Practically Speaking

Q. What can an agent write in Paragraph 11 (Special Provisions) of a TREC promulgated sales contract? A. Not a dang thing! Seriously, though, factual statements and business details only. A prudent agent or broker will hesitate and think hard before ever writing something in Paragraph 11. Q. If the legal description of the property cannot fit in Paragraph 2, and it will all fit in Paragraph 11, is it acceptable to put the legal description there? A. Yes, that is a good place to put it. Remember, if the whole legal description will not fit in the space allowed for

Paragraph 11, put the whole legal description in an attached exhibit to the contract. It is never good to split up the legal description.

What the Law Says

License holders must use and are permitted to fill in the blanks on contract forms and addenda promulgated by TREC. So, they are allowed to insert information into Paragraph 11. However, a license holder shall only add factual statements and business details or shall strike text as directed in writing by the principals. Also, if TREC promulgated an addendum

Examples of facts or business details that could go in Paragraph 11: 1031 exchange language; additional parties whose names will not fit in Paragraph 1 but will fit in Paragraph 11; and a legal description that will not fit in Paragraph 2 but will fit in Paragraph 11. Examples of facts or business details that cannot go in Paragraph 11: Anything that changes the rights, obligations, or remedies of the parties (e.g., “the earnest money will be non-refundable”); anything that should

Paragraph 11 is provided for factual statements and business details. The hard part for brokers and agents is Special Provisions is seen as the place to put whatever might be “imagined” by the consumer or the agent. Exercise caution and rarely use Paragraph 11. Consistent training on the contract will help a license holder understand where to put items required by a that addresses the factual statement or business detail the client wants to add, a license holder must use that addendum and not write it in Paragraph 11. Finally, a license holder may not draft language defining or affecting the rights, obligations, or remedies of the principals, including escalation, appraisal, or other contingency clauses. [TREC Rules §537.11]

client and what constitutes the unauthorized practice of law. If a client insists on putting a statement in Paragraph 11 that the license holder thinks crosses into the practice of law, the license holder should suggest the client consult with an attorney on the language. If the client does not, let her write the language herself.

For Example

be addressed in another section of the contract (e.g., repairs go in Paragraph 7; “clean the house before closing” goes in Paragraph 7D; “run a daycare on the property,” Paragraph 6D; “seller to pay for closing costs for buyer,” Paragraph 12A); and anything for which a promulgated addendum exists (e.g., Back-up Contract Addendum should be used instead of writing “this is a back-up contract” in Paragraph 11).

Best Practice

Bonus Question

Q. Is it okay to put “This offer will expire in two days if not accepted” in Special Provisions Paragraph 11? A. No. Offer expiration provisions are not part of the contract between the parties. They are a pre-contract issue and are more properly placed in the cover letter or email delivering the contract offer.

Nothing in this publication should be construed as legal advice for a particular situation. For specific advice, consult an attorney. Lewis (kerrilewis13@gmail.com) is a member of the State Bar of Texas and former general counsel for the Texas Real Estate Commission (TREC). Wukasch (avis@2oldchicks.com) is a broker and former TREC chair.