The Texas Real Estate Commission (TREC) has announced several significant updates to the One to Four Family Residential Contract and related addenda. Here is a breakdown of the key takeaways for your real estate business.
1. Definitions & Deadlines: The "Legal Holiday" Rule
One of the most practical updates involves how we calculate deadlines for earnest money and option fees.
- The Problem: Previously, "business days" were sometimes open to interpretation during federal or state-specific holidays.
- The Fix: The contract now formally defines "Legal Holiday." There are now 12 recognized holidays (including both Federal and Texas-specific days). If your deadline for depositing fees falls on one of these 12 days, the deadline is automatically extended to the next day that is not a Saturday, Sunday, or legal holiday.
2. Property Improvements: The "Snowmageddon" Update
Following the recent years of extreme weather in Texas, the "Improvements" section has been modernized.
- Generators: Permanent generators are now explicitly listed as a built-in improvement. If a seller intends to take their backup generator with them, it must be listed as an exclusion in Paragraph 2.
3. The New Water Rights Notice
Water rights are no longer just a concern for massive ranches. A new disclosure regarding groundwater and surface water rights has been introduced.
- When it’s used: This is primarily for properties with wells, ponds, lakes, or tanks.
- What it covers: It asks the seller to disclose any certificates of adjudication or permits.
- City Agents: If the property is on municipal (city) water, this notice is generally not required.
4. Broker Compensation & Transparency
In a move to simplify negotiations, the broker compensation section has been restructured.
- Streamlined Language: The contract now more clearly allows for either party to agree to contribute to the other's broker compensation.
- Removing Redundancy: Language that previously lived in the contract but actually referred to external agreements (like the Buyer Representation Agreement) has been removed to reduce confusion.
- Pro-Tip: Title companies still need your CDA (Commission Disbursement Authorization) as early as possible to ensure settlement statements are accurate!
5. HOA Addendum: Clarity on Fees and Timelines
The HOA Addendum received a significant "cleanup" to prevent last-minute closing delays.
- Transfer Fees: The addendum now clarifies that if there is a conflict between the HOA's internal charges and what was negotiated in the addendum, the addendum controls.
- Excess Fees: The seller is explicitly responsible for any transfer fees that exceed the amount agreed upon in the addendum.
- Review Periods: The timeline for a buyer to receive and review subdivision information is now more rigid to provide finality to the termination period.
6. Reorganized Addenda & Notices
To make the contract easier to read, Paragraph 22 (the list of addenda) has been reorganized into logical categories:
- Financial (e.g., Third Party Financing)
- Lease (e.g., Temporary Residential Leases)
- Testing & Reports
- Statutory Disclosures
Final Thoughts
These updates are all about clarity, transparency, and protecting both buyers and sellers. While most of these changes happen behind the scenes, they can make a big difference in how smoothly your transaction goes.
If you’re thinking about buying or selling in East Texas and want guidance on how these updates affect you, I’m here to help.
IMPORTANT: The information provided in this post is for educational and informational purposes only and does not constitute legal advice. While these updates reflect the current 2026 TREC contract revisions discussed as of the date of this publication, real estate forms and laws are subject to change without notice.
Real estate professionals are strongly encouraged to independently verify all contract language, effective dates, and mandatory usage requirements by visiting the official Texas Real Estate Commission (TREC) website or consulting with a qualified real estate attorney. Do not rely solely on this summary for legal compliance in your transactions.
