lease options in Texas

7 Replies

@Benjamin Misner We basically outlawed lease options in Texas about 12 years ago....I believe it was 2006. There of course are people who think they have a way around the laws. The really good real estate attorneys I know, probably a dozen of them say don't do it. There is a way, but it is so difficult to follow the law, it is almost impossible to do so and if you don't follow the law, you can be in a world of hurt. Plenty of other legit ways to make money.

You can still do it, but the tenant/buyer can record the L/O in the real property records the next day as a lien. Compliance is nearly impossible. And any JP who knows anything (and they get trained in this issue) will reject your eviction if there's a default.

Anyone pushing something else is selling you.

We structure 12 month lease options here in TX. The 12 months has nothing to do with the law, it's simply that we want Optionee's to obtain financing in a year. The law states that a LO over 6 months must have specific verbiage in the documents, such as mortgage disclosure, and that the buyer must be able to verify mortgage status. Many people confuse the requirements with that of contract for deed, because the laws are written within the same section of Title 2 CH 5 TPC. There is a massive difference between a lease option and a contract for deed, so you will need specific documents for the lease option. My documents are a total of 20 pages long, but are actually very straightforward.