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Our license holders are governed by the Texas Real Estate License Act, the Inspector Act, and the Timeshare Act. These Acts establish the makeup of the Commission and its advisory committees and outline procedures by which a person can become real estate license holders in Texas. The Acts also describe TREC’s jurisdiction over license holders and registrants.

TREC has the authority to adopt administrative rules to provide specificity to provisions of the Acts. TREC may also adopt rules to establish a policy regarding certain practices. Both the Acts and TREC rules are a great resource for helping consumers know what to expect from a real estate service provider.

TREC Rules

The tables below show all of our recently proposed and adopted rules. Written comments on proposed rules are accepted for 30 days after publication in the Texas Register. After that period, comments can be made in person at the next Commission meeting. Please send written comments to TREC's general.counsel@trec.texas.gov. For the complete version of our current rules go to:

Recently Adopted Rules

Rule Number
Rule Name
Continuing Education Requirements
Proposed Date
02/14/2022
Adopted Date
05/02/2022
Effective Date:
01/01/2023

New §535.406 implements the continuing education requirements in HB 2730.

Standard Contract Form TREC No. 57-0, Notice to Prospective Buyer
Proposed Date
08/08/2022
Adopted Date
11/07/2022
Effective Date:
11/29/2022

The amendments and new rule to Chapter 537 are made as a result of the Commission’s quadrennial rule review. The new rule pairs a previously existing form that was available for voluntary use by license holders with a rule to provide greater clarity about the form's purpose and use. The Notice to Prospective Buyer form (which currently exists, but has not had a corresponding rule which adopts the form by reference) is amended to add a reference to the notice requirements regarding public improvement districts.

Attachment(s)
Standard Contract Form TREC No. 9-16, Unimproved Property Contract
Proposed Date
08/08/2022
Adopted Date
11/07/2022
Effective Date:
02/01/2023

The changes to the existing rules add the title of the form adopted by reference in each rule to the rule title and add clarifying language to specify which forms are for mandatory versus voluntary use by license holders. The rules also include corresponding contract forms adopted by reference. Please see TREC rule §537.28 for changes that apply to all contract forms.  Additionally, in the Unimproved Property Contract, the Seller’s Disclosures paragraph has been amended to: (i) add check boxes to each disclosure item to indicate whether the seller is or is not aware; and (ii) add two additional disclosures relating to whether the property is located in a floodplain or if any tree located on the property has oak wilt.

Attachment(s)
Standard Contract Form TREC No. 20-17, One to Four Family Residential Contract (Resale)
Proposed Date
08/08/2022
Adopted Date
11/07/2022
Effective Date:
02/01/2023

The changes to the existing rules add the title of the form adopted by reference in each rule to the rule title and add clarifying language to specify which forms are for mandatory versus voluntary use by license holders. The rules also include corresponding contract forms adopted by reference. 

The changes listed below apply to all contract forms unless specified otherwise. Paragraph numbers referenced are from the One to Four Family Residential Contract (Resale).

The term “Escrow Agent” is capitalized throughout the contract to reflect its status as a defined term.

Paragraph 3 is amended to add a definition of “cash portion of the sales price.”

A new “required notices” section is added to Paragraph 6, which provides one location where MUD, PID, or other similar notices that have been given or are attached to the contract can be listed. The corresponding reference to the Commission’s form “Addendum containing Notice of Obligation to Pay Improvement District Assessment” is removed from Paragraph 22. 

Paragraph 7.F is revised to require that the seller: (i) provide the buyer with copies of documentation from the repair person that shows both the scope of work and payment for the work completed; and (ii) transfer, at seller’s expense, any transferable warranties at closing.

Paragraph 7.H is amended to replace the term “residential service company” with the terminology used by the Texas Department of Licensing and Regulation, which as of September 1, 2021, regulates residential service companies.

Paragraph 9.B(3) is amended to add the transfer of any warranties to correspond with the change in Paragraph 7F. New paragraph 9.B(5) provides that private transfer fees will be the obligation of the seller, unless otherwise provided in this contract.

Paragraph 11 is amended to further clarify the intent of the paragraph by replacing the terms “factual statements” and “business details” with “informational items,” which is now defined, and adding that real estate brokers cannot practice law and are prohibited from adding to, deleting, or modifying the contract unless drafted by a party to the contract or a party’s attorney. Lines have also been inserted into the blank.

