The Texas Real Estate Commission (TREC) adopts amendments to §§537.11, 537.20, 537.28 - 537.32, 537.37 and 537.38, concerning standard contract forms, without changes to the proposed text as published in the January 21, 2000, issue of the Texas Register (25 TexReg 348). These amendments adopt by reference eight revised contract forms for use by Texas real estate licensees. The forms have been revised to include verbatim statutory notices which sellers may be required to provide to purchasers regarding mandatory membership in a residential owners' association or the possible annexation of the property and to correct dates used in the contracts.

The amendment to §537.11 renumbers the revised forms in a list of forms promulgated by the commission and also clarifies that licensees may use forms approved by the commission to replace promulgated forms prior to the time the revised versions become mandatory.

The amendment to §537.20 adopts by reference a revised form TREC No. 9-3, Unimproved Property Contract. The form has been revised to include a notice (the "owners' association notice") regarding mandatory membership in a residential owners' association which is required by the Texas Property Code, §5.011, in the sale of property upon which an owners' association may fix liens for unpaid assessments. A second notice has been added regarding the possibility of annexation of the property (the "annexation notice") which will be required by the Texas Property Code, §5.012, in the sale of property located outside the limits of a municipality. Both notice requirements became effective January 1, 2000. Failure to provide either notice in an applicable transaction is a statutory ground for the purchaser to terminate the contract. The form also has been revised to delete specific date lines and leave blanks for the parties to insert the appropriate year.

The amendment to §537.28 adopts by reference a revised form TREC No. 20-4, One to Four Family Residential Contract (Resale) All Cash, Assumption, Third Party Conventional or Seller Financing. The form has been revised to include the owners' association and annexation notices and to delete specific date lines.

The amendment to §537.29 adopts by reference revised form TREC No. 21-4, One to Four Family Residential Contract (Resale) FHA Insured or VA Guaranteed Financing. The form has been revised to include the owners' association and annexation notices and to delete specific date lines.

The amendment to §537.30 adopts by reference revised form TREC No. 23-3, New Home Contract (Incomplete Construction). The form has been revised to include the owners' association and annexation notices and to delete specific date lines.

The amendment to §537.31 adopts by reference revised form TREC No. 24-3, New Home Contract (Completed Construction). The form has been revised to include the owners' association and annexation notices and to delete specific date lines.

The amendment to §537.32 adopts by reference revised form TREC No. 25-3, Farm and Ranch Contract. The form has been revised to include only the annexation notice and to delete specific date lines, since farm or ranch would likely not be in a residential subdivision subject to the owners' association notice.

The amendment to §537.37 adopts by reference revised form TREC No. 30-2, Residential Condominium Contract (Resale) All Cash, Assumption, Third Party Conventional or Seller Financing. The form has been revised to include only the annexation notice and to delete specific date lines, because condominium sales are not subject to the notice required by The Texas Property Code, §5.011.

The amendment to §537.38 adopts by reference revised form TREC No. 31-2, Residential Condominium Contract (Resale) FHA Insured or VA Guaranteed Financing. The form has been revised to include only the annexation notice and to delete specific date lines, because condominium sales are not subject to the notice required by The Texas Property Code, §5.011.

Two comments were received on the proposed new contract forms. One person suggested that more space be provided to list the addenda to the contracts, and another person suggested the addition of an automatic release of the earnest money upon the buyer's exercise of an option to terminate the contract. The commission determined that these suggestions should be considered in the next revision of the contract forms, as the changes originally proposed by the Texas Real Estate Broker-Lawyer Committee had been limited to adding new statutory notices and removing date lines. The Texas Real Estate Broker-Lawyer Committee is presently engaged in a substantive review for possible changes to all the TREC promulgated contract forms.

The amendments are adopted under Texas Civil Statutes, Article 6573a, §5(h), which authorize the Texas Real Estate Commission to make and enforce all rules and regulations necessary for the performance of its duties.