available for trial use by license holders with the consent
of the Commission.
(b) A license holder may not:
(1) practice law;
(2) offer, give or attempt to give legal advice, directly
or indirectly;
(3) give advice or opinions as to the legal effect
of any contracts or other such instruments which may affect the title
to real estate;
(4) give opinions concerning the status or validity
of title to real estate; or
(5) attempt to prevent or in any manner whatsoever
discourage any principal to a real estate transaction from employing
a lawyer.
(c) This section does not limit a license holder's
fiduciary obligation to disclose to the license holder's principals
all pertinent facts which are within the knowledge of the license
holder, including such facts which might affect the status of or title
to real estate.
(d) A license holder may not undertake to draw or prepare
documents fixing and defining the legal rights of the principals to
a real estate transaction.
(e) In negotiating real estate transactions, a license
holder may prepare forms using only forms that have been approved
and promulgated by the Commission or such forms as are otherwise permitted
by these rules.
(f) When filling in a form authorized for use by this
section, the license holder may only fill in the blanks provided and
may not add to or strike matter from such form, except that a license
holder shall add factual statements and business details desired by
the principals and shall strike only such matter as is desired by
the principals and as is necessary to conform the instrument to the
intent of the parties.
(g) A license holder may not add to a promulgated contract
form factual statements or business details for which a contract addendum,
lease or other form has been promulgated by the commission for mandatory
use.
(h) This section does not prevent the license holder
from explaining to the principals the meaning of the factual statements
and business details contained in an instrument so long as the license
holder does not offer or give legal advice.
(i) It is not the practice of law as defined in this
Act for a real estate license holder to complete a contract form which
is either promulgated by the Commission or prepared by the committee
and made available for trial use by license holder with the consent
of the Commission.
(j) Contract forms prepared by the committee for trial
use may be used on a voluntary basis after being approved by the Commission.
(k) A contract form prepared by the committee and
approved by the Commission to replace a previously promulgated form
may be used by license holders on a voluntary basis before the effective
date of rules requiring use of the replacement form.
(l) When a transaction involves unusual matters that
should be reviewed by legal counsel before an instrument is executed,
or if the instrument must be acknowledged and filed of record, the
license holder shall advise the principals that each should consult
a lawyer of the principal's choice before executing the instrument.
(m) A license holder may not employ, directly or indirectly,
a lawyer nor pay for the services of a lawyer to represent any principal
to a real estate transaction in which the license holder is acting
as an agent. The license holder may employ and pay for the services
of a lawyer to represent only the license holder in a real estate
transaction, including preparation of the contract, agreement, or
other legal instruments to be executed by the principals to the transactions.
(n) A license holder shall advise the principals that
the instrument they are about to execute is binding on them.
(o) Forms approved or promulgated by the Commission
may be reproduced only from the following sources:
(1) numbered copies obtained from the Commission, whether
in a printed format or electronically reproduced from the files available
on the Commission's website;
(2) printed copies made from copies obtained from the
commission;
(3) legible photocopies made from such copies; or
(4) computer-driven printers following these guidelines:
(A) The computer file or program containing the form
text must not allow the end user direct access to the text of the
form and may only permit the user to insert language in blanks in
the forms. Blanks may be scalable to accommodate the inserted language.
The Commission may approve the use of a computer file or program that
permits a principal of a license holder to strike through language
of the form text. The program must be:
(i) limited to use only by a principal of a transaction;
and
(ii) in a format and authenticated in manner acceptable
to the Commission.
(B) Typefaces or fonts must appear to be identical
to those used by the Commission in printed copies of the particular
form.
(C) The text and order of the text must be identical
to that used by the Commission in printed copies of the particular
form.
(D) The name and address of the person or firm responsible
for developing the software program must be legibly printed below
the border at the bottom of each page in no less than six point type
and in no larger than 10 point type.
(p) Forms approved or promulgated by the Commission
must be reproduced on the same size of paper used by the commission
with the following changes or additions only:
(1) The business name or logo of a broker, organization
or printer may appear at the top of a form outside the border.
(2) The broker's name may be inserted in any blank
provided for that purpose.
(q) Standard Contract Forms adopted by the Commission
are published by and available from the Commission at P.O. Box 12188,
Austin, Texas 78711-2188 or www.trec.texas.gov.
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| Source Note: The provisions of this §537.11 adopted to be effective January 1, 1976; amended to be effective January 4, 1983, 7 TexReg 4462; amended to be effective October 20, 1983, 8 TexReg 3999; amended to be effective May 16, 1985, 10 TexReg 1419; amended to be effective August 1, 1985, 10 TexReg 1075; amended to be effective May 19, 1986, 11 TexReg 2093; amended to be effective February 12, 1987, 12 TexReg 346; amended to be effective October 5, 1990, 15 TexReg 5483; amended to be effective September 1, 1992, 17 TexReg 2394; amended to be effective February 1, 1994, 18 TexReg 8200; amended to be effective September 1, 1994, 19 TexReg 3576; amended to beeffective March 1, 1995, 19 TexReg 9996; amended to be effective January 3, 1996, 20 TexReg 11016; amended to be effective January 1, 1998, 22 TexReg 10133; amended to be effective September 1, 1998, 23 TexReg 6956; amended to be effective March 1, 1999, 23 TexReg 13075; amended to be effective January 1, 2000, 24 TexReg 9001; amended to be effective April 19, 2000, 25 TexReg 3270; amended to be effective September 1, 2000, 25 TexReg 6700; amended to be effective April 1, 2001, 26 TexReg 978; amended to be effective February 1, 2002, 26 TexReg 9383; amended to be effective April 1, 2003, 28 TexReg 677; amended to be effective April 1, 2004, 29 TexReg 2013; amended to be effective September 1, 2004, 29 TexReg 8301; amended to be effective May 1, 2006, 31 TexReg 1445; amended to be effective December 27, 2006, 31 TexReg 10299; amended to be effective September 1, 2010, 35 TexReg 7800;amended to be effective December 10, 2014, 39 TexReg 9530 |
