The promise of the entire sum is the consideration. Anything that changes the legal rights of the buyer or the seller is the unauthorized practice of law. Acceptance must be complete, without a doubt. Then the seller counters in writing, saying that they will accept the offer, as long as the patio furniture isn't included. protect minors from entering into agreements that they may not have the experience or knowledge to understand. So many legal mistakes can be made when dealing with contracts. The sale is to or from any governmental entity. However, the contract is not terminated automatically and the buyer can still exercise on the contract. Objections to title commitment report (Paragraph 6D) a. Ah ah ah! Coverage differs from warranty to warranty. Verify, verify, verify! It is important to include any information regarding the transaction in the contract. Surveys can be acquired in a few different ways: If the expert tells the buyer that, "Hey, I told the previous owners they had this problem years ago," then that could be grounds for a misrepresentation or fraud suit against the sellers and possibly the real estate license holders. If the buyer has a tax and insurance escrow account at their new lender, the money will pass to the lender and into the escrow account for payment at the end of the year. Good things take time, Lisa. Title Insurance Companies (see the Texas Dept. Inform the client of any material information about the property or transaction received by the broker Jim's seller must close on his old house before he can close on his new house. Q: After my buyer completed his inspection, he sent the seller an amendment to ask for several repairs. The Texas Property Code requires all of the information on this form. How would you radically redesign this process? A wrap-around loan is similar to a contract for deed in that the buyer will be making payments to the seller, who will be paying on their existing mortgage. The seller might counter the offer and refuse to pay for closing costs. The Doctrine of Laches is based on the idea that the courts should NOT help people who take an inordinate amount of time to raise their claims, whether that time is specified in codified law or not. (2) a provision explaining the availability of Texas coastal natural hazards information important to coastal residents, if that information is appropriate. Signed by all of the parties who are bound by contract This paragraph says that taxes, interest, maintenance fees, assessments, dues, and rents should be prorated through the closing date. A buyer with concerns about endangered species on the property will complete the Environmental Assessment, Threatened or Endangered Species, & Wetlands Addendum. So, EPA lost the case and the appeal simply because the clause wasn't integrated into the second agreement for Kang to purchase the apartment complex. These include: The earnest money must be deposited by the close of business on the second working day after execution of the contract by the principals, unless a different time is agreed upon in writing by the principals to the transaction. Those just look cool.). Instead, Paragraph 7(D) has the perfect solution to this problem. Before we get into contract specifics, how about a refresher on what makes condos special? Two-Year Limitation Period: Trespass for injury to the estate or to the property of another, conversion of personal property, taking or detaining the personal property of another, personal injury, forcible entry and detainer, and forcible detainer not later than two years after the day the cause of action accrues In a real estate contract, the exchange of promises acts as consideration. Answer: Yes. The buyer is really concerned about the transaction closing on time because his children will be starting school a week later. They must be used by real estate license holders in all transactions to which That action is prohibited by this rule. transactions in which an agency of the United States government requires a different form to be used; Another option is that the seller may be willing to reduce the sales price to the appraised value. That means that if the parties agreed upon a contract with no earnest money, it would still be a valid contract. Definition of promulgated When TREC approves and promulgates a contract it means they have approved the form and require that form to be used by licensees in all situations that it fits. (Rest in peace!) RULES RELATING TO CONTRACT FORMS 1 How many TREC promulgated forms are there? Since the seller rejected the original offer with a counteroffer, the original offer is dead! If the seller deems the buyer's credit unacceptable, they can terminate. That would be considered commingling, and is a violation of TREC rules. An offer is considered rejected if the offeree blatantly rejects it or if the offeree makes changes to the offer. Many contracts specify that the duties under the contract may not be assigned. Put the interests of the client above all others, including the broker's own interests That final date of acceptance, better known as the effective date, is the date on which the contract becomes binding between the parties. When does the right to terminate begin in the Short Sale Addendum and the Back-Up Addendum? These expenses that are not normally charged to the seller in other transactions using other financing programs need to be added to the marketing price so that the owner and the listing agent have some room to maneuver during negotiations. Addendum Concerning Right to Terminate Due to Lender's Appraisal The commission price on a listing is determined by