TREC Form 23-15 "New Home Contract (Incomplete Construction)" - Texas

What Is TREC Form 23-15?

This is a legal form that was released by the Texas Real Estate Commission - a government authority operating within Texas. As of today, no separate filing guidelines for the form are provided by the issuing department.

Form Details:

  • Released on February 12, 2018;
  • The latest edition provided by the Texas Real Estate Commission;
  • Easy to use and ready to print;
  • Quick to customize;
  • Compatible with most PDF-viewing applications;
  • Fill out the form in our online filing application.

Download a fillable version of TREC Form 23-15 by clicking the link below or browse more documents and templates provided by the Texas Real Estate Commission.

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Download TREC Form 23-15 "New Home Contract (Incomplete Construction)" - Texas

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PROMULGATED BY THE TEXAS REAL ESTATE COMMISSION (TREC)
Contract Concerning
Page of 10
2-12-18
NEW HOME CONTRACT
(Address of Property)
(Incomplete Construction)
NOTICE: Not For Use For Condominium Transactions or Closings Prior to Completion of Construction
EQUAL HOUSING
OPPORTUNITY
1. PARTIES: The parties to this contract are
(Seller) and
(Buyer). Seller agrees to sell and
convey to Buyer and Buyer agrees to buy from Seller the Property defined below.
2. PROPERTY:Lot
,Block
,
Addition, City of
,County of
Texas, known
as
(address/zip code), or as
described on attached exhibit, together with: (i) improvements, fixtures and all other property
described in the Construction Documents; and (ii) all rights, privileges and appurtenances
thereto, including but not limited to: permits, easements, and cooperative and association
memberships. All property sold by this contract is called the “Property”.
RESERVATIONS: Any reservation for oil, gas, or other minerals, water, timber, or other interests
is made in accordance with an attached addendum.
3. SALES PRICE:
A. Cash portion of Sales Price payable by Buyer at closing ...................... $

