The Texas Real Estate Commission (TREC) proposes amendments to §§537.21 - 537.23, 537.35, 537.39 - 537.41, and 537.48, concerning Professional Agreements and Standard Contract Forms. The amendments would adopt by reference eight revised contract forms to be used by Texas real estate licensees.

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.

Generally speaking most of the revisions to the forms are non-substantive in nature and update and conform the text and format for consistency with current contract forms.

The amendment to §537.21 would adopt by reference Standard Contract Form TREC No. 10-5, Addendum for Sale of Property by Buyer. The revisions to Paragraphs A & B of the form remove references to a specific time of day in the definition of Contingency and in the deadline date to waive the Contingency. Paragraph D is rewritten for clarity and deletes extraneous language regarding Buyer's failure to obtain loan or assumption approval.

The amendment to §537.22 would adopt by reference Standard Contract Form TREC No. 11-6, Addendum for "Back-Up" Contract. The blank line for the Buyer's name is removed from Paragraph A. Paragraphs B & C are rewritten and combined for clarity. In Paragraph B, the reference to a specific time of day is deleted consistent with the proposed revisions to TREC No. 10-5; the reference to a Contingency Date is deleted in the last sentence of Paragraph B, which defines the Amended Effective Date for purposes of performance of the Back-Up Contract. Therefore, as proposed, the Amended Effective Date hinges solely on the date the Buyer receives notice of termination of the First Contract.

The amendment to §537.23 would adopt by reference Standard Contract Form TREC No. 12-2, Addendum for Release of Liability on Assumed Loan and/or Restoration of Seller's VA Entitlement. The amendments to the form change the title to more accurately reflect the purpose and use of the addendum. Redundant phrases in Paragraphs A.2, B.2, and the Notice are removed. The paragraph that addresses payment of costs for obtaining the release and restoration, which includes a sentence regarding negotiation of payment of such costs that exceed a specified amount, is amended to delete the sentence so that seller pays all such costs under the addendum.

The amendment to §537.35 would adopt by reference Standard Contract Form TREC No. 28-1, Environmental Assessment, Threatened or Endangered Species, and Wetlands Addendum. The amendments to the form remove redundant text and make non-substantive conforming changes consistent with current forms.

The amendment to §537.39 would adopt by reference Standard Contract Form TREC No. 32-1, Condominium Resale Certificate. The amendments to the form add two additional paragraphs: Paragraph O regarding disclosure of association fees resulting from the transfer, and Paragraph P regarding disclosure of contributions, if any, to the capital reserves account.

The amendment to §537.40 would adopt by reference Standard Contract Form TREC No. 33-1, Addendum for Coastal Area Property. The amendments to the form make non-substantive conforming changes consistent with current forms.

The amendment to §537.41 would adopt by reference Standard Contract Form TREC No. 34-2, Addendum for Property Located Seaward of the Gulf Intracoastal Waterway. The amendments to the form make non-substantive conforming changes consistent with current forms.

The amendment to §537.48 would adopt by reference Standard Contract Form TREC No. 41-1, Loan Assumption Addendum. The amendments to the form make non-substantive conforming changes consistent with current forms.

Loretta R. DeHay, General Counsel, has determined that for the first five-year period the sections are in effect there will be no fiscal implications for the state or for units of local government as a result of enforcing or administering the sections. There is no anticipated impact on small businesses, micro-businesses or local or state employment as a result of implementing the sections.

Ms. DeHay also has determined that for each year of the first five years the sections as proposed are in effect the public benefit anticipated as a result of enforcing the sections will be the availability of current standard contract forms. There will be no effect on small businesses. There is no anticipated economic cost to persons who are required to comply with the proposed sections, other than the costs of obtaining copies of the forms, which would be available at no charge through the TREC web site, and available from private printers at an estimated cost of $7.50 per set of 50 copies.

Comments on the proposal may be submitted to Loretta R. DeHay, General Counsel, Texas Real Estate Commission, P.O. Box 12188, Austin, Texas 78711-2188.

The amendments and forms are proposed under Texas Occupations Code, §1101.151, which authorizes the Texas Real Estate Commission to adopt and enforce rules necessary to administer Chapters 1101 and 1102; and to establish standards of conduct and ethics for its licensees to fulfill the purposes of Chapters 1101 and 1102 and ensure compliance with Chapters 1101 and 1102.

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