Real Estate Salesperson · Texas: Contracts · 11 min read
TREC promulgated contracts, forms and addenda
- Identify the statutory definitions, mandatory contract rules, and legal exceptions governing contract forms under Texas law.
- Explain the strict prohibitions against the unauthorized practice of law and the permissible actions a license holder may take when completing contracts.
- Differentiate between TREC contract forms, addenda, and notices approved for mandatory use versus those approved for voluntary use.
Definitions and Rules for Contract Use
In Texas real estate practice, Chapter 537 defines 'Commission' as the Texas Real Estate Commission (22 TAC §537.1(1)). A 'license holder' is defined as a real estate broker or sales agent licensed under Chapter 1101, Texas Occupations Code (22 TAC §537.1(4)). 'Contract forms' encompass contracts and related addenda, including notices, amendments, and other documents used in the sale, exchange, option, or lease of any interest in real property (22 TAC §537.1(2)). An 'informational item' refers to a statement that completes a blank in a contract form, discloses factual information, or provides instructions (22 TAC §537.1(3)).
Texas law establishes clear boundaries regarding when contract forms must be utilized. 'Mandatory use' means that unless an exception applies, use of the contract form is required by a license holder (22 TAC §537.1(5)). Conversely, 'voluntary use' means a license holder may, but is not required to, use the contract form (22 TAC §537.1(6)). When you negotiate contracts binding the sale, exchange, option, or lease of any interest in real property, you must use only contract forms approved for mandatory use by the Commission for that type of transaction, unless a specific exception applies (22 TAC §537.11(a)). The Commission may adopt rules in the public's best interest requiring license holders to use contract forms prepared by the Texas Real Estate Broker-Lawyer Committee and adopted by the commission (Tex. Occ. Code §1101.155(a)).
There are explicit exceptions where you are not required to use a mandatory contract form. You are not required to use a mandatory form in transactions where you are functioning solely as a principal and not as an agent (22 TAC §537.11(a)(1)). You are also exempt in transactions where an agency of the United States government requires a different form to be used (22 TAC §537.11(a)(2)). Furthermore, you are not required to use a mandatory form in transactions for which a contract form has been prepared by the property owner or prepared by an attorney and required by a property owner (22 TAC §537.11(a)(3)), and the Commission may not prohibit you from using such a form (Tex. Occ. Code §1101.155(b)).
For transactions where no mandatory form is approved, Texas law provides specific options. You may use a form prepared by an attorney licensed in Texas or a trade association in consultation with a Texas-licensed attorney that contains required disclosure elements (22 TAC §537.11(a)(4)(A)). Alternatively, you may use a form prepared by the Texas Real Estate Broker-Lawyer Committee and approved by the Commission for voluntary use by license holders (22 TAC §537.11(a)(4)(B)). A Commission-adopted listing contract form addressing the obligations between a seller and the seller’s agent must state that commissions are negotiable and, if appropriate, explain the availability of Texas coastal natural hazards information (Tex. Occ. Code §1101.155(c)).
Common mistakes
- Assuming you can draft or recommend custom contingency or remedy language affecting the parties’ rights: 22 TAC §537.11(b)(5) prohibits that conduct, while mandatory suspension or revocation under Tex. Occ. Code §1101.654(a) depends on its additional statutory conditions.
- Believing all TREC forms are mandatory, overlooking that resale certificates, property condition disclosures, and personal property addenda are approved for voluntary use (22 TAC §537.39, 22 TAC §537.62, 22 TAC §537.64).
- Inserting informational items into an approved form when another specific form has been approved for mandatory use for that exact purpose (22 TAC §537.11(b)(6)).
- Confusing the temporary lease forms by using the seller's temporary lease (TREC No. 15-7) when a buyer occupies the home prior to closing (22 TAC §537.26, 22 TAC §537.27).
Key points
- A license holder negotiating contracts binding the sale, exchange, option, or lease of an interest in real property must use a Commission-approved mandatory form for that transaction type unless an exception under 22 TAC §537.11(a) applies.
- Exceptions to mandatory form use include acting solely as a principal, requirements by federal government agencies, or contracts prepared by a property owner or prepared by an attorney and required by the owner (22 TAC §537.11(a)(1)-(3), Tex. Occ. Code §1101.155(b)).
- License holders are strictly prohibited from practicing law, offering legal opinions on title, discouraging principals from hiring an attorney, or drafting clauses defining legal rights, remedies, or contingencies (22 TAC §537.11(b), Tex. Occ. Code §1101.654(a)).
- License holders may add permitted informational items to authorized forms and explain informational items or choices without giving legal advice; a principal’s specific written instructions and a conspicuous change are required when adding or striking language under 22 TAC §537.11(d)(2).
- Promulgated sales contracts exist for residential resales (No. 20-19), residential condominium resales (No. 30-18), unimproved property intended for one-to-four-family residences (No. 9-18), new homes with incomplete construction (No. 23-20), new homes with completed construction (No. 24-20), and farms or ranches (No. 25-17).
- TREC forms are categorized by legal status as either mandatory use (such as financing addenda, termination notices, and temporary leases) or voluntary use (such as resale certificates, seller disclosures, and non-realty item addenda) (22 TAC §537.1(5)-(6)).
The full lesson continues with 4 more sections with exam tips, audio in English and Spanish and 5 Check yourself questions.
See Real Estate plansAlready a member? Log in
Original lesson written for Real Estate Salesperson practice · updated October 30, 2026. Exam names are trademarks of their owners; tests.global is not affiliated with them.