B. Sum of all financing described in the attached:
Third Party Financing Addendum,


Loan Assumption Addendum,
Seller Financing Addendum ...... $
C. Sales Price (Sum of A and B) .......................................................... $
4. LICENSE HOLDER DISCLOSURE: Texas law requires a real estate license holder w ho is
a party to a transaction or acting on behalf of a spouse, parent, child, business entity in which
the license holder owns more than 10%, or a trust for which the license holder acts as trustee or
of which the license holder or the license holder’s spouse, parent or child is a beneficiary, to
notify the other party in writing before entering into a contract of sale. Disclose if applicable:
.
5. EARNEST MONEY:
W i t h i n 3 d a y s a f t e r t h e E f f e c t i v e D a t e , B u y e r must deliver
$_________________ as earnest money to
, as
escrow agent, at
(address).
Buyer shall deliver additional earnest money of $
to escrow agent within
______ days after the Effective Date of this contract. If Buyer fails to deliver the earnest money
within the time required, Seller may terminate this contract or exercise Seller’s remedies under
Paragraph 15, or both, by providing notice to Buyer before Buyer delivers the earnest money. If
the last day to deliver the earnest money falls on a Saturday, Sunday, or legal holiday, the time
to deliver the earnest money is extended until the end of the next day that is not a Saturday,
Sunday, or legal holiday. Time is of the essence for this paragraph.
6. TITLE POLICY AND SURVEY:
A. TITLE POLICY: Seller shall furnish to Buyer at
Seller’s
Buyer’s expense an owner policy
of title insurance (Title Policy) issued by
(Title Company)
in the amount of the Sales Price, dated at or after closing, insuring Buyer against loss under
the provisions of the Title Policy, subject to the promulgated exclusions (including existing
building and zoning ordinances) and the following exceptions:
(1)Restrictive covenants common to the platted subdivision in which the Property is located.
(2) The standard printed exception for standby fees, taxes and assessments.
(3) Liens created as part of the financing described in Paragraph 3.
(4) Utility easements created by the dedication deed or plat of the subdivision in which the
Property is located.
(5) Reservations or exceptions otherwise permitted by this contract or as may be approved by
Buyer in writing.
(6) The standard printed exception as to marital rights.
(7) The standard printed exception as to waters, tidelands, beaches, streams, and related
matters.
(8)The standard printed exception as to discrepancies, conflicts, shortages in area or boundary
lines, encroachments or protrusions, or overlapping improvements:
(i) will not be amended or deleted from the title policy; or
(ii) will be amended to read, "shortages in area" at the expense of
Buyer
Seller.
(9) The exception or exclusion regarding minerals approved by the Texas Department of
Insurance.
B. COMMITMENT:
Within 20 days after the Title Company receives a copy of this contract,
Seller shall furnish to Buyer a commitment for title insurance (Commitment) and, at Buyer's
expense, legible copies of restrictive covenants and documents evidencing exceptions in the
Commitment (Exception Documents) other than the standard printed exceptions. Seller
authorizes the Title Company to deliver the Commitment and Exception Documents to Buyer
at Buyer's address shown in Paragraph 21. If the Commitment and Exception Documents
are not delivered to Buyer within the specified time, the time for delivery will be
automatically extended up to 15 days or 3 days before the Closing Date, whichever is earlier.
If the Commitment and Exception Documents are not delivered within the time required,
Buyer may terminate this contract and the earnest money will be refunded to Buyer.
Initialed for identification by Buyer
and Seller
TREC NO. 23-15
PROMULGATED BY THE TEXAS REAL ESTATE COMMISSION (TREC)
Contract Concerning
Page of 10
2-12-18
NEW HOME CONTRACT
(Address of Property)
(Incomplete Construction)
NOTICE: Not For Use For Condominium Transactions or Closings Prior to Completion of Construction
EQUAL HOUSING
OPPORTUNITY
1. PARTIES: The parties to this contract are
(Seller) and
(Buyer). Seller agrees to sell and
convey to Buyer and Buyer agrees to buy from Seller the Property defined below.
2. PROPERTY:Lot
,Block
,
Addition, City of
,County of
Texas, known
as
(address/zip code), or as
described on attached exhibit, together with: (i) improvements, fixtures and all other property
described in the Construction Documents; and (ii) all rights, privileges and appurtenances
thereto, including but not limited to: permits, easements, and cooperative and association
memberships. All property sold by this contract is called the “Property”.
RESERVATIONS: Any reservation for oil, gas, or other minerals, water, timber, or other interests
is made in accordance with an attached addendum.
3. SALES PRICE:
A. Cash portion of Sales Price payable by Buyer at closing ...................... $

