The Texas Real Estate Commission (TREC) adopts amendments to §§537.21 - 537.23, 537.35, 537.39 - 537.41, and 537.48, concerning Professional Agreements and Standard Contract Forms without changes to the proposed text as published in the March 16, 2007, issue of the Texas Register (32 TexReg 1456) and will not be republished. The amendments adopt by reference eight revised contract forms for use by Texas real estate licensees. The forms are adopted without changes as submitted to the Texas Register.

The revised forms may be used on a voluntary basis upon adoption; licensees will be required to use the forms on a mandatory basis as of July 1, 2007. 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 adopts 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 adopts 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 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, the Amended Effective Date hinges solely on the date the Buyer receives notice of termination of the First Contract.

The amendment to §537.23 adopts 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 adopts 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 adopts 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 N regarding disclosure of contributions, if any, to the capital reserves account.

The amendment to §537.40 adopts 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 adopts 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 adopts 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.

The commission received 3 comments during the notice and comment period, including one comment from the Houston Association of Realtors. One commenter suggested that TREC No. 32-1, Condominium Resale Certificate, should include a more detailed definition of "budget" in paragraph G. The commission respectfully disagrees with the commenter and believes that the term "budget" is sufficiently described in the form and that no additional clarification is necessary. One commenter asked a question regarding how a person would terminate a contract subject to the terms of TREC No. 28-1, Environmental Assessment, Threatened or Endangered Species, and Wetlands Addendum. One commenter asked a general question about the assumption of hazard insurance under TREC No. 41-1, Loan Assumption Addendum.

The reasoned justification for the revisions to the rules and forms adopted by reference is to clarify existing rules, remove redundant provisions, and to make the forms more consistent with other promulgated forms.

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