Lease Options in Texas - Rent to Own
Phil SalazarPro Member
Rental Property Investor · Conroe, TX · Member since 2015 · 49 posts · 7 votesI am currently under contract with a 3 bedroom 2 bathroom house in Cleveland, Texas (Montgomery county) It is being bought with a Wrap Around Mortgage and I want to sell using a Lease Option Purchase. I see other new developments in the area offering Lease to Own for 3 yrs. Can anyone give me a straight answer on doing Lease Options here in Texas? Others seem to be doing it, how can I?
I had a conversation with my RE Attorney and he says, up to 179 days and then you do something with a verbal agreement. I am scheduled to have a conference call with him this week sometime and I'll let you know what I find out.
What part of Houston are you at? Are there any Meetups or active REIAs where they meet regularly? It would be good to mingle and network.
Doing Lease Options is fine until they sue you. You'd lose. By the way, I don't know which
RE Attorney would say "then you do something with a verbal agreement." Pardon my French, but that attorney is crazy. I truly think you misunderstood what he said.
Here is what the law states
Property Code Sections 5.069 and 5.070. The requirements state that:
Do us a favor and read it for yourself to be sure
https://texas.public.law/statutes/tex._prop._code_section_5....
Prop. Code Section 5.070https://texas.public.law/statutes/tex._prop._code_section_5....
Prop. Code Section 5.072https://texas.public.law/statutes/tex._prop._code_section_5....
Executory contracts are not limited to the classic contract for deed. Leases with an option to purchase are also defined as executory contracts:
Prop. Code Sec. 5.062(a)(2). [Lease with an Option to Purchase]. An option to purchase real property that includes or is combined or executed concurrently with a residential lease agreement, together with the lease, is considered an executory contract for conveyance of real property.
There's more. but suffice it to say, someone misunderstood the law
"Pretending that an executory contract is something else by renaming it will fool no one, particularly after the document is deconstructed and scrutinized in court. It is astonishingly difficult to deceive a jury of six or twelve of one’s peers.
A judge or jury may even be angry with a seller who tries to pull a fast one with overly-clever conveyance documents that pretend to be something other than an executory contract—and may therefore be more inclined to consider a finding of fraud and treble damages plus attorney fees."
In other words "be careful".
Hello Phil,
As far as I know, in Texas you can only do Lease option up to 6 months at a time.
Good luck! Let us know how you end up proceeding.
I had a conversation with my RE Attorney and he says, up to 179 days and then you do something with a verbal agreement. I am scheduled to have a conference call with him this week sometime and I'll let you know what I find out.
What part of Houston are you at? Are there any Meetups or active REIAs where they meet regularly? It would be good to mingle and network.
I had a conversation with my RE Attorney and he says, up to 179 days and then you do something with a verbal agreement. I am scheduled to have a conference call with him this week sometime and I'll let you know what I find out.
What part of Houston are you at? Are there any Meetups or active REIAs where they meet regularly? It would be good to mingle and network.
Doing Lease Options is fine until they sue you. You'd lose. By the way, I don't know which
RE Attorney would say "then you do something with a verbal agreement." Pardon my French, but that attorney is crazy. I truly think you misunderstood what he said.
Here is what the law states
Property Code Sections 5.069 and 5.070. The requirements state that:
Do us a favor and read it for yourself to be sure
https://texas.public.law/statutes/tex._prop._code_section_5....
Prop. Code Section 5.070https://texas.public.law/statutes/tex._prop._code_section_5....
Prop. Code Section 5.072https://texas.public.law/statutes/tex._prop._code_section_5....
Executory contracts are not limited to the classic contract for deed. Leases with an option to purchase are also defined as executory contracts:
Prop. Code Sec. 5.062(a)(2). [Lease with an Option to Purchase]. An option to purchase real property that includes or is combined or executed concurrently with a residential lease agreement, together with the lease, is considered an executory contract for conveyance of real property.
There's more. but suffice it to say, someone misunderstood the law
"Pretending that an executory contract is something else by renaming it will fool no one, particularly after the document is deconstructed and scrutinized in court. It is astonishingly difficult to deceive a jury of six or twelve of one’s peers.
A judge or jury may even be angry with a seller who tries to pull a fast one with overly-clever conveyance documents that pretend to be something other than an executory contract—and may therefore be more inclined to consider a finding of fraud and treble damages plus attorney fees."
In other words "be careful".
I had a conversation with my RE Attorney and he says, up to 179 days and then you do something with a verbal agreement. I am scheduled to have a conference call with him this week sometime and I'll let you know what I find out.
What part of Houston are you at? Are there any Meetups or active REIAs where they meet regularly? It would be good to mingle and network.
Hey Phil,
I am in Houston. I am part of the Greater Houston REIA, and we have a monthly meeting second Saturday of the month, and 6 other focus groups that meet over the week (I lead the Landlord Forcus Group). Two months ago we had Ron LeGrand at the monthly meeting and he talked about lease options and how you can do them legally in TX.
You should swing by if you want to network with people that are doing it. DM me if you want details.
Good Luck!
I am currently under contract with a 3 bedroom 2 bathroom house in Cleveland, Texas (Montgomery county) It is being bought with a Wrap Around Mortgage and I want to sell using a Lease Option Purchase. I see other new developments in the area offering Lease to Own for 3 yrs. Can anyone give me a straight answer on doing Lease Options here in Texas? Others seem to be doing it, how can I?
I’m following….
I didn’t go to the trouble of repeating what I’ve heard prior to only options in Texas…too many people are authorities on this subject and actually they’re just repeating what they heard.
John Jackson, which I’m not sure if he’s still doing them has a whole training on how to do lease options in Texas. He knows all about them and if you don’t believe me, just ask him. :-)
Like you had mentioned there are companies offering lease options so people are still doing them It appears. Whether they have a special workaround would be good to know.
Yes, I will definitely swing by and would enjoy checking out the other focus groups as well. Thank you for the invite!