B. Sum of all financing described in the attached:
Third Party Financing Addendum,


Loan Assumption Addendum,
Seller Financing Addendum ...... $
C. Sales Price (Sum of A and B) .......................................................... $
4. LICENSE HOLDER DISCLOSURE: Texas law requires a real estate license holder w ho is
a party to a transaction or acting on behalf of a spouse, parent, child, business entity in which
the license holder owns more than 10%, or a trust for which the license holder acts as trustee or
of which the license holder or the license holder’s spouse, parent or child is a beneficiary, to
notify the other party in writing before entering into a contract of sale. Disclose if applicable:
.
5. EARNEST MONEY:
W i t h i n 3 d a y s a f t e r t h e E f f e c t i v e D a t e , B u y e r must deliver
$_________________ as earnest money to
, as
escrow agent, at
(address).
Buyer shall deliver additional earnest money of $
to escrow agent within
______ days after the Effective Date of this contract. If Buyer fails to deliver the earnest money
within the time required, Seller may terminate this contract or exercise Seller’s remedies under
Paragraph 15, or both, by providing notice to Buyer before Buyer delivers the earnest money. If
the last day to deliver the earnest money falls on a Saturday, Sunday, or legal holiday, the time
to deliver the earnest money is extended until the end of the next day that is not a Saturday,
Sunday, or legal holiday. Time is of the essence for this paragraph.
6. TITLE POLICY AND SURVEY:
A. TITLE POLICY: Seller shall furnish to Buyer at
Seller’s
Buyer’s expense an owner policy
of title insurance (Title Policy) issued by
(Title Company)
in the amount of the Sales Price, dated at or after closing, insuring Buyer against loss under
the provisions of the Title Policy, subject to the promulgated exclusions (including existing
building and zoning ordinances) and the following exceptions:
(1)Restrictive covenants common to the platted subdivision in which the Property is located.
(2) The standard printed exception for standby fees, taxes and assessments.
(3) Liens created as part of the financing described in Paragraph 3.
(4) Utility easements created by the dedication deed or plat of the subdivision in which the
Property is located.
(5) Reservations or exceptions otherwise permitted by this contract or as may be approved by
Buyer in writing.
(6) The standard printed exception as to marital rights.
(7) The standard printed exception as to waters, tidelands, beaches, streams, and related
matters.
(8)The standard printed exception as to discrepancies, conflicts, shortages in area or boundary
lines, encroachments or protrusions, or overlapping improvements:
(i) will not be amended or deleted from the title policy; or
(ii) will be amended to read, "shortages in area" at the expense of
Buyer
Seller.
(9) The exception or exclusion regarding minerals approved by the Texas Department of
Insurance.
B. COMMITMENT:
Within 20 days after the Title Company receives a copy of this contract,
Seller shall furnish to Buyer a commitment for title insurance (Commitment) and, at Buyer's
expense, legible copies of restrictive covenants and documents evidencing exceptions in the
Commitment (Exception Documents) other than the standard printed exceptions. Seller
authorizes the Title Company to deliver the Commitment and Exception Documents to Buyer
at Buyer's address shown in Paragraph 21. If the Commitment and Exception Documents
are not delivered to Buyer within the specified time, the time for delivery will be
automatically extended up to 15 days or 3 days before the Closing Date, whichever is earlier.
If the Commitment and Exception Documents are not delivered within the time required,
Buyer may terminate this contract and the earnest money will be refunded to Buyer.
Initialed for identification by Buyer
and Seller
TREC NO. 23-15
Contract Concerning
Page 2 of 10
2-12-18
(Address of Property)
C. SURVEY: The survey must be made after the Substantial Completion Date by a registered
professional land surveyor acceptable to the Title Company and Buyer’s lender(s).
(Check one box only)
(1) At least
days prior to the Closing Date, Seller, at Seller’s expense, shall provide a
new survey to Buyer.
(2) At least
days prior to the Closing Date, Buyer, at Buyer’s expense, shall obtain a
new survey. Buyer is deemed to receive the survey on the date of actual receipt or the
date specified in this paragraph, whichever is earlier.
D. OBJECTIONS: Buyer may object in writing to defects, exceptions, or encumbrances to title:
disclosed on the survey other than items 6A(1) through (7) above; disclosed in the
Commitment other than items 6A(1) through (9) above; or which prohibit the following use
or activity:
.
Buyer must object the earlier of (i) the Closing Date or (ii)
days after Buyer receives
the Commitment, Exception Documents, and the survey. Buyer’s failure to object within the
time allowed will constitute a waiver of Buyer’s right to object; except that the requirements
in Schedule C of the Commitment are not waived by Buyer. Provided Seller is not obligated
to incur any expense, Seller shall cure any timely objections of Buyer or any third party
lender within 15 days after Seller receives the objections (Cure Period) and the Closing Date
will be extended as necessary. If objections are not cured within the Cure Period, Buyer may,
