What’s the Purpose of Paragraph 11, Special Provisions, and What Can I Write?

Before we take a closer look at Paragraph 11, Special Provisions, TREC, with input from agents
and brokers, have designed the contract to cover the most common scenarios and frequently used
terms; for less common conditions, a robust library of addendums is available for use. Our first
obligation as license holders is to be competent and understand the documents available for use
to fulfill our duty and responsibilities to our clients.

Paragraph 11, Special Provisions, is included in the contract to allow the buyer and seller to
make factual statements and attend to business details that may arise in a sale and NOT covered
in the contract or TREC addendum; Texas REALTORS® has additional forms available too.
Special Provisions is NOT designed to rewrite the terms of the contract or include complex
scenarios. The instructions before the open text field state, “Insert only factual statements and
business details applicable to the sale. TREC rules prohibit licensees from adding factual
statements or business details for which a contract addendum, lease or other form has been
promulgated by TREC for mandatory use.”

TREC Rule 537.11(b)(5 & 6) provides guidance, and it states: “A license holder may not”… (5)
“draft language defining or affecting the rights, obligations or remedies of the principals of a
real estate transaction, including escalation, appraisal or other contingency clauses.” OR (6)
“add factual statements or business details to a form approved by the Commission if the
Commission has approved a form or addendum for mandatory use for that purpose.”

In other words, there is very little, if anything, you should write in Special Provisions,
and if you use the field, do so with great care and consideration. Agents often place statements
covered in other areas of the contract or an existing addendum because they haven’t mastered the
terms and conditions in the current forms. The primary danger for placing any statements in this
section is the risk of violating Section 16 of the Real Estate License Act and the REALTOR®
Code of Ethics, prohibiting us from engaging in the unauthorized practice of law.

If you find yourself in a circumstance where a buyer or seller wishes to change the contract’s
language or that isn’t covered in one of the many addendums, you should advise your client to
consult with an attorney. If you’re uncertain if something can or should be included in Special
Provisions, air on the side of caution and leave it blank. Your first line of defense as an agent is
to contact your broker with questions. But regardless if you’re an agent or broker, as a
REALTOR® benefit, the Texas REALTORS® Legal Hotline has staff attorneys dedicated to
answering members’ legal questions. Though attorneys cannot give legal advice regarding
specific transactions or factual situations, members can receive information from a general
perspective on regulations, contracts, agency, brokerage, closings, and more. Call 800-873-9155.