Paragraph 13 is amended to clarify what amounts will be prorated through the closing date.

Paragraph 18.B is amended to add that if no closing occurs, the escrow agent may require a written release of liability before releasing the earnest money.

Paragraph 21 is amended to add a line for a courtesy copy to another individual, like an agent.

Attachment(s)
Standard Contract Form TREC No. 23-18, New Home Contract (Incomplete Construction)
Proposed Date
08/08/2022
Adopted Date
11/07/2022
Effective Date:
02/01/2023

The changes to the existing rules add the title of the form adopted by reference in each rule to the rule title and add clarifying language to specify which forms are for mandatory versus voluntary use by license holders. The rules also include corresponding contract forms adopted by reference. Please see TREC rule §537.28 for changes that apply to all contract forms. Additionally, in the New Home Contract (Incomplete Construction), the Seller’s Disclosures paragraph has been amended to: (i) add checkboxes to each disclosure item to indicate whether the seller is or is not aware; and (ii) add two additional disclosures relating to whether the property is located in a floodplain or if any tree located on the property has oak wilt.

Attachment(s)
Standard Contract Form TREC No. 24-18, New Home Contract (Completed Construction)
Proposed Date
08/08/2022
Adopted Date
11/07/2022
Effective Date:
02/01/2023

The changes to the existing rules add the title of the form adopted by reference in each rule to the rule title and add clarifying language to specify which forms are for mandatory versus voluntary use by license holders. The rules also include corresponding contract forms adopted by reference. Please see TREC rule §537.28 for changes that apply to all contract forms. Additionally, in the New Home Contract (Complete Construction), the Seller’s Disclosures paragraph has been amended to: (i) add checkboxes to each disclosure item to indicate whether the seller is or is not aware; and (ii) add two additional disclosures relating to whether the property is located in a floodplain or if any tree located on the property has oak wilt.

Attachment(s)
Standard Contract Form TREC No. 25-15, Farm and Ranch Contract
Proposed Date
08/08/2022
Adopted Date
11/07/2022
Effective Date:
02/01/2023

The changes to the existing rules add the title of the form adopted by reference in each rule to the rule title and add clarifying language to specify which forms are for mandatory versus voluntary use by license holders. The rules also include corresponding contract forms adopted by reference. Please see TREC rule §537.28 for changes that apply to all contract forms. Additionally, in the Farm and Ranch Contract, the Seller’s Disclosures paragraph has been amended to: (i) add checkboxes to each disclosure item to indicate whether the seller is or is not aware; and (ii) add two additional disclosures relating to whether the property is located in a floodplain or if any tree located on the property has oak wilt.  The Farm and Ranch Contract also contains the following additional changes:

  • A notice is added that states the form is designed for use in sales of existing farms or ranches of any size, and that it’s not for use in complex transactions.
  • Paragraph 2.A adds the term “Counties” to reflect the fact that farm and ranch properties could be located across two or more counties. Additionally, the phrase “including but not limited to: water rights, claims, permits, strips and gores, easements, and cooperative or association memberships” is deleted from the paragraph.
  • Paragraph 2.B is amended to make the terms “house” and “garage” plural.
  • Paragraph 3.D is amended to alter the calculation of the sales price adjustment should  the survey reveal a difference in acreage.
  • New paragraph 4.D is added to address surface leases and includes options regarding whether the seller has delivered copies of written leases or provided notice of oral leases to the buyer, similar to the existing natural resource lease paragraph. The corresponding language in Paragraph 6.F is also amended.
  • On page 10 of the Contract, the statement “Do not sign if there is a separate written agreement for payment of Brokers’ fees” is being modified to make it more conspicuous.
Attachment(s)
Standard Contract Form TREC No. 26-8, Seller Financing Addendum
Proposed Date
08/08/2022
Adopted Date
11/07/2022
Effective Date:
02/01/2023

The changes to the existing rules add the title of the form adopted by reference in each rule to the rule title and add clarifying language to specify which forms are for mandatory versus voluntary use by license holders. The Seller Financing Addendum also contains the following amendments: 

