Chapter 3
ADDENDUM FOR PROPERTY SUBJECT TO MANDATORY MEMBERSHIP IN AN OWNERS' ASSOCIATION
In Paragraph 6E(2) of the main contract there is a checkbox to indicate if the property is located in a mandatory homeowner's association. If this box is checked it triggers the use of this addendum. A buyer may choose to request the seller to provide certain subdivision information such as subdivision restrictions and rules and bylaws of the association.
TREC does not promulgate which forms and agreements?
Listing or buyer representation agreements, property management contracts, forms for commercial property, or residential leases (other than temporary residential leases used in connection with a sale)
ENVIRONMENTAL ASSESSMENT, THREATENED OR ENDANGERED SPECIES, AND WETLANDS ADDENDUM (28-2)
When a buyer is concerned about environment issues this form is used. The form has three categories: Environment assessment Threatened or endangered species Wetlands
SELLER'S TEMPORARY RESIDENTIAL LEASE (15-5)
When a seller needs to remain in possession of the house after closing, this temporary lease is used. This form is an addendum to a TREC contract form and is never to be used as any other lease agreement. The Seller's Temporary Residential Lease is used in home and condo sales.
What does TRELA Section 537.11 use of Standard Contract Forms state?
When negotiating contracts binding the sale, exchange, option, lease or rental of any interest in real property, a real estate licensee shall use only those contract forms promulgated by the Texas Real Estate Commission for that kind of transaction.
When is mediation used?
When resolving conflicts between a buyer and seller in which a mediator listens to each side and helps make a mutually agreeable decision
LOAN ASSUMPTION ADDENDUM (41-2)
A loan assumption means that a buyer agrees to purchase the property subject to the current indebtedness and continue making the payments. Title to the property is transferred to the buyer but the seller may remain liable for the loan if the buyer defaults on the terms of the loan. Loan assumptions are rare today. Loan documents for the past 20 plus years do not allow assumptions and current loan programs make it more attractive to secure a new home loan.
AMENDMENT TO CONTRACT (39-8)
An amendment to a contract is specifically drafted to reflect changes negotiated AFTER the original contract has been signed. It is not a part of the original contract as addenda are. Each amendment is signed by the parties and has an effective date as of the signing.
An amendment to a contract is specifically drafted to reflect what?
Changes negotiated AFTER the original contract has been signed
The Third Party Financing Addendum for Credit Approval addresses which types of loans?
Conventional, Texas Veterans, FHA insured, VA guaranteed financing, and USDA Guaranteed Financing, Reverse Mortgage
The contract you will probably use most often is the
ONE TO FOUR FAMILY RESIDENTIAL CONTRACT (TREC NO 20-14).
BUYER'S TEMPORARY RESIDENTIAL LEASE (16-5)
Occasionally a buyer may lease a house before closing. This is done only rarely and obviously the seller has already vacated the house. Before allowing a buyer to take possession of a property, a seller and his or her agent should be reasonably assured that closing will take place.
ADDENDUM FOR SALE OF OTHER PROPERTY BY BUYER (10-6)
Often a buyer must sell another house before he or she can buy the new house. This addendum creates a contingency contract based on the sale of the buyer's current house.
SELLER FINANCING ADDENDUM (26-7)
Seller financing is available when the seller owns the property "free and clear" and does not require the entire amount of the sales price in cash. Rather than a third party lender the seller acts as the "bank". The property is collateral for the loan and the seller may foreclose if the buyer/borrower does not pay.
ADDENDUM FOR RESERVATION OF OIL, GAS AND OTHER MINERALS (44-2)
TREC sales contracts state that the seller will deliver title to the property to the buyer and does not address reservations of subsurface minerals. This form is for use only if the seller reserves all or a portion of the mineral estate, meaning oil, gas, and other minerals in or under the property and any royalty under existing leases. It also addresses certain surface rights such as production and drilling rights, easements, lease payments and other benefits.
CONDOMINIUM RESALE CERTIFICATE (32-4)
The Condo Resale Certificate must be requested in writing with information for delivery and solely prepared by the condominium association. The one significant difference in condo and non-condo forms is that all condos have a mandatory owners' association where single family homes do not. Therefore, there is not an addendum addressing the buyer's options regarding the receipt of the documents, it is incorporated into the body of the contract in the Property paragraph.
A condominium resale certificate must be solely prepared by whom?
The Condominium Association
In Paragraph 2 of the Residential Condominium Contract, the Property paragraph addresses what other topics besides Unit and Building type legal description, itemization of improvements and accessories?
The Condominium Declaration, Bylaws, Rules of the Association, and the Resale Certificate
ADDENDUM FOR PROPERTY LOCATED SEAWARD OF THE GULF INTRACOASTAL WATERWAY (34-4)
The Intracoastal waterway is part-manmade and part natural and is a series of canals and passages that extend from Sabine Pass to the Brownsville Ship Channel. The primary purpose of this addendum is to inform buyers of land on or near the coast that beaches are open to the public. Texas law states that all beaches are open to the public as a public easement and no structures may be on any beach. Due to erosion as a result of hurricane forces, the property owners may be sued by the state to remove their houses.
