Option Period and Fees

Yes. If the buyer in this situation chooses to request an extension of the termination-option period instead of exercising the default remedies available to him in the contract, then he must agree to offer something of value as consideration to the seller to ensure that the extension is legally enforceable. This is often done by paying an additional termination-option fee. 

Extensive case law in Texas suggests a termination-option period cannot be extended without an additional option fee, so a buyer should pay another option fee to reliably extend the option period.

Use TREC’s Amendment to the contract (TXR 1903, TREC 39-8) and fill in an amount acceptable to both parties in Paragraph 6. To ensure the extension of the option period is valid, be sure to include an amount the buyer has paid seller for the additional option fee. Leaving it blank or putting zero dollars may lead to an unenforceable amendment.

The termination option ends at 5 p.m. local time to where the property is located. The Texas Real Estate Commission revised its contracts effective January 1, 2016, to implement this time deadline.

Use TREC’s Amendment to the contract (TAR 1903, TREC 39-8) and fill in an amount acceptable to both parties in Paragraph 6. There must be an amount included in Paragraph 6. For instance, putting “$0” in the blank may risk the extension being held unenforceable.