Chapter 6
The definition of property in paragraph 2 the TREC Farm and Ranch Contract addresses all of the following EXCEPT?
The answer is parking.
In the TREC Unimproved Property Contract, who is responsible for paying for the survey if seller fails to provide it as promised?
The answer is seller.
Under paragraph 13 of the TREC Residential Condominium Contract, who is responsible to pay for any special condominium assessment due and unpaid at closing?
The answer is seller.
Buyer and seller enter into a contract for buyer to purchase seller's condominium unit using the TREC Residential Condominium Contract with an effective date of January 31. The roof of the complex is partially destroyed by a fire on February 3. Seller notified buyer on February 5 of the fire. What is the latest date buyer can terminate the contract because of the fire?
The answer is February 12.
Buyer and seller enter into a contract for buyer to purchase seller's condominium unit using the TREC Residential Condominium Contract with an effective date of January 5. Seller delivers the condominium documents before the effective date. Assuming no option period, what is the latest date in which buyer may cancel the contract based on the documents and still get her earnest money refunded?
The answer is January 11.
Buyer and seller enter into a contract for buyer to purchase seller's condominium unit using the TREC Residential Condominium Contract with an effective date of January 5. Seller delivers the condominium documents three days after the effective date. Assuming no option period, what is the latest date on which buyer may cancel the contract and still get her earnest money refunded?
The answer is January 13.
Buyer and seller wish to enter into an agreement for buyer to purchase a new condominium that has never been occupied. Which TREC contract should the buyer's agent advise the buyer to use?
The answer is none of the TREC contracts are suitable for this transaction.
Which TREC contract should be used to buy or sell a new home if closing will happen before the builder is finished building the house?
The answer is none of the TREC contracts are suitable for this transaction.
In what way are the Condominium Contract and the Farm and Ranch Contract different from the other four contract forms?
The answer is paragraph 6 is different in both. The remaining answers are incorrect.
An important difference between the One to Four Family Residential Contract and the Farm and Ranch Contract, dealing with flooding, environmental hazards, and endangered species, is covered by which paragraph of the Farm and Ranch Contract?
The answer is paragraph 7H.
How is paragraph 3 different in the Farm and Ranch Contract from the other five contracts?
The answer is sales price can be adjusted after the effective date.
The TREC contract forms say that if the property is damaged by fire or other casualty prior to closing, the
The answer is seller will be obligated to restore the property prior to closing.
A buyer and seller enter into an agreement for buyer to purchase seller's 3,500-acre ranch using the TREC Farm and Ranch Contract. Seller was denied a special use valuation by the county that resulted in assessments. Who is responsible for payment of the assessments?
The answer is seller.
In the TREC Unimproved Property Contract, who is responsible for payment of assessments if seller's change in use of the property prior to closing results in assessments for periods prior to closing?
The answer is seller.
How long does the buyer have to terminate the contract after he receives the condominium documents in the TREC Residential Condominium Contract?
The answer is six days after delivery of the documents.
In what way is paragraph 2 in the TREC Farm and Ranch Contract different from paragraph 2 of the One to Four Family Residential Contract?
The answer is the Farm and Ranch Contract calls for a metes-and-bounds legal description rather than reference to a recorded plat.
A new home builder is selling a spec house that she briefly lived in before listing it in the local MLS. A buyer is interested in making an offer on the house. Which TREC contract should the buyer's agent advise the buyer to use to submit the offer?
The answer is the One to Four Family Residential Contract (Resale).
Buyer and seller wish to enter into an agreement for builder to sell to buyer a new home that is currently occupied by a tenant. Which TREC contract should the buyer's agent advise the buyer to use?
The answer is the One to Four Family Residential Contract.
Which paragraph is different in all six TREC contracts?
The answer is paragraph 2.
Which TREC promulgated contract form has a spot for information about exception documents and surface leases?
The answer is the Farm and Ranch Contract.
Which of the following is NOT considered a construction document in the TREC New Home Contract (Incomplete Construction)?
The answer is survey.
Rollback taxes are discussed in
The answer is all of these.
Which TREC-promulgated contract form(s) gives disclosure about the type of insulation in the property?
The answer is both New Home Contracts.
Which of the following is NOT in the Seller's Disclosure in the TREC Unimproved Property Contract?
The answer is foundation problems.
Why is the Seller's Disclosure of Property Condition form not addressed in the TREC Unimproved Property Contract?
The answer is it is not required under section 5.008 of the property code.
Most builders in Texas
The answer is provide their own contract.
The seller of unimproved property
The answer is provides a disclosure in paragraph 7E of the Unimproved Property Contract.
Which TREC-promulgated contract form allows for the sales price to be adjusted because of the survey?
The answer is the Farm and Ranch Contract.
How is paragraph 13 different in the New Home Contracts, the Unimproved Property Contract, and the Farm and Ranch Contract?
The answer is there is a possibility of the assessment of rollback taxes.
Why are improvements and accessories not addressed in paragraph 2 of the two TREC New Home Contracts?
