Real Estate Attorney? (Austin, Howe: credit, brokers, how much) - Texas (TX) - Page 3 - City-Data Forum

Austin-Willy · 05-29-2008, 04:24 PM

I'm not sure I follow you. Are you saying that the TREC form, as it's written, is "fair" to both parties?

Indulge me for just one moment...

TREC Form (paraphrased):
Seller is obligated to deliver title documents to buyer within 20 days. Buyer has an opportunity to object to title if something comes up that the buyer can't live with. If the seller can't fix it, the buyer can walk. Only, the buyer can't object to subdivision restrictions.

Now, the option period is 14 days long, and has now expired. Seller delivers the title documents on day 15. Buyer diligently reads the subdivision restrictions the day (s)he gets them, only to find that they prohibit more than 2 dogs per household. Buyer has 3 dogs. I guess buyer has the choice of giving up pooch #3, or breaching the contract and being sued by the seller.

How is that fair? And how many agents do you think recognize this as a problem, much less point it out to their buyer? Did the TREC attorneys just miss this, or do they think it's fair?

The point is, the TREC form is a crude tool. Yes, in most cases you can eat your steak with a spoon. That doesn't mean the spoon is the tool of all tools, or that the fork and knife makers should be run out of town.

Also, of course residential contracts need to be balanced. Just because you're an attorney doesn't mean that you're going to write the contract to define the seller's first born as a fixture that conveys with the property.

Torontonian · 05-29-2008, 04:52 PM

Quote:

Originally Posted by Austin-Willy

TREC Form (paraphrased):
Seller is obligated to deliver title documents to buyer within 20 days. Buyer has an opportunity to object to title if something comes up that the buyer can't live with. If the seller can't fix it, the buyer can walk. Only, the buyer can't object to subdivision restrictions.

Now, the option period is 14 days long, and has now expired. Seller delivers the title documents on day 15. Buyer diligently reads the subdivision restrictions the day (s)he gets them, only to find that they prohibit more than 2 dogs per household. Buyer has 3 dogs. I guess buyer has the choice of giving up pooch #3, or breaching the contract and being sued by the seller.

Wouldn't TREC form 36-4 (Addendum) handle this case?

1. Within xx days after the effective date of the contract, Seller shall at Seller’s expense deliver the Subdivision Information to Buyer. If Buyer does not receive the Subdivision Information, Buyer may terminate the contract at any time prior to closing and the earnest money will be
refunded to Buyer. If Seller delivers the Subdivision Information, Buyer may terminate the contract for any reason within 7 days after Buyer receives the Subdivision Information or prior to closing, whichever first occurs, and the earnest money will be refunded to Buyer.

Austin-Willy · 05-29-2008, 05:25 PM

In most cases it would. But there are occassions where there are common restrictions without mandatory membership in an association, and presumably the addendum is only used when membership is required.

But why is the addendum necessary? If the intent is to give the buyer a fair shot at reviewing the restrictions, why not just draft the contract that way and forget the addendum?

Torontonian · 05-29-2008, 06:02 PM

Austin-Willy,

I have a question to you regarding Seller's disclosure. What if a seller (seller's agent) intentionally (or unintentionally) misrepresented some facts regarding the property? Is the seller legaly responsible for providing the true and correct information? What options does the buyer have if he discovers the mistake before/after the closing?

Rakin · 05-29-2008, 08:15 PM

Usually attorneys want to start scratching out part of our contracts that have been developed by the state that protects the buyer & seller. They "Unbalance" the contract to their clients side and normally the other side will not accept their offer or contract.

Most Title Companies I know are owned by attorneys and normally review all the documents.

Austin-Willy · 05-30-2008, 08:29 AM

Quote:

Originally Posted by Rakin

Usually attorneys want to start scratching out part of our contracts that have been developed by the state that protects the buyer & seller. They "Unbalance" the contract to their clients side and normally the other side will not accept their offer or contract.