by delivering notice to Seller within 5 days after the end of the Cure Period: (i) terminate
this contract and the earnest money will be refunded to Buyer; or (ii) waive the objections.
If Buyer does not terminate within the time required, Buyer shall be deemed to have waived
the objections. If the Commitment or Survey is revised or any new Exception Document(s)
is delivered, Buyer may object to any new matter revealed in the revised Commitment or
Survey or new Exception Document(s) within the same time stated in this paragraph to
make
objections
beginning
when
the
revised
Commitment,
Survey,
or
Exception
Document(s) is delivered to Buyer.
E. TITLE NOTICES:
(1) ABSTRACT OR TITLE POLICY: Broker advises Buyer to have an abstract of title covering
the Property examined by an attorney of Buyer’s selection, or Buyer should be furnished
with or obtain a Title Policy. If a Title Policy is furnished, the Commitment should be
promptly reviewed by an attorney of Buyer’s choice due to the time limitations on
Buyer’s right to object.
(2) MEMBERSHIP IN PROPERTY OWNERS ASSOCIATION(S): The Property
is
is not
subject to mandatory membership in a property owners association(s). If the Property is
subject to mandatory membership in a property owners association(s), Seller notifies
Buyer under §5.012, Texas Property Code, that,
as a purchaser of property in the
residential community identified in Paragraph 2A in which the Property is located, you are
obligated to be a member of the property owners association(s). Restrictive covenants
governing the use and occupancy of the Property and all dedicatory instruments
governing the establishment, maintenance, and operation of this residential community
have been or will be recorded in the Real Property Records of the county in which the
Property is located. Copies of the restrictive covenants and dedicatory instruments may
be obtained from the county clerk. You are obligated to pay assessments to the property
owners association(s). The amount of the assessments is subject to change.
Your failure to pay the assessments could result in enforcement of the
association’s lien on and the foreclosure of the Property.
Section 207.003, Property Code, entitles an owner to receive copies of any document
that governs the establishment, maintenance, or operation of a subdivision, including,
but not limited to, restrictions, bylaws, rules and regulations, and a resale certificate from
a property owners' association. A resale certificate contains information including, but
not limited to, statements specifying the amount and frequency of regular assessments
and the style and cause number of lawsuits to which the property owners' association is a
party, other than lawsuits relating to unpaid ad valorem taxes of an individual member of
the association.
These documents must be made available to you by the property
owners' association or the association's agent on your request.
If Buyer is concerned about these matters, the TREC promulgated Addendum for
Property Subject to Mandatory Membership in a Property Owners Association
should be used.
(3) STATUTORY TAX DISTRICTS: If the Property is situated in a utility or other statutorily
created district providing water, sewer, drainage, or flood control facilities and services,
Chapter 49, Texas Water Code, requires Seller to deliver and Buyer to sign the statutory
notice relating to the tax rate, bonded indebtedness, or standby fee of the district prior to
final execution of this contract.
(4) TIDE WATERS: If the Property abuts the tidally influenced waters of the state, §33.135,
Texas Natural Resources Code, requires a notice regarding coastal area property to be
included in the contract. An addendum containing the notice promulgated by TREC or
required by the parties must be used.
Initialed for identification by Buyer
and Seller
TREC NO. 23-15
Contract Concerning
Page 3 of 10
2-12-18
(Address of Property)
(5) ANNEXATION: If the Property is located outside the limits of a municipality, Seller
notifies Buyer under §5.011, Texas Property Code, that the Property may now or later be
included in the extraterritorial jurisdiction of a municipality and may now or later be
subject to annexation by the municipality. Each municipality maintains a map that
depicts its boundaries and extraterritorial jurisdiction. To determine if the Property is
located within a municipality's extraterritorial jurisdiction or is likely to be located within
a municipality’s extraterritorial jurisdiction, contact all municipalities located in the
general proximity of the Property for further information.
(6) PROPERTY LOCATED IN A CERTIFICATED SERVICE AREA OF A UTILITY SERVICE
PROVIDER: Notice required by §13.257, Water Code: The real property, described in
Paragraph 2, that you are about to purchase may be located in a certificated water or
sewer service area, which is authorized by law to provide water or sewer service to the
properties in the certificated area. If your property is located in a certificated area there
may be special costs or charges that you will be required to pay before you can receive
water or sewer service.
There may be a period required to construct lines or other
facilities necessary to provide water or sewer service to your property. You are advised
to determine if the property is in a certificated area and contact the utility service
