If your seller wishes to formally inform the buyer of his decision to terminate the contract and receive the serious money due to the buyer`s default, he can write a letter to this effect, containing a serious release of money for the buyer. Although the letter does not conclusively state that the contract has been terminated, sending the letter is still a good idea as it clearly expresses the seller`s position that it will be terminated. I noticed that the TREC cancellation form is no longer available on ZipForm for a buyer who terminates the contract on the condition of third-party financing. Which form should I use? There are many reasons why a buyer could terminate under the Texas contract. In fact, there are probably at least 32 reasons, according to this book published on the subject! Usually, serious money goes to the buyer because he has so many options to legitimately withdraw from a contract. TREC has made it relatively easy for a buyer to terminate a contract because an eventuality is not met. Form TREC 38-4, Notice of Termination of Contract by Buyer, contains a written statement confirming the contract: « Buyer notifies Seller that the Contract is terminated in accordance with the following provisions, » and then lists various clauses that allow Buyer to terminate the Contract. But until the buyer signs the termination form and hands it over to the seller, the contract is still alive and enforceable. Note that the seller does not need to sign this TREC form. The buyer may unilaterally terminate the contract if the listed factors occur. However, please also note: This termination form only deals with the need to formally terminate the contract; it expressly does not deal with the right to money (« NOTE: the release of money is regulated by the terms of the contract. »). As mentioned in recent weeks, both parties must agree on the legitimate recipient of Earnest Money before the securities company can release it.
What happens if the seller refuses to sign the release of the money? The contract states exactly what is happening. 1. Serious money is not a « quid pro quo » for TREC contracts. A real estate contract is an enforceable contract if it expires in writing, shows a correspondence of opinions on all conditions and is signed by all contracting parties. The promise to purchase of the seller and the buyer to buy is sufficient consideration to support the conclusion of a contract. A party`s failure to comply with an obligation under the terms of the contract, including a buyer`s failure to deposit real money on time, is a failure by that party to allow the other party to exercise any of the default remedies described in paragraph 15 of the TREC contracts. 2. A written formal notice from a seller to a buyer would be desirable to eliminate an argument by the buyer that the seller could, by its conduct or comment, waive its right to insist on the timely performance of its obligation to deposit real money by the buyer. Article 21 of the TREC Agreement requires that all communications from one party to another be made in writing. TREC has published the « Notice of Termination of Contract by Buyer » form to be used when a licensee assists a buyer in notifying the seller accordingly of the exercise of its termination option. While a buyer may use any form of written notice to terminate the contract, a buyer`s agent who is asked to assist the buyer in giving the appropriate notice should use the advertised form.
If the corresponding box of the form has been ticked, the TREC form on the termination of the buyer`s contract clearly indicates that the buyer intends and gives the seller the appropriate notice of his choice to terminate the contract in accordance with the provisions of § 23. Although it may be believed that the buyer has made the decision to terminate the contract under its termination option by sending the seller or its agent a signed serious cash release form stating that the money will be returned to the buyer and indicating a release of all rights or responsibilities under the contract, a court cannot accept that this letter meets the Buyer`s termination requirements in accordance with paragraphs 21 and 23 of the Contract. The preferred practice would be for a buyer`s representative to use the TREC notice of termination form for the buyer`s contract in order to exercise its termination option in accordance with the provisions of § 23 and to send the signed form to the seller at the address specified in § 21 or by fax in accordance with this paragraph. . . .