Contract Law Part III Flashcards
What does TRELA Section 537.11 use of Standard Contract Forms state?
When negotiating contracts binding the sale, exchange, option, lease or rental of any interest in real property, a real estate licensee shall use only those contract forms promulgated by the Texas Real Estate Commission for that kind of transaction.
TREC does not promulgate which forms and agreements?
Listing or buyer representation agreements, property management contracts, forms for commercial property, or residential leases (other than temporary residential leases used in connection with a sale)
In the One to Four Family Residential Contract, what does the financing paragraph identify? Which form will be completed in addition to the residential contract for financing?
The financing paragraph identifies the type of financing the buyer intends to secure. The details of the financing are specified in one of the financing addendums available.
When is mediation used?
When resolving conflicts between a buyer and seller in which a mediator listens to each side and helps make a mutually agreeable decision
The Farm and Ranch Contract is designed for what types of properties? Name three specific buildings to ask about.
This form is designed to be used for anything from the country getaway place or the small farm to the large working farm or ranch. It covers barns, outbuildings, and farm homes.
In Paragraph 2 of the Residential Condominium Contract, the Property paragraph addresses what other topics besides Unit and Building type legal description, itemization of improvements and accessories?
The Condominium Declaration, Bylaws, Rules of the Association, and the Resale Certificate
List items addressed in the Seller’s Financing Addendum.
The items addressed in the addendum are: Credit worthiness of the buyer Credit approval The Promissory Note Deed of Trust and if it is assumable Tax and Insurance Escrows
The contingencies in the Notice of Buyer’s Termination of Contract are for what reason?
To protect buyers from contractual obligations they cannot fulfill
The Third Party Financing Addendum for Credit Approval addresses which types of loans?
Conventional, Texas Veterans, FHA insured, VA guaranteed financing, and USDA Guaranteed Financing
A condominium resale certificate must be solely prepared by whom?
The Condominium Association
An amendment to a contract is specifically drafted to reflect what?
Changes negotiated AFTER the original contract has been signed
In the Buyer’s Temporary Residential Lease, name 3 items the buyer/tenant may NOT do.
The buyer/tenant is not allowed to:
Make any holes or drive nails into the woodwork, floors, walls or ceilings
Alter, paint or decorate the property
Install improvements or fixtures without the prior written consent of landlord/seller
The Use of Standard Contract Forms section of TRELA states that
“when negotiating contracts binding the sale, exchange, option, lease or rental of any interest in real property, a real estate licensee shall use only those contract forms promulgated by the Texas Real Estate Commission (the commission) for that kind of transaction with exceptions.”
TREC contract forms are intended for use only by
licensed real estate brokers or salespersons that are trained in their correct use. Mistakes in the use of a form may result in financial loss or a contract which is unenforceable.
TREC does not promulgate
listing or buyer representation agreements, property management contracts, forms for commercial property, or residential leases (other than temporary residential leases used in connection with a sale).
When filling in a form authorized for use by TRELA
the licensee may only fill in the blanks provided and may not add to or strike matter from the form, except that licensees can add factual statements and business details desired by the principals and can strike only such matter as is desired by the principals and as is necessary to conform the instrument to the intent of the parties.
The contract you will probably use most often is the
ONE TO FOUR FAMILY RESIDENTIAL CONTRACT.
Real estate licensees should avoid attempting
to interpret the builder’s contract or give opinions. It is very wise to advise the buyer to seek legal counsel before signing the contract.
The Farm and Ranch Contract is designed
to be used for anything from the country getaway place or the small farm to the large working farm or ranch. It covers barns, outbuildings, and farm homes.
The Texas Property Code defines a Condominium as
“a form of real property ownership that combines separate ownership of individual apartments or units with common ownership of all other elements.”
Often a seller must sell another house before he or she can buy the new house
The ADDENDUM FOR SALE OF OTHER PROPERTY BY BUYER creates a contingency contract based on the sale of the buyer’s current house.
The SELLER FINANCING ADDENDUM is for
seller financing when the seller owns the property “free and clear” and does not require the entire amount of the sales price in cash.
Contingencies are
intended to protect buyers from contractual obligations they cannot fulfill.
Coastal area addenda are required for properties along the Gulf coast of Texas
Damage that occurs as a result of a storm may erode the beach more than any property owner could have imagined. These addenda serve as a warning about shifting boundaries due to erosion and flooding.
