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Texas Register Preamble


The Texas Real Estate Commission (TREC) adopts amendments to 22 TAC §537.47, Standard Contract Form TREC No. 40-9; and §537.55, Standard Contract Form TREC No. 48-1, in Chapter 537, Professional Agreements and Standard Contracts, without changes to the text as published in the August 30, 2019, issue of the Texas Register (44 TexReg 4654). The rules will not be republished.

Texas real estate license holders are generally required to use forms promulgated by TREC when negotiating contacts for the sale of real property. These forms are drafted and recommended for adoption 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 one public member appointed by the governor.

The Broker Lawyer Committee recommends revisions to the contract forms adopted by reference under the amendments to Chapter 537 to address issues that have arisen since the last contract revisions.

The Third Party Financing Addendum adopted by reference in §537.47 is amended to clarify that the three-day notice requirement in 2.B does not apply to Paragraph 4 and the "time is of the essence" language was moved to the body of Paragraph 2 for clarity.

The Addendum for Authorizing Hydrostatic Testing adopted by reference in §537.55 is amended to include a reference to the scope of hydrostatic testing in the top sentence.

Eight commenters submitted comments on the proposed amendments to §537.47, regarding the Third Party Financing Addendum. Most comments were unrelated to the pending amendments. One commenter requested added language to allow a buyer to choose whether their appraisal is ordered during or after the option period. Another requested to add a checkbox for private lending in Paragraph 1 and to require a copy of a written statement in Paragraph 2.A. if the buyer is not able to satisfy lender requirements due to credit history. Another commenter requested the addendum language change to reflect how lenders have changed verbiage from a percentage-based origination fee to a set fee. One commenter opposed the changes that removes applicability of the 3-day notice of termination requirements in Paragraph 2.B. to Paragraph 4 and another requested additional clarification as to whether a buyer is required to give any notice under Paragraph 4. Another commenter requested additional language be added to Paragraph 2.B. allowing parties to choose when property approval must be obtained. One commenter requested the addendum include a time period where a buyer will order and pay for the appraisal to avoid a closing delay. One comment was submitted to add additional seller and buyer signature lines.

The Broker-Lawyer Committee considered all of the comments at an open meeting in October.

After some discussion, the Committee declined changes in the addenda. They recommend adoption of the amendments to the forms adopted by reference as proposed.

The amendments 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.



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