Promulgated Contracts-Level 9 MAIN SUMMARY

If there is an improvement of any kind on a property, then this form should NOT be used

Unimproved Property Contract

Farm and Ranch contract

Which TREC promulgated contract has a spot for information about Exception Documents and Surface Leases?

Paragraph 13 (ROLLBACK TAXES) is different from the One to Four in the

New Home Contract Unimproved Property Contract Farm and Ranch Contract

These are taxes that can be assessed if the zoning of the property changes when it is sold and no longer qualifies for a previous exemption.

rollback taxes (para 13)

The Unimproved Property Contract can be used for a

small city lot, regardless of zoning It can also be used for a rural acreage tract NO IMPROVEMENTS

Paragraph 6F of farm and ranch contract, if a seller gives the buyer notice of an oral lease and lists it in the contract,

the buyer cannot later use that oral lease as an objection but seller should terminate oral leases before closing

Townhouse: Owners own

the home AND the land that it sits on

reason builders can use OWN contract

they are personal property owner and can require OWN form instead of promulgated

most builders of subdivisions have their own contract form and will not sell a completed home to a buyer

unless the builder's form is used so TREC promulgated new home contract rarely used

For townhouse transactions,

use the One to Four Family Residential Contact.

If the buyer and the seller agree to an Exception Document listed in the farm and ranch contract, the buyer cannot

later use that as an objection

Rollback taxes can be a significant expense, and according to TREC contracts, the party changing the property usage

(say, from farm land to residential) is responsible for paying those taxes.

TREC 6 promulgated contracts:

1-4 fam res (resale) farm and ranch unimproved property residential condo (resale) new home contract (complete) new home contract (incomplete)

If a relatively new home has had a PREVIOUS owner, no matter how briefly they owned it and REGARDLESS of whether anyone lived in the home, use???

1-4 fam res cont NOT new home

Broker Andie is getting ready to write an offer on a townhouse. The legal description of the townhouse is lot 2 block 17 Conner Addition. Which form should the broker use to write the offer?

1-4 family contract ALWAYS for townhouse

two types of New Home Contracts:

Completed Construction and Incomplete Construction. The forms vary slightly from the One to Four

Paragraph 3: Sales Price is the same in all promulgated residential contracts except for the

Farm and Ranch Contract the sales price can be adjusted by variances in the survey and Paragraph 3 of the Farm and Ranch allows for that variation

Resale Certificate should be completed by the

HOA; time frame for delivery negotiated in para 2 of Residential Condo Resale

best way to know legal description of condo (or any property)

locate deed/most available on line can also compare deed to tax roll

legal description for a farm or ranch is

longer and more detailed than it is for an urban or suburban residence

seller is required to provide financial and restrictive information about the condominium to the buyer in the form of

a Resale Certificate and other documents

for condo legal description still found in para 2 but

a unit number is required also a building number, letter, or even a building name that is part of the legal description

WHO will ALWAYS pay rollback taxes in New home contract?

builder-seller b/c one and only owner the only one that could have changed usage

Paragraph 2 of farm and ranch not only covers the legal description,

but also the improvements that are expected to stay with the property

contract that diverges most from this standard of 1-4 Fam Res is the

is the Farm and Ranch Contract, specifically Paragraphs 2, 3, 6, 7, and 13

Paragraph 6 of farm and ranch contract includes

disclosures about exception documents and surface leases Both of these are disclosed as exceptions to the title policy and cannot be used as a basis for the objection of a title

Residential Condominium Contract (Resale) as long as it's a resale and not new construction.

do not own land or exterior of building; common areas owned COLLECTIVELY by all

Farm and Ranch Contract should not be used for

empty lots in urban areas that are primarily identified by a legal address-use UNIMPROVED

Unimproved Property Contract should be reserved for truly

empty lots without improvements

If a property owner living in an area with an HOA does not pay their HOA assessments, the HOA can

enforce their lien on the property and foreclose

If an agent is selling a large piece of land with a windmill and barn but no home, the agent will most likely use the ______.

farm and ranch contract

All TREC promulgated contracts have similarities and differences. Para 1 and 2 always

identify parties identify property (but may look a bit different)

Farm and Ranch Contract for property that has

improvements like windmills and animal pens, even if there is no house on the lot