  • A notice encouraging consultation with an attorney and a financial professional and informing parties of the complicated nature of these transactions is added to the top of the form.
  •  Paragraph B is amended to modify the time period within which the seller may terminate.
  • A new instructional parenthetical is added in Paragraph C. Additionally, the interest in modified to reflect a per annum interest rate.
  • Paragraph D.2(a) and (b) are amended to clarify the casualty insurance requirements and new paragraph D.2 is added to address casualty insurance.
  • Paragraph D.2(b) is further amended to add a requirement that the seller provide the buyer with an annual accounting of the escrow account, use escrow deposits to pay taxes and insurance premiums in a timely manner in certain circumstances, and hold the escrow deposit in a separate account. Language is also added to specify whether the escrow account will or will not be services by a third-party servicer at either the buyer’s or seller’s expense.
Attachment(s)
Standard Contract Form TREC No. 30-16, Residential Condominium Contract (Resale)
Proposed Date
08/08/2022
Adopted Date
11/07/2022
Effective Date:
02/01/2023

The changes to the existing rules add the title of the form adopted by reference in each rule to the rule title and add clarifying language to specify which forms are for mandatory versus voluntary use by license holders. The rules also include corresponding contract forms adopted by reference. Please see TREC rule §537.28 for changes that apply to all contract forms. The Residential Condominium Contract also contains the following additional changes: 

  • Paragraph 2.A(1) is amended to add a reference to a exhibit.
  • Paragraph 2.B(2) and 2.C(2) are amended to clarify the timing related to termination and to add a reference to the applicable Property Code provision. 
  • Paragraph 12.A(3) is amended to except prepaid regular periodic maintenance fees, assessments, or dues from the buyer’s obligation to pay any and fees associated with the transfer of the property not to exceed a certain amount, and the seller pays the excess. 
Attachment(s)
Standard Contract Form TREC No. 36-10, Addendum for Property Subject to Mandatory Membership in a Property Owners Association
Proposed Date
08/08/2022
Adopted Date
11/07/2022
Effective Date:
02/01/2023

The changes to the existing rules add the title of the form adopted by reference in each rule to the rule title and add clarifying language to specify which forms are for mandatory versus voluntary use by license holders. The Addendum for Property Subject to Mandatory Membership in a Property Owners Association is amended to except prepaid regular periodic maintenance fees, assessments, or dues from the buyer’s obligation to pay any and fees associated with the transfer of the property not to exceed a certain amount, and the seller pays the excess. Language is also added to clarify that these fees should be prorated pursuant to Paragraph 13 of the Contract. Finally, the amended language adds that the paragraph does not apply to a fee that is not imposed by the Association even if it is collected by the Association for the benefit of a third party.

Attachment(s)
Standard Contract Form TREC No. 39-9, Amendment to Contract
Proposed Date
08/08/2022
Adopted Date
11/07/2022
Effective Date:
02/01/2023

The changes to the existing rules add the title of the form adopted by reference in each rule to the rule title and add clarifying language to specify which forms are for mandatory versus voluntary use by license holders. The Amendment to Contract is amended to add a notice to consult an attorney and to add a reference to Paragraph 7 of the contracts in Paragraph 2 of the Amendment dealing with repairs. The form is also amended to replace the parenthetical following Paragraph 9, Other Modifications, with a statement that real estate brokers and sales agents are prohibited from practicing law. Lines have also been inserted into the blank.

Attachment(s)
Standard Contract Form TREC No. 40-10, Third Party Financing Addendum
Proposed Date
08/08/2022
Adopted Date
11/07/2022
Effective Date:
02/01/2023

The changes to the existing rules add the title of the form adopted by reference in each rule to the rule title and add clarifying language to specify which forms are for mandatory versus voluntary use by license holders. The Third Party Financing Addendum is amended to add an “other financing” box in Paragraph 1. Paragraph 3 is amended to add that a note must be secured by vendor’s and deed of trust liens only if required by the buyer’s lender. Finally, the phrase “provided in relation to the closing of this sale” is struck from Paragraph 5.B to streamline the paragraph.

Attachment(s)
Standard Contract Form TREC No. 41-3, Loan Assumption Addendum
Proposed Date
08/08/2022
Adopted Date
11/07/2022
Effective Date:
02/01/2023

The changes to the existing rules add the title of the form adopted by reference in each rule to the rule title and add clarifying language to specify which forms are for mandatory versus voluntary use by license holders. The Loan Assumption Addendum contains the following amendments:

  • “Effective Date” and “Title Company” are capitalized throughout.
  • Paragraph A is amended to add that the noteholder of the loan being assumed is authorized to receive a copy of the buyer’s credit reports.
  • Paragraph B is amended to modify the time period within which the seller may terminate.
  • Paragraph C is amended to clarify that the buyer will assume in writing the following notes at closing, to remove the reference to $500 and instead insert a blank, and to add the following sentence: “Within 7 days after the Effective Date, Seller will deliver to Buyer copies of the note(s) to be assumed, the deed(s) of trust, and the most recent loan statement(s) from the lender.”
  • New paragraph H is added related to authorization to release information. 
  • A new due on sale notice is added.
Attachment(s)
Standard Contract Form TREC No. 44-3, Addendum for Reservation of Oil, Gas, and Other Minerals
Proposed Date
08/08/2022
Adopted Date
11/07/2022
Effective Date:
02/01/2023

The changes to the existing rules add the title of the form adopted by reference in each rule to the rule title and add clarifying language to specify which forms are for mandatory versus voluntary use by license holders. The Addendum for Reservation of Oil, Gas, and Other Minerals is also amended to replace the phrase “reserve and retain implied” with “waive” in Paragraph C. The term “current” is added to “contact information” in Paragraph D.

Attachment(s)
Standard Contract Form TREC No. 51-1, Addendum Regarding Residential Leases
Proposed Date
08/08/2022
Adopted Date
11/07/2022
Effective Date:
02/01/2023

The amendments and new rule to Chapter 537 are made as a result of the Commission’s quadrennial rule review. The changes to the existing rules add the title of the form adopted by reference in each rule to the rule title and add clarifying language to specify which forms are for mandatory versus voluntary use by license holders. The Addendum Regarding Residential Leases is also amended to add a checkbox in Paragraph B.1 related to notice of oral leases. 

Attachment(s)
Standard Contract Form TREC No. 52-1, Addendum Regarding Fixture Leases
Proposed Date
08/08/2022
Adopted Date
11/07/2022
Effective Date:
02/01/2023

The amendments and new rule to Chapter 537 are made as a result of the Commission’s quadrennial rule review. The changes to the existing rules add the title of the form adopted by reference in each rule to the rule title and add clarifying language to specify which forms are for mandatory versus voluntary use by license holders. The Addendum Regarding Fixture Leases is also amended to add a checkbox in Paragraph B.1 related to notice of oral leases. Additionally, the Addendum for Disclosure of Fixture Leases is amended to modify Paragraph A.1 to include check boxes, in lieu of a blank line, so that the parties can specifically indicate what types of fixture leases will be assumed and assigned.

Attachment(s)


Recently Proposed Rules

Rule Number
Rule Name
Standard Inspection Report Form
Proposed Date
11/07/2022
Adopted Date
02/13/2023

The proposed amendments clarify that when multiple boxes are checked for a particular item on the report form, the inspector must also explain the reason for checking multiple boxes. The proposed amendments also remove single-system inspections from the list of exemptions—meaning the requirements in §535.223 would apply to those inspections.

The Texas Real Estate Inspector Committee recommends the proposed amendments.

Comment
Definitions
Proposed Date
11/07/2022
Adopted Date
02/13/2023

The proposed new rule adds a definitions section for ease of reading and for consistency with other Commission rule chapters. This includes a definition for the new term “informational items,” which is intended to better describe the type of information that a license holder can add to a contract form.

Comment
Use of Standard Contract Forms
Proposed Date
11/07/2022
Adopted Date
02/13/2023

The proposed amendments to §537.11 reorganize and consolidate the rule for clarity, and simplify the language regarding when a license holder is required to use a Commission-approved contract form and what is considered the unauthorized practice of law. Specifically, the proposed changes in subsection (a) align the rule language more closely with the applicable statutory language and simplify the list of exceptions related to contract form use by license holders. Importantly, the exception found in subsection (a)(4) is amended to eliminate the ability of license holders to use contract forms prepared by an attorney for a brokerage when no Commission-approved contract form for mandatory use exists.

Subsections (b) – (d) provide further guidance to license holders and members of the public on what the Commission considers to be the unauthorized practice of law. Of note, subsection (d)(2) provides that it is not the practice of law to add language to or strike language from a contract form, if specifically instructed in writing by a principal, as long as any change is made conspicuous, including underlining additions, striking through deletions, or employing some other method which clearly indicates the change being made.

Finally, the proposed changes to subsection (h) update the language regarding reproduction of Commission-approved contract forms to better account for changes in technology.

The Commission’s Unauthorized Practice of Law Working Group recommends the proposed amendments.

Comment