The GREENE Sheet by Dianne McCoy, Director of Education and Compliance

TAR updates Seller’s Disclosure Notice and creates new Update to Seller’s Disclosure Notice

The Texas Association of REALTORS® provides well over 100 forms to supplement those twenty-plus TREC contracts and forms used daily by license holders in Texas. One very important form used by property owners and found in the Texas Property Code is the Seller’s Disclosure Notice. 

Two versions of the Seller’s Disclosure Notice exist, one promulgated by the Texas Real Estate Commission and taken directly from the Texas Property Code (TREC OP‐H attached).  The version preferred and used by Texas REALTORS® is the Texas Association of REALTORS® TAR 1406 Seller’s Disclosure Notice. This form includes the TREC version and incorporates into it more questions for consumer protection.

Written by Texas attorneys and brokers, this TAR 1406 Seller’s Disclosure Notice has been updated and the form date is February 1, 2018. Relatively minor changes were made to the form. To help see the changes, attached is the proposed “redline” version for comparison. No changes were made to the “redline” when presented for public comment so the resulting form is like the “redline”.

One item added in Section 3 is reference to TAR 1414 Information About Special Flood Hazard Areas. This is not a new form (dated 01‐01‐14).  It is a general information piece that can be used with buyers, sellers, landlords and tenants to provide thoughtful information about flood hazard areas.

TAR adds information like this to protect agents who attempt to clarify and direct the consumer, but may miscommunicate facts. The form is to be acknowledged, signed by the consumer to show that it was presented. Like the Information About Brokerage Services (IABS), it should be presented and signed, but if the recipient refuses to sign it, an agent should just make a note in a file that the form was presented but a signature was not obtained.

TAR 2518 Information Regarding Windstorm and Hail Insurance for Certain Properties (attached) is a new form found among property management forms in the TAR library on zipForms®. This informational form is also intended to be presented to a customer/client especially those looking at properties along the coastline but also anywhere as a precaution. This form is now referenced on page 5 of the TAR Seller’s Disclosure Notice under Additional Notices to Buyer, Section (3).

A much needed form addition is the TAR 1418 Update to Seller’s Disclosure Notice (attached). This new form provides an easier place for seller’s to update the TAR Seller’s Disclosure Notice consistently. It specifically refers to the seller becoming aware of “new information regarding the condition of the Property.”

During the listing appointment this form could be introduced to the seller when the TAR Seller’s Disclosure Notice form is provided. It may help to remind the seller that in Sec. 13 G and H of the listing agreement (Seller’s Additional Promises), the seller agrees to update any notices and disclosures. The new TAR 1418 is made for that!

So when are all these forms to be used? They can be used now by going to the TAR website under “forms”. Once the new TAR forms are available on zipForm®, they are the only version of each form to be used.

According to TAR legal counsel, it is NOT necessary to go back to the seller and have the existing TAR Seller’s Disclosure Notice information put on the newly revised form. However, it certainly can be done. Unlike when TREC changes the Seller’s Disclosure notice following changes in the Property Code, TAR forms are not mandated by the state legislature. TAR forms like the Seller’s Disclosure notice incorporates the mandated forms.

Best Business Practices: Begin using the TAR 1406 Seller’s Disclosure Notice with each new listing. Revise existing TAR Seller’s Disclosure Notices with the new TAR 1418 Update to Seller’s Disclosure Notice, and before you know it they will become second nature.

713-465-6644, Ext. 106713-465-9823 FAX713-828-5300 cell dianne.mccoy@garygreene.com