The answer is they are addressed in the Construction Documents which are attached by reference to the contract.
Under the TREC Unimproved Property Contract, why must a buyer of an unimproved building lot carefully research availability of utilities?
The answer is they may affect the suitability of the lot for the buyer's intended use.
Under the TREC Residential Condominium Contract, what type of interest does a unit owner have in the common elements?
The answer is undivided.
Under the TREC Residential Condominium Contract, how old can the resale certificate be?
The answer is it must have been prepared no more than three months before the date it is delivered to buyer. The other answers are wrong.
How is paragraph 2 of the Residential Condominium Contract different from the One to Four Family Residential Contract?
The answer is it provides the property description of the condominium unit.
Buyer and seller (builder) wish to enter into an agreement for buyer to purchase a new home from builder. The builder ran out of money and never completed the project, but buyer is willing to buy the unfinished home and have builder finish the project with the funding from closing. Which TREC contract should the buyer's agent advise the buyer to use?
The answer is none of the TREC contracts are suitable for this transaction.
A buyer and seller enter into an agreement for buyer to purchase seller's 2,000-acre ranch using the TREC Farm and Ranch Contract. The parties agree that the sales price is calculated at $2,000 per acre and that the sales price will be adjusted based on the survey. The buyer gets a survey done which indicates that the ranch is 2,400 acres. The seller wants to adjust the sales price accordingly and buyer disagrees. What is buyer's option under the contract?
The answer is buyer may terminate with written notice to the seller.
Under the TREC New Home Contract (Incomplete Construction) how are change orders that result in a lower sales price addressed in the contract?
The answer is the amounts paid in cash and financed are reduced proportionately.
Under paragraph 12A(3) of the TREC Residential Condominium Contract, who pays association fees or other charges resulting from the transfer of the property?
The answer is the parties negotiate the payment.
Buyer and seller enter into a contract for buyer to purchase seller's condominium unit using the TREC Residential Condominium Contract with an effective date of February 1. Seller timely delivers the condominium documents five days after the effective date. Assuming the buyer gives timely notice, what happens when she terminates the contract?
The answer is the earnest money will be refunded to the buyer.
Which paragraph from the One to Four Family Residential Contract changes in only one of the promulgated forms?
The answer is paragraph 14.
Buyer and seller enter into a contract for buyer to purchase seller's condominium unit using the TREC Residential Condominium Contract with an effective date of January 15. Seller timely delivers the resale certificate three days after the effective date. Assuming no option period, what is the latest date on which buyer may cancel the contract based on the resale certificate and still get her earnest money refunded?
The answer is January 23.
Despite the additional cost, the buyer has decided the flooring material in his under-construction home should be clear Hawaii-sourced koa wood rather than the red oak specified by the construction documents. Both the buyer and the contractor should insist on
The answer is a detailed change order.
What is a rollback tax?
The answer is a tax that can be assessed when the property zoning is changed.
A buyer and seller enter into an agreement for buyer to purchase seller's property using the TREC Unimproved Property Contract. The buyer intends to develop the property for commercial use. Which of the following has the biggest impact on buyer's decision to purchase?
The answer is all of these. A buyer of an unimproved building lot must carefully research zoning ordinances, restrictive covenants, availability of utilities, access, and other matters that will affect the suitability of the building lot for the buyer's intended use.
TREC's new home contracts
The answer is are available for both complete and incomplete construction.
A buyer and seller enter into an agreement for buyer to purchase seller's 200-acre ranch using the TREC Farm and Ranch Contract. The parties agree that the sales price is calculated at $4,000 per acre and that the sales price will be adjusted based on the survey. The buyer gets a survey done which indicates that the ranch is 220 acres. The seller wants to adjust the sales price accordingly. What is buyer's option under the contract?
The answer is buyer may not terminate because the variance is 10%.
Buyer and seller enter into a contract for buyer to purchase seller's condominium unit using the TREC Residential Condominium Contract. The seller timely notifies buyer that the roof of the complex was severely damaged by wind shear. Buyer timely gives notice that she will terminate the contract because of the damage unless buyer receives written confirmation from the association that the roof will be restored to its previous condition within a reasonable time at no cost to buyer. The association fails to timely provide the written notification within seven days of buyer's notice. What is buyer's option under the contract?
The answer is buyer may terminate and receive the earnest money.
Buyer and seller enter into a contract for buyer to purchase seller's condominium unit using the TREC Residential Condominium Contract. The seller timely notifies buyer that the roof of the complex is partially destroyed by hail. What happens if buyer fails to terminate the contract because of the damage within seven days of getting the notice?
The answer is buyer will be deemed to have accepted the property without confirmation that it will be repaired.
A buyer and seller enter into an agreement for buyer to purchase seller's 3,500-acre ranch using the TREC Farm and Ranch Contract. Buyer intends to develop the ranch for commercial use. Who is responsible for payment of additional taxes?
The answer is buyer.
