- March 29, 2021
- All Texas Issuing Offices
- UNDERWRITING - TREC FORM CHANGE - Delivery of Option Fee
The Texas Real Estate Commission (TREC) made a change to their Contract forms effective April 1, 2021. The revised contract forms require the buyer deliver the option fee to the title company, not to the seller, within 3 days after signing and acceptance of the contract unless the 3rd day is on a Saturday, Sunday, or legal holiday then the delivery date is extended to the next day that is not a Saturday, Sunday, or legal holiday. Here is a link to the updated forms: https://www.trec.texas.gov/agency-information/contracts.
However, these changes to the contract forms do not have regulatory impact on the title industry as TREC does not have regulatory authority over title companies. Texas Department of Insurance (TDI) regulates title companies. Additionally, the contracts provide that the title company is not a party to the contract.
A title company may choose to accept delivery of the option fee under any regulation imposed by the TDI. As with any escrow deposit, if you are directed to immediately disburse the option payment to the seller, we remind you of the “Good Funds” requirements per TDI rule P-27.
Please remember that escrow matters such as this are outside the scope of our underwriting agreement, thus it is your decision whether and how to comply with the new forms' provisions.
If you have any questions relating to this or other bulletins, please contact a Stewart Title Guaranty Company underwriter.
For on-line viewing of this and other bulletins, please log onto www.vuwriter.com.
THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.