Another related pre-closure requirement is included in Property Code Section 5.016: “A person cannot pass on or enter into an interest agreement for registered residential real estate” without giving a seven-day termination to both lenders and buyers. The law defines the necessary content of this communication, which is quite technical, although there are no actual sanctions, with the exception of granting a right of pre-retraction to the purchaser. After closing, there is no remedy from the buyer or any liability on the part of the seller. Result? The request for a seven-day letter is largely ignored. Expect a future legislator to be able to re-establish this status and be penalized for non-compliance. Owners in all states, including Texas, are required under federal law to include essential elements in their leases, in particular: what if the seller errs in the annual accounts? Does this trigger draconian legal sanctions? Is this a violation of the DTPA? Probably not, “unless the explanation is so flawed that it is anything other than a faithful attempt by the seller to inform the buyer of the current state of his contractual relationship.” Morton v. Nguyen, 369 S.W.3d 659 (Tex. App.-Houston [14th Dist.] 2012). The Texas Supreme Court, in later reviewing the case, left that part of the Court of Appeals` judgment. Don`t make a mistake, you can still make a transaction with a lease purchase of more than 180 days, but many requirements now exist that were not in effect before 2005.

Paragraphs 5.069 and 5.070 of the property code contain a series of these requirements that must be met before the contract of execution is signed by the purchaser (i.e. before and not at the conclusion): in the past, unscrupulous sellers abused enforcement contracts by not respecting the same rights of the buyer and justices of the peace who misinterpreted the fact that these buyers were ordinary tenants subject to contracts buyers have appropriate rights). Sellers could then obtain evictions for minor or technical failures, which often includes large instalments. The seller could then go to his next victim and receive another down payment. Parliament has rightly acted to put an end to these abuses. 5.069 (a) (1) requires the seller to provide the buyer with a survey that is no more than a year old or an updated record. Subsection (a) the seller is also required to inform the buyer that there is “no restrictive, facilitated or other exclusion of ownership or charge that prohibits the construction of a house on the land.” Additional notice is required to advise the buyer, “obtain an obligation to own the property and have the summary or obligation verified by a lawyer before signing such a contract, and to acquire property insurance covering the property.” Section 5.062 of the Real Estate Code provides that “the option to acquire real estate including a lease agreement with the lease agreement or entered into or executed at the same time as the lease is considered a performance contract for the transportation of real estate exclusively for the purposes of Sub-Chapter D.” Tex. Prop. Code 5.062 (a) (2). As stated in this blog, Sub-Chapter D contains many pitfalls for sellers in the context of execution contracts.

As a result, leases that contain genuine purchase options – including the tenant`s right to acquire the property within a specified time frame – must be very careful.