A buyer and seller enter into an agreement for buyer to purchase seller's lot, which is currently used for grazing, using the TREC Unimproved Property Contract. The buyer intends to develop the property for commercial use. Who pays for any rollback taxes in this case?
The answer is buyer.
In the TREC Unimproved Property Contract, who is responsible for getting the survey done if seller fails to provide it as promised?
The answer is buyer.
Under paragraph 12A(4) of the TREC Residential Condominium Contract, who pays for any deposits for reserves required at closing by the Association?
The answer is buyer.
Under the TREC New Home Contract (Incomplete Construction), who is responsible for payment of the increase in costs resulting from change orders?
The answer is buyer.
Under paragraph 13 of the TREC Residential Condominium Contract, which of the following is TRUE?
The answer is cash reserves from regular condominium assessments for deferred maintenance established by the association will not be credited to seller.
Under paragraph 13 of the TREC Residential Condominium Contract, which of the following is TRUE?
The answer is cash reserves from regular condominium assessments for deferred maintenance established by the association will not be credited to seller. The contract states that cash reserves from regular condominium assessments for deferred maintenance or capital improvements established by the association will not be credited to seller.
Buyer and seller enter into an agreement for builder to sell to buyer a new home using the TREC New Home Contract (Incomplete Construction). Buyer wants to upgrade the tile in the kitchen and completes a change order. Which set of documents includes change orders?
The answer is construction documents.
Buyer and seller enter into an agreement for buyer to purchase seller's farm using the TREC Farm and Ranch Contract. Buyer wants to harvest the corn that is currently growing. What should buyer's agent advise the buyer?
The answer is get an agreement from seller in writing acknowledging that buyer gets to harvest the corn.
Which of the following is NOT a specifically listed right, privileges and appurtenances in the TREC Unimproved Property Contract?
The answer is harvest rights.
Seller's disclosure of lead-based paint is
The answer is included in the One to Four Family Residential Contract but not the New Home Contracts.
What does the R-Value address in the TREC new home contracts?
The answer is insulation. R-Value is a measure of insulation.
How is paragraph 13 of the Residential Condominium Contract different from the One to Four Family Residential Contract?
The answer is it addresses cash reserves from regular condominium assessments.
How long does the seller have to provide the condominium documents in the TREC Residential Condominium Contract?
The answer is it is negotiated by the parties.
A buyer and seller enter into an agreement for buyer to purchase seller's 3,500-acre ranch using the TREC Farm and Ranch Contract. The parties agree that the sales price is calculated at $5,000 per acre and that the sales price will be adjusted based on the survey. The seller gets a survey done which indicates that the ranch is 3,900 acres. The seller wants to adjust the sales price accordingly and buyer disagrees. What happens if buyer fails to timely terminate the contract?
The answer is the additional cost is allocated as agreed in paragraph 3D.
Buyer and seller enter into a contract for buyer to purchase seller's condominium unit using the TREC Residential Condominium Contract with an effective date of March 1. Seller timely delivers the resale certificate five days after the effective date. Assuming the buyer gives timely notice, what happens when she terminates the contract?
The answer is the earnest money will be refunded to the buyer.
Who is responsible for paying rollback taxes under the TREC Unimproved Property Contract?
The answer is the party changing the property usage.
Which of the following is NOT defined as a "Document" in the TREC Residential Condominium Contract?
The answer is the resale certificate.
Paragraph 6G(8) of the Farm and Ranch Contract informs the consumer that if the property is subject to a private transfer fee
The answer is the seller must notify the buyer.
The TREC contract forms that discuss rollback taxes say that if the rollback taxes are assessed because the seller changed the usage prior to closing
The answer is the seller will be obligated to pay the rollback taxes.
Under the TREC New Home Contract (Incomplete Construction) how long does buyer have to select things such as carpeting and tile?
The answer is the time period is negotiated.
How are cash reserves from regular condominium assessments for deferred maintenance and capital improvements established by the association addressed in the TREC Residential Condominium Contract?
The answer is they are not credited to seller.
Under the TREC Unimproved Property Contract, why should an adequate termination option be purchased?
The answer is to provide a sufficient amount of time to make absolutely certain that the property is suitable.
When buyers purchase a condominium, they are buying the
The answer is unit and an undivided interest in the common areas.
Buyer and seller enter into a contract for buyer to purchase seller's condominium unit using the TREC Residential Condominium Contract. The seller timely notifies buyer that the roof of the complex has been partially destroyed by hail. Buyer timely gives notice that she will terminate the contract because of the damage unless she receives written confirmation from the association that the roof will be restored to its previous condition within a reasonable time at no cost to buyer. How long does the association have to provide the confirmation?
The answer is within seven days of getting the notice.
Buyer and seller enter into an agreement for buyer to purchase seller's lot, using the TREC Unimproved Property Contract. There used to be underground storage tanks on the property, but seller removed them several years ago. Is the seller required to disclose this to the buyer?
The answer is yes, even though they were removed.
Rollback taxes can be assessed when
The answer is zoning is changing and the property no longer qualifies for a previous exemption.