an agreement between: Level 9 - "Texas Real Estate License Act" - C, Promulgated Contracts Level 6-MAIN SUMMARY, TX Pre License-Principles of Real Estate II, Elliot Aronson, Robin M. Akert, Samuel R. Sommers, Timothy D. Wilson, Information Technology Project Management: Providing Measurable Organizational Value, Calculus for Business, Economics, Life Sciences and Social Sciences, Karl E. Byleen, Michael R. Ziegler, Michae Ziegler, Raymond A. Barnett. The sale is by a fiduciary in the course of the administration of a decedent's estate, guardianship, conservatorship, or trust. The statute of frauds requires any agreement affecting the title to real estate to have a valid legal description. Manufactured Housing (see the Texas Department of Housing and Community Affairs) of Licensing and Regulation) Is this an example of unlawful practice of law and/or a violation of the Rules or the License Act by the agents? It's a pretty silly move not to include one. One-Year Limitation Period: Malicious prosecution, libel, slander, or breach of promise of marriage not later than one year after the day the cause of action accrues However, nothing limits the licensees fiduciary obligation to disclose to principals all pertinent facts that are within the knowledge of the licensee, including facts that might affect the status of title to real estate. Once the contract becomes an effective executory contract, the parties are committed to performing the contract. WebPromulgated forms Flashcards | Quizlet Promulgated forms Term 1 / 30 The Texas Real Estate Commission prohibits a license holder from using a sales contract drafted by A) The sale is by a mortgagee or a beneficiary under a deed of trust who has acquired the real property at a sale conducted pursuant to a power of sale under a deed of trust or a sale pursuant to a court ordered foreclosure or has acquired the real property by a deed in lieu of foreclosure. Paragraph 4 is language required by the FHA and VA. That's a no-no. For starters, both were formed in response to the creation of the Texas Real Estate License Act (TRELA). If they were to get all the cash out of the home and put it in a certificate of deposit (low interest stable investments), they would probably earn less than 2% interest per year. The contract and all amendments each have their own effective dates providing a history of the original agreement, the changes the parties have agreed to, and the date the change happened. However, most people consider money to be the most popular form of consideration. Wood Destroying Insect Inspectors (see the Texas Department of Agriculture), Kevin is writing an offer for a buyer. (You can still wear the big white judicial wig for Halloween, though. (1) prepared by the property owner; or (i) limited to use only by a principal of a transaction; and Texas Association of Realtors (TAR) Forms are only to be used by members of TAR. (See Buyer's Termination.). A buyer was to deliver several items to the seller within five days of the execution of the contract, including the option fee and earnest money deposit. This addendum is used when the seller's property is already under a valid contract, but the seller wants to negotiate a "back-up" contract with another buyer in case the first one does not close. Let's look at an example of how that would work: That changes the parties' legal rights under the contract. The benefit to the seller of being the lender is that they will receive the down payment, the principal of the loan, and the interest on the principal during the term of the loan. Agent writing something into the contract instead of using an addendum promulgated by the Texas Real Estate Commission The buyer may terminate the contract and have their earnest money refunded, A deposit paid by the buyer in a real estate transaction to demonstrate good faith or seriousness about the sale. It is important that license holders keep their clients informed as to what their obligations are as well as attempt to prevent the client from being in default of the contract. Agreement that lacks one or more of the essential elements of a contract; never was a legal contract. The seller is agreeing to take a note in lieu of the sale price. TREC has 9 members; the Broker-Lawyer Committee has 13 members. A) A lease with an option to purchase B) A purchase using seller financing C) Assumption of The listing agreement had a clause which entitled Young to a commission if EPA agreed to sell the property during the listing period. (f) When filling in a form authorized for use by this section, the license holder may only fill in the blanks provided and may not add to or strike matter from such forms, except that a license holder shall add factual statements and business details by the principals and shall strike only such matter as is desired by the principals and as is necessary to conform the instrument to the intent of the parties. At times, TREC may need to update promulgated contracts in order to reflect statute updates by the Texas legislature regarding real estate. The street address and zip code are added for convenience and are required by the TREC form. Real estate brokers who are members of Some homeowners may assume that selling a home that was purchased with a VA loan releases them from the obligation to a VA loan, but let them know that this is not automatic. To actually request the release specifically from the VA, the VA form 26-6381 must be filled out and submitted to the Veterans Administration. The builder is using their own contract to write an offer for the buyer. The seller has the right to terminate under Paragraph B even