The Texas Real Estate Commission (TREC) proposes amendments to §537.20, concerning Standard Contract Form TREC No. 9-8; §537.28, concerning Standard Contract Form TREC No. 20-9, One to Four Family Residential Contract (Resale); §537.30, concerning Standard Contract Form TREC No. 23-10, New Home Contract (Incomplete Construction); §537.31, concerning Standard Contract Form TREC No. 24-10, New Home Contract (Completed Construction); §537.32, concerning Standard Contract Form TREC No. 25-7, Farm and Ranch Contract; §537.37, concerning Standard Contract Form TREC No. 30-8, Residential Condominium Contract; §537.43, concerning Standard Contract Form TREC No. 36-6, Addendum for Property Subject to Mandatory Membership in a Property Owners Association; §537.47, concerning Standard Contract Form TREC No. 40-4 Third Party Financing Condition Addendum; and new §537.53, concerning Standard Contract Form TREC No. 46-0, Non-Realty Items Addenda. The amendments and new rule propose to adopt by reference eight revised contract forms and one new form for use 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.

The amendment to §537.20 proposes to adopt by reference Standard Contract Form TREC No. 9-8, Unimproved Property Contract. The proposed revisions are the same as those proposed for Form TREC No. 20-9, except for paragraph 2.

The amendments to §537.28 propose to adopt by reference Standard Contract Form TREC No. 20-9, One to Four Family Residential Contract (Resale). Paragraph 2.B. is revised to include mounts and brackets for televisions and speakers; the phrase regarding controls in paragraph 2.C. is rewritten and placed at the end of the list of accessories. Paragraph 4.A.(1) is amended to provide examples of underwriting examples to include appraisal, insurability, and lender required repairs; the termination provision under this paragraph is revised. Paragraph 4.A.(2) is revised to change Financing Approval to Credit approval. The sentence regarding Sellers failure to timely provide the existing survey or affidavit in paragraph 6.C.(1) is moved from the end of the paragraph to the middle of the paragraph; a new subparagraph (4) is added with a checkbox indicating no survey is required; paragraph 6.E.(2) is revised to delete apostrophes to be consistent with statutory provisions. Paragraph 7.D.(2) is rewritten to include a blank line for specific repairs and an admonishment telling parties not to insert general phrases. A notice is added to the end of paragraph 7 reminding the parties about the buyer's rights to conduct inspections, negotiate repairs under a subsequent amendment, or terminate during the option period, if any. Paragraph 9.B.(3) is rewritten; new subparagraph 5 regarding leases is added to paragraph 9.B. The two sentences at the end of paragraph 10 are underlined. Paragraph 12.A.(2) is restructured Paragraph 18.B. is rewritten for clarity. Addenda are added to and deleted from paragraph 22. Option Period is defined in paragraph 23. Paragraph 24 is rewritten. The Broker Information page is rewritten and restructured.

The amendment to §537.30 proposes to adopt by reference Standard Contract Form TREC No. 23-10, New Home Contract (Incomplete Construction). The proposed revisions are the same as those proposed for Form TREC No. 20-9, except for paragraph 2, paragraph 6.C.(1), paragraph 7.B., paragraph and 9.B.(5).

The amendment to §537.31 proposes to adopt by reference Standard Contract Form TREC No. 24-10, New Home Contract (Completed Construction). The proposed revisions are the same as those proposed for Form TREC No. 20-9, except for paragraph 2, paragraph 6.C.(1), paragraph 7.B., paragraph and 9.B.(5).

The amendment to §537.32 proposes to adopt by reference Standard Contract Form TREC No. 25-7, Farm and Ranch Contract. Except for paragraph 6.C.(4) which is already in the contract, and the ratification page in which no changes are made, the same amendments are made as those proposed for Form TREC No. 20-9. In addition, paragraph 2.F. is revised to delete "mineral" and "royalty."

The amendment to §537.37 proposes to adopt by reference Standard Contract Form TREC No. 30-8, Residential Condominium Contract. The same amendments are made to 30-8, Residential Condominium Contract as those proposed for Form TREC No. 20-9. In addition, paragraphs 2.B.(2) and 2.C.(2) are amended by adding a provision regarding Buyer's cancellation of the contract; subparagraph (3) is revised and subparagraph (4) is added to paragraph 12.

The amendment to §537.43 propose to adopt by Standard Contract Form TREC No. 36-6, Addendum for Property Subject to Mandatory Membership in a Property Owners Association. Subparagraph A.2. is revised to add a reference to providing an updated resale certificate. New paragraph C. is added regarding deposits and reserves.

The amendment §537.47 proposes to adopt by reference Standard Contract Form TREC No. 40-4 Third Party Financing Condition Addendum. The references to "Financing Approval" are changed to "Credit Approval." The reference to "Loan Fees" is changed to "Adjusted Original Charges" in subparagraphs (1) and (2) of paragraph A, and paragraphs C and D. The note regarding HUD 92564-CN is deleted.

New §537.53 proposes to adopt by reference Standard Contract Form TREC No. 46-0, Non-Realty Items Addendum. The new addendum is to be used when personal property is sold in conjunction with the real estate transaction.

Loretta R. DeHay, General Counsel, has determined that for the first five-year period the amendments and new section 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 amendments and new section. There is no anticipated impact on small businesses, micro-businesses or local or state employment as a result of implementing the amendments and new section. There is no anticipated economic cost to persons who are required to comply with the proposed amendments and new section, other than the costs of obtaining copies of the forms, which would be available at no charge through the TREC web site.

Ms. DeHay also has determined that for each year of the first five years the amendments and new section are in effect the public benefit anticipated as a result of enforcing the amendments and new section will be the availability of current standard contract forms.

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 new section 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 proposal.