Texas REALTORS® has updated the Residential Leasing and Property Management Agreement (TXR 2201). The form will be published for use on February 3 and will be available on the Texas REALTORS® website and through all Texas REALTORS®-licensed forms vendors.

To assist with the transition to using the new, restructured form, a watermarked version can be found here. Here’s a summary of changes.

  • A line for owners to initial was added to every page of the document.
  • On the first page, the parties’ information has been reworked to provide for an easier read. Checkboxes were added for owners to consent to receive text messages from the broker and/or the broker’s operating software.
  • In Paragraph 3, Terms, the clause “Notice to Modify Terms and Conditions” has been added to allow for changes to be made to the document after the end of the first term of the agreement. This will allow for necessary modifications to be made in certain circumstances without the parties having to execute an entirely new agreement.
  • New Paragraph 4, Summary of Fees, was added to assist brokers when explaining their fee structures to an owner. With blanks for reserves, broker’s fees, and termination fees all in one place, this paragraph will streamline fee discussions, removing the need to search all 14 pages of the agreement for specific fee information.
  • In Paragraph 5, Reserves, a sentence was added to account for additional make-ready costs upon vacancy or notice of termination by a tenant.
  • Broker’s Fees, previously Paragraph 11, was moved to Paragraph 6, and the blanks to insert fees have been moved to the Fees Summary paragraph. Additional fee structure options have been included under A. Management Fees, B. Leasing Fees for New Tenancies, and C. Renewal or Extension Fees. Under D. Service Fees, service fees are now payable at the time the services are rendered. An additional option was added under G. Fees Related to Insurance and Legal Matters (see the Insurance paragraph below). Finally, in H. Fees in the Event of a Sale, the options for “Fee if a Tenant Purchases Property” and “Fee if Buyer is Procured through Broker” have been removed. In either of these cases, a separate written listing agreement should now be used.
  • Paragraph 7J, Fund-sharing within portfolio of properties, has been added to allow the owner the option to grant the broker the authority to share that owner’s funds from one property to another if the broker is managing multiple properties for the owner. This is intended to assist, for example, where a property within that owner’s portfolio of properties has deficient funds for reasonable upkeep.
  • In Paragraph 9, Advances, a sentence was added at the end of the paragraph to limit broker’s obligation to performing only those repairs related to the health and safety of the tenant and/or the securing of the property.
  • Paragraph 11, Owner’s Cooperation, adds a requirement that the owner provide necessary passwords and controls to ensure that the broker has access to any electronic devices that are on the property. The owner must also provide the broker with owner’s association documentation and contact information and reasonable notice before listing the property for sale.
  • Relating to Paragraph 12, Insurance, a clause has been added to provide for an administrative fee (either monthly or annually), along with reimbursement of the cost of the policy, if an owner does not maintain the owner’s own public liability insurance policy naming broker as a co-insured or additional insured and the broker chooses to purchase an insurance policy.
  • The previous Paragraph 12 has now been renamed Paragraph 13, Termination, and has been reworked to provide additional clarity after the agreement ends. These changes give the broker the option to provide off-boarding services for a fee after the agreement ends. Certain services, such as processing vendor invoices, utility bills, security deposits, etc., generally must still be provided after the agreement ends, and this new paragraph gives the owner and the broker the ability to negotiate how those services and the broker’s fees for providing those services will be handled.
  • Paragraph 23G was added to inform the owner of certain fund-withholding requirements under federal tax law if the owner is a foreign person. This paragraph also provides check boxes for the owner to notify the broker whether they are or are not a foreign person.
  • A small numbering change was also made to Paragraph 4.