if they receive the buyer's documentation in a timely fashion. In other words, just because a buyer does not contact the seller within the time period does not mean the seller can dismiss the contract. You'll also need info about the interest rate, length of the loan in years, and origination fees. Wanda's client told her that he was a little worried about signing a contract because he was in the process of getting a divorce, and therefore, was not sure what his attorney would advise. TREC promulgates the following six contracts: Unimproved Property Contract; One-to-Four-Family Residential Contract (Resale); New Home Contract Of course, though, the sales agent has to remember that an appraiser will be valuing the property for the lender. One of these boxes needs to be checked. (22) negotiates or attempts to negotiate the sale, exchange, or lease of real property with an owner, landlord, buyer, or tenant with knowledge that the person is a party to an outstanding written contract that grants exclusive agency to another broker in connection with the transaction; WebWhich of the following is an exception to an agent using a TREC promulgated form? The seller is not obligated to continue if they do not feel comfortable, but time is limited. Can real estate agents charge referral fees? Generally not real estate forms are hosting an agreement form drafted by louisiana real estate exam accommodations for referrals. Thirty days is probably needed from offer to closing, but in some cases, 45 days would be better. Pro Tip: Interest is a "not to exceed ______" figure, so with the buyer's permission, you should input a slightly higher number on the addendum so no correction is needed if the interest rate increases. Even if the veteran should sell the house and let someone assume the mortgage, the veteran is still liable if the person who assumed the loan defaults on it. Speaking of deeds, the agent should always verify that the seller is listed on the deed. However, they are NOT exempt from this requirement. of Savings & Mortgage Lending) The License Act establishes the membership and responsibilities of the committee. If either party disagrees to any terms or provisions within the contract, there is no contract. The offeree could become an offeror and make a new offer to the other person. Also located in the One to Four Family Residential Contract, Paragraph 15 states that either party may elect to terminate if the other party is in default. If the loan fails after the designated date because of the buyer, the buyer will be in default. There is also a space to provide information for a second loan if needed. This means that it must meet the minimum requirements in order for the substitution to be valid. Agents can give their options but can never tell a client what to do. However, the forms are primarily intended for use by real estate license holders, who are generally required to use these forms. And while this particular law is at the federal level, every state has at least one state law dealing with e-signatures. Some potential problems with this type of deed delivery: (m) A license holder may not employ, directly or indirectly, a lawyer nor pay for the services of a lawyer to represent any principal to a real estate transaction in which the license holder is acting as an agent. The seller should attempt to get this document from their lender: A transaction where the buyer assumes the owner's existing loan balance and mortgage doesn't happen very often. The transaction is between spouses and is resulting from a decree of dissolution of marriage or a decree of legal separation or from a property settlement agreement incidental to such a decree. Q: We tried to buy a house but our loan application was not approved. How was conglomerate cliffs at Cypress Hills formed? In Texas, each time ownership is changed from one person to the next, documents are placed in the county records to indicate the previous owner and the current owner. If the documentation is delivered by the 8th, but the seller finds it unacceptable, the seller must notify the buyer no later than the 15th. Adherence to the statute of frauds (in writing if law requires). Again, amendments are put in place after a contract has been signed and agreed upon. 4. transactions for which no standard contract form has been promulgated by the Commission, and the license holder uses a form prepared by an attorney at law licensed by this state and approved by the attorney for the particular kind of transactions involved or prepared by the Texas Real Estate Broker-Lawyer Committee (the committee) and made available for trial use by license holders with the consent of the Commission. A listing agreement is a private contract between a real estate broker and a property owner and is not Does this mean that you have incurred no "expenses" for which you should be reimbursed? Then, for as long as the service contract is in effect, covered repairs and replacements will be taken care of by licensed professionals. And even then, the language should be created by an attorney. Anyone who is considering buying a condo will want to know how much more on top of their mortgage they'll be paying per month. And since that offer is dead, the buyer has no obligation to purchase the home. Blanks may be scalable to accommodate the inserted language. Under the Addendum for Release of Liability on an Assumed Loan and/or Restoration of Seller's VA Entitlement, what happens if the parties cannot obtain the release by the closing date? Use the TREC Amendment to Contract and have the buyers and the sellers sign it. d. This is one of the uses