The Texas Real Estate Commission (TREC) adopts amendments to §537.11 and §537.46, concerning standard contract forms. Section 537.46 is adopted with changes to the proposed text as published in the June 25, 2004, issue of the Texas Register (29 TexReg 6054). Changes in §537.46 and the form adopted by reference respond to public comments or otherwise reflect nonsubstantive variations from the proposed rule and form to clarify their intent and improve style and readability. Section 537.11 is adopted without changes to the proposed text and will not be republished.

These amendments would adopt by reference a revised contract form to be used by Texas real estate licensees. The contract forms are published by TREC and available at the TREC web site (www.trec.state.tx.us) or at the Texas Real Estate Commission, P.O. Box 12188, 1101 Camino La Costa, Austin, Texas 78711-2188.

Texas real estate licensees are generally required to use forms promulgated by TREC when negotiating contacts for the sale of real property. These forms are drafted by the Texas Real Estate Broker-Lawyer Committee, an advisory body consisting of six attorneys appointed by the President of the State Bar of Texas, six brokers appointed by TREC, and a public member appointed by the governor.

The amendment to §537.11 renumbers the revised form promulgated by TREC. The amendment to §537.22 adopts by reference Standard Contract Form TREC No. 39-5, Amendment. The form is revised to delete Paragraph 3 regarding the option fee, adds a new paragraph to extend the date for buyer to give written notice to seller that buyer cannot obtain financing approval as set forth in the Third Party Financing Condition, and renumbers the form accordingly.

The Texas Association of Realtors (TAR) commented in favor of the revisions to the form with one change. Six other commenters commented in favor of the revisions to the form with additional revisions. All comments regarding this adoption, including any not specifically referenced herein, were fully considered by the commission.

Comment: TAR recommends changing Paragraph (8) to strike "will be extended to" and substitute "is changed to" to allow more flexibility and to more closely tracks other paragraphs in the addendum.

Response: The commission agrees with the commenter and changed the form accordingly.

Comment: One commenter suggested that the commission should add "Buyer" and "Seller" to mirror the lines immediately above.

Response: The commission agrees with the suggestion and has revised the form accordingly.

Comment: Two commenters suggested that the form should include a paragraph that delineates the number of the amendments that occurred prior to the amendment or a checkbox to indicate that the amendment replaces or is in addition to prior amendments as contracts may have several amendments.

Response: The Commission determined that the proposed changes were unnecessary and the public interest was best served by the proposed text of the forms without the suggested changes.

Comment: One commenter suggested a revision to the option period extension paragraph to indicate the exact date and time that the option period expires.

Response: The Commission determined that the proposed changes were unnecessary and the public interest was best served by the proposed text of the forms without the suggested changes.

Comment: One commenter suggested that the form should include an acknowledgement that the amendment is under consideration, and that the amendment form should include another paragraph to give notice to seller that the buyer is unable to obtain financing approval according to the terms of the Third Party Financing Addendum in cases where an extension request to obtain financing approval is not granted.

Response: The commission disagrees with the commenter. There is an existing form, TREC No. 42-0, which licensees must use to give notice to seller that the buyer is unable to obtain financing approval according to the terms of the Third Party Financing Addendum; thus proposed changes are unnecessary and the public interest is best served by the proposed text of the forms without the suggested changes.

Comment: One commenter suggested non-substantive revisions.

Response: The commission disagrees with the commenter. The commission determined that the proposed changes were unnecessary and the public interest was best served by the proposed text of the forms without the suggested changes.

The Broker Lawyer Committee reviewed the comments and made an additional suggestion to delete the clause "Upon final acceptance of this Amendment" from paragraph (7), as it appears to be redundant. The commission agrees with the suggestion and has revised the form accordingly.

The amendments are adopted under Texas Occupations Code, §1101.151, which authorizes the Texas Real Estate Commission to make and enforce all rules and regulations necessary for the performance of its duties and to establish standards of conduct and ethics for its licensees in keeping with the purpose and intent of the Act to insure compliance with the provisions of the Act.

The statute affected by this adoption is Texas Occupations Code, Chapter 1101. No other statute, code or article is affected by the adopted amendments.