Contract Update New TREC Forms

Transcription

1 Contract Update New TREC Forms Texas Land Title Institute December 2 3, 2010 Mrs. Dawn Enoch Moore Allegiance Title Company 6030 Sherry Lane Dallas, TX Direct Fax dmoore@allegiancetitle.com

2 DAWN ENOCH MOORE Allegiance Title Company 6030 Sherry Lane Dallas, Texas EDUCATION B.S. in Economics, Magna Cum Laude, Southern Methodist University J.D. with Honors, Southern Methodist University School of Law PROFESSIONAL ACTIVITES President and CEO, Allegiance Title Company Lawyer Co-Chair, Texas Real Estate Commission, Broker/Lawyer Committee Fellow of the Texas Bar Foundation Board Member, TLTA Past Chair, Federal Issues Committee of the TLTA Past Chair, Regulatory Committee of the TLTA Past Member of the Board of Directors of the TLTA Past Member of the Board of Directors of the MetroTex Association of Realtors Past Member of the Board of Directors of the Collin County Association of Realtors ACADEMIC APPOINTMENTS AND HONORS Author/Lecturer, Texas Land Title Institute 2010 Contract Update Author/Lecturer, MetroTex 2009 Legal Issues Update Author/Lecturer, Texas Land Title Associate Seminar New RESPA Reform Rule and its Impact in Texas Author/Lecturer, Texas Land Title Association Regional Seminar New Rates and Rules Author/Lecturer, Texas Land Title Institute 2007 Lender Closing Issues Author/Lecturer, Texas Land Title Institute 2006 Fee Attorneys and AfBAs Author/Lecturer, State Bar of Texas, Advanced Real Estate Law Course 2006 New TREC Contracts Explained Author/Lecturer, Texas Land Title Association Regional Seminars A Summary of Federal Regulations and Recent Enforcement Actions Author/Lecturer, Texas Land Title Association Institute 2003 Lenders Escrow Instructions and Closings Guest Speaker, National Association of Hispanic Brokers, MetroTex and Collin County Associations of Realtors Distinguished Alumni for Corporate Service 2005, awarded by the SMU Dedman School of Law COMMUNITY INVOLVMENT Member, Planning and Zoning Commission, City of University Park Education Chair, Dallas Chapter, World Presidents Organization Past Chair, Legislative Affairs Committee, City of University Park Past Chair (Governor Appointed), Board of Directors, Texas State Affordable Housing Corporation Past Vice-Chair, Board of Directors, North Texas Health Facilities Dev. Corp. Past Chair, Board of Directors, Interfaith Housing Coalition Past Member, Alumni Board of Directors, Southern Methodist University Past Member, Board of Directors, Dallas Habitat for Humanity Past Member, Board of Trustees, University Park United Methodist Church

3 Contract Update New TREC Forms Effective November 15, 2010 Mandatory March 1, 2011 Presented by Dawn Enoch Moore Lawyer Co Chair, TREC Broker/Lawyer Committee New Forms One to Four Family Residential Contract (Resale) TREC NO Third Party Financing Addendum for Credit Approval TREC NO Addendum for Property subject to Mandatory membership in a Property Owners Association TREC NO TEXAS LAND TITLE INSTITUTE New Forms continued Residential Condominium Contract (Resale) TREC NO Farm and Ranch Contract TREC NO New Home Contract (Completed Construction) TREC NO (Incomplete Construction) TREC NO TEXAS LAND TITLE INSTITUTE 1

4 New Forms continued Unimproved Property Contract TREC NO. 9 8 Disclosure of Relationship with Residential Service Company RSC 1 Non Realty Items Addendum TREC NO. OP M (Approved not Promulgated) 2010 TEXAS LAND TITLE INSTITUTE One to Four Family Contract (Paragraph 2) Paragraph 2B added: mounts and brackets for televisions and speakers if Seller excludes under paragraph 2D, Buyer may require Seller repair the holes under paragraph 7D if Buyer wants TVs and speakers, use Non Realty Items Addendum Paragraph 2C added catch all for controls: controls for and (iv) other improvements and accessories TEXAS LAND TITLE INSTITUTE One to Four Family Contract (Paragraph 4) Paragraph 4A(1): provides examples of lenders underwriting requirements : (including, but not limited to appraisal, insurability and lender required repairs) makes termination of contract under this paragraph a Buyer s right and not automatic CAUTION: must timely exercise right 2010 TEXAS LAND TITLE INSTITUTE 2

5 One to Four Family Contract (Paragraph 4) Paragraph 4A(2): Financing Approval changed to Credit Approval corresponding changes made to the term Financing Approval under the Third Party Financing Addendum terms of financing a function of credit 2010 TEXAS LAND TITLE INSTITUTE One to Four Family Contract (Paragraph 6) Paragraph 6C(1) (existing survey): inserted the affidavit form number ( T 47 ) rearranged paragraph to reinforce Seller s obligation 2010 TEXAS LAND TITLE INSTITUTE One to Four Family Contract (Paragraph 6) Paragraph 6E(2) Property Owners Association(s) Mandatory Membership: made plural to effect notice when multiple associations cover the Property clarifies that a separate addendum should be used for each association 2010 TEXAS LAND TITLE INSTITUTE 3

