Broker-Lawyer Committee Recommends Form Updates for August Proposal

The Texas Broker-Lawyer Committee (BLC) met twice in July to discuss its routine work of reviewing TREC's forms, but also to discuss potential changes to the TREC contract forms as a result of the proposed NAR settlement related to compensation.

What follows are proposed changes recommended by BLC. These changes will be presented at the next TREC Meeting on August 19. Once proposed in August, you will have a chance to provide public comment, which BLC will consider at its next meeting on October 11. The earliest any changes would be adopted is at the TREC Meeting on November 4.

Recommendations Related to Compensation Language

In light of recent discussions surrounding broker compensation, Paragraph 12A(1)(a) and 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) has been 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. Conforming changes are also made in the Amendment to Contract.

The compensation disclosure in the Broker Information section of the contracts (except for the Farm and Ranch Contract) removes the parenthetical referencing the MLS and to add checkboxes to allow for the fee to be reflected either as a percentage or a dollar amount.

Be sure to attend or livestream the August TREC Meeting for more on this and other recommendations BLC is making to the Commission.