West DFW REI Group

 

The TREC contracts used by brokers and agents in Texas do not contain any language regarding assignments. Since the contracts were silent, a TREC contract was able to be assigned without any notice to the seller. All the original buyer needed to do was enter into an assignment agreement with the new buyer and provide a copy of the executed agreement to the title company. 

Then, beginning January 1, 2024, the Texas Property Code was amended, specifically section 5.025. That section of the code always required the original buyer, before they entered into the assignment agreement, notify the new buyer that only an equitable interest was being sold, meaning the buyer did not have title to the property. Starting in January of 2024, an additional requirement was added, requiring the seller to be given notice that the original buyer was going to assign their interest in the contract. Note, it does not state seller must agree to such assignment or be told the terms of the assignment, just be notified. Such notice must be given to the seller prior to an assignment agreement being entered into between the original buyer and the new buyer.  

There are three ways the buyer can give notice to the seller:

1. Include the wording "and/or assigned" in the buyer's name on page 1 of the TREC contract.
2. A
   Read More...

 
Starting February 1, 2021, Texas Real Estate Agents have the option, but not the requirement, to use the new TREC 20-15 1-4 Family Residential Contract (Resale), which contains new provisions for the Title Insurance Agent to receipt and disburse the Option Fee.  This contract form becomes mandatory for use by all Texas Real Estate Agents after April 1, 2021.

Changes from the prior 20-14 form contained in the new 20-15 contract form include –

      Deleting paragraph 23 dealing with the Option Fee and combining Option Fee provisions into paragraph 5 with the Earnest Money Provisions.

      Both the Option Fee and the Earnest Money are to be delivered to the Title Insurance Agent, referred to as escrow agent in the Contract form.

      The Option Fee and Earnest Money can be delivered in a single check, rather than in separate checks as required previously.

      The new Contract form now provides for a separate receipt of the Option Fee and the Earnest Money, with the receipt of the Option Fee being subtly changed from being signed by the Seller’s Broker to requiring the signature of the escrow agent. Make sure yo
Read More...