Key Takeaways
- Addenda are additional forms attached to modify or supplement the contract for specific situations
- The Third Party Financing Addendum is required when the buyer is obtaining a loan (conventional, FHA, VA)
- The Seller's Disclosure of Property Condition is not an addendum but a required disclosure form
- The Addendum for Property Subject to Mandatory Membership is used for HOA properties
- Each addendum must be checked or referenced in the main contract to be effective
Common Addenda
TREC promulgates addenda that supplement the main contract for specific situations. These are used in addition to (not instead of) the main contract form.
Most Common Addenda
Third Party Financing Addendum
Used when the buyer is obtaining a loan:
| Field | Purpose |
|---|---|
| Loan type | Conventional, FHA, VA, USDA |
| Loan amount | Maximum amount of financing |
| Interest rate | Maximum rate buyer will accept |
| Loan period | Term of loan (usually 30 years) |
| Financing deadline | Days to obtain financing approval |
Key Contingency: If buyer cannot obtain financing on the specified terms, buyer may terminate and receive earnest money refund.
Addendum for Sale of Other Property by Buyer
Used when buyer must sell another property first:
| Provision | Purpose |
|---|---|
| Property address | Buyer's property to be sold |
| Waiver deadline | Date seller can demand removal |
| Right to continue marketing | Seller can accept backup offers |
Kick-out clause: Seller can require buyer to waive contingency or terminate.
Addendum for Back-Up Contract
Used when property is already under contract:
- Buyer knows property is under contract
- Becomes effective only if first contract terminates
- Earnest money typically held until first contract status changes
Addendum for Property Subject to Mandatory Membership
Used for HOA (Homeowner Association) properties:
| Disclosure | Requirement |
|---|---|
| HOA fees | Current and projected assessments |
| Documents | Buyer's right to receive HOA docs |
| Termination | Buyer may terminate within specified days |
| Restrictions | Buyer acknowledges restrictions |
Seller Financing Addendum
Used when the seller is providing financing:
| Term | Description |
|---|---|
| Loan amount | Principal balance |
| Interest rate | Rate charged by seller |
| Term | Length of loan |
| Monthly payment | P&I amount |
| Due date | Balloon payment date (if any) |
Addendum for Coastal Area Property
Required for properties in coastal areas:
- Discloses erosion and flood risks
- Explains Dune Protection Line
- Buyer acknowledges coastal hazards
Non-Promulgated Forms Used With Contract
| Form | Purpose |
|---|---|
| Seller's Disclosure | Property condition disclosure |
| Lead-Based Paint Addendum | Pre-1978 homes (federal requirement) |
| Information About Brokerage Services | Agency disclosure |
| MUD Disclosure | Municipal Utility District info |
How Addenda Modify the Contract
| Principle | Explanation |
|---|---|
| Addenda supersede | Addendum terms override conflicting contract terms |
| Must be referenced | Check box in contract or list in Special Provisions |
| Same execution | Must be signed by all parties |
| Part of contract | Becomes integral part of agreement |
Which TREC addendum is required when a buyer is obtaining a mortgage loan?
When an addendum conflicts with the main contract, which takes precedence?