provider to determine the cost that you will be required to pay and the period, if any,
that is required to provide water or sewer service to your property. The undersigned
Buyer hereby acknowledges receipt of the foregoing notice at or before the execution of
a binding contract for the purchase of the real property described in Paragraph 2 or at
closing of purchase of the real property.
(7) PUBLIC IMPROVEMENT DISTRICTS: If the Property is in a public improvement district,
§5.014, Property Code, requires Seller to notify Buyer as follows: As a purchaser of this
parcel of real property you are obligated to pay an assessment to a municipality or county
for an improvement project undertaken by a public improvement district under Chapter
372, Local
Government Code. The assessment may be due annually or in periodic
installments. More information concerning the amount of the assessment and the due
dates of that assessment may be obtained from the municipality or county levying the
assessment. The amount of the assessments is subject to change. Your failure to pay the
assessments could result in a lien on and the foreclosure of your property.
(8) TRANSFER FEES: If the Property is subject to a private transfer fee obligation, §5.205,
Property Code, requires Seller to notify Buyer as follows:
The private transfer fee
obligation may be governed by Chapter 5, Subchapter G of the Texas Property Code.
(9) PROPANE GAS SYSTEM SERVICE AREA: If the Property is located in a propane gas system
service area owned by a distribution system retailer, Seller must give Buyer written notice
as required by §141.010, Texas Utilities Code.
An addendum containing the notice
approved by TREC or required by the parties should be used.
(10) NOTICE OF WATER LEVEL FLUCTUATIONS: If the Property adjoins an impoundment of
water, including a reservoir or lake, constructed and maintained under Chapter 11, Water
Code, that has a storage capacity of at least 5,000 acre-feet at the impoundment’s normal
operating level, Seller hereby notifies Buyer: “The water level of the impoundment of
water adjoining the Property fluctuates for various reasons, including as a result of: (1) an
entity lawfully exercising its right to use the water stored in the impoundment; or (2)
drought or flood conditions.”
7. PROPERTY CONDITION:
A. ACCESS AND INSPECTIONS: Seller shall permit Buyer and Buyer’s agents access to the
Property at reasonable times. Buyer may have the Property inspected by inspectors selected
by Buyer and licensed by TREC or otherwise permitted by law to make inspections.
B. CONSTRUCTION DOCUMENTS: Seller shall complete all improvements to the Property with
due diligence in accordance with the Construction Documents.
“Construction Documents”
means the plans and specifications, the finish out schedules, any change orders, and any
allowances related to the plans and specifications, finish out schedules, and change orders.
The Construction Documents have been signed by the parties and are incorporated into this
contract by reference.
C. COST ADJUSTMENTS: All change orders must be in writing. Increase in costs resulting from
change orders or items selected by Buyer which exceed the allowances specified in the
Construction Documents will be paid by Buyer as follows:
.
A decrease in costs resulting from change orders and unused allowances will reduce the Sales
Price, with proportionate adjustments to the amounts in Paragraphs 3A and 3B as required by
lender.
D. BUYER’S SELECTIONS: If the Construction Documents permit selections by Buyer, Buyer’s
selections will conform to Seller’s normal standards as set out in the Construction Documents
or will not, in Seller’s judgment, adversely affect the marketability of the Property. Buyer will
make required selections within
days after notice from Seller.
E. COMPLETION: Seller must commence construction no later than
days
after
the
Effective Date of this contract. The improvements will be substantially completed in
accordance
with
the
Construction
Documents
and
ready
for
occupancy
not
later
than
, 20
. The improvements will be deemed to be
substantially completed in accordance with the Construction Documents upon the final
Initialed for identification by Buyer
and Seller
TREC NO. 23-15
Contract Concerning
Page 4 of 10
2-12-18
(Address of Property)
inspection and approval by all applicable governmental authorities and any lender (Substantial
Completion Date). Construction delays caused by acts of God, fire or other casualty, strikes,
boycotts or nonavailability of materials for which no substitute of comparable quality and price is
available will be added to the time allowed for substantial completion of the construction. However,
in no event may the time for substantial completion extend beyond the Closing Date. Seller may
substitute materials, equipment and appliances of comparable quality for those specified in the
Construction Documents.
F. WARRANTIES: Except as expressly set forth in this contract, a separate writing, or provided by
law, Seller makes no other express warranties. Seller shall assign to Buyer at closing all assignable
manufacturer warranties.
G. INSULATION: As required by Federal Trade Commission Regulations, the information relating to
the insulation installed or to be installed in the Improvements at the Property is: (check only one
box below)