SUBDIVISION INFORMATION, INCLUDING RESALE CERTIFICATE FOR PROPERTY SUBJECT TO MANDATORY MEMBERSHIP IN AN OWNER'S ASSOCIATION (37-5)
The Subdivision Information has important financial information about the subdivision association. It is required by state law that the information must be requested in writing and delivery information must be included with the request. By law, the association must comply with the request. They may also charge a fee.
RESIDENTIAL CONDOMINIUM CONTRACT (RESALE) (30-13)
The Texas Property Code defines a Condominium as "a form of real property ownership that combines separate ownership of individual apartments or units with common ownership of all other elements."
SHORT SALE ADDENDUM (45-1)
The addendum creates a contingency agreement based on the lender's approval of the "short sale."
In the Buyer's Temporary Residential Lease, name 3 items the buyer/tenant may NOT do.
The buyer/tenant is not allowed to: Make any holes or drive nails into the woodwork, floors, walls or ceilings Alter, paint or decorate the property Install improvements or fixtures without the prior written consent of landlord/seller
NEW HOME CONTRACT (24-15) (Completed Construction)
The contract for completed construction includes such items as the insulation paragraph. Both completed and incomplete forms address builder warranties in paragraph 7C. Any builder warranty is to be in a separate document and any manufacturer's warranties are to be passed from the builder to the home buyer.
In the One to Four Family Residential Contract, what does the financing paragraph identify? Which form will be completed in addition to the residential contract for financing?
The financing paragraph identifies the type of financing the buyer intends to secure. The details of the financing are specified in one of the financing addendums available.
List items addressed in the Seller's Financing Addendum.
The items addressed in the addendum are: Credit worthiness of the buyer Credit approval The Promissory Note Deed of Trust and if it is assumable Tax and Insurance Escrows
THIRD PARTY FINANCING ADDENDUM FOR CREDIT APPROVAL (40-7)
The third party financing addendum addresses conventional, Texas Veterans, FHA insured, VA guaranteed financing, and USDA Guaranteed Financing. This addendum is concerned only with financing approval. It requires the buyer to apply promptly and use all diligence in securing financing and the buyer is given a specific number of days to do so. If the buyer cannot secure financing, he or she must notify the seller, the contract terminates, and the earnest money is refunded. If the buyer does not make timely notification, the buyer is bound by the terms of the contract and must close or be in default.
ADDENDUM FOR COASTAL AREA PROPERTY (33-2)
This addendum must be added to contracts involving land abutting tidally influenced waters. It provides warning that the boundaries of the property may change due to tidal forces. The landowner could lose or gain land.
ADDENDUM FOR PROPERTY IN A PROPANE GAS SYSTEM SERVICE AREA (47-0)
This addendum must be made part of the contract if the property is in a propane gas system service area. The addendum reads in part: "The above referenced real property that you are about to purchase may be located in a propane gas system service area, which is authorized by law to provide propane gas service to the properties in the area pursuant to Chapter 141, Utilities Code."
NEW HOME CONTRACT (23-15) (Incomplete Construction)
This contract is intended for houses that are to be built basically from the ground up. Some of the differences are found in Paragraph 7. It includes sections for construction specifications, change orders, and allowances for Buyer selected materials. Paragraph 7E addresses starting and completion dates of the construction. Paragraph 7G contains the Federal Trade Commission required disclosure about the R-Value of insulation.
The Farm and Ranch Contract is designed for what types of properties? Name three specific buildings to ask about.
This form is designed to be used for anything from the country getaway place or the small farm to the large working farm or ranch. It covers barns, outbuildings, and farm homes.
FARM AND RANCH CONTRACT (25-12)
This form is designed to be used for anything from the country getaway place or the small farm to the large working farm or ranch. It covers barns, outbuildings, and farm homes. The legal description allows room for a metes and bounds description and covers such things as water rights and easements.
ADDENDUM FOR RELEASE OF LIABILITY ON ASSUMED LOAN AND/OR RESTORATION of SELLER'S VA ENTITLEMENT (12-3)
This form is only used if the buyer is assuming the seller's current loan. Use this addendum when the seller wishes to be released from liability upon the buyer's assumption of the loan. The buyer will be required to apply for approval of income and credit worthiness.
ADDENDUM FOR "BACK-UP" CONTRACT (11-7)
This form is used for just what the name states. It is the "back-up" for a current valid contract on a property.
UNIMPROVED PROPERTY CONTRACT (9-13)
This is to be used for vacant land that has been subdivided into lots and blocks rather than large tracts of raw land. Paragraph 2 calls for lot and block numbers but allows for an exhibit to be attached for lengthy metes and bounds descriptions.
NOTICE OF BUYER'S TERMINATION OF CONTRACT (38-5)
This promulgated Notice is not a part of the contract. It serves as a notice when the contract requires the buyer to notify the seller of termination of the contract due to one of the contingencies built into the agreement.
The contingencies in the Notice of Buyer's Termination of Contract are for what reason?
To protect buyers from contractual obligations they cannot fulfill