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Texas · Prop. Code §§5.062–5.081Texas contract for deed and rent-to-own: the buyer protections

In Texas, a contract for deed – and a lease combined with an option to buy – on a home the buyer will live in is an executory contract with strict seller duties (Prop. Code §5.062). Before the buyer signs, the seller must give a recent survey or plat, copies of encumbrances and a signed condition notice (§5.069), plus a tax certificate and proof of insurance (§5.070). The buyer may cancel for any reason within 14 days (§5.074). The seller must record the contract within 30 days (§5.076) and send an accounting every January (§5.077). Before forfeiture the buyer gets 30 days to cure; after 40% or 48 monthly payments, or once recorded, the seller must use a trustee sale with at least 60 days to cure (§§5.064–5.066). The deed is due within 30 days of the final payment, with $250–$500 a day in damages (§5.079).

Seller duties and buyer rights

  1. Covered deals

    Executory contracts and lease-with-option on the buyer's or a close relative's residence; a lot of 1 acre or less is presumed residential (§5.062).

  2. Before signing

    Survey from the past year or plat, copies of encumbrances, signed condition notice (§5.069); tax certificate and insurance evidence (§5.070).

  3. 14-day cancellation

    Buyer may cancel for any reason by written notice within 14 days; seller refunds within 10 days (§5.074).

  4. Recording

    Seller records the contract within 30 days; up to $500 a year in damages for failing (§5.076).

  5. Annual statement

    Every January: paid, owed, payments left, taxes and insurance paid (§5.077).

  6. Default

    30 days to cure before forfeiture; after 40% or 48 payments or recording – trustee sale and at least 60 days to cure (§§5.064–5.066).

  7. Title

    Deed within 30 days of the final payment; $250 a day from day 31 to 90, more after (§5.079). Buyer may convert to legal title at any time (§5.081).

What the buyer should have in hand

  • The survey or plat, title documents, tax certificate and insurance evidence – before signing.
  • The signed contract with the 14-day cancellation statement next to the signature.
  • Proof the contract was recorded with the county clerk within 30 days.
  • Each January statement, kept with the payment records.

Where these deals go wrong

  • A lease-option treated as a simple lease – Texas treats it as an executory contract.
  • No recording, so the buyer's interest is invisible and forfeiture is threatened.
  • Missing tax certificate or insurance evidence – the buyer can cancel for a full refund (§5.070(b)).

Questions buyers ask

Is rent-to-own legal in Texas?

Yes, but a lease combined with an option to buy a home is treated as an executory contract with the protections of Prop. Code chapter 5, subchapter D.

Can I cancel a Texas contract for deed?

Yes, for any reason, by written notice to the seller within 14 days after the contract date; the seller must refund within 10 days (§5.074).

When must a Texas seller give me the deed?

Within 30 days after receiving the final payment, or the seller owes liquidated damages of $250 a day, rising to $500 a day after 90 days (§5.079).

Related guides

Put the 14-day cancellation date, the 30-day recording deadline and each January statement on the deal as tasks with an owner and due date in ClosingCode.

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Source: Texas Property Code §§5.062, 5.064–5.066, 5.069, 5.070, 5.074, 5.076, 5.077, 5.079 and 5.081 (statutes.capitol.texas.gov, read October 25, 2026).

General information, not legal advice. ClosingCode is software; it is not a law firm or brokerage.