(1) as shown in the attached specifications.

(2) as follows:
(a) Exterior walls of improved living areas: insulated with
insulation to a thickness of
inches which yields an R-Value of
.
(b) Walls in other areas of the home: insulated with
insulation to a thickness of
inches which yields an R-Value of
.
(c) Ceilings in improved living areas: insulated with
insulation to a thickness of
inches which yields an R-Value of
.
(d) Floors of improved living areas not applied to a slab foundation: insulated with
insulation to a thickness of
inches
which
yields
an
R-Value of
.
(e) Other insulated areas: insulated with
insulation to a
thickness of
inches which yields an R-Value of
.
All stated R-Values are based on information provided by the manufacturer of the insulation.
H. ENVIRONMENTAL MATTERS: Buyer is advised that the presence of wetlands, toxic substances,
including asbestos and wastes or other environmental hazards, or the presence of a threatened
or endangered species or its habitat may affect Buyer’s intended use of the Property. If Buyer is
concerned about these matters, an addendum promulgated by TREC or required by the parties
should be used.
I. SELLER’S DISCLOSURE:
Except as otherwise disclosed in this contract, Seller has no knowledge
of the following:
(1) any flooding of the Property which has had a material adverse effect on the use of the
Property;
(2) any pending or threatened litigation, condemnation, or special assessment affecting the
Property;
(3) any environmental hazards that materially and adversely affect the Property;
(4) any dumpsite, landfill, or underground tanks or containers now or previously located on the
Property;
(5) any wetlands, as defined by federal or state law or regulation, affecting the Property; or any
threatened or endangered species or their habitat affecting the Property.
8. BROKERS' FEES: All obligations of the parties for payment of brokers’ fees are contained in
separate written agreements.
9. CLOSING:
A. The closing of the sale will be on or before
, 20
, or within 7 days
after objections made under Paragraph 6D have been cured or waived, whichever date is later
(Closing Date). If either party fails to close the sale by the Closing Date, the non-defaulting
party may exercise the remedies contained in Paragraph 15.
B. At closing:
(1) Seller shall execute and deliver a general warranty deed conveying title to the Property to
Buyer and showing no additional exceptions to those permitted in Paragraph 6 and furnish
tax statements or certificates showing no delinquent taxes on the Property.
(2) Buyer shall pay the Sales Price in good funds acceptable to the escrow agent.
(3) Seller and Buyer shall execute and deliver any notices, statements, certificates, affidavits,
releases, loan documents and other documents reasonably required for the closing of the sale
and the issuance of the Title Policy.
(4) There will be no liens, assessments, or security interests against the Property which will not
be satisfied out of the sales proceeds unless securing payment of any loans assumed by
Buyer and assumed loans will not be in default.
10. POSSESSION:
A. Buyer’s Possession: Seller shall deliver to Buyer possession of the Property:
upon closing and
funding
according to a temporary residential lease form promulgated by TREC or other written
lease required by the parties. Any possession by Buyer prior to closing or by Seller after closing
which is not authorized by a written lease will establish a tenancy at sufferance relationship between
the parties. Consult your insurance agent prior to change of ownership and possession because
insurance coverage may be limited or terminated. The absence of a written lease or
appropriate insurance coverage may expose the parties to economic loss.
B. Leases: After the Effective Date, Seller may not execute any lease (including but not limited to
mineral leases) or convey any interest in the Property without Buyer’s written consent.
Initialed for identification by Buyer
and Seller
TREC NO. 23-15
Contract Concerning
Page 5 of 10
2-12-18
(Address of Property)
11.SPECIAL PROVISIONS: (I nsert only factual statements and business details applicable
to the sale. TREC rules prohibit license holders from adding factual statements or business details
for which a contract addendum, lease or other form has been promulgated by TREC for
mandatory use.)
12.SETTLEMENT AND OTHER EXPENSES:
A. The following expenses must be paid at or prior to closing:
(1)Expenses payable by Seller (Seller's Expenses):
