Busy. Please wait.
or

show password
Forgot Password?

Don't have an account?  Sign up 
or

Username is available taken
show password

why


Make sure to remember your password. If you forget it there is no way for StudyStack to send you a reset link. You would need to create a new account.
We do not share your email address with others. It is only used to allow you to reset your password. For details read our Privacy Policy and Terms of Service.


Already a StudyStack user? Log In

Reset Password
Enter the associated with your account, and we'll email you a link to reset your password.

Remove ads
Don't know
Know
remaining cards
Save
0:01
To flip the current card, click it or press the Spacebar key.  To move the current card to one of the three colored boxes, click on the box.  You may also press the UP ARROW key to move the card to the "Know" box, the DOWN ARROW key to move the card to the "Don't know" box, or the RIGHT ARROW key to move the card to the Remaining box.  You may also click on the card displayed in any of the three boxes to bring that card back to the center.

Pass complete!

"Know" box contains:
Time elapsed:
Retries:
restart all cards




share
Embed Code - If you would like this activity on your web page, copy the script below and paste it into your web page.

  Normal Size     Small Size show me how

tx- chp5

contracts

TermDefinition
5-1 texas promulgated contract forms -*texas requires use of promulgated forms when negotiating contracts binding the sale, exchange, option, lease, or rental of property *licensees must use only those contract forms promulgated or approved by the Texas Real Estate Commission (TREC) for that kind of transaction
promulgated means that the contracts are issued by TREC for mandatory use by license holders
exceptions include the following: transactions in which (4) 1. the licensee is functioning solely as a principal, not an agent 2. an agency of the US gov requires that a diff form be used 3. form has been prepared by a principal to the transaction or by an attorney & required by a principal to the transaction
...4. transaction for which no standard form exists and the licensee uses a form prepared by an attorney at law licensed in texas and approved by the attorney for the particular kind of transactions involved or prepared by the Texas Real Estate Broker-Lawyer Committee and made available for trial use by TREC
forms may be reproduced only from the following sources: -#ed copies obtained from TREC -printed copies made from copies obtained from TREC -legible photocopies made from such copies -computer-driven printers following mandatory guidelines
*no changes except the business name or logo of a broker may appear at the top of a form outside the border -the broker's name may be inserted in any blank provided for that purpose
licensees may not add to or strike matter from forms except that licensees shall add factual statements & bus details desired by principals -shall strike only such matter as is desired by principals & as is necessary to conform the instrument to the intent of the parties -only if no other TREC-form exist
it is not the practice of law as defined in this act for a real estate licensee to complete a contract form which is either TREC-promulgated or prepared by TREC and made available for trial use by licensees w/ TREC's consent
Texas promulgated contracts (6) 1. One- to Four-Family Residential Contract (Resale) 2. Unimproved Property Contract 3. Farm and Ranch Contract 4. New Home Contract (completed construction) 5. New Home Contract (in-completed) 6. residential condominium contract (resale)
One- to Four-Family Residential Contract (Resale) freestanding home, duplex, triplex, one to 4 units
farm and ranch contract deals w/ roll-back taxes & provides for sale of minerals, royalties, timber interests & crops -who will pay rb taxes for periods prior to closing (buyer pays if buyer changed the use; the seller pays if the seller changed the use)
...roll-back taxes are assessed if the use of property changes from agricultural or open space to another classification
selected texas addenda (8) 1. 3rd party financing addendum for credit approval 2. seller financing addendum 3. addendum for sale of other property by buyer 4. ..."back-up" contract 5. ...coastal area property- natural resources code 6. ...property located seaward of the gulf
*3rd party financing addendum for credit approval -to be used if the buyer is applying for a 3rd party loan to purchase property -used for conventional, Texas VA loan, FHA Insured, & VA Guaranteed Financing -time is of the essence
*seller financing addendum -buyer and seller can agree that buyer shall provide certain docs to establish buyer's creditworthiness or seller can terminate contract -seller has 7 days after receipt of the buyer's credit doc to terminate the contract at the seller's sole discretion
*addendum for sale of other property by buyer -time is of the essence -addendum provides a contingency for buyer to terminate contract w/out default, or continue in the contract by removing contingency & depositing additional earnest money in case buyer cannot sell the named property owned by buyer
...seller may continues to show property and if subsequent offer from 2nd buyer is accepted by seller -seller can require buyer to waive contingency & put up additional earnest money, or terminate the 1st contract & take her earnest money back
...if 1st buyer elects to terminate, the 2nd buyer's contract (which should have Addendum For "Back-Up" Contact attached) will become the primary contract
*time is of the essence clause states, "Strict compliance with the times for performance stated herein is required"
addendum for "back-up" contract -time is of the essence -makes an offer or contract contingent upon an existing offer terminating -neither party is required to perform during the contingency period, although earnest money & any option fee must be paid if required by the contract
5. addendum for coastal area property- natural resources code -owner of property may gain or lose portions of tract b/c of changes in boundary of state-owned tidally influenced submerged lands -state law prohibits use, encumbrance, construction, or placing of any structure in, on, or over state-owned sub. lands
