The initial process of starting a business can be daunting. Even with the availability of the internet, navigating the various documents, forms, and applications involved in purchasing property for your new business is not easy. Make sure your new business is set up for success. While generic forms are readily available online, utilizing the expertise of an attorney can make the process much easier. Understand, there are a multitude of risks when using free forms that claim to be “one size fits all.”
What Is a Promulgated Contract?
In Texas, a promulgated contract is any form that has been provided for public use. The most common in Texas, is to use those created by the Texas Real Estate Commission (TREC). These contracts are allowed for all real estate professionals and may be used by agents and brokers alike during transactions to make agreements official. Because a real estate professional cannot provide legal advice, they cannot change a promulgation form. Some examples of promulgated contracts include:
- 1-4 Family Residential Contract (Resale)
- New Home Contracts
- Farm and Ranch Contract
- Residential Condominium Contract
- Unimproved Property Contract
In addition to these generic contracts, there are also several addendums and other forms for the purchase of real property.
What Are the Limitations of Promulgated Contracts?
Not surprisingly, promulgated contracts, generic designs result in a variety of limitations. While they are meant to be used by all real estate professionals, these contracts are not specific to the type of transaction needed. Therefore, if a change is made to any of the language in these contracts, a dealer contract attorney must review the contract for the sake of accuracy; so the real estate professional does not violate Texas law. In other words, any change to the contract removes the protection afforded by use of the generic form.
Furthermore, not every transaction is covered by these contracts. Promulgated contracts do not provide flexibility for purchase of certain types of real property. Nonlawyer real estate professionals cannot prepare documents defining legal rights of principals to a real estate transaction.
If there is an addendum addressing the business detail or factual statement, the agent is required to use the addendum and cannot simply edit the promulgated contract form.
Are You Protected by Promulgated Contracts?
Because promulgated contracts are designed to be catch-alls, promulgated contracts do not provide any protection for your business if there is a challenge to the language in the contract. The purpose of promulgated contracts is to provide a baseline for real estate brokers, but the end result is they ultimately protect no one.
Moreover, since real estate professionals cannot provide legal advice, any attempt to tailor these contracts to better suit the purchaser requires the input of an attorney to guarantee protection under the law.
Contact an Attorney at Rosenblatt Law Firm to Achieve Your Business Goals Today
Purchasing property for your business is of major importance to its overall success. Our attorneys at Rosenblatt Law Firm can help navigate the complexities of real estate purchases, and help protect you from potential pitfalls. If you are looking into real estate relating to your business, please call us today at (210) 562-2900 or contact us through our website.