Most Title Companies I know are owned by attorneys and normally review all the documents.

This is exactly my point. If a seller sees something that is "scratched out" they think the buyer is trying to make the deal "unbalanced." Ridiculous. This is why many attorneys do not like the forms. If the contract is broken, which I consider that the TREC form is in a few places, it does not become unbalanced if it is fixed.

I would love to hear a conversation between a buyer and seller where the seller tries to explain why the buyer shouldn't be able to object to the subdivision restrictions. Of course, that's not how residential deals work. Usually no one in the transaction understands the contract, so everyone just operates on fear if the form is changed.

Leaving aside the issue of the unauthorized practice of law, and with all due respect to the agents on the board, agents just are not qualified to understand, let alone explain, the legal ramifications of the contract. They may have a lot of experience, and they may be able to tell you that most of the time the contract works just fine. Which is true. But just because a risk is unlikely to occur, that is no reason to keep the broken provision in the contract. If everything always went according to plan, the contract could be 1 page long.

I don't know where this idea comes from that as long as some attorney, who has no duty or allegiance to you as a buyer, looks over the documents you are therefore protected. The title company attorney's only interest is collecting the title insurance premium and protecting the title company from risk. Period. In residential deals, unless you happen to do A LOT of transactions, the title company typically isn't even worried about your repeat business.

Austin-Willy · 05-30-2008, 09:13 AM

Quote:

Originally Posted by Torontonian

Austin-Willy,

I have a question to you regarding Seller's disclosure. What if a seller (seller's agent) intentionally (or unintentionally) misrepresented some facts regarding the property? Is the seller legaly responsible for providing the true and correct information? What options does the buyer have if he discovers the mistake before/after the closing?

From a practical standpoint, a person might be well advised to weigh what the misrep is before deciding what to do. Is the undisclosed condition something that would make you not want to buy the house? If so, that makes the decision easy (if you haven't closed). If it's not a problem, but you're angry that someone lied, I would give serious consideration to what you might be able to "get" from the seller, and what it would cost for the chance to get it. Another thing to consider is whether you could have discovered the undisclosed condition with a diligent inspection.

As far as what the seller's legal obligation is, and what your remedies are, I can only suggest that you contact an attorney if you're faced with this situation.

Torontonian · 05-30-2008, 10:16 AM

Quote:

Originally Posted by Austin-Willy

If it's not a problem, but you're angry that someone lied, I would give serious consideration to what you might be able to "get" from the seller, and what it would cost for the chance to get it.

Got it. It was about some accessories which were supposed to be conveyed with the property at the closing. "What it would cost for the chance to get it" is the key phrase - not worth it :-)

Austin-Willy · 05-30-2008, 10:27 AM

Of course, it only costs something if you hire someone. You could certainly pursue the seller yourself, and at least see if they have a conscience.

austifornian · 05-30-2008, 12:59 PM

Quote:

Originally Posted by Austin-Willy

If the TREC contract is so great, why did TAR come up with its own form? (And incidentally, which do you use?)

Why do the TREC forms change frequently? They aren't perfect. Yes, they serve a purpose - mainly to make everyone feel good that the other person isn't trying to get a "better" deal. But to tell a buyer that the forms are the equivalent of a contract that has been prepared by the buyer's attorney is just inaccurate.

That's one way to look at it. I think you know as well as I do there is no such thing as a perfect contract that covers all bases for all sides. If there was, you would be out of business. You are correct. It is not the equivalent of a contract that has been prepared by a buyers attorney. It is a contract that has been designed to simplify the transaction and standardized to be understandable and usable by the people authorized to fill it out as part of their business. Your buyer's contract might protect the interests of your client to a greater degree than a standard contract but are your clients interests best served if the seller chooses a standard contract that they can understand without hiring their own attorney? A seller might dismiss such a contract out of hand wondering what tricks are contained in this custom contract.