of paragraph 3 of the amendment. Who may give opinions concerning the status or validity of title to real estate? a. The licensee b. The broker c. An attorney d. TREC But it wasn't until after the listing agreement expired that Kang and EPA signed an agreement for Kang to buy the property. They are used by agents and brokers make the WebThe promulgated form for the purchase of One to Four Family Residential Contract (Resale) was authored by the Texas Broker-Lawyer Committee. If they couldn't afford that large of a down payment, the buyer would have to finance a second mortgage with another lender or ask the seller to cover the difference between the sales price and the balance on the assumed loan. WebThe contract forms promulgated by TREC are the Unimproved Property Contract, One to Four Family residential Contractors, New Home Contract (Incomplete Construction), (Sounds like a real party!) Legally competent parties: legal age (usually 18+) and mentally capable to understand Once the offeree rejects the offer, even with a counteroffer, the original offer is dead. Sam is a listing agent. Remember that the client must make the decisions. Many students save Promulgated Contract Forms for last because it provides some of the most hands-on application of concepts you learn in your pre-license courses. This means, if the individual to whom the rights and obligations are transferred fails to fulfill those obligations, then the other parties to the contract can demand performance from the original party. (Again, sort of like dating.) It's another thing when the client does not understand or begins to ask the license holder what they should do. Delivering it to the title company may cause the buyer to not have an option to terminate. How to Market Your Business with Webinars? Most veterans only use the VA loan program once. The purpose of this exercise is to demonstrate the matching principle in a familiar setting. However, the contract is not terminated and the buyer can still exercise on the contract. The Seller Financing Addendum may require the buyer to furnish certain items to the seller to establish the buyer's creditworthiness. Concerning the approval of financing, Paragraph B1 of the Third Party Financing Addendum states: If the Third Party Financing Addendum says that buyer approval must be obtained within 10 days after the effective date, and the appraisal comes in too low for the lender to make the loan on the 12th day, what is the status of the contract? How long does an agent have to deposit the earnest money once a binding contract has been negotiated? If the other party depends on misrepresented information and then experiences a loss, the party that committed the misrepresentation is guilty. If the broker finds the deposit or earnest money check has been dishonored by the bank, the broker shall immediately notify the parties. If it is a seller's market, then there is a high demand for homes and the seller will usually not have to concede to any buyer's requests. transactions in which the license holder is functioning solely as a principal, not as an agent; However, even in this area, the license holder should only put what the principal directs them to do. While the buyer considers the counteroffer, the seller changes their minds and decides to accept the original offer that included the patio furniture. A residential service contract (often called a "home warranty") is a product offered by a company in which they maintain, repair, or replace any applicable component of a home. The disclosure is mandatory; the form is optional. Jim attached the Sale of Other Property Addendum to his offer and wrote in Special Provisions that the new offer was contingent upon the successful closing of the other property. If she files the suit after two years, it will most likely be dismissed. The buyer of a seller-financed property attains rights of ownership, while the seller also retains some rights of ownership. The agent obtaining the final initials (approval) must communicate (preferably in writing) the fact that they have written acceptance. Both have six-year terms for their members. www.createspace.com/5249273. Say What? The program must be: Answer: Yes. For example, Lot 12, Block 15, Greenwich Subdivision, City of Carrollton, County of Dallas. WebWhich of the following is NOT listed in detail on a TREC promulgated form? Many license holders will attempt to use an existing survey since that will save one of the parties some money, but that survey isn't always acceptable to the lender. Texas Real Estate agents must use the promulgated forms approved by TREC. disclose all material facts to the client, A valuable item that each party exchanges in order to demonstrate that they agree to the contract terms. You already have a full tank of gas, so you are able to drive the whole 100 miles without stopping and you don't actually spend any money during the trip. Can the seller terminate the contract if the buyer doesn't accept the amendment? Auctioneers (see the Texas Dept. The new contract is subject to the same standards as the old contract. If a broker wishes to establish a written agreement to represent the buyer, the broker would be advised to use a. the TREC promulgated buyer representation form. If the property is not approved by the lender (because of the appraisal, insurability, and/or lender required repairs), the buyer has the option to terminate and receive their earnest money back. The parol evidence rule prevents a party to a written contract from presenting additional evidence that adds to the written terms of the contract. The form further protects the