Navigating 2025 TREC Contract Changes Together!

Happy New Year from Capital City Coordination 🎉

As we kick off 2025, the team at Capital City Coordination is excited to keep supporting our amazing Realtor® partners with top-notch transaction coordination services. We take immense pride in being a team of licensed Realtors® working for Realtors®, bringing decades of real estate expertise to ensure your transactions run smoothly.

With the new year comes important updates for all Texas real estate professionals. Starting January 3, 2025, the Texas Real Estate Commission (TREC) has made several changes to its contract forms. These changes, recommended by the Broker-Lawyer Committee and adopted during TREC’s November meeting, aim to address evolving industry needs and provide clarity on critical points like compensation, surveys, and disclosures.

Below, we’ve highlighted the key updates and how our experienced team can help you navigate them seamlessly.

TREC Contract Changes Effective January 3, 2025

With the start of the new year, important updates to TREC contract forms will take effect on January 3, 2025. These changes, recommended by the Broker-Lawyer Committee and adopted by the Texas Real Estate Commission, are aimed at improving clarity and ensuring compliance with new laws and procedural rules. Below is a detailed summary of the changes and how they may impact your transactions.

Key Changes to TREC Contracts

Natural Resource Leases (Paragraph 4)

The term “geothermal” has been added to the definition of Natural Resource Leases due to a 2023 law. Property owners now explicitly own geothermal energy beneath their land and have the right to drill or produce that energy and related resources.
Additionally, the word “Requirements” has been changed to singular for consistency, with conforming updates made to a paragraph citation.

Survey and T-47.1 Declaration (Paragraph 6C)

Sellers can now provide a T-47.1 Declaration (no notarization required) instead of the T-47 Affidavit when furnishing an existing survey.
The “no survey required” option has been removed, and buyers may obtain a new survey at their discretion. If the buyer does not obtain the survey, they cannot terminate the contract under Paragraph 2B of the Third Party Financing Addendum.

Mold Remediation Certificates (Paragraph 6E)

Paragraph 6E(11) requires sellers to provide mold remediation certificates issued within five years of the sale, except in the Unimproved Property Contract.
Paragraph 6E(12) now includes examples of required notices and adds a caution that failure to provide these notices may grant the buyer certain remedies, including the right to terminate the contract.

Broker Compensation Adjustments (Paragraph 12)

Paragraphs 12A(1)(a) and 12A(2) state that each party pays their agreed brokerage fees.
Paragraph 12A(1)(b) allows for specific seller contributions to the buyer’s brokerage fees.
A new Paragraph 12A(1)(c) separates other seller contributions (previously in 12A(1)(b)) and removes restrictions on contribution order or fee type. These changes also apply to the Amendment to Contract

Compensation Disclosure (Broker Information Section)

The disclosure section now includes checkboxes to reflect fees as either a percentage or a dollar amount. Parenthetical references to the MLS have been removed for clarity.

Federal Requirements (Paragraph 20)

The title has been updated from “Federal Tax Requirements” to “Federal Requirements.”
Paragraph 20B in the Farm and Ranch Contract now includes obligations under the Agriculture Foreign Investment Disclosure Act.

Third Party Financing Addendum

For Buyer Approval (Paragraph 2A), buyers must now provide both a termination notice and a written statement of the lender’s determination.
Paragraph 2B clarifies timing for notice of termination, aligning it with other contract provisions.

Condominium Resale Certificate

Language in Paragraphs K and L has been updated to conform to Section 82.157 of the Texas Property Code.

Unimproved Property and Farm & Ranch Contracts

Paragraph 3D in the Unimproved Property Contract now includes sales price adjustment language similar to that in the Farm and Ranch Contract.
A dollar sign has also been added to Paragraph 3D in the Farm and Ranch Contract for clarity.

Special Provisions and Addendum for “Back-Up” Contract

To address confusion about Paragraph 11 (Special Provisions), the Back-Up Contract Addendum has been updated to clarify timing and payment of earnest money and option fees.

Addendum for Section 1031 Exchange

A new addendum allows parties to disclose intent for a 1031 exchange and agree to cooperate. This addendum ensures flexibility without causing confusion when the exchange is not applicable. A reference to this addendum has been added to Paragraph 22 of the contract.

For a detailed look at all the updates, including highlighted changes in blue and red, you can review the full list of contract forms directly from TREC. These updated forms provide essential clarity on the discussed adjustments and ensure you are fully informed for your transactions starting January 3, 2025. View the updated TREC contract forms here.

What This Means for You

The adoption of these changes ensures contracts remain compliant and reflective of current laws. However, we understand that updates like these can bring challenges, especially when juggling multiple transactions. That’s where Capital City Coordination comes in.

How Capital City Coordination Can Help

At Capital City Coordination, our team of licensed Realtors® working for Realtors® takes pride in staying ahead of regulatory changes like these. As an extension of your business, we ensure your transactions comply with the latest TREC requirements, saving you time and reducing the risk of errors.

Experience You Can Trust: Our team of licensed transaction coordinators has extensive knowledge of TREC forms and requirements. We act as an extension of your business, bringing the professionalism and expertise your clients expect.
Seamless Transitions: With these new changes, you can count on us to handle contract updates with precision, ensuring compliance and reducing the risk of errors.
Support Every Step of the Way: From MLS entry and listing coordination to contract-to-close services, we’re here to streamline your workload, allowing you to focus on what you do best—serving your clients.

Let’s Make 2025 a Success Together

The changes in TREC contracts reflect the dynamic nature of the real estate industry. As you adapt to these updates, know that our team is ready to guide you every step of the way. Whether you’re navigating compensation adjustments or implementing the new survey options, Capital City Coordination has you covered.

If you have questions about how these updates impact your contracts or need assistance managing the transition, our experienced transaction coordinators are here to help. Together, we can make 2025 a seamless and successful year for your real estate business!

Contact us today to learn more about how our services can enhance your real estate practice. Together, let’s make this year your best yet!

The Capital City Coordination Team
Licensed Realtors® Working for Realtors®