Texas Real Estate Updates for Buyers, Sellers, Tenants, Investors and Landlords

Every two years the Texas Real Estate Commission requires me, as a Realtor, to take two - three hour courses to maintain my real estate license: Legal and Ethics.
These classes are put in place for three reasons:

1. They familiarize us of the Code of Ethics we promised to honor when we obtained our license.
2. They update us on the industry legal changes so we may be educated enough to educate our clients.
3. They are required because there are a handful of licensees who still, even with updates every two years, do not abide the law or the Code of Ethics.

I find myself taking these courses not once every two years as required to maintain my license... but once a year to update me on industry changes that I can pass onto my clients, be aware industry changes to ensure I'm complying both legally and ethically and because I am a real estate investor and many of these changes effect me personally. Last Wednesday, I had the pleasure of taking the TREC Legal Update at the Austin Board of Realtors. Every time I take this course, I find many changes that potential homeowners, tenants, investors or licensees should be aware of. Here are some of the many updates in regards to Texas Real Estate:

Disclosure of Survey & T-47 (Real Property Affidavit)

Section 6(C) of the Texas Real Estate Residential Contract states, "Within ______ days after the effective date of this contract, Seller shall furnish to Buyer and Tile Company Seller's existing survey of the property and the Residential Property Affidavit (T-47). If the existing survey or Affidavit is not acceptable to the Title Company or the Buyer's Lender the Buyer shall obtain a new survey at the ___ Sellers ____ Buyer's expense no later than 3 days prior to the closing date. If the Seller fails to furnish the existing survey or Affidavit within the time prescribed, the Buyer shall obtain a new survey at the Seller's expense no later than 3 days prior to the closing date.
The last line of this section is where things can get sticky. The listing agent may have supplied the survey, but not the Affidavit (T-47) or the Affidavit is not fully completed, including a notarized client signature. A survey must accompany a signed and notarized T-47 document to ensure this portion of the contract is satisfied. If both documents are not provided within the time frame prescribed, the listing agent has just opened the door for the their client, the seller, to now pay for the buyers new survey, if the survey is not accepted by the title company or the buyers lender.

Short Sale Addendum Update

If you are purchasing a home that is considered a "short sale," a Short Sale Addendum must be attached to the contract. The Short Sale Addendum provides an additional layer of buyer protection.

1. The buyer, if should the short sale investor not respond in a timely manner, has the option to terminate the contract and receive a full refund of the earnest money.
2. The seller authorizes the lien holder (listing agent) to furnish the buyer (buyer's agent) information relating to the status of the short sale.

Without the the Short Sale Addendum, the buyer could be in jeopardy of not having their earnest money returned if they choose to terminate. Based on my experience, when all parties are provided a status or progress update the buyer is less likely to walk away from the transaction.

Landlord/Tenant Relationships - Family or Domestic Violence (House Bill 83)

A current tenant terminate a lease before the end of their term if:
1. violence is committed by a family member or co-tenant/occupant of the dwelling the tenant only needs to provide the landlord with a copy of the court order.
2. the tenant is a victim or parent or guardian of a victim of sexual assault, aggravated sexual assault or continuous sexual abuse of a child and the offense takes place during the preceding 6-month period on the premises or any dwelling on the premises. The tenant only needs to provide the landlord with a copy of documentation of the assault or abuse from a licensed health care services provided who examined the victim, a licensed mental heath services provider who examined or evaluated the victim or an individual authorized under the Sexual Assault Prevention and Crisis Services Act or documentation of protective order.

This change authorizes the tenant to exercise the right to terminate the lease, vacate the dwelling before the end of the lease term and avoid all future liability under the lease - no exceptions!!!

Landlord/Tenant Relationships - Hearing Impaired Smoke Detectors (House Bill - 1715)

House Bill 1715 requires a smoke detector capable of alerting a hearing-impaired person, if such capability is requested by a tenant with a hearing-impairment.

Landlord/Tenant Relationships - Guarantors (House Bill 534)

House Bill 534 states that if a guarantor is not a tenant, the guarantors liability is limited to the original lease term, unless the guarantor agrees to guarantee the renewal of the lease at the time of the original lease. It permits a guarantee of the renewal only if the original lease states the last date, specified by the guarantor, on which the lease will renew the obligation of the guarantor and states the guarantor is liable for such a renewal. A guarantor can only be liable if the renewal involves the same parties to the original lease an does not increase the guarantors financial obligation for rent, which existed in the original lease.

Foreclosure Sales Procedures

A purchaser at a foreclosure sale is no longer required to pay the trustee immediately at the action. The change allows for a reasonable time for the purchaser to produce a cashier's check to finalize the sale. Please Note: The trustee may request for the funds be returned by close of business on the same day as the auction - so be ready to make a trip to the bank!