​In Texas, the residential resale contracts do not have termination provisions that could be triggered under something like a pandemic. The default paragraph allows a party to terminate the contract if the other party does not meet its obligations under the contract. The closing date is not designated with “time is of the essence” or a strict deadline. Therefore, a reasonable extension of the closing due to illness or quarantine from COVID-19 may be negotiated by the parties.

To address this situation, Texas REALTORS® has created the COVID-19 Addendum (TXR 2520) that may be used as an addendum to a new contract or to amend a currently executed contract.  The COVID-19 Addendum provides for a 30-day extension of the closing date in a residential sales contract if the closing cannot occur due to a voluntary or mandatory COVID-19 quarantine or closure. If the closing cannot occur after the 30-day extension, either party may terminate the sales contract with the earnest money being returned to the buyer. The COVID-19 Addendum also permits either party to terminate the sales contract, with the buyer receiving the earnest money, if the buyer is unable to fund their loan beyond the terms of the Third Party Financing Addendum due to loss of income from a COVID-19-related issue.

The addendum should be available in zipForm soon and you can also download it directly here: https://www.texasrealestate.com/members/legal-and-ethics/forms/blank-form-downloads/form-downloader/?post_id=51417&type=file

Be sure to also review the useful FAQs about Coronavirus and real estate transactions: https://www.texasrealestate.com/about-us/newsroom/coronavirus-faqs/

Note: this addendum is NOT mandatory and caution should be used before using or agreeing to it in your transactions. While the intentions may be good, the language is such that could allow someone to exploit the situation.