Other Advocacy Updates From TLTA – TREC Adopts Option Fee Changes
Feb. 24, 2021
TREC adopted option fee changes Feb. 19 - UPDATED FAQs on timeline and implementation
We continue to monitor closely TREC's adoption and implementation of the changes to the termination option and option fee language included in the TREC contract form. Under the revised forms, a buyer is required to deliver the option fee to the title company, not to the seller. TREC adopted the updated form at their meeting Feb. 19, so the newly adopted form may now be used. Please note that use of the updated forms will be mandatory beginning April 1, 2021.
After we published TREC's FAQs regarding these changes in the Jan. 27 issue of Dateline, TREC updated the FAQs to incorporate a change we requested. Per TLTA's request, TDI's good funds requirements are highlighted in the following updated FAQ:
Will the seller have to wait until closing to receive the option fee from the title company?
No. Under the revised forms, the buyer authorizes the escrow agent to release and deliver the option fee to the seller at any time without further notice to or consent from the buyer, and releases escrow agent from liability for delivery of the option fee to the seller. The option fee will be credited to the sales price at closing. Note, however, that any disbursement may be conditioned on the collection of good funds acceptable to the escrow agent. Title companies, which are regulated by the Texas Department of insurance, must comply with “good funds” rules before disbursing option fees.
Thank you to the Texas Realtors and TREC for accomodating our requested change.
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In case you missed it, TLTA hosted a webinar in February that reviewed the new changes to the TREC contract forms. On-Demand TLTA Webinar: Recent TREC Contract Form Changes »