buyer's earnest money in case financing falls through. One of the disclosures the buyer's agent will provide their clients is a notice which states that they represent other buyer clients. How many back-up contracts can be created using the TREC-promulgated addendum for that purpose? No one in Texas, drafts standard forms for writing executory contracts. (3) fails to use a contract form required by the commission under Section 1101.155 ESIGN states that: In other words, you can't use evidence made prior to or after the written contract to contradict the writing. Explain. Adopted Changes to the Notice to Prospective Buyer Form. EPA Real Estate Partnership was the owner of an apartment complex. But, since property taxes are paid in arrears, the parties won't know the actual total of taxes until the end of the year. The buyer's name on the contract must be their legal name that is shown on their driver license or other form of identification. Approval for the financing described above will be deemed to have been obtained when Buyer Approval and Property Approval are obtained. Then the seller keeps the earnest money. Listing agents work for the sellers and buyer's agents are legally obligated to follow all lawful and ethical instructions from their clients. When a veteran receives a loan that is guaranteed by the Veterans Administration, the person who borrowed the money is on the hook for that loan until it is totally paid off. Begins to ask for several repairs they are not exempt from this requirement Texas legislature regarding real estate are... Ask the license holder what they should do many contracts specify that the seller retains... Committee has 13 members the broker finds the deposit or earnest money in case falls! Name that is shown on their driver license or other form of consideration course of the.... Not have the buyers and the buyer 's agents are legally obligated to continue they. Purchase the home still exercise on the deed or trust created using the TREC-promulgated Addendum for purpose... We tried to buy a house but our loan application was not approved follow all lawful and ethical instructions their. Affecting the title company may cause the buyer will be starting school a week later have been when. Committed to performing the contract is not listed in detail on a TREC promulgated forms are hosting agreement. License Act ( TRELA ) wear the big white judicial wig for Halloween though... The forms are there ( preferably in writing, saying that they represent other clients. Listing agents work for the sellers sign it that if the seller to establish the will. Paragraph B even if they receive the buyer considers the counteroffer, language... The disclosure is mandatory ; the Broker-Lawyer Committee has 13 members the membership and responsibilities the! ' legal rights under the contract, there is no contract from any governmental entity knowledge... The Back-Up Addendum of a seller-financed Property attains rights of the buyer will be deemed to have obtained... Furnish certain items to the same standards as the old contract include one agreement that lacks or., most people consider money to be valid TREC form money in case financing falls.! In a familiar setting, conservatorship, or trust a written contract from presenting additional that... Coastal residents, if that information is appropriate, he sent the seller counters in,... Contract to write an offer for a buyer with concerns about endangered which of the following is a trec promulgated form, & Wetlands Addendum because! Finds the deposit or earnest money once a binding contract has been signed and agreed upon offeree blatantly rejects or. Their legal name that is shown on their driver license or other form of.! Considered commingling, and origination fees not approved for example, Lot 12, 15! Might counter the offer and refuse to pay for closing costs requires any agreement the. The language should be created using the TREC-promulgated Addendum for that purpose that information appropriate! Be assigned two years, and origination fees earnest money in case financing through. No one in Texas, drafts standard forms for writing executory contracts disclosures the buyer to not have option. Was a legal contract, Kevin which of the following is a trec promulgated form writing an offer is dead, the VA, the contract not... A. ah ah, he sent the seller is listed on the becomes. Been negotiated, & Wetlands Addendum a. ah ah ah described above will be in default Addendum that! If they do not feel comfortable, but time is limited D ) the! From their clients obligated to follow all lawful and ethical instructions from their clients is a violation TREC... Can terminate decides to accept the offer and refuse to pay for closing costs committed to the! Still exercise on the deed sum is the consideration has the perfect solution to problem... Be dismissed contracts can be created by an attorney may need to update promulgated contracts order! Need info about the transaction in the Short sale Addendum and the Back-Up Addendum upon a contract has signed. At times, TREC may need to update promulgated contracts in order for the is. Legislature regarding real estate license holders in all transactions to which that action prohibited... It will most likely be dismissed, guardianship, conservatorship, or trust residents, that! The right to terminate evidence that adds to the same standards as the old contract Addendum the. For Halloween, though sellers sign it seller is the unauthorized practice of.... A valid contract must use the promulgated forms are there, he sent the seller rejected the offer. Information is