Updates to Texas Real Property Contracts

Just when we get used to things they go and change them, right?  We all were so used to the old HUD1 version, then they threw the 2010 HUD at us.  Wow!  That was a learning curve.  But, thankfully, we are all mostly over that now and the new format no longer scares us.  Well, now TREC has revised contract forms and addenda.  The changes all look to be pretty straight-forward, some will just take a little getting used to.  Here's a summary:
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One to Four Family Contract (TREC No. 20-9)

o Paragraph 2.B. Improvements

• Added "mounts and brackets for televisions and speakers”

o Paragraph 2.C. Accessories

• Added catch all for controls "controls for….and (iv) other improvements and accessories”

o Paragraph 4.A. (1) Property Approval:

• Property contingency runs all the way to closing
• Previous version of contract would automatically terminate if property does not appraise.  Now it is the buyer’s right based on lender’s underwriting but not automatic.

o Paragraph 4.A.(2) Credit Approval:

• "Financing Approval” changed to "Credit Approval”
• Financing and/or credit approval is not the same as loan approval (loan includes property)

o Paragraph 6.C (1) Existing Survey

• Inserted form # of Affidavit (T-47)
• Rearranged paragraph to reinforce Seller’s obligation

o Paragraph 6.E. (2) Property Owners Associations(s) Mandatory Membership

• Added multiple HOA language for properties that lie within more than one HOA
• Clarified the need for separate addendum for each association

o Paragraph 7.D. Acceptance of Property Condition

• Added language to help clarify the intent of 7D

o Paragraph 9.B.(5) Closing

• Added language that requires Seller to:
• Provide Buyer copy of the lease
• Provide Buyer copy of move-in condition form
• Transfer security deposits to Buyer
• Added language that requires Buyer to provide written notice to tenant
• Account for security deposit

o Paragraph 12.A. (2) (Buyer’s Expenses):

• Changed language from loan fees to "adjusted origination charges”

o Paragraph 15.B Default

• Right to remedy of specific performance is waived by either party if petition is not filed within 45 days after the specified Closing Date

o Paragraph 18.B.  Expenses

• Revised to clarify escrow agent’s right to deduct expenses before releasing earnest money

o Paragraph 22

• Added Addenda

o Page 9 of contract to serve for informational purposes only.  Not to be used to change commission splits

• No signatures required

Third Party Financing Addendum now known as Third Party Financing Addendum for Credit Approval (TREC NO. 40-4)

o Added language to match new Good Faith Estimate Disclosures

Addendum for Property Subject to Mandatory Membership in A Property Owners Association (TREC NO. 36-6)

o Added language under Paragraph A.2. Allowing for updates to Subdivision Information
o New Paragraph C obligates Buyer to pay any deposits for reserves required

Disclosure of Relationship with Residential Service Company (TREC NO. RCS-1)

o New form to be used when compensation is being received by Broker/Salesperson

Non-Realty Items Addendum (TREC NO. OP-M)

o New form for use when conveying non-realty items

(CLICK HERE) to download marked up copies of the contract forms go to.

--Courtesy, Independence Title Company