You must provide the addendum. TREC rules require a license holder to provide the Addendum for Sale of Other Property By Buyer (TXR 1908, TREC 10-6) by Buyer to a buyer who wants to make a contract contingent on the sale of another property. License holders are not allowed to write language into the Special Provisions Paragraph for situations that are covered by a TREC promulgated form, such as the contingency addendum. If your client doesn’t want to use the addendum, you should advise him to consult his attorney to draft language that will reflect his intention.

No. A buyer who can qualify for a loan without having to sell her other property doesn’t need to use the addendum. However, she can still use it if she wants to make the contract contingent on the sale of her other property.

No. The addendum is drafted for a specific purpose, the sale of another property. Using the addendum for another purpose requires that it be modified by a lawyer. A broker who makes such modifications is likely engaging in the unauthorized practice of law.

Yes. If your client’s ability to perform under a contract (i.e., close the transaction) is contingent upon the closing of another property, the Addendum for Sale of Other Property by Buyer (TXR 1908, TREC 10-6) should be made part of the contract. Otherwise, the buyer risks default under the contract if he fails to close because the sale of the other property doesn’t close. Default by the buyer could result in termination of the contract and the loss of earnest money. Alternatively, the seller could also take action to enforce specific performance or other remedies through the legal system, or both.

No. If the buyer can’t close because the buyer didn’t sell her other property, the buyer will be in default. Paragraph D of the addendum states that if the buyer waives the contingency and then can’t close and fund because she did not receive the property’s proceeds, she is in default and the seller may exercise the remedies in Paragraph 15 of the sales contract. One of the remedies available to the seller is to terminate the contract and keep the earnest money.

The time periods and rights provided under the contingency addendum and the termination option are completely independent. If the buyer doesn’t waive the contingency within the three days provided for in the addendum, the contract will automatically terminate. His right to terminate within the 10-day termination option period is not diminished by his election to waive the contingency.

No. The Addendum for Sale of Other Property by Buyer (TXR 1908, TREC 10-6) doesn’t require the buyer to provide evidence to support her decision to waive this contingency. The only requirements in the addendum are that the buyer notify the seller in writing within the time stated and deposit the additional earnest money with the escrow agent in a timely manner.

Buyers should consider the risks of waiving this contingency when they don’t already have the proceeds from the sale of another property. A buyer would be in default on her contractual obligations if she waives the contingency and then fails to close solely because she didn’t receive the sale proceeds.