Multiple contract form changes were adopted by the Texas Real Estate Commission during the November 4 TREC Meeting after being recommended by the Broker-Lawyer Committee (BLC). Some of those changes are in response to industry practice changes around broker compensation.

"This has been a topic of interest across the whole industry and represents a lot of hard work on behalf of the Broker-Lawyer Committee and staff," said TREC Executive Director Chelsea Buchholtz. "This is ongoing. We are not finished yet."

Adopted Changes

After receiving and reviewing a whopping number of public comments (341) regarding the forms, BLC recommended the following changes that are now adopted by TREC and will become effective for mandatory use January 3, 2025. The full details on the changes can be found on page 177 of the Meeting Materials Part 2.

Compensation

Most of the public comments received by BLC were in response to Paragraph 12. Those changes include:

• Paragraph 12A(1)(a) and Paragraph 12A(2) adds that each party pays the brokerage fees that they each have agreed to pay.
• Paragraph 12A(1)(b) is amended to allow for a specific seller contribution to the buyer's brokerage fees.
• A new Paragraph 12A(1)(c) is added to separately address other seller contributions (that was previously in Paragraph 12A(1)(b)) and the prior language that specified the order in which any contribution was to be paid, as well as a limitation on the type of fee that could be paid, is removed.

Mold Requirement

One change includes new Paragraph 6E(11) added to provide information regarding a Texas law that requires a seller to provide a buyer a copy of any mold remediation certificate issued during the five years preceding the sale of the property.

T-47.1 Declaration Option

To be consistent with a recently updated Texas Department of Insurance procedural rule, Paragraph 6C(1) is amended to include the option of providing the T-47.1 Declaration (which does not need to be notarized)-in lieu of the T-47 Affidavit-when the Seller furnishes the Buyer an existing survey.

In lieu of providing a "no survey required" option, Paragraph 6C(2) is amended to read "Buyer may obtain a new survey" instead of "Buyer shall obtain a new survey", and adds that if the Buyer ultimately fails to obtain the survey, the Buyer does not have the right to terminate the contract under Paragraph 2B of the Third Party Financing Addendum because the survey was not obtained.

Proposed Changes You Can Comment On

The following are out for public comment through December 22, 2024, and will be up for possible adoption at the February 10, 2025 TREC Meeting.

IABS

The proposed amendments to the Information About Brokerage Services form will clarify to the consumer that any brokerage fees are not set by law and are negotiable.

Inspector Committee- and ESAC-Recommended Amendments

The following changes, recommended by the Inspector Committee (TREIC) and Education Standards Advisory Committee (ESAC), affect three rules regarding course proctoring and student identification requirements:

• TREC Rule 535.65, Responsibilities and Operations of Providers of Qualifying Courses
• TREC Rule 535.70, Definitions
• TREC Rule 535.72, Approval of Non-elective Continuing Education Courses

Proposed changes include replacing the phrase "check the photo identification" with "verify" in response to concerns over the security of students' personal information.

Other amendments include removing proctoring requirements for course exams and certain courses delivered using technology.

Penalty Payments

Amendments proposed to TREC Rules 535.191, Schedule of Administrative Penalties and 535.219, Schedule of Administrative Penalties, clarify a person may only pay an administrative penalty in an authorized manner and that online payments may be subject to fees set by the Department of Information Resources (DIR).

Contract Clarification

A clarifying change is recommended for Paragraph 2 of the Notice of Buyer's Termination of Contract to ensure that the buyer has delivered the lender's written statement to the seller in accordance with recent changes to Paragraph 2A, Buyer Approval, of the Third Party Financing Addendum.

Committee Appointments

Appointments were made to both ESAC and TREIC.

Education Standards Advisory Committee

"ESAC is a really great advisory committee because it brings the license holders and educators together to see what's best for the industry," said TREC Chair R. Scott Kesner. "So, thank you for your commitment to serve on that."

License Holder Members

• Christopher Gonzalez
• Kandi Luensmann
• Bill Steddum
• Christina Valero
• Jean Mitchell, alternate

Education Provider Members

• Kara Bang
• Paul Silverman
• Jill Malloy, alternate

Inspector Committee

• Cole Robinson, public member

Meeting Materials

TREC's November 4 meeting recording and materials can be found here.

Upcoming Meeting Information

The next Commission meeting is February 10, 2025.

Public link

Please use the above public link if you want to share this noodl on another website.