6 One to Four Family Contract (Paragraph 7) Paragraph 7D added: NOTICE TO BUYER AND SELLER; Buyer s agreement to accept the Property in its present condition under Paragraph 7D(1) or (2) does not preclude Buyer from inspecting the Property under Paragraph 7A, from negotiating repairs or treatments in a subsequent amendment, or from terminating this contract during the Option Period, if any TEXAS LAND TITLE INSTITUTE One to Four Family Contract (Paragraph 7) Paragraph 7D(2) included an admonishment not to insert general phrases: (Do not insert general phrases, such as subject to inspections that do not identify specific repairs.) 2010 TEXAS LAND TITLE INSTITUTE One to Four Family Contract (Paragraph 9) New Paragraph 9B(5): requires Seller to: provide Buyer copy of lease, if any provide Buyer copy of move in condition form, if any transfer to Buyer the security deposits, if any; requires Buyer to: send written notice to tenant 2010 TEXAS LAND TITLE INSTITUTE 4

7 One to Four Family Contract (Paragraph 9B(5)) Note: rent proration covered under paragraph 13 if no move in condition form, Buyer may rely on his inspection Buyer must provide accounting of security deposit to tenant within 30 days of tenant vacating the Property and providing a forwarding address 2010 TEXAS LAND TITLE INSTITUTE One to Four Family Contract (Paragraph 12) Paragraph 12A(2): deletes term Loan Fees and insert adjusted origination charges rolls in Private Mortgage Insurance Premium (previously set out in separate paragraph 12B) 2010 TEXAS LAND TITLE INSTITUTE One to Four Family Contract (Paragraph 15) New Paragraph 15B: right to remedy of specific performance is waived by either party if petition for specific performance is not filed, and such filing copied to escrow agent, within 45 days after the Closing Date if Closing Date amended, a copy of the written amendment must be in the escrow agent s possession to extend the 45 days Intent of Paragraph 15B is to allow resale of property during dispute over earnest money TEXAS LAND TITLE INSTITUTE 5

8 One to Four Family Contract (Miscellaneous) Paragraph 18B revised to clarify escrow agent s right to deduct expenses before releasing earnest money. Paragraph 22 modified to include all current promulgated residential property addenda. Paragraph 23 defines term Option Period. Paragraph 24 reworded to make clear that TREC prohibits licensees from giving legal advice TEXAS LAND TITLE INSTITUTE One to Four Family Contract (Broker Information) Page to be used for information purposes only: not to be used to change commissions splits between co brokers (need separate agreement) no signatures required 2010 TEXAS LAND TITLE INSTITUTE Third Party Financing Addendum for Credit Approval NOTE: Think of Addendum as a contingency and not a disclosure of Buyer s financing! 2010 TEXAS LAND TITLE INSTITUTE 6

9 Third Party Financing Addendum for Credit Approval Contingency revised to match new Good Faith Estimate disclosures: the term Loan Fees (loan origination, discount, buy down, and commitment fees) replaced by Adjusted Origination Charges as shown on Buyer s Good Faith Estimate for the loan (still expressed in terms of % of the loan ) 2010 TEXAS LAND TITLE INSTITUTE Third Party Financing Addendum for Credit Approval Note regarding HUD92564 CN For Your Protection: Get a Home Inspection deleted no longer required by FHA on execution of the contract 2010 TEXAS LAND TITLE INSTITUTE Addendum for Property Subject to Mandatory Membership in a Property Owners Association Added language under Paragraph A 2 allowing for updates to Subdivision Information (Tex. Prop. Code Sec (f)) New Paragraph C obligates Buyer to pay any deposits for reserves required by the Association 2010 TEXAS LAND TITLE INSTITUTE 7

10 Other Form Changes The One to Four Family Contract is used as a template. All corresponding changes were made throughout the library of forms, (except Broker Information page on Farm and Ranch Contract) TEXAS LAND TITLE INSTITUTE Unique Form Changes Residential Condominium Contract paragraphs 2B(2) and 2C(2) amended to clarify Buyer s right to refund of earnest money Farm and Ranch Contract paragraph 2F deleted words mineral and royalty since those terms are covered in the Addendum for Reservation of Oil, Gas, and Other Minerals TEXAS LAND TITLE INSTITUTE Disclosure of Relationship with Residential Service Company TREC NO (RSC 1) explains: the purpose of a Residential Service Contract (RSC); the RSC is optional; the relationship between the Broker or Salesperson and the Residential Service Company, if any; and whether Broker or Salesperson will receive compensation from the Company 2010 TEXAS LAND TITLE INSTITUTE 8

11 Non Realty Items Addendum (Approved not Promulgated) Differs from the TAR form in that no option to check at no cost (often, a lender issue) If addendum used, it should be listed under Other in paragraph 22 of the contract 2010 TEXAS LAND TITLE INSTITUTE Conclusion All new contracts are available for use effective November 15, Date of new forms 11/15/2010. New forms mandatory as of March 1, Old forms repealed as of March 1, TEXAS LAND TITLE INSTITUTE 9

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

32

33

34

35

36

37

38

39

40

41

42

43

44

45

46

47

48

49

50

51

52

53

54

55

56

57

58

59

60

61

62

63

64

65

66

67

68

69

70