6. addendum for property located seaward of the gulf intracoastal waterway- natural resources code -provides notice, according to that if property is in close proximity to a beach fronting the Gulf of Mexico, public has easement to or over the area of any public beach
.... -states that state law prohibits any obstruction to the public easement and that structures erected on or over the easement are subject to a lawsuit to remove them
7. seller's temporary residential lease used when the seller retains possession of the property for no more than 90 days after closing
8. buyer's temporary residential lease used when the buyer takes possession of the property not more than 90 days prior to closing
selected notices, amendments, and other forms (not addenda) -6 none are used as addenda and should not be part of or attached to an offer or contract as addenda -some promulgated, some approved therefore optional
1. notice of buyer's termination of contract -promulgated notice -to be used by a broker when the buyer wishes to notify the seller that the contract is terminated pursuant to one or more of 6 diff. contractual rights to terminate contained in the contract of an addendum
2. amendment to contract concerning the property at____ - -promulgated form -to be used to modify an existing contract and/or addendum to a contract -contains 9 contract subject areas to amend or modify, including one labeled other modifications
3. notice to prospective buyer -approved & optional form -to be used by a licensee working w/ buyer when TREC-promulated contract forms are not used under the exceptions rule and/or buyer's agent has not used a buyer rep agreement that already contains these notices
4. texas real estate consumer notice concerning hazards or deficiencies -used optionally -to increase buyer awareness to hazards and reduce broker liability
5. seller's disclosure of property condition -used optionally -contains only the minimum requirements of the Texas Property Code Section -many brokers use their own versions or TAR versions w/ many additional items of disclosure than those required
6. info about brokerage services -format is approved but optional -have to give them the info but doesn't have to be that form -used to give the statutorily required written statement concerning forms of agency or non-agency relationships lawfully provided to consumers by RElicensees
...written statement must be in at least 10-point type -not addendum -shouldn't be attached to or made part of offer/contract -statue doesn't require anyone to sign it, good idea so licensee can prove in court or to TREC that he gave notice as required by law
5-2 *statues of frauds a promise or agreement for sale of real property, or for lease of real property for > 1year, is not enforceable unless agreement is IN WRITING & SIGNED BY THE PERSON TO BE CHARGED W/ THE AGREEMENT OR BY SOMEONE LAWFULLY AUTHORIZED TO SIGN FOR THAT PERSON
...debt agreements & contracts for the transfer of real estate but not leases of 12 months or less, are included
...oral contracts for the sale of real estate or for the lease of real estate for more than one year are not illegal, but bc of this statute, these oral contracts are unenforceable by law
agreement signed certain agreements must be signed by the parties to be charged w/ the responsibility to perform -*both spouses must sign agreements to release community property and homestead rights
purpose of statue of frauds -not designed to prevent oral contracts -to prevent fraud by someone seeking the enforcement of an executory contract that was never made or to disallow fraudulent oral evidence of a fictitious contract -to protect spouses' rights in property
5-3 remedies for breach of contract/default replacement notice contained in TREC-promulated contract forms 1. seller's remedies for buyer's default, according to paragraph 15 (default) of the TREC 20-10 contract form 2. buyer's remedies for seller's default, " " (buyer has 2 diff sets of options) 3. statue of limitations
*1. seller's remedies for buyer's default, according to paragraph 15 (default) of the TREC 20-10 contract form -enforce specific performance (court action to force breaching party to perform), seek other relief as provided by law (suit for damages, injunction, etc.) or both -terminate contract & receive earnest money as liquidated damages=releasing both parties
2. buyer's remedies for seller's default, " " (buyer has 2 diff sets of options) -if due to factors beyond seller's control, seller fails w/in the time allowed to make any non-casualty repairs to deliver the commitment, or survey, if required of seller, buyer may
two options of option 1 a) extend time for performance up to 15 days & closing date will be extended as necessary or b) terminate this contract as the sole remedy and receive the earnest money
option two of buyer's remedies if seller fails to comply w/ contacts for any reason -seller in default & buyer may a) enforce specific performance, seek other reliefs as may be provided by law, or both, or b)terminate the contract & receive earnest money (releasing both parties)
*3. statue of limitations (2) 1) action to bring suit or enforce rights must be w/in 4 years for a written contract & 2 years for an oral contract (remember some oral contracts can't be enforced due to the statute of frauds)
*2) suit brought for a violation of the Deceptive Trade Practices Act must commence w/in 2 years from the date a buyer discovered or should reasonably have discovered the deceptive act
5-4 termination option (2) 1) certain Texas-promulgated contract forms contain the possibility of a termination option, which allows a buyer, for a nominal fee, the unrestricted right to terminate a contract based on accepted terms (time is of the essence w/ this option)
2) -option fee= directly to seller w/in 2 days after the effective date of contract for this right -earnest money= deposited by buyer w/ escrow agent as soon as the buyer & seller have reached final agreement & have a contract
according to TREC 20-10, earnest money is never given to the seller's agent, but deposited by the buyer -buyer's agent may deposit it if so instructed by the buyer
Created by: kmills5