November 22, 2024

In This Issue:

  • TREC Form Changes Effective Jan. 3, 2025
  • Registration for Our Industry's Day at the Capitol Now Open - Make Your Plan to Join Us Feb. 10-11 in Austin
  • Bipartisan Congressional Caucus Calls on FHFA to Halt Title Waiver Program
  • FinCEN Alert on Fraud Schemes Involving Deepfake Media Targeting Financial Institutions
  • Texas Society of Professional Surveyors: Updated Manual of Practice

TREC Form Changes Effective Jan. 3, 2025

TREC | Nov. 14, 2024
As reported last week, TREC adopted a number of contract form changes at its meeting Nov. 4. The new forms may be used now and become mandatory January 3, 2025. The changes are enumerated here, along with redlines of the changes and other resources. 
 
TLTA is pleased to report that there are four title professionals on TREC’s Broker-Lawyer Committee, including Darlene Fairchild, Latra Szal, and Aimee Slusher. Brian Watts, another TLTA member, is also on the committee. About this most recent round of adopted changes, Brian said, “The changes adopted this time around are important but not as voluminous as in years past.”
 
We’re grateful to all of these title industry partners for helping ensure TREC form changes align with our industry’s needs and process. Thank you for your good work.
 
Here are some highlights of the contract form changes and new addendums that title pros should be aware of:
 
  • To be consistent with a recently updated Texas Department of Insurance procedural rule, Paragraph 6C(1) is amended to include the option of providing the T-47.1 Declaration (which does not need to be notarized)—in lieu of the T-47 Affidavit—when the Seller furnishes the Buyer an existing survey. In lieu of providing a “no survey required” option, Paragraph 6C(2) is amended to read “Buyer may obtain a new survey” instead of “Buyer shall obtain a new survey”, and adds that if the Buyer ultimately fails to obtain the survey, the Buyer does not have the right to terminate the contract under Paragraph 2B of the Third Party Financing Addendum because the survey was not obtained.

  • In light of recent discussions surrounding broker compensation, Paragraph 12A(1)(a) and 12A(2) adds that each party pays the brokerage fees that they each have agreed to pay. Paragraph 12A(1)(b) is amended to allow for a specific seller contribution to the buyer’s brokerage fees. A new Paragraph 12A(1)(c) has been added to separately address other seller contributions (that was previously in Paragraph 12A(1)(b)) and the prior language that specified the order in which any contribution was to be paid, as well as a limitation on the type of fee that could be paid, is removed. Conforming changes are also made in the Amendment to Contract.

  • Out of concern about confusion and improper use of Paragraph 11, Special Provisions, by license holders, the Addendum for “Back-Up” Contract is modified to provide more clarity on the timing and payment of the earnest money and option fee by incorporating similar language from Paragraph 5 of the contract and by addressing timing and payment of additional fees. The parties may now provide for payment of additional option fee when the backup contract becomes the primary contract.

  • The committee drafted a new Addendum for Section 1031 Exchange that allows the seller or buyer to disclose an intent to use the subject property as a 1031 exchange and includes a statement that the parties will reasonably cooperate with one another provided it does not result in increased cost or liability to the non-exchanging party and does not delay closing. Providing this as an addendum, rather than in the contract, allows the parties to use it when applicable without causing unnecessary confusion. A reference to the new Addendum for Section 1031 Exchange is also added to Paragraph 22 of the contract.

  • The Third Party Financing Addendum has been amended to provide that if a buyer is to terminate the contract because the buyer could not get “Buyer Approval” the buyer must give timely notice of termination along with a copy of a written statement from the lender setting for the reasons for the lender’s determination.  Paragraph 2B has been reworded to make it clear that the buyer’s notice of election to terminate for failure to get Property Approval must be given on or before the third day before the Closing Date.  Paragraph 4 of the addendum states that the three day notice of termination requirement in paragraph 2B (Property Approval) does not apply to FHA/VA financing.
 
Want to learn more about these recent changes? Register now for our TLTA's Institute program Dec. 5-6 in San Antonio. Brian Watts will join the hot topics discussion to talk about these new TREC form changes in greater detail, sharing his insights as a member of TREC’s Broker-Lawyer Committee.
 
All contract form changes adopted by TREC effective January 3 » 
Read a recap of TREC's Nov. 4 meeting »
Who's on TREC’s Broker-Lawyer Committee »

Registration for Our Industry's Day at the Capitol Now Open - Make Your Plan to Join Us Feb. 10-11 in Austin

Texas Real Estate Commission| Nov. 12, 2024
The Texas Legislature's 89th Session will commence January 2025, and as we do every session, our industry will host a Day at the Capitol to share our story with lawmakers and staff.
 


Please make your plan to join us.
 
Learn More and Register Today »

Bipartisan Congressional Caucus Calls on FHFA to Halt Title Waiver Program

HousingWire | Nov. 19, 2024
The Bipartisan Congressional Real Estate Caucus is calling on the Federal Housing Finance Agency (FHFA) to cease its pilot program for title insurance waivers until the program is vetted and the agency seeks public input on it.

The caucus expressed this view in a letter written by Reps. Lou Correa (D-Calif.), Mark Alford (R-Mo.), Tracey Mann (R-Kan.) and Brittany Pettersen (D-Colo.) and sent to FHFA Director Sandra Thompson.
 
Read More from Housingwire »
Review the Letter »

FinCEN Alert on Fraud Schemes Involving Deepfake Media Targeting Financial Institutions

FinCEN | Nov. 13 2024
The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued an alert to help financial institutions identify fraud schemes associated with the use of deepfake media created with generative artificial intelligence (GenAI) tools. The alert explains typologies associated with these schemes, provides red flag indicators to assist with identifying and reporting related suspicious activity, and reminds financial institutions of their reporting requirements under the Bank Secrecy Act.
 
Read the Alert »
Review the Press Release »

Texas Society of Professional Surveyors: 2024 Manual of Practice

TSPS | September 2024
Earlier this year the Texas Society of Professional Surveyors updated their TSPS Manual of Practice.
 
The updated manual was effective as of Sept. 30, 2024.
 
Review the Updated Manual »
Review the Redline to Track Changes from the Old Edition to the New »
 

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