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Texas · Property Code §5.0205Texas wholesaling disclosure: assigning a contract or selling an option

In Texas, a person who sells an option or assigns an interest in a contract to buy real property must, before entering that contract, tell any potential buyer in writing that they are selling only an option or assigning a contract and do not hold legal title, and tell the owner in writing that they intend to sell the option or assign the contract (Property Code §5.0205). Under Occupations Code §1101.0045, doing this without the written disclosure – or using the contract to engage in brokerage – is real estate brokerage that requires a license.

The rules

  1. To the buyer (§5.0205(1))

    Before contracting: the person is selling only an option or assigning a contract interest and does not have legal title.

  2. To the owner (§5.0205(2))

    Before contracting: the person intends to sell the option or assign the contract interest.

  3. License (Occ. Code §1101.0045)

    No license is needed if the person does not use the contract to engage in brokerage and discloses the equitable interest in writing to any seller or potential buyer; without the disclosure, it is brokerage.

  4. Since 2024

    Both sections were amended or redesignated by SB 1577, effective January 1, 2024.

What the TC tracks

  • The signed equitable interest disclosure to the end buyer before the assignment.
  • The owner's written notice of the intended assignment.
  • The assignment agreement and the title company's instructions for both closings or the assignment fee.

Questions about wholesaling in Texas

Is wholesaling legal in Texas?

Selling an option or assigning a purchase contract is allowed without a license if the person discloses the equitable interest in writing and does not use the contract to engage in brokerage (Occupations Code §1101.0045).

What must a Texas wholesaler disclose?

To the buyer, that only an option or contract interest is being sold and the wholesaler has no legal title; to the owner, the intent to sell the option or assign the contract (Property Code §5.0205).

When must the wholesaling disclosure be given?

Before entering into the contract to sell the option or assign the interest.

Related guides

Keep the equitable interest disclosures and the assignment with the deal in ClosingCode, with each signature tracked as a task.

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Source: Texas Property Code §5.0205 and Occupations Code §1101.0045 (statutes.capitol.texas.gov, read October 24, 2026).

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