Lease-to-Purchase Agreement Texas

A lease-to-purchase agreement in Texas is a contract between a landlord and tenant that’s legally binding. The significant difference between this type of agreement and a regular lease is that, in this case, a part of the rental payment is set aside to be used as a downpayment for purchasing the property. 

These agreements are also called an executory contract or a rent-to-own agreement. The tenant can pay off the remainder of the purchase price at any time during the term of the contract.

In Texas, all lease-to-purchase agreements (LPAs) are governed by Chapter 5 of the Texas Property Code. This code can make it challenging to enter into an LPA, so it’s recommended to use a local lawyer when entering into this type of contract.

LPA requirements in Texas

Must be in writing

All LPAs must be in writing and signed by both parties.

Contract length

The term of the LPA must be longer than six months or 180 days.

No relation

The buyer and seller cannot be directly related, i.e. parents, children, or grandparents.

Must utilize the property as a residence

The buyer-tenant must use the property as a residence during the term of the LPA.