Legal document that gives right to purchase?

Question

I am in TX, I want to lock in a commercial property with a private seller, he doesn't want to go the traditional route of selling outright just yet, due to the property having items of value that need to be sold first. He estimates it will take about 2 years to do so. He doesn't want to do a lease back either, or owner finance.

He told me that he promises to sell it to me for our agreed price once he clears out his items. lease with option to buy only last so long in Texas so not an option

So what other options do I have that will hold up in a legal setting? Contract notarized? Opinions please.

Mitch Messer · Answer

Hey @Dan Wells. Why not use a straight option (not a lease option)? Just a bilateral agreement that specifies:

• The giver of the option, or optionor
• The receiver of the option, or optionee
• The purchase price
• The term (start date and end date) that the agreement will be in effect
• The consideration (typically a dollar amount) paid by the optionee to secure the right to buy
• PLUS whatever else your attorney thinks is necessary.

Make the document recordable by your county clerk, get it signed (and possibly notarized), and then have it recorded on public record.

The intent is to ensure that if he tries to sell to anyone else, a title search will find this agreement and trigger a title defect.

Guy Gimenez · Answer

@Dan Wells

You're just recording a memorandum of the contract. I would make sure it's written in the contract that the seller acknowledges you'll be recording the memorandum to give notice of the existence of said contract. This will cloud title in most instances and keep another buyer from "back-dooring" you and the seller will find it more difficult to make a claim of you slandering his title if he agreed to it contractually. And yes, the title will remain clouded if current owner passes unless the contract specifies otherwise.

Dan Wells · Answer

Thank you guys very much for your time.

So to Sum it up, when this option gets recorded on the title, Say something happens, Would the Heirs, or other potential buyers need to clear it up with me first before moving forward?

Wayne Brooks · Answer

Definitely talk to a TX real estate attorney.  The real options I’ve seen (not the happy homeowner lease options) typically are for a year for a set option fee, with the right to renew for another year at a set additional fee, with or without a price escalation.

Jerel Ehlert · Answer

All the lease option/executory contract issues only apply to consumer transactions (intended for personal use and enjoyment; that includes 1-4 residential units).  In the Commercial space, all parties are deemed sophisticated enough to look out after their own interests.  Game on!

Here, you will want to pay consideration for an option to purchase, and record the option in the real property records.

Dan Wells · Answer

Ronald something very small, I am helping his sell of things at this property and in return he is not needing a significant amount for the option.

Ronald Rohde · Answer

Are you providing consideration for the option?

Dan Wells · Answer

@wayne brooks

Dan Wells · Answer

Here in TX does it get tricky on straight option?

for example can we agree today on 450k and a sale date no later than 4 years from today at 450k

Wayne Brooks · Answer

A straight option, recorded, is what you need. A ROFR doesn’t establish a set price.

Legal document that gives right to purchase?

Most Popular Reply