The Texas Real Estate Commission (TREC) adopts amendments to 22 TAC §537.26, Standard Contract Form TREC No. 15-5; §537.27, Standard Contract Form TREC No. 16-5; and new §537.61, Standard Contract Form TREC No. 54-0, Landlord's Floodplain and Flood Notice in Chapter 537, Professional Agreements and Standard Contracts, and the forms adopted by reference, without changes in the rule text, but with the following non-substantive changes to the forms as published in the May 20, 2022, issue of the Texas Register (47 TexReg 3013):

-The insertion of lines in the blank following Paragraph 11, Special Provisions, of the Seller's Temporary Residential Lease (TREC No. 15-5) and the Buyer's Temporary Residential Lease (TREC No. 16-5),

-The addition of "to" in the notice of the Buyer's Temporary Residential Lease so that the notice reads "…prior to the closing", and

-The replacement of the term "Property" with "a dwelling" in Paragraph C(2) of the Landlord's Floodplain and Flood Notice.

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 proposal 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 Texas Real Estate Broker-Lawyer Committee recommended revisions to the contract forms adopted by reference under the amendments and new rule to Chapter 537 to comply with statutory changes enacted by the 87th Legislature in HB 531.

HB 531 requires a landlord to disclose, in certain situations, whether the landlord is aware that the dwelling is located in a 100-year floodplain or that the dwelling has flooded within the last five years. Because landlords of temporary residential leases are not exempted, the changes create a new flood disclosure notice form and add a new paragraph referencing the notice in the Seller's Temporary Residential Lease (TREC No. 15-5) and the Buyer's Temporary Residential Lease (TREC No. 16-5).

Additionally, the amendments §535.26, Standard Contract Form TREC No. 15-5, and §535.27, Standard Contract Form TREC No. 16-5, contain changes made as a result of the Commission's quadrennial rule review. Those changes add the corresponding standard contract form title to the rule title and add clarifying language to specify that both of the forms adopted by reference in these rules are for mandatory use by license holders.

One comment was received from the Texas Association of Builders (TAB), who believes that the proposed addition of "mandatory" to the rules §535.26 and §535.27 will lead to confusion regarding the right of a property owner to use non-TREC forms in certain transactions, and in turn, may delay these transactions. TAB suggested that where the term "mandatory" has been added to the rules, the statement "unless otherwise permitted under 22 TAC 537.11(a)" be appended. The Commission declines to make any changes at this time in response to TAB's comments. However, the Commission is currently reviewing 22 TAC §537.11, Use of Standard Contract Forms, and plans to present recommended changes to that rule, as well as a new definitions section that would include definitions of "mandatory use" and "voluntary use", at the November Commission meeting for proposal. The Commission believes these revisions will better address TAB's concerns.

The amendments and new rules 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 license holders to fulfill the purposes of Chapters 1101 and 1102 and ensure compliance with Chapters 1101 and 1102. The amendments and new rules are also adopted under Texas Occupations Code, §1101.155, which authorizes the Texas Real Estate Commission to adopt rules in the public's best interest that require license holders to use contract forms prepared by the Texas Real Estate Broker-Lawyer Committee and adopted by the Commission.