TREC-Promulgated Contract Forms
A distinctive feature of Texas practice is that TREC promulgates standard contract forms that license holders generally must use. This chapter covers the promulgated forms and the boundary against the unauthorized practice of law.
Mandatory Use of Promulgated Forms
TREC adopts (promulgates) standard contract forms, such as the residential resale contract and various addenda, and Texas license holders are generally required to use the appropriate promulgated form for a transaction rather than drafting their own. Using the standard forms protects consumers and keeps licensees from practicing law. A broker is responsible for making sure sponsored agents use the correct current forms.
Filling In Versus Drafting
License holders may complete the blanks on a promulgated form to reflect the parties' business terms, but they may not add clauses or draft language that changes the legal effect of the contract, which would be the unauthorized practice of law. When a transaction needs custom legal provisions, the parties should consult an attorney. Knowing what a license holder may and may not do with the forms is a core Texas competency.
Amendments, Addenda, and Broker Review
Standard addenda handle common situations such as financing, seller's disclosure, and property condition, and amendments document agreed changes. The broker's supervisory role includes reviewing that the correct forms and addenda are used and that any changes are properly documented. Errors in form use can create liability, so the broker exam emphasizes the license holder's proper handling of promulgated forms.