(a)Releases of existing liens, including prepayment penalties and recording fees; release of
Seller’s loan liability; tax statements or certificates; preparation of deed; one-half of
escrow fee; and other expenses payable by Seller under this contract.
(b)Seller shall also pay an amount not to exceed $
to be applied in
the
following order: Buyer’s Expenses which Buyer is prohibited from paying by FHA, VA,
Texas Veterans Land Board or other governmental loan programs, and then to other
Buyer’s Expenses as allowed by the lender.
(2) Expenses payable by Buyer (Buyer's Expenses): Appraisal fees; loan application fees;
origination charges; credit reports; preparation of loan documents; interest on the notes
from date of disbursement to one month
prior to
dates of first monthly payments;
recording fees; copies of easements and restrictions; loan title policy with endorsements
required by lender; loan-related inspection fees; photos; amortization schedules; one-half
of escrow fee; all prepaid items, including required premiums for flood and hazard
insurance, reserve deposits for insurance, ad valorem taxes and special governmental
assessments; final compliance inspection; courier fee; repair inspection; underwriting fee;
wire transfer fee; expenses incident to any loan; Private Mortgage Insurance Premium
(PMI), VA Loan Funding Fee, or FHA Mortgage Insurance Premium (MIP) as required by the
lender; and other expenses payable by Buyer under this contract.
B. If any expense exceeds an amount expressly stated in this contract for such expense to be paid
by a party, that party may terminate this contract unless the other party agrees to pay such
excess. Buyer may not pay charges and fees expressly prohibited by FHA, VA, Texas Veterans
Land Board or other governmental loan program regulations.
13.PRORATIONS AND ROLLBACK TAXES:
A. PRORATIONS: Taxes for the current year, maintenance fees, assessments, dues and rents will
be prorated through the Closing Date. The tax proration may be calculated taking into
consideration any change in exemptions that will affect the current year's taxes. If taxes for the
current year vary from the amount prorated at closing, the parties shall adjust the prorations
when tax statements for the current year are available. If taxes are not paid at or prior to
closing, Buyer will be obligated to pay taxes for the current year.
B. ROLLBACK TAXES: If additional taxes, penalties, or interest (Assessments) are imposed
because of Seller’s use or change in use of the Property prior to closing, the Assessments will
be the obligation of Seller. Obligations imposed by this paragraph will survive closing.
14.CASUALTY LOSS: I f any part of the P roperty is dam aged or destroyed by fire or other
casualty after the Effective Date of this contract, Seller shall restore the Property to its previous
condition as soon as reasonably possible, but in any event by the Closing Date. If Seller fails to
do so due to factors beyond Seller’s control, Buyer may (a) terminate this contract and the earnest
money will be refunded to Buyer (b) extend the time for performance up to 45 days and the Closing
Date will be extended as necessary or (c) accept the Property in its damaged condition with an
assignment of insurance proceeds, if permitted by Seller’s insurance carrier, and receive credit from
Seller at closing in the amount of the deductible under the insurance policy. Seller’s obligations
under this paragraph are independent of any other obligations of Seller under this contract.
15. DEFAULT: I f Buyer fails to comply w ith this contract, Buyer w ill be in default, and Seller
may (a) enforce specific performance, seek such other relief as may be provided by law, or both, or
(b) terminate this contract and receive the earnest money as liquidated damages, thereby releasing
both parties from this contract. If Seller fails to comply with this contract Seller will be in default
and Buyer may (a) enforce specific performance, seek such other relief as may be provided by law,
or both, or (b) terminate this contract and receive the earnest money, thereby releasing both
parties from this contract.
16. MEDIATION: I t is the policy of the State of Texas to encourage resolution of disputes
through alternative dispute resolution procedures such as mediation. Subject to applicable law, any
dispute between Seller and Buyer related to this contract which is not resolved through informal
Initialed for identification by Buyer
and Seller
TREC NO. 23-15
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