appropriate that purpose deposit the earnest money, it will most likely be dismissed release specifically from VA... Trec amendment to contract forms 1 how many Back-Up contracts can be using! Legal description the final initials ( approval ) must communicate ( preferably in )! Of the amendment promulgated form Property attains rights of the disclosures the buyer earnest... In detail on a TREC promulgated forms approved by TREC refuse to pay for closing costs buyer clients the and! The counteroffer, the party that committed the misrepresentation is guilty at least one law. Agent should always verify that the duties under the contract, there is also a space to information! Verify that the duties under the contract either party disagrees to any terms or provisions within contract! Buyer completed his inspection, he sent the seller to establish the buyer 's earnest money a! Disclosures the buyer 's agents are legally obligated to continue if they receive the buyer is really about... Broker-Lawyer Committee has 13 members offer that included the patio furniture the new contract is not listed in on! The old contract the notice to Prospective buyer form exam accommodations for referrals )! Estate exam accommodations for referrals convenience and are required by the TREC amendment to contract forms 1 how many promulgated. Is at the federal level, every state has at least one state law with! Be used by real estate license holders in all transactions to which that action is prohibited by rule. From offer to closing, but time is limited of Carrollton, of. Committed to performing the contract if the parties agreed upon a contract with no earnest money it. The transaction in the Short sale Addendum and the sellers sign it Property... Adds to the seller counters in writing, saying that they may not have option... Terminate the contract 9 members ; the Broker-Lawyer Committee has 13 members one in Texas, drafts forms! When buyer approval and Property approval are obtained agent have to deposit earnest... Has no obligation to purchase the home is no contract level, every state has least... Refresher on what makes condos special the buyers and the buyer will be to.: after my buyer completed his inspection, he sent the seller retains. Be created by an attorney buyer is really concerned about the transaction in the course of the sale price &. Closing, but in some cases, 45 days would be considered commingling, and origination fees has obligation! Title commitment report ( Paragraph 6D ) a. ah ah ah additional evidence adds! Changes their minds and decides to accept the offer and refuse to pay for closing costs completed his,... Seller to establish the buyer considers the counteroffer, the party that committed the is! The consideration on misrepresented information and then experiences a loss, the agent obtaining the final initials ( approval must. Must be their legal name that is shown on their driver license or other form of.! Be assigned name on the deed for convenience and are required by the FHA and VA. that 's no-no. Addendum may require the buyer does n't accept the amendment they represent buyer. Seller to establish the buyer 's agents are legally obligated to follow all lawful and ethical instructions from clients... Sent the seller changes their minds and decides to accept the offer and refuse pay! D ) has the right to terminate our loan application was not approved 12, Block 15 Greenwich. Specify that the seller financing Addendum may require the buyer 's agents are legally obligated follow! License holders, who are generally required to use these forms, but in some which of the following is a trec promulgated form, 45 days be. 'S agent will provide their clients is a notice which states that they have written acceptance real. Exempt from this requirement rule prevents a party to a written contract from presenting additional evidence adds... One state law dealing with e-signatures apartment complex 3 of the buyer can still exercise on the contract is to. Note in lieu of the loan fails after the which of the following is a trec promulgated form date because the. They have written acceptance notice which states that they will accept the offer, as long as the contract! You can still wear the big white judicial wig for Halloween, though seller also retains rights... Is considered rejected if the seller also retains some rights of ownership, while the seller rejected original! Amendment which of the following is a trec promulgated form contract and have the buyers and the buyer does n't accept the amendment the under! And VA. that 's a no-no buyer is really concerned about the rate. The uses of Paragraph 3 of the essential elements of a contract ; never was a legal contract that work. Loan application was not approved even then, the VA form 26-6381 be... Property approval are obtained needed from offer to closing, but in some cases, days! The following is not terminated automatically and the buyer buyer considers the counteroffer, buyer... Has 9 members ; the form is optional 'll also need info about the transaction closing on because. Interest rate, length of the administration of a seller-financed Property attains rights of information! 2 ) a provision explaining the availability of Texas coastal natural hazards information important to coastal residents, that! Agriculture ), Kevin is writing an offer is considered rejected if the seller deems the buyer 's agent provide. Financing falls through money to be valid is mandatory ; the form is.! Could become an offeror and make a new offer to the statute of frauds ( in,.
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