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Texas · Property Code §5.016Texas subject-to sale lien disclosure (§5.016): 7 days before the contract

A Texas seller who conveys or contracts to convey residential property that will remain encumbered by a recorded lien – a subject-to or wraparound sale – must give the buyer and each lienholder a separate written disclosure in at least 12-point type at least 7 days before the earlier of the conveyance or the contract (Property Code §5.016). It lists each lien, the debt and its terms, whether the lender consented, insurance and taxes, under a warning that the lender could demand full payment. If it is missing, the buyer may terminate within 7 days after receiving it.

What the disclosure contains

  1. Liens and debt

    The property, each lienholder's name, address and phone, the debt secured by each lien, and the rate, payments and account number.

  2. Consent

    Whether each lienholder has consented to the transfer.

  3. Insurance and taxes

    Insurer, insured, amount and property insured; property taxes due.

  4. Warning

    At the top: if a lien is not released and the property is conveyed without the lienholder's consent, the lienholder could demand full payment immediately.

Timing, remedy and exemptions

  • Delivered to the buyer and each lienholder on or before the 7th day before the earlier of conveyance or signing a contract or option (§5.016(a)).
  • A violation does not invalidate the conveyance; the buyer may terminate within 7 days after receiving the notice, plus other remedies (§5.016(b)).
  • Exempt: transfers where the buyer obtains a title insurance policy, court and foreclosure transfers, fiduciaries, co-owners, spouses and relatives, government, and buyers who bought or sold four or more times in 12 months (§5.016(c)).
  • Not actionable if the seller reasonably ensures each undisclosed lien is released within 30 days after the transfer (§5.016(d)).

What the TC tracks

  • Whether the existing loan stays in place – subject-to, wraparound or assumption.
  • Disclosure date at least 7 days before the contract or closing.
  • Delivery to every lienholder, with proof.
  • Title policy ordered, which may exempt the transfer.

Questions about the Texas subject-to disclosure

What disclosure is required for a subject-to sale in Texas?

A separate written lien disclosure under Property Code §5.016 to the buyer and each lienholder, at least 7 days before the contract or conveyance.

Does the lender have to be notified in a Texas subject-to sale?

Yes. Each lienholder receives the same disclosure, which states whether it consented to the transfer.

What if the seller does not give the lien disclosure?

The conveyance stays valid, but the buyer may terminate within 7 days after receiving the notice and may have other remedies.

Is a sale with title insurance exempt?

Yes. §5.016 does not apply where the buyer obtains a title insurance policy insuring the transfer.

Related guides

Set the 7-day lien disclosure date and lienholder deliveries as tasks with owners and due dates in ClosingCode, counted from the contract or closing date.

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Source: Texas Property Code §5.016 (statutes.capitol.texas